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Select a Bookmark UNION PACIFIC CORPORATIONFORM 10-KTABLE OF CONTENTSCHAIRMAN’S
LETTER DIRECTORS AND SENIOR MANAGEMENTPART I   Item 1. Business   Item 1A. Risk
Factors   Item 1B. Unresolved Staff Comments   Item 2. Properties   Item 3.
Legal Proceedings   Item 4. Mine Safety Disclosures   Information About Our
Executive Officers and Principal Executive Officers of Our SubsidiariesPART
II   Item 5. Market for the Registrant’s Common Equity, Related Stockholder
Matters, and Issuer Purchases of Equity Securities   Item 6. [Reserved]   Item
7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations      Critical Accounting Estimates      Cautionary Information   Item
7A. Quantitative and Qualitative Disclosures about Market Risk   Item 8.
Financial Statements and Supplementary Data      Report of Independent
Registered Public Accounting Firm    Item 9. Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure   Item 9A. Controls and
Procedures      Management’s Annual Report on Internal Control over Financial
Reporting      Report of Independent Registered Public Accounting Firm   Item
9B. Other Information   Item 9C. Disclosure Regarding Foreign Jurisdictions that
Prevent InspectionsPART III   Item 10. Directors, Executive Officers, and
Corporate Governance   Item 11. Executive Compensation   Item 12. Security
Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters   Item 13. Certain Relationships and Related Transactions, and Director
Independence   Item 14. Principal Accountant Fees and ServicesPART IV   Item 15.
Exhibit and Financial Statement Schedules   Item 16. Form 10-K
SummarySIGNATURESCERTIFICATION OF PRINCIPAL EXECUTIVE OFFICERBACK PAGE






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 * UNION PACIFIC CORPORATION
 * FORM 10-K
 * TABLE OF CONTENTS
 * CHAIRMAN’S LETTER
 * DIRECTORS AND SENIOR MANAGEMENT
 * PART I
    * Item 1. Business
    * Item 1A. Risk Factors
    * Item 1B. Unresolved Staff Comments
    * Item 2. Properties
    * Item 3. Legal Proceedings
    * Item 4. Mine Safety Disclosures
    * Information About Our Executive Officers and Principal Executive Officers
      of Our Subsidiaries

 * PART II
    * Item 5. Market for the Registrant’s Common Equity, Related Stockholder
      Matters, and Issuer Purchases of Equity Securities
    * Item 6. [Reserved]
    * Item 7. Management’s Discussion and Analysis of Financial Condition and
      Results of Operations
       * Critical Accounting Estimates
       * Cautionary Information
   
    * Item 7A. Quantitative and Qualitative Disclosures about Market Risk
    * Item 8. Financial Statements and Supplementary Data
       * Report of Independent Registered Public Accounting Firm
   
    * Item 9. Changes in and Disagreements with Accountants on Accounting and
      Financial Disclosure
    * Item 9A. Controls and Procedures
       * Management’s Annual Report on Internal Control over Financial Reporting
       * Report of Independent Registered Public Accounting Firm
   
    * Item 9B. Other Information
    * Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent
      Inspections

 * PART III
    * Item 10. Directors, Executive Officers, and Corporate Governance
    * Item 11. Executive Compensation
    * Item 12. Security Ownership of Certain Beneficial Owners and Management
      and Related Stockholder Matters
    * Item 13. Certain Relationships and Related Transactions, and Director
      Independence
    * Item 14. Principal Accountant Fees and Services

 * PART IV
    * Item 15. Exhibit and Financial Statement Schedules
    * Item 16. Form 10-K Summary

 * SIGNATURES
 * CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
 * BACK PAGE

