# EDGAR Filing Document

**Accession Number:** 0000100885
**File Stem:** 0001437749-23-001638
**Filing Date:** 2023-1
**Character Count:** 43770
**Document Hash:** cf4fb5b04cbbcb9f16703b3aff7485d9
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-23-001638.hdr.sgml**: 20230124

**ACCESSION NUMBER**: 0001437749-23-001638

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20230124

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230124

**DATE AS OF CHANGE**: 20230124

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** UNION PACIFIC CORP
- **CENTRAL INDEX KEY:** 0000100885
- **STANDARD INDUSTRIAL CLASSIFICATION:** RAILROADS, LINE-HAUL OPERATING [4011]
- **IRS NUMBER:** 132626465
- **STATE OF INCORPORATION:** UT
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-06075
- **FILM NUMBER:** 23545876

**BUSINESS ADDRESS:**
- **STREET 1:** 1400 DOUGLAS STREET
- **STREET 2:** STOP 0310
- **CITY:** OMAHA
- **STATE:** NE
- **ZIP:** 68179
- **BUSINESS PHONE:** 402 544 6763

**MAIL ADDRESS:**
- **STREET 1:** 1400 DOUGLAS STREET
- **STREET 2:** STOP 0310
- **CITY:** OMAHA
- **STATE:** NE
- **ZIP:** 68179

unp20221219b_8k.htm

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

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**FORM **8-K**

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**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

**Date of Report (Date of earliest event reported): **January 24, 2023** (January 24, 2023)**

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**UNION PACIFIC CORPORATION**

(Exact name of registrant as specified in its charter)

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| | | |
|:---|:---|:---|
| **Utah** | **1-6075** | **13-2626465** |
| (State or other jurisdiction | (Commission | (IRS Employer |
| of Incorporation) | File Number) | Identification No.) |

---

---

| | |
|:---|:---|
| **1400 Douglas Street**, **Omaha**, **Nebraska** | **68179** |
| (Address of principal executive offices) | (Zip Code) |

---

Registrant's telephone number, including area code: **(**402**) **544-5000**

**N/A**

(Former name or former address, if changed since last report)

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

---

| | | |
|:---|:---|:---|
| Securities registered pursuant to Section 12(b) of the Act: | Securities registered pursuant to Section 12(b) of the Act: | Securities registered pursuant to Section 12(b) of the Act: |
| <u>Title of each Class</u> | <u>Trading Symbol</u> | <u>Name of each exchange on which registered</u> |
| Common Stock (Par Value $2.50 per share) | UNP | New York Stock Exchange |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

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**Item 2.02 Results of Operations and Financial Condition.**

On January 24, 2023, Union Pacific Corporation issued a press release announcing its financial results for the quarter and year ended December 31, 2022. A copy of the press release is furnished herewith as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

**Item 9.01 Financial Statements and Exhibits.**

(d) Exhibits.

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| | |
|:---|:---|
| 99.1 | [Press Release of Union Pacific Corporation, dated January 24, 2023, announcing its financial results for the quarter and year ended December 31, 2022.](ex_457715.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |

---

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**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: January 24, 2023

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| | |
|:---|:---|
| UNION PACIFIC CORPORATION | UNION PACIFIC CORPORATION |
| By: | /s/ Jennifer L. Hamann |
|  | Jennifer L. Hamann |
|  | Executive Vice President and<br> Chief Financial Officer |

---

## Exhibit 99.1

**Exhibit 99.1**

**Union Pacific Reports Fourth Quarter and Full Year 2022 Results**

● *Fourth quarter earnings per diluted share of $2.67* 

● *Fourth quarter operating revenue up 8%* 

● *Full year earnings per diluted share of $11.21* 

● *Full year operating income up 6%* 

**Omaha, Neb., January 24, 2023** – Union Pacific Corporation (NYSE: UNP) today reported 2022 fourth quarter net income of $1.6 billion, or $2.67 per diluted share. This compares to 2021 fourth quarter net income of $1.7 billion, or $2.66 per diluted share.

Reported net income for full year 2022 was $7.0 billion, or $11.21 per diluted share. These full year results compare to full year 2021 net income of $6.5 billion, or $9.95 per diluted share.

"In the fourth quarter, we grew carloads as we continued to face challenges hiring craft professionals in critical locations and experienced the impact of extreme winter weather on our network in December," said Lance Fritz, Union Pacific chairman, president, and chief executive officer. "As a result, revenue growth was more than offset by elevated operating expenses from operational inefficiencies and a higher inflationary environment. For the full year, we made good progress on employee safety, and we took another step toward our sustainability goals as our fuel consumption rate improved for the fourth consecutive year. Looking to 2023, we expect continued improvements in network fluidity to support business development, generating volume growth that exceeds industrial production. We also expect network improvements to help us recapture lost productivity while providing customers with reliable service."

**Fourth Quarter Summary**

**Financial Results: Revenue Growth Offset by Higher Expenses Associated with Inflation and Network Recovery; Fourth Quarter Record for Operating Revenue**

***Fourth Quarter 2022 Compared to Fourth Quarter 2021***

● Operating revenue of $6.2 billion was up 8% driven by higher fuel surcharge revenue, core pricing gains, and volume growth, partially offset by a negative business mix.

● Business volumes, as measured by total revenue carloads, were up 1%.

● Union Pacific's 61.0% operating ratio deteriorated 360 basis points. Falling fuel prices late in the quarter positively impacted the operating ratio by 20 basis points.

● Operating income of $2.4 billion declined 1%.

● The company repurchased 3.5 million shares in fourth quarter 2022 at an aggregate cost of $0.7 billion.

-more-

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**Operating Performance: Service and Efficiency Measures Impacted by Network Congestion and Winter Weather; Fourth Quarter Record for Fuel Consumption Rate**

***Fourth Quarter 2022 Compared to Fourth Quarter 2021***

● Quarterly freight car velocity was 191 daily miles per car, a 3% decline.

● Quarterly locomotive productivity was 123 gross ton-miles (GTMs) per horsepower day, a 5% decline.

● Average maximum train length decreased 1% to 9,191 feet.

● Quarterly workforce productivity decreased 3% to 1,010 car miles per employee.

● Fuel consumption rate of 1.064, measured in gallons of fuel per thousand GTMs, improved 2%.

**2022 Full Year Summary**

**Financial Results: Fuel Surcharge, Core Pricing Gains, and Volume Drive Revenue Growth; Records for Operating Revenue, Operating Income, Net Income, and Earnings Per Share**

***Full Year 2022 Compared to Full Year 2021***

● Operating revenue of $24.9 billion was up 14% driven by higher fuel surcharge revenue, core pricing gains, and volume growth.

● Business volumes, as measured by total revenue carloads, grew 2%.

● Union Pacific's 60.1% reported operating ratio deteriorated 290 basis points. Higher fuel prices negatively impacted the operating ratio by 20 basis points and the prior period adjustment related to new labor agreements added 30 basis points to operating ratio.

● Operating Income of $9.9 billion was up 6%.

● Union Pacific's 2022 capital program totaled $3.4 billion.

● The company repurchased 27.1 million shares in 2022 at an aggregate cost of $6.3 billion.

**Operating Performance: Network Operations Impacted by Crew Availability and Operational Inefficiencies; Record for Fuel Consumption Rate**

***Full Year 2022 Compared to Full Year 2021***

● Union Pacific's reportable personal injury rate improved 18% to 0.80 per 200,000 employee-hours compared to 0.98 for full year 2021.

● Freight car velocity was 191 daily miles per car, a 6% decline.

● Locomotive productivity was 125 GTMs per horsepower day, a 6% decline.

● Average maximum train length of 9,329 feet was flat.

● Workforce productivity of 1,036 car miles per employee was flat.

● Fuel consumption rate of 1.078, measured in gallons of fuel per thousand GTMs, improved 1%.

-more-

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**2023 Guidance**

● Full year carloads to exceed Industrial Production

● Full year operating ratio improvement

● Pricing dollars in excess of inflation dollars

● Capital Allocation:

**Fourth Quarter 2022 Earnings Conference Call**

Union Pacific will webcast its fourth quarter 2022 earnings release presentation live at www.up.com/investor and via teleconference on Tuesday, January 24, 2023, at 8:45 a.m. Eastern Time. Participants may join the conference call by dialing 877-407-8293 (or for international participants, 201-689-8349).

**ABOUT UNION PACIFIC**

Union Pacific (NYSE: UNP) delivers the goods families and businesses use every day with safe, reliable, and efficient service. Operating in 23 western states, the company connects its customers and communities to the global economy. Trains are the most environmentally responsible way to move freight, helping Union Pacific protect future generations. More information about Union Pacific is available at www.up.com.

**Union Pacific Investor contact**: Brad Stock at 402-544-4227 or bkstock@up.com

**Union Pacific Media contact**: Clarissa Beyah at 402-957-4793 or cbeyah@up.com

**Supplemental financial information is attached.**

-more-

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**\*\*\*\***

*This news release and related materials contain statements about the Company*'*s future that are not statements of historical fact, including specifically the statements regarding the Company*'*s expectations with respect to economic conditions and demand levels, its ability to improve network performance (including those in response to increased traffic), its results of operations, and potential impacts of the COVID-19 pandemic and the Russian-Ukraine conflict. These statements are, or will be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements also generally include, without limitation, information, or statements regarding: projections, predictions, expectations, estimates, or forecasts as to the Company*'*s and its subsidiaries*' *business, financial, and operational results, and future economic performance; and management*'*s beliefs, expectations, goals, and objectives and other similar expressions concerning matters that are not historical facts.* 

*Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times that, or by which, such performance or results will be achieved. Forward-looking information, including expectations regarding operational and financial improvements and the Company*'*s future performance or results are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statement. Important factors, including risk factors, could affect the Company*'*s and its subsidiaries*' *future results and could cause those results or other outcomes to differ materially from those expressed or implied in the forward-looking statements. Information regarding risk factors and other cautionary information are available in the Company*'*s Annual Report on Form 10-K for 2021, which was filed with the SEC on February 4, 2022. The Company updates information regarding risk factors if circumstances require such updates in its periodic reports on Form 10-Q and its subsequent Annual Reports on Form 10-K (or such other reports that may be filed with the SEC).* 

*Forward-looking statements speak only as of, and are based only upon information available on, the date the statements were made. The Company assumes no obligation to update forward-looking information to reflect actual results, changes in assumptions, or changes in other factors affecting forward-looking information. If the Company does update one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect thereto or with respect to other forward-looking statements. References to our website are provided for convenience and, therefore, information on or available through the website is not, and should not be deemed to be, incorporated by reference herein.*

###

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**UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES**

*Condensed Consolidated Statements of Income (unaudited)*

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| *Millions, Except Per Share Amounts and* | ***4th Quarter*** | ***4th Quarter*** | ***4th Quarter*** | ***Full Year*** | ***Full Year*** | ***Full Year*** |
| *Percentages, For the Periods Ended December 31,* | ***2022*** | *2021* | *%* | ***2022*** | *2021* | *%* |
| **Operating Revenues** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Freight revenues | $**5768** | $5297 | 9 | $**23159** | $20244 | 14 |
| &nbsp;&nbsp;&nbsp; Other revenues | **412** | 436 | (6) | **1716** | 1560 | 10 |
| Total operating revenues | **6180** | 5733 | 8 | **24875** | 21804 | 14 |
| **Operating Expenses** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Compensation and benefits | **1174** | 1070 | 10 | **4645** | 4158 | 12 |
| &nbsp;&nbsp;&nbsp; Fuel | **853** | 597 | 43 | **3439** | 2049 | 68 |
| &nbsp;&nbsp;&nbsp; Purchased services and materials | **633** | 538 | 18 | **2442** | 2016 | 21 |
| &nbsp;&nbsp;&nbsp; Depreciation | **569** | 556 | 2 | **2246** | 2208 | 2 |
| &nbsp;&nbsp;&nbsp; Equipment and other rents | **238** | 230 | 3 | **898** | 859 | 5 |
| &nbsp;&nbsp;&nbsp; Other | **301** | 302 |  | **1288** | 1176 | 10 |
| Total operating expenses | **3768** | 3293 | 14 | **14958** | 12466 | 20 |
| **Operating Income** | **2412** | 2440 | (1) | **9917** | 9338 | 6 |
| &nbsp;&nbsp;&nbsp; Other income, net | **92** | 83 | 11 | **426** | 297 | 43 |
| &nbsp;&nbsp;&nbsp; Interest expense | **(333)** | (295) | 13 | **(1271)** | (1157) | 10 |
| Income before income taxes | **2171** | 2228 | (3) | **9072** | 8478 | 7 |
| Income taxes | **(533)** | (517) | 3 | **(2074)** | (1955) | 6 |
| **Net Income** | $**1638** | $1711 | (4) | $**6998** | $6523 | 7 |
| **Share and Per Share** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Earnings per share - basic | $**2.67** | $2.67 |  | $**11.24** | $9.98 | 13 |
| &nbsp;&nbsp;&nbsp; Earnings per share - diluted | $**2.67** | $2.66 |  | $**11.21** | $9.95 | 13 |
| &nbsp;&nbsp;&nbsp; Weighted average number of shares - basic | **612.7** | 640.4 | (4) | **622.7** | 653.8 | (5) |
| &nbsp;&nbsp;&nbsp; Weighted average number of shares - diluted | **613.7** | 642.1 | (4) | **624.0** | 655.4 | (5) |
| &nbsp;&nbsp;&nbsp; Dividends declared per share | $**1.30** | $1.18 | 10 | $**5.08** | $4.29 | 18 |
| **Operating Ratio** | **61.0%** | 57.4% | 3.6 | **60.1%** | 57.2% | 2.9 |
| **Effective Tax Rate** | **24.6%** | 23.2% | 1.4 | **22.9%** | 23.1% | (0.2) |

---

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**UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES**

*Freight Revenues Statistics (unaudited)*

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | *4th Quarter* | *4th Quarter* | *4th Quarter* | *Full Year* | *Full Year* | *Full Year* |
| *For the Periods Ended December 31,* | *2022* | *2021* | *%*  | *2022* | *2021* | *%*  |
| ***Freight Revenues (Millions)*** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Grain & grain products | $**974** | $889 | 10% | $**3598** | $3181 | 13% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fertilizer | **171** | 176 | (3) | **712** | 697 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Food & refrigerated | **265** | 259 | 2 | **1093** | 998 | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Coal & renewables | **523** | 485 | 8 | **2134** | 1780 | 20 |
| &nbsp;&nbsp;&nbsp; Bulk | **1933** | 1809 | 7 | **7537** | 6656 | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Industrial chemicals & plastics | **502** | 507 | (1) | **2158** | 1943 | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Metals & minerals | **548** | 481 | 14 | **2196** | 1811 | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Forest products | **325** | 351 | (7) | **1465** | 1357 | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Energy & specialized markets | **624** | 558 | 12 | **2386** | 2212 | 8 |
| &nbsp;&nbsp;&nbsp; Industrial | **1999** | 1897 | 5 | **8205** | 7323 | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Automotive | **594** | 469 | 27 | **2257** | 1761 | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Intermodal | **1242** | 1122 | 11 | **5160** | 4504 | 15 |
| &nbsp;&nbsp;&nbsp; Premium | **1836** | 1591 | 15 | **7417** | 6265 | 18 |
| Total | $**5768** | $5297 | 9% | $**23159** | $20244 | 14% |
| ***Revenue Carloads (Thousands)*** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Grain & grain products | **208** | 213 | (2)% | **798** | 805 | (1)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fertilizer | **41** | 48 | (15) | **190** | 201 | (5) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Food & refrigerated | **44** | 48 | (8) | **187** | 189 | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Coal & renewables | **215** | 215 |  | **885** | 819 | 8 |
| &nbsp;&nbsp;&nbsp; Bulk | **508** | 524 | (3) | **2060** | 2014 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Industrial chemicals & plastics | **151** | 157 | (4) | **637** | 606 | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Metals & minerals | **196** | 181 | 8 | **785** | 697 | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Forest products | **52** | 63 | (17) | **241** | 250 | (4) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Energy & specialized markets | **140** | 137 | 2 | **552** | 559 | (1) |
| &nbsp;&nbsp;&nbsp; Industrial | **539** | 538 |  | **2215** | 2112 | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Automotive | **198** | 182 | 9 | **778** | 701 | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Intermodal [a] | **743** | 728 | 2 | **3116** | 3211 | (3) |
| &nbsp;&nbsp;&nbsp; Premium | **941** | 910 | 3 | **3894** | 3912 |  |
| Total | **1988** | 1972 | 1% | **8169** | 8038 | 2% |
| ***Average Revenue per Car*** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Grain & grain products | $**4681** | $4187 | 12% | $**4509** | $3953 | 14% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fertilizer | **4167** | 3705 | 12 | **3749** | 3470 | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Food & refrigerated | **5957** | 5409 | 10 | **5844** | 5279 | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Coal & renewables | **2431** | 2251 | 8 | **2410** | 2173 | 11 |
| &nbsp;&nbsp;&nbsp; Bulk | **3799** | 3457 | 10 | **3658** | 3305 | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Industrial chemicals & plastics | **3335** | 3242 | 3 | **3388** | 3207 | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Metals & minerals | **2790** | 2659 | 5 | **2797** | 2598 | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Forest products | **6264** | 5521 | 13 | **6092** | 5424 | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Energy & specialized markets | **4459** | 4054 | 10 | **4320** | 3956 | 9 |
| &nbsp;&nbsp;&nbsp; Industrial | **3711** | 3522 | 5 | **3704** | 3467 | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Automotive | **3007** | 2576 | 17 | **2902** | 2511 | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Intermodal [a] | **1672** | 1541 | 9 | **1656** | 1403 | 18 |
| &nbsp;&nbsp;&nbsp; Premium | **1953** | 1748 | 12 | **1905** | 1601 | 19 |
| Average | $**2902** | $2686 | 8% | $**2835** | $2519 | 13% |

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[a] For intermodal shipments each container or trailer equals one carload.

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**UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES**

*Condensed Consolidated Statements of Financial Position (unaudited)*

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| | | | |
|:---|:---|:---|:---|
|  | ***Dec. 31,*** | ***Dec. 31,*** | *Dec. 31,* |
| *Millions, Except Percentages* |  | ***2022*** | *2021* |
| **Assets** |  |  |  |
| &nbsp;&nbsp;&nbsp; Cash and cash equivalents |  | $**973** | $960 |
| &nbsp;&nbsp;&nbsp; Short-term investments |  | **46** | 46 |
| &nbsp;&nbsp;&nbsp; Other current assets |  | **2933** | 2545 |
| &nbsp;&nbsp;&nbsp; Investments |  | **2375** | 2241 |
| &nbsp;&nbsp;&nbsp; Properties, net |  | **56038** | 54871 |
| &nbsp;&nbsp;&nbsp; Operating lease assets |  | **1672** | 1787 |
| &nbsp;&nbsp;&nbsp; Other assets |  | **1412** | 1075 |
| Total assets |  | $**65449** | $63525 |
| **Liabilities and Common Shareholders' Equity** |  |  |  |
| &nbsp;&nbsp;&nbsp; Debt due within one year |  | $**1678** | $2166 |
| &nbsp;&nbsp;&nbsp; Other current liabilities |  | **3842** | 3578 |
| &nbsp;&nbsp;&nbsp; Debt due after one year |  | **31648** | 27563 |
| &nbsp;&nbsp;&nbsp; Operating lease liabilities |  | **1300** | 1429 |
| &nbsp;&nbsp;&nbsp; Deferred income taxes |  | **13033** | 12675 |
| &nbsp;&nbsp;&nbsp; Other long-term liabilities |  | **1785** | 1953 |
| Total liabilities |  | **53286** | 49364 |
| Total common shareholders' equity |  | **12163** | 14161 |
| Total liabilities and common shareholders' equity |  | $**65449** | $63525 |
| **Return on Average Common Shareholders' Equity** | **Return on Average Common Shareholders' Equity** | **53.2%** | 41.9% |
| **Return on Invested Capital as Adjusted (ROIC)\*** | **Return on Invested Capital as Adjusted (ROIC)\*** | **17.3%** | 16.4% |

---

\* ROIC is a non-GAAP measure; however, management believes that it is an important measure in evaluating the efficiency and effectiveness of our long-term capital investments. See page 9 for a reconciliation to GAAP.

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**UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES**

*Condensed Consolidated Statements of Cash Flows (unaudited)*

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| | | |
|:---|:---|:---|
| *Millions,* | ***Full Year*** | ***Full Year*** |
| *For the Periods Ended December 31,* | ***2022*** | *2021* |
| **Operating Activities** |  |  |
| &nbsp;&nbsp;&nbsp; Net income | $**6998** | $6523 |
| &nbsp;&nbsp;&nbsp; Depreciation | **2246** | 2208 |
| &nbsp;&nbsp;&nbsp; Deferred and other income taxes | **262** | 154 |
| &nbsp;&nbsp;&nbsp; Other - net | **(144)** | 147 |
| Cash provided by operating activities | **9362** | 9032 |
| **Investing Activities** |  |  |
| &nbsp;&nbsp;&nbsp; Capital investments\* | **(3620)** | (2936) |
| &nbsp;&nbsp;&nbsp; Maturities of short-term investments | **46** | 94 |
| &nbsp;&nbsp;&nbsp; Purchases of short-term investments | **(46)** | (70) |
| &nbsp;&nbsp;&nbsp; Other - net | **149** | 203 |
| Cash used in investing activities | **(3471)** | (2709) |
| **Financing Activities** |  |  |
| &nbsp;&nbsp;&nbsp; Share repurchase programs | **(6282)** | (7291) |
| &nbsp;&nbsp;&nbsp; Debt issued | **6080** | 4201 |
| &nbsp;&nbsp;&nbsp; Dividends paid | **(3159)** | (2800) |
| &nbsp;&nbsp;&nbsp; Debt repaid | **(2291)** | (1299) |
| &nbsp;&nbsp;&nbsp; Net issued/(paid) commercial paper | **(205)** | 325 |
| &nbsp;&nbsp;&nbsp; Debt exchange | **-** | (270) |
| &nbsp;&nbsp;&nbsp; Other - net | **(30)** | (24) |
| Cash used in financing activities | **(5887)** | (7158) |
| **Net Change in Cash, Cash Equivalents, and Restricted Cash** | **4** | (835) |
| Cash, cash equivalents, and restricted cash at beginning of year | **983** | 1818 |
| Cash, cash equivalents, and restricted cash at end of year | $**987** | $983 |
| **Free Cash Flow\*\*** |  |  |
| &nbsp;&nbsp;&nbsp; Cash provided by operating activities | $**9362** | $9032 |
| &nbsp;&nbsp;&nbsp; Cash used in investing activities | **(3471)** | (2709) |
| &nbsp;&nbsp;&nbsp; Dividends paid | **(3159)** | (2800) |
| Free cash flow | $**2732** | $3523 |

---

\* Capital investments include locomotive and freight car early lease buyouts of $70 million in 2022 and $34 million in 2021.

\*\* Free cash flow is a non-GAAP measure; however, we believe this measure is important to management and investors in evaluating our financial performance and measures our ability to generate cash without additional external financing.

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**UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES**

*Operating and Performance Statistics (unaudited)*

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | ***4th Quarter*** | ***4th Quarter*** | ***4th Quarter*** | ***Full Year*** | ***Full Year*** | ***Full Year*** |
| *For the Periods Ended December 31,* | ***2022*** | *2021* | *%* | ***2022*** | *2021* | *%* |
| **Operating/Performance Statistics** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Freight car velocity (daily miles per car)\* | **191** | 197 | (3) | **191** | 203 | (6) |
| &nbsp;&nbsp;&nbsp; Average train speed (miles per hour)\* | **23.8** | 24.2 | (2) | **23.8** | 24.6 | (3) |
| &nbsp;&nbsp;&nbsp; Average terminal dwell time (hours)\* | **24.5** | 24.4 |  | **24.4** | 23.7 | 3 |
| &nbsp;&nbsp;&nbsp; Locomotive productivity (GTMs per horsepower day) | **123** | 129 | (5) | **125** | 133 | (6) |
| &nbsp;&nbsp;&nbsp; Gross ton-miles (GTMs) (millions) | **208949** | 209970 |  | **843443** | 817919 | 3 |
| &nbsp;&nbsp;&nbsp; Train length (feet) | **9191** | 9319 | (1) | **9329** | 9334 |  |
| &nbsp;&nbsp;&nbsp; Intermodal car trip plan compliance (%)\*\* | **73** | 78 | (5) | **67** | 73 | (6) |
| &nbsp;&nbsp;&nbsp; Manifest/Automotive car trip plan compliance (%)\*\* | **58** | 58 |  | **59** | 63 | (4) |
| &nbsp;&nbsp;&nbsp; Workforce productivity (car miles per employee) | **1010** | 1046 | (3) | **1036** | 1038 |  |
| &nbsp;&nbsp;&nbsp; Total employees (average) | **31120** | 29989 | 4 | **30717** | 29905 | 3 |
| **Locomotive Fuel Statistics** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Average fuel price per gallon consumed | $**3.70** | $2.53 | 46 | $**3.65** | $2.23 | 64 |
| &nbsp;&nbsp;&nbsp; Fuel consumed in gallons (millions) | **222** | 228 | (3) | **909** | 888 | 2 |
| &nbsp;&nbsp;&nbsp; Fuel consumption rate\*\*\* | **1.064** | 1.088 | (2) | **1.078** | 1.086 | (1) |
| **Revenue Ton-Miles (Millions)** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Grain & grain products | **20683** | 21656 | (4) | **79725** | 79520 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fertilizer | **2701** | 3185 | (15) | **11769** | 12387 | (5) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Food & refrigerated | **4576** | 4651 | (2) | **17965** | 18475 | (3) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Coal & renewables | **21847** | 22795 | (4) | **91824** | 85586 | 7 |
| &nbsp;&nbsp;&nbsp; Bulk | **49807** | 52287 | (5) | **201283** | 195968 | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Industrial chemicals & plastics | **6626** | 7257 | (9) | **29572** | 30048 | (2) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Metals & minerals | **9367** | 8611 | 9 | **37827** | 32993 | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Forest products | **5546** | 6458 | (14) | **25438** | 25863 | (2) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Energy & specialized markets | **9575** | 9420 | 2 | **37068** | 37902 | (2) |
| &nbsp;&nbsp;&nbsp; Industrial | **31114** | 31746 | (2) | **129905** | 126806 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Automotive | **4384** | 3830 | 14 | **17018** | 14879 | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Intermodal | **17622** | 16977 | 4 | **72546** | 73620 | (1) |
| &nbsp;&nbsp;&nbsp; Premium | **22006** | 20807 | 6 | **89564** | 88499 | 1 |
| Total | **102927** | 104840 | (2) | **420752** | 411273 | 2 |

---

\* Surface Transportation Board (STB) reported performance measures.

\*\* Methodology used to report is not comparable with the reporting to the STB under docket number EP 770.

\*\*\* Fuel consumption is computed as follows: gallons of fuel consumed divided by gross ton-miles in thousands.

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**UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES**

*Condensed Consolidated Statements of Income (unaudited)*

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| Millions, | **2022** | **2022** | **2022** | **2022** | **2022** |
| *Except Per Share Amounts and Percentages,* | ***1st Qtr*** | ***2nd Qtr*** | ***3rd Qtr*** | ***4th Qtr*** | ***Full Year*** |
| **Operating Revenues** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Freight revenues | $5440 | $5842 | $6109 | $5768 | $23159 |
| &nbsp;&nbsp;&nbsp; Other revenues | 420 | 427 | 457 | 412 | 1716 |
| Total operating revenues | 5860 | 6269 | 6566 | 6180 | 24875 |
| **Operating Expenses** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Compensation and benefits | 1101 | 1092 | 1278 | 1174 | 4645 |
| &nbsp;&nbsp;&nbsp; Fuel | 714 | 940 | 932 | 853 | 3439 |
| &nbsp;&nbsp;&nbsp; Purchased services and materials | 561 | 622 | 626 | 633 | 2442 |
| &nbsp;&nbsp;&nbsp; Depreciation | 555 | 559 | 563 | 569 | 2246 |
| &nbsp;&nbsp;&nbsp; Equipment and other rents | 215 | 230 | 215 | 238 | 898 |
| &nbsp;&nbsp;&nbsp; Other | 337 | 331 | 319 | 301 | 1288 |
| Total operating expenses | 3483 | 3774 | 3933 | 3768 | 14958 |
| **Operating Income** | 2377 | 2495 | 2633 | 2412 | 9917 |
| &nbsp;&nbsp;&nbsp; Other income, net | 47 | 163 | 124 | 92 | 426 |
| &nbsp;&nbsp;&nbsp; Interest expense | (307) | (316) | (315) | (333) | (1271) |
| Income before income taxes | 2117 | 2342 | 2442 | 2171 | 9072 |
| Income taxes | (487) | (507) | (547) | (533) | (2074) |
| **Net Income** | $1630 | $1835 | $1895 | $1638 | $6998 |
| **Share and Per Share** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Earnings per share - basic | $2.58 | $2.93 | $3.05 | $2.67 | $11.24 |
| &nbsp;&nbsp;&nbsp; Earnings per share - diluted | $2.57 | $2.93 | $3.05 | $2.67 | $11.21 |
| &nbsp;&nbsp;&nbsp; Weighted average number of shares - basic | 632.2 | 625.6 | 620.4 | 612.7 | 622.7 |
| &nbsp;&nbsp;&nbsp; Weighted average number of shares - diluted | 633.6 | 626.8 | 621.5 | 613.7 | 624.0 |
| &nbsp;&nbsp;&nbsp; Dividends declared per share | $1.18 | $1.30 | $1.30 | $1.30 | $5.08 |
| **Operating Ratio** | 59.4% | 60.2% | 59.9% | 61.0% | 60.1% |
| **Effective Tax Rate** | 23.0% | 21.6% | 22.4% | 24.6% | 22.9% |

---

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**UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES**

*Freight Revenues Statistics (unaudited)*

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | ***2022*** | ***2022*** | ***2022*** | ***2022*** | ***2022*** |
|  | ***1st Qtr*** | ***2nd Qtr*** | ***3rd Qtr*** | ***4th Qtr*** | ***Full Year*** |
| ***Freight Revenues (Millions)*** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Grain & grain products | $877 | $867 | $880 | $974 | $3598 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fertilizer | 180 | 183 | 178 | 171 | 712 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Food & refrigerated | 267 | 271 | 290 | 265 | 1093 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Coal & renewables | 508 | 492 | 611 | 523 | 2134 |
| &nbsp;&nbsp;&nbsp; Bulk | 1832 | 1813 | 1959 | 1933 | 7537 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Industrial chemicals & plastics | 520 | 557 | 579 | 502 | 2158 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Metals & minerals | 485 | 562 | 601 | 548 | 2196 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Forest products | 364 | 386 | 390 | 325 | 1465 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Energy & specialized markets | 552 | 586 | 624 | 624 | 2386 |
| &nbsp;&nbsp;&nbsp; Industrial | 1921 | 2091 | 2194 | 1999 | 8205 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Automotive | 501 | 561 | 601 | 594 | 2257 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Intermodal | 1186 | 1377 | 1355 | 1242 | 5160 |
| &nbsp;&nbsp;&nbsp; Premium | 1687 | 1938 | 1956 | 1836 | 7417 |
| Total | $5440 | $5842 | $6109 | 5768 | 23159 |
| ***Revenue Carloads (Thousands)*** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Grain & grain products | 205 | 195 | 190 | 208 | 798 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fertilizer | 45 | 53 | 51 | 41 | 190 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Food & refrigerated | 47 | 48 | 48 | 44 | 187 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Coal & renewables | 225 | 202 | 243 | 215 | 885 |
| &nbsp;&nbsp;&nbsp; Bulk | 522 | 498 | 532 | 508 | 2060 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Industrial chemicals & plastics | 160 | 161 | 165 | 151 | 637 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Metals & minerals | 182 | 205 | 202 | 196 | 785 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Forest products | 64 | 63 | 62 | 52 | 241 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Energy & specialized markets | 131 | 141 | 140 | 140 | 552 |
| &nbsp;&nbsp;&nbsp; Industrial | 537 | 570 | 569 | 539 | 2215 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Automotive | 190 | 192 | 198 | 198 | 778 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Intermodal [a] | 757 | 805 | 811 | 743 | 3116 |
| &nbsp;&nbsp;&nbsp; Premium | 947 | 997 | 1009 | 941 | 3894 |
| Total | 2006 | 2065 | 2110 | 1988 | 8169 |
| ***Average Revenue per Car*** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Grain & grain products | $4269 | $4451 | $4641 | $4681 | $4509 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fertilizer | 4016 | 3437 | 3504 | 4167 | 3749 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Food & refrigerated | 5637 | 5770 | 6017 | 5957 | 5844 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Coal & renewables | 2262 | 2426 | 2514 | 2431 | 2410 |
| &nbsp;&nbsp;&nbsp; Bulk | 3508 | 3642 | 3685 | 3799 | 3658 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Industrial chemicals & plastics | 3247 | 3455 | 3508 | 3335 | 3388 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Metals & minerals | 2660 | 2755 | 2969 | 2790 | 2797 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Forest products | 5672 | 6128 | 6347 | 6264 | 6092 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Energy & specialized markets | 4219 | 4161 | 4434 | 4459 | 4320 |
| &nbsp;&nbsp;&nbsp; Industrial | 3574 | 3674 | 3852 | 3711 | 3704 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Automotive | 2640 | 2919 | 3030 | 3007 | 2902 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Intermodal [a] | 1566 | 1711 | 1672 | 1672 | 1656 |
| &nbsp;&nbsp;&nbsp; Premium | 1782 | 1943 | 1939 | 1953 | 1905 |
| Average | $2711 | $2830 | $2895 | $2902 | $2835 |

---

[a] For intermodal shipments each container or trailer equals one carload.

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**UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES**

*Non-GAAP Measures Reconciliation to GAAP*

---

| | | |
|:---|:---|:---|
| ***Adjusted Debt / Adjusted EBITDA\**** | | |
| *Millions, Except Ratios* | ***Dec 31,*** | *Dec 31,* |
| *For the Twelve Months Ended* | ***2022*** | *2021* |
| Net income | $**6998** | $6523 |
| Add: |  |  |
| &nbsp;&nbsp;&nbsp; Income tax expense | **2074** | 1955 |
| &nbsp;&nbsp;&nbsp; Depreciation | **2246** | 2208 |
| &nbsp;&nbsp;&nbsp; Interest expense | **1271** | 1157 |
| EBITDA | $**12589** | $11843 |
| Adjustments: |  |  |
| &nbsp;&nbsp;&nbsp; Other income, net | **(426)** | (297) |
| &nbsp;&nbsp;&nbsp; Interest on operating lease liabilities\*\* | **54** | 56 |
| Adjusted EBITDA | $**12217** | $11602 |
| Debt | $**33326** | $29729 |
| Operating lease liabilities | **1631** | 1759 |
| Unfunded pension and OPEB, net of tax cost of $0 and $0 [a] | **-** | - |
| Adjusted debt | $**34957** | $31488 |
| Adjusted debt / adjusted EBITDA | **2.9** | 2.7 |

---

---

| | | |
|:---|:---|:---|
| ***Comparable Adjusted Debt / Adjusted EBITDA\**** | | |
|  | ***Dec 31,*** | *Dec 31,* |
|  | ***2022*** | *2021* |
| Adjusted debt / Adjusted EBITDA | **2.9** | 2.7 |
| Factors Affecting Comparability: |  |  |
| &nbsp;&nbsp;&nbsp; Labor accrual adjustment [b] | **(0.1)** | N/A |
| Comparable adjusted debt / adjusted EBITDA\* | **2.8** | 2.7 |

---

---

| | |
|:---|:---|
| [a] | Prior periods were recast to conform to the current year presentation, which removes the impact of pension and OPEB when the net amount represents a funded amount. |
| [b] | Adjustments remove the impact of $69 million from net income and $23 million from income tax expense for the year ended December 31, 2022. See page 10 for a reconciliation to GAAP. |

---

\* Total debt plus operating lease liabilities plus after-tax unfunded pension and other postretirement benefit (OPEB) liabilities divided by net income plus income tax expense, depreciation, amortization, interest expense, and adjustments for other income and interest on operating lease liabilities. Adjusted debt to adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, and adjustments for other income and interest on operating lease liabilities) and comparable adjusted debt to adjusted EBITDA are considered a non-GAAP financial measure by SEC Regulation G and Item 10 of SEC Regulation S-K and may not be defined and calculated by other companies in the same manner. We believe these measures are important to management and investors in evaluating the Company's ability to sustain given debt levels (including leases) with the cash generated from operations. In addition, a comparable measure is used by rating agencies when reviewing the Company's credit rating. Adjusted debt to adjusted EBITDA and comparable adjusted debt to adjusted EBITDA should be considered in addition to, rather than as a substitute for, net income. The tables above provide a reconciliation from net income to adjusted EBITDA, debt to adjusted debt, and adjusted debt to adjusted EBITDA to comparable adjusted debt to adjusted EBITDA. At December 31, 2022 and 2021, the incremental borrowing rate on operating lease liabilities was 3.3% and 3.2%, respectively.

\*\* Represents the hypothetical interest expense we would incur (using the incremental borrowing rate) if the property under our operating leases were owned or accounted for as finance leases.

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**UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES**

*Non-GAAP Measures Reconciliation to GAAP*

---

| | | |
|:---|:---|:---|
| ***Return on Average Common Shareholders' Equity*** | | |
| *Millions, Except Percentages* | ***2022*** | *2021* |
| Net income | $**6998** | $6523 |
| Average equity | $**13162** | $15560 |
| Return on average common shareholders' equity | **53.2%** | 41.9% |

---

---

| | | |
|:---|:---|:---|
| ***Return on Invested Capital as Adjusted (ROIC)\**** | | |
| *Millions, Except Percentages* | ***2022*** | *2021* |
| Net income | $**6998** | $6523 |
| Interest expense | **1271** | 1157 |
| Interest on average operating lease liabilities | **56** | 54 |
| Taxes on interest | **(304)** | (280) |
| Net operating profit after taxes as adjusted | $**8021** | $7454 |
| Average equity | $**13162** | $15560 |
| Average debt | **31528** | 28229 |
| Average operating lease liabilities | **1695** | 1682 |
| Average invested capital as adjusted | $**46385** | $45471 |
| Return on invested capital as adjusted | **17.3%** | 16.4% |

---

---

| | | |
|:---|:---|:---|
| ***Comparable Return on Invested Capital as Adjusted (Comparable ROIC)\**** | ***Comparable Return on Invested Capital as Adjusted (Comparable ROIC)\**** | ***Comparable Return on Invested Capital as Adjusted (Comparable ROIC)\**** |
|  | ***2022*** | *2021* |
| Return on invested capital as adjusted | **17.3%** | 16.4% |
| Factors Affecting Comparability: |  |  |
| &nbsp;&nbsp;&nbsp; Labor accrual adjustment [a] | **0.1** | N/A |
| Comparable return on invested capital as adjusted | **17.4%** | 16.4% |

---

---

| | |
|:---|:---|
| [a] | Adjustments remove the impact of $69 million from both net income for the year ended and shareholders' equity as of December 31, 2022. See page 10 for a reconciliation to GAAP. |

---

\* ROIC and comparable ROIC are considered non-GAAP financial measures by SEC Regulation G and Item 10 of SEC Regulation S-K and may not be defined and calculated by other companies in the same manner. We believe these measures are important to management and investors in evaluating the efficiency and effectiveness of our long-term capital investments. In addition, we currently use ROIC as a performance criterion in determining certain elements of equity compensation for our executives. ROIC and comparable ROIC should be considered in addition to, rather than as a substitute for, other information provided in accordance with GAAP. The most comparable GAAP measure is return on average common shareholders' equity. The tables above provide reconciliations from return on average common shareholders' equity to ROIC and comparable ROIC. At December 31, 2022 and 2021, the incremental borrowing rate on operating lease liabilities was 3.3% and 3.2%, respectively.

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**UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES**

*Non-GAAP Measures Reconciliation to GAAP*

***Financial Performance\****

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | *Reported results* | *Reported results* | *Labor accrual* | *Adjusted results* | *Adjusted results* |
| *Millions, Except Per Share Amounts and Percentages* |  | *(GAAP)* | *adjustment* |  | *(non-GAAP)* |
| *For the Twelve Months Ended December 31, 2022* | *For the Twelve Months Ended December 31, 2022* |  |  |  |  |
| Compensation and benefits expense |  | $4645 | $(92) |  | $4553 |
| Operating expense |  | 14958 | (92) |  | 14866 |
| Operating income |  | 9917 | 92 |  | 10009 |
| Income taxes |  | (2074) | (23) |  | (2097) |
| Net income |  | 6998 | 69 |  | 7067 |
| Diluted EPS |  | 11.21 | 0.12 |  | 11.33 |
| Operating ratio |  | 60.1 | (0.3 | pts | 59.8 |
| *As of December 31, 2022* |  |  |  |  |  |
| Shareholders' equity |  | $12163 | $69 |  | $12232 |

---

\* The above table reconciles our results for the twelve months ended and as of December 31, 2022, to adjust results that exclude the impact of certain items identified as affecting comparability. We use adjusted compensation and benefits expense, adjusted operating expense, adjusted operating income, adjusted income taxes, adjusted net income, adjusted diluted earnings per share (EPS), adjusted operating ratio, and adjusted shareholders' equity, as applicable, among other measures, to evaluate our actual operating performance. We believe these non-GAAP financial measures provide valuable information regarding earnings and business trends by excluding specific items that we believe are not indicative of our ongoing operating results of our business, providing a useful way for investors to make a comparison of our performance over time and against other companies in our industry. Since these are not measures of performance calculated in accordance with GAAP, they should be considered in addition to, rather than as a substitute for, compensation and benefits expense, operating expense, operating income, income taxes, net income, diluted EPS, operating ratio, and shareholders' equity as indicators of operating performance.