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J. M. Carreon, Assistant Vice President – Public Affairs

9 th Annual Southwestern Rail Conference Dallas, Texas January 24-25, 2013. J. M. Carreon, Assistant Vice President – Public Affairs. Lincoln Signs Pacific Railroad Act in 1862. Mergers Expand Union Pacific’s Service. 1982. 1982. 1988. 1995. 1996. Portland. Twin Cities. Chicago.

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J. M. Carreon, Assistant Vice President – Public Affairs

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  1. 9th Annual Southwestern Rail Conference Dallas, Texas January 24-25, 2013 J. M. Carreon, Assistant Vice President – Public Affairs

  2. Lincoln Signs Pacific Railroad Act in 1862

  3. Mergers Expand Union Pacific’s Service 1982 1982 1988 1995 1996 Portland Twin Cities Chicago Omaha KC SLC Denver St. Louis Memphis LA New Orleans Houston

  4. Union Pacific System Seattle Eastport Portland 2011 Fast Facts Duluth • Freight Revenue $19 billion • Route Miles 32,000 in 23 states • Employees 44,800 • Annual Payroll $4.0 billion • Community Giving $13.9 million • Purchases Made $8.3 billion • Capital Spending $3.2 billion 2011 • Capital Spending $10.7billion 2006-2010 • Locomotives 8,200 Twin Cities Chicago Omaha SLC Oakland KC Denver St. Louis LA Memphis Dallas Calexico New Orleans Nogales El Paso Houston Eagle Pass Laredo Brownsville

  5. UNION PACIFIC IN TEXAS 2011 FAST FACTS Miles of Track 7,464 Annual Payroll $634 million In-State Purchases $2.5 billion Capital Spending $530 million Employees 7,736

  6. Union Pacific Hauls . . . Just About Everything

  7. 2011 Business LevelsFull Year Volume Growth (Revenue Carloads) Revenue Mix Intermodal 20% +9% Agricultural 18% Chemicals Industrial 17% Industrial Products Autos 8% +7% Chemicals 15% Energy 22% Automotive +7% Energy +5% 7 Day Carloadings +2% Agricultural -2% Intermodal TOTAL +3%

  8. 2012 Capital Plan • Replacement, Growth & Productivity 2012 vs. 2011 Capital* ($ In Millions) • $3.6+ Billion in 2012 • Safe and ResilientInfrastructure • Increased Capacity Spending • Santa Teresa Facility • Southern Region Projects • 200 New Locomotives • Increased PTC (Positive Train Control) Spend $160 2011 2012 2011 2012 2011 2012 *Includes cash capital, leases and other non-cash capital

  9. Delivering Value to Customers Customer Satisfaction Index Mexico YTD is 97 • Excellent service drives satisfaction • Year-over-year improvement • New all-time record

  10. Freight Railroads Are Critical to Our Country • 7 large railroads21 regional railroads ~540 smaller railroads • 140,000 miles • 1.5 million freight cars • 175,000 employees • Privately owned • Taxed • Not government subsidized

  11. Armour Yellow Outside – Green Inside • 1 train takes up to 300 trucks off congested highways • Rail is almost 4 times more fuel efficient than trucks • UP can haul 1 ton 865 miles on 1 gallon of diesel fuel • Rail transportation is 3 times cleaner than trucks on a ton-mile basis UP Genset Yard Locomotive

  12. UNION PACIFIC CELEBRATED ITS 150TH ANNIVERSARY JULY 2, 2012 BY CEO AND FELLOW EMPLOYEES RINGING CLOSING BELL AT NYSE

  13. 2012 UNION PACIFIC CELEBRATES ITS 150TH ANNIVERSARY • All 46,000 employees were part of the 150th celebration • 40 company hosted events • UP hired 4,000 employees in 2012 • UP officials traveled to hundreds of towns across the country • They celebrated with about 2 million people • UP held more than 150 public events in various communities

  14. UNION PACIFIC IN MEXICO

  15. The Strength of a Unique Franchise • Diverse Business Mix • Fastest Growing States • Port Access • Mexico connectivity Seattle Eastport Duluth Portland Twin Cities Chicago Omaha Oakland Salt Lake City Denver St. Louis Kansas City Los Angeles Memphis Business Mix Calexico Dallas Nogales El Paso New Orleans Houston Intermodal 20% Eagle Pass Agricultural 19% Laredo Brownsville Autos 8% Industrial 16% Chemicals 15% Borders & Interchange Coal22% Coal 22% Ports Fastest Growing States

  16. Hermosillo Chihuahua Monclova Torreón Monterrey Saltillo Culiacán SanLuisPotosí Aguascalientes Tampico Mérida Querétaro Guadalajara Veracruz Mexico City Coatzacoalcos Puebla Manzanillo Lázaro Cárdenas Salina Cruz Mexico … A Key Link Access to All Six Border Crossings • Mexico connectivity • Growing Population • Macro Drivers Favor Mexico Production • Close proximity to U.S. • Skilled labor pool Calexico Nogales El Paso Mexico Commodity Mix Eagle Pass Laredo Brownsville

  17. UP’s presence in MexicoStronger than ever $178 MillionInvested to Support Cross-Border Flows During Past 7 Years Calexico Nogales El Paso Eagle Pass Laredo Brownsville UP MX Access and Offices Mexico City Ferromex KCSM Ferrosur

  18. Foreign Direct Investment in a Growing Economy Mexico’s competitive advantages Growing near-shoring vs. off-shoring Ford - $1,500m Holcim Apasco - $400m Deacero - $500m Ternium - $1,100m GM - $500m Chrysler - $570m Bajio FDI Nissan $600m VW $550m Mazda $500m Eurocopter $550m Iberdrola $320m Pirelli $210m Jatco $200m Goldcorp - $1,500m GM - $300m Bajio FDI Bombardier - $147m Mitsui - $480m Intel - $177m P&G - $250m Tenaris-Tamsa - $850m Nestle - $486m OHL - $600m GM $540m Braskem/Idesa - $2,000m

  19. Supporting Growth in Cross-Border Flows • Laredo International Customer Service Center • Through-Billing • S/B and N/B Clearance • Shippers/Customs Brokers • Work with government agencies to reduce border delays

  20. UP SANTA TERESA FACILITY

  21. UP SANTA TERESA FACILITY

  22. UP SANTA TERESA FACILITY • $400 million state-of-the-art rail facility on the busy Sunset Route • 2,200 acres • 11.5 miles long by 1 mile wide • Intermodal ramp • Fueling facility • Crew change building

  23. UP SANTA TERESA FACILITY • Overall impact of $500 million to NM economy • Will create 3,000 jobs during the construction phase from 2011 to 2015 • Eventually be headquarters for more than 600 permanent jobs • Excavated 5.94 million cubic yards of excavation • 260 mile long double stack train

  24. U.S.-Mexico: One of the World’s Most Dynamic Borders – 2011 Border Crossings • 8,366 Trains • 61.2 Million Personal Vehicles • 40 Million Pedestrians • 4.8 Million Tractor-Trailers

  25. TRUCKS TO MEXICO AT LAREDO, TX

  26. MEXICO MARKETS – NATURAL FIT WITH UP FRANCHISE • Unparalleled access to all 6 Border Interchanges • UP Capital Investment in Border Infrastructure focused on growth and efficient and safe service • Preferred routes • UP Auto Network • Border Transload Network • Flexibility to work with either Mexican Carrier

  27. OUTLOOK • Mexico will continue to be an important trading partner with the U.S. • $460 billion in 2011 • Strong automotive sector growth • Stable economy • Mexico GDP in 2012 estimated at 3.5% • Stable government - President Enrique Pena Nieto

  28. Question and answer session

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