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1

Energy

Doug Glass, VP & General Manager Energy

November 4, 2010

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Union Pacific Coal Market Profile$2.6 Billion Revenue as of 9/30/10

Southern Powder

River Basin (SPRB)

75%

Colorado/ Utah18%

Northern Powder

River Basin3%

Illinois1%

Coke1%

Southern Wyoming

1%

Other1%

Origin Mix(% of Revenue)

South42%

East23%

Industrial8%

Midwest22%

West5%

Key End-Use Markets(% of Revenue)

UP Energy Line Density Map*

*Lane density based on carloadings. Line thickness depicts traffic density.

Diverse

Western Coal Deposits

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3

UP Coal Network

Western Coal Deposits

Interchange / Gateway

Union Pacific Coal Market Profile$2.6 Billion Revenue as of 9/30/10

• Diverse

• Flexible

4

UP Coal Network

Western Coal Deposits

Interchange / Gateway

Water Terminal

Union Pacific Coal Market Profile$2.6 Billion Revenue as of 9/30/10

• Diverse

• Flexible

• Water Routes

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5

• Diverse

• Flexible

• Water Routes

• Large Network

Western Coal Deposits

SPRB Coal Utility Plant

Union Pacific Coal Market Profile$2.6 Billion Revenue as of 9/30/10

UP Coal Network

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UP Coal Network

Western Coal Deposits

Other Coal Utility Plant

• Diverse

• Flexible

• Water Routes

• Large Network

• Broad Products

Union Pacific Coal Market Profile$2.6 Billion Revenue as of 9/30/10

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5-Year Market Outlook

• Emission Regulations

• Low Carbon Future

• New Business

• Price

• New Power Plants

• Economic Recovery / Growth

• Emerging Market

• Niche Markets

Industry Risks

UP Opportunities

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Coal Under Attack

• Regulations

– Federal

– Regional

– State

• Renewable Energy

Standards

• Natural Gas

Substitution

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9

Serving the Low Risk Power Plants

Only 7% of UP’s Coal Revenue Falls into the Highest Risk Quartile

• Based on National Data

Comparing Plant Size,

Carbon Intensity and Cost

*Company estimates as to the probability that a power plant could shut down in the face of significant future investments in scrubbers and SCR's.

Plant

Categories *

High Risk

Quartile

Medium-High

Risk Quartile

Medium-Low

Risk Quartile

Low Risk

Quartile

7%

93%

• High Carbon

• High Cost / Mwh

• Small Plant

• Low Carbon

• Low Cost / Mwh

• Large Plant

UP Coal

Revenue

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The Business Case for Coal is Still Strong

Coal Natural Gas

Nuclear

HydroOther

Renewables

Wind

Oil

2009 Shares of Electricity Generation-U.S.*

*Source: EIA

• Provides 45% of Electricity Generation

• Stable Prices

• Resource Abundant

• Lowest Cost Fossil Fuel

Coal

• Historic Price Volatility

• Breakeven with Coal at $3.00 - $4.00 Mbtu

• Industry Return Threshold of ~$5.00 Mbtu

Natural Gas

• Long Construction Time Frame

• Potentially High Construction Costs

Nuclear

• Government Subsidies Required

• Transmission Problems

Wind

When economy comes back, pressure will

be on all sources of electrical power

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More Business, More Price

Powder

River

Basin

• All Remaining Legacy Business

To Be Re-Priced by 1/1/2015

• Fuel Surcharge

• Contract Escalators

• 9 Million Tons

• Offers Customer Greater

Productivity Than SPRB Average

– +4% train tonnage

– ~6 additional cars per train

• Efficient Routing / Faster Service

Re-Priced

60%

Remaining

Legacy

40%

As of 10/1/2010

Price ImprovementNew Business

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New Business Opportunities

13 New Coal-Fired Units• 2 in Last 12 Months

• 1 More by November

• 3 Under Construction

• 1 Converting from Truck

to Rail

• 3 in Development

• 3 Clean Coal Projects

Coal Deposits

Truck Conversion

Under Construction

Recently Completed

In Development

Clean Coal Development

*From new units under construction

2010 2011 2012 2013 2014 2015

3.0

5.5 6.8

-

3.0

9.0

Estimated Incremental Annual Tons*(In Millions)

7

13

0

10

20

30

40

50

60

70

80

Jan Feb Mar Apr May Jun Jul Aug Sep

2009 2010 Normal

Days

Economic RecoveryPoised for Growth

• No Inventory Overhang

• Available Capacity to

Grow

SPRB Inventory U.S. Electricity Consumption (Year-Over-Year % Change)

• Electricity Demand

Picking Up

• Expected 5-Year

Average GDP of 2.8%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

Residential Commercial Industrial

Jan

2009Sep

2010

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Emerging Market: ExportsGlobal Market for Western U.S. Coal

Current / Potential Export Coal Flows

Western Coal Deposits

Water Terminal

Growing International

Market - 100 Million

Annual Tons

Asia Consuming

South African and

Australian Coal

Coal Exporting

Capability Likely To Be

Added at PNW Ports

Potential for Greater

Throughput at

Long Beach

Other Port Facilities

Interested in Coal

Exports

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Niche Market Opportunities

*Source: EIA

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7

9

11

13

2000 2005 2010E

Central Appalachian Mines Western Mines

Regional Coal Production* (Quadrillion Btu)

Eastern Utility Conversion to Western Coal

• 500 Million Ton Market

• Central Appalachian Coal Basin Declining

• Mountaintop Mining Restrictions

Mexico Opportunities

• Coal Represents 5% of Electric Power

• 7 Million Tons of Coal Imported Today

• Opportunity for Oil-Based Power Converting to Coal

Markets Served by Industrial Energy

• 10 Million Ton Market

• Winning New Business in Agriculture and Mexico

• Great Upside on Cement Industry

Industrial Energy

End-Use Markets

Cement

19%Export

14%

Agriculture

23%

Metals

13%

Chemicals

11%

Energy

10%

Other

10%

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Delivering on Our Value Proposition

2006 2007 2008 2009 Sept YTD 2010

20.8 20.3

21.9

25.724.8Good

2006 2007 2008 2009 Sept YTD 2010

15,060

15,325 15,486

15,687 15,706

Tons Per Train

Good

AAR Coal Train Velocity (MPH)

2006 2007 2008 2009 Sept YTD 2010

8.68.8

8.3

6.76.3

Good

Round Trip Cycle Time (Days)

• Increased Train

Productivity

• Greater Speed and

Service

• Asset Utilization

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Energy Summary & Outlook

2006 2007 2008 2009 Sept YTD 2010

67

83

8992 93

Energy Customer Satisfaction

More Business, More Price

New Coal-Fired Units

Clean Coal Plant Development

Delivering Value to Customers

Economic Recovery

Yield Expansion

Western Export Opportunities

Volume Outlook: Economy + +