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UNION PACIFIC CORPORATION 2022 ANNUAL REPORT ON FORM 10-K


UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM
10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 For the transition period from __________ to ____________ Commission
File Number 1-6075 UNION PACIFIC CORPORATION (Exact name of registrant as
specified in its charter) Utah 13-2626465 (State or other jurisdiction of
incorporation or organization) (I.R.S. Employer 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
Securities registered pursuant to Section 12(b) of the Act: Title of each Class
Trading Symbol Name of each exchange on which registered Common Stock (Par Value
$2.50 per share) UNP New York Stock Exchange Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405 of the
Securities Act. ☑Yes ☐ No Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the Act.
☐Yes ☑ No Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. ☑Yes ☐ No Indicate by check mark
whether the registrant has submitted electronically every Interactive Data File
required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit such files). ☑Yes ☐ No Indicate by check
mark whether the registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer, a smaller reporting company, or an emerging growth
company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the
Exchange Act. Large Accelerated Filer ☑ Accelerated Filer ☐ Non-Accelerated
Filer ☐ Smaller Reporting Company ☐ 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. ☐
Indicate by check mark whether the registrant has filed a report on and
attestation to its management’s assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act
(15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report. ☑ If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the
registrant included in the filing reflect the correction of an error to
previously issued financial statements. ☐ Indicate by check mark whether any of
those error corrections are restatements that required a recovery analysis of
incentive- based compensation received by any of the registrant’s executive
officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). ☐Yes ☑ No As of June 30, 2022, the aggregate market
value of the registrant’s Common Stock held by non-affiliates (using the New
York Stock Exchange closing price) was $131.5 billion. The number of shares
outstanding of the registrant’s Common Stock as of February 3, 2023, was
611,872,981.

Documents Incorporated by Reference – Portions of the registrant’s definitive
Proxy Statement for the Annual Meeting of Shareholders to be held on May 18,
2023, are incorporated by reference into Part III of this report. The
registrant’s Proxy Statement will be filed with the Securities and Exchange
Commission (SEC) within 120 days after the end of the fiscal year that this
report relates pursuant to Regulation 14A. UNION PACIFIC CORPORATION TABLE OF
CONTENTS Chairman’s Letter 3 Directors and Senior Management 5 PART I Item 1.
Business 6 Item 1A. Risk Factors 12 Item 1B. Unresolved Staff Comments 18 Item
2. Properties 18 Item 3. Legal Proceedings 21 Item 4. Mine Safety Disclosures 22
Executive Officers of the Registrant and Principal Executive Officers of
Subsidiaries 22 PART II Item 5. Market for the Registrant’s Common Equity,
Related Stockholder Matters, and Issuer Purchases of Equity Securities 23 Item
6. [Reserved] 24 Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations 24 Critical Accounting Estimates 24
Cautionary Information 40 Item 7A. Quantitative and Qualitative Disclosures
About Market Risk 40 Item 8. Financial Statements and Supplementary Data 41
Report of Independent Registered Public Accounting Firm 42 Item 9. Changes in
and Disagreements with Accountants on Accounting and Financial Disclosure 73
Item 9A. Controls and Procedures 73 Management’s Annual Report on Internal
Control Over Financial Reporting 73 Report of Independent Registered Public
Accounting Firm 74 Item 9B. Other Information 75 Item 9C. Disclosure Regarding
Foreign Jurisdictions that Prevent Inspections 75 PART III Item 10. Directors,
Executive Officers, and Corporate Governance 75 Item 11. Executive Compensation
75 Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters 75 Item 13. Certain Relationships and Related
Transactions, and Director Independence 76 Item 14. Principal Accountant Fees
and Services 76 PART IV Item 15. Exhibit and Financial Statement Schedules 76
Item 16. Form 10-K Summary 80 Signatures 81 Certifications 82 2

February 10, 2023 Fellow Shareholders: 2022 was a foundational year for Union
Pacific, building and executing on our long-term growth strategy. From numerous
customer wins, to preparing for and onboarding a large intermodal customer, to
strategic investments in our intermodal network and transload business, we took
action to create long-term value. Those successes, however, were met with some
significant short-term barriers – continued global supply chain disruptions, an
elevated inflationary environment, record fuel prices, challenging labor
markets, and an extended labor negotiation. All of those factors had a real
impact on our ability to deliver a consistent and reliable service product to
our customers in 2022. They also contributed to uneven financial results for the
year. In 2022, we reported record earnings per share of $11.21, a 13% increase
versus 2021. Total volumes increased 2% versus 2021, driven by strength in
industrial and bulk markets offsetting continued supply chain challenges in our
premium markets. Our operating ratio was a 60.1%, a 290-basis point
deterioration versus 2021 driven by inflation, operational inefficiency, and
higher fuel prices. For the full year, our average fuel price per gallon
increased 64%. Also notable, was a $92 million one-time charge recorded in the
third quarter for new labor agreements. Success at Union Pacific begins with
safety. In 2022, we made progress on our personal injury safety metrics,
improving 18% to a five-year low and lead the industry in employee safety. We
will build upon this improvement by enhancing training programs and solidifying
our safety culture through ownership and personal accountability on the path to
achieving our goal of world-class safety performance. We need to expand our
progress from personal injuries to derailments, where we have opportunity for
improvement. The ultimate goal remains returning each employee home safely at
the end of the day. In 2021, we rolled out a strategic plan we call, “Serve,
Grow, Win – Together.” And over the past two years, we have been executing on
that long-term strategy. While our 2022 progress was mixed, we advanced our
position towards long-term sustainable growth through targeted capital
investments, emissions reduction programs, and by leveraging technology to
improve our customer's experience. Everything we do starts with Serve and
delivering customer-centered operational excellence. In 2022, our service
product did not meet expectations. Constrained crew bases in critical locations,
elevated freight car inventory levels, and continued supply chain disruptions
all played a role and impacted our ability to support customers and their needs.
In 2022, freight car velocity deteriorated 6% versus 2021, lowering trip plan
compliance for intermodal 6 points and manifest/automotive 4 points. Similarly,
our efficiency measures were impacted as locomotive productivity declined 6% and
workforce productivity and train length were flat. To address constrained crew
bases, we hired and trained over 1,300 new transportation employees in 2022 and
have almost 600 more in the training pipeline as we enter 2023. We also
amplified our customer communications to provide clear expectations and
leveraged continuous improvement efforts to address discrete service issues. A
key long-term initiative for Union Pacific is to reduce our carbon footprint for
the benefit of all stakeholders. For the fourth consecutive year, we achieved a
best-ever fuel consumption rate, improving 1% versus 2021. In addition, we
increased our biodiesel blend to over 4.5%, on track toward our 2030 target of
20%. These efforts helped our customers eliminate over 23 million metric tons of
greenhouse gas emissions by choosing Union Pacific versus truck. We continue to
make significant investments in our infrastructure to support our service
product. In 2022, our capital program of approximately $3.4 billion included
completing 24 siding projects, finishing the Twin Cities, MN, intermodal
terminal, further expanding the West Colton, CA, intermodal terminal,
modernizing over 130 locomotives, and hardening our infrastructure. These
investments support the next tenet of our strategy – Grow. We have the best rail
franchise in North America. Our growth is powered by providing products and
services that meet our customers’ needs. This includes providing new services
for our customers and expanding our reach through new transload facilities and
intermodal terminals, which our team translated into new business wins in 2022.
And those business development wins will provide a tailwind in 2023 as we
navigate an uncertain economy. 3

Growth is also dependent on a customer experience that constantly improves and
evolves. Technology plays a key role. We’re integrating deeper in our customers’
systems and supply chains by being the industry leader in providing application
programming interfaces (API), with over 70 services available being called on
over 600,000 times a day. Successful execution of our plans to “Serve” and
“Grow” leads to Win. For our shareholders, winning means generating strong cash
returns. In 2022, we paid dividends of $3.2 billion, which included a 10%
dividend increase in the second quarter. In addition, we repurchased 27 million
Union Pacific shares, decreasing our full-year average share count 5%. Combining
dividends and share repurchases, Union Pacific returned $9.4 billion to our
shareholders in 2022. “Winning” extends to all UP’s stakeholders, and the value
we create for each of them, which is the final piece of our strategy – Together.
We continue to evolve our comprehensive approach to Environmental, Social, and
Governance issues as laid out in “Building a Sustainable Future 2030”.
Ultimately, we demonstrate our commitment to this through actions. In 2022, we
announced our plans to purchase battery electric locomotives for use in yard
operations, executed a three-year deal to modernize 600 additional locomotives
starting in 2023, issued $600 million in green bonds, and became the first U.S.
railroad to formally support the Task Force on Climate-related Financial
Disclosures (TCFD). Late in the year we were added to the Dow Jones
Sustainability Index and included in the JUST Capital 100. Our momentum on
sustainability is real and demonstrates our position as the rail leader in the
space. The entire Union Pacific team recognizes that we fell short of
expectations in 2022. But, thanks to the hard work of our exceptional workforce,
we are entering 2023 positioned for success. While the year ahead has some real
challenges – an uncertain economy, higher cost structure, and stakeholder trust
to rebuild – the Union Pacific team is again ready to rise to the occasion. Our
fundamentals for long-term success have not changed. Powered by our
best-in-industry employees and franchise, a strategy built for profitable
growth, and a more efficient and reliable service product, Union Pacific is
poised to do great things in 2023. We can’t wait to prove it to you. Chairman,
President, and Chief Executive Officer 4

DIRECTORS AND SENIOR MANAGEMENT BOARD OF DIRECTORS William J. DeLaney Former
Chief Executive Officer – Sysco Corporation Board Committees: Audit;
Compensation and Benefits (Chair) David B. Dillon Former Chairman and CEO – The
Kroger Company Board Committees: Audit (Chair); Compensation and Benefits Sheri
H. Edison Former Executive Vice President and General Counsel – Amcor plc Board
Committees: Compensation and Benefits; Corporate Governance, Nominating, and
Sustainability Teresa M. Finley Former Chief Marketing and Business Services
Officer – United Parcel Service, Inc. Board Committees: Compensation and
Benefits; Finance Lance M. Fritz Chairman, President, and Chief Executive
Officer – Union Pacific Corporation and Union Pacific Railroad Company Deborah
C. Hopkins Former Chief Executive Officer – Citi Ventures and Former Chief
Innovation Officer – Citi Board Committees: Audit; Finance (Chair) Jane H. Lute
Strategic Advisor – SICPA, North America Board Committees: Audit; Corporate
Governance, Nominating, and Sustainability Michael R. McCarthy Chairman –
McCarthy Group, LLC; Co-Chairman – Bridges Trust Company Lead Independent
Director Board Committees: Corporate Governance, Nominating, and Sustainability
(Chair); Finance Jose H. Villarreal Retired Advisor – Akin, Gump, Strauss,
Hauer, & Feld, LLP Board Committees: Compensation and Benefits; Corporate
Governance, Nominating, and Sustainability Christopher J. Williams Chairman –
Siebert Williams Shank & Co. Board Committees: Audit; Finance SENIOR MANAGEMENT*
Lance M. Fritz Chairman, President, and Chief Executive Officer Prentiss W.
Bolin, Jr. Vice President – External Relations Bryan L. Clark Vice President –
Tax Eric J. Gehringer Executive Vice President – Operations Jennifer L. Hamann
Executive Vice President and Chief Financial Officer Rahul Jalali Senior Vice
President – Information Technologies and Chief Information Officer Michael V.
Miller Vice President and Treasurer Scott D. Moore Senior Vice President –
Corporate Relations and Chief Administrative Officer Clark J. Ponthier Senior
Vice President – Supply Chain and Continuous Improvement Craig V. Richardson
Executive Vice President, Chief Legal Officer, and Corporate Secretary Kenny G.
Rocker Executive Vice President – Marketing and Sales Todd M. Rynaski Senior
Vice President and Chief Accounting, Risk, and Compliance Officer Elizabeth F.
Whited Executive Vice President – Sustainability and Strategy *Senior management
are elected officers of both Union Pacific Corporation and Union Pacific
Railroad Company, except Messrs. Gehringer, Ponthier, and Rocker are elected
officers for Union Pacific Railroad Company. 5

PART I Item 1. Business GENERAL Union Pacific Railroad Company is the principal
operating company of Union Pacific Corporation. One of America's most recognized
companies, Union Pacific Railroad Company connects 23 states in the western
two-thirds of the country by rail, providing a critical link in the global
supply chain. The Railroad’s diversified business mix includes Bulk, Industrial,
and Premium. Union Pacific serves many of the fastest-growing U.S. population
centers, operates from all major West Coast and Gulf Coast ports to Eastern
gateways, connects with Canada's rail systems, and is the only railroad serving
all six major Mexico gateways. Union Pacific provides value to its roughly
10,000 customers by delivering products in a safe, reliable, fuel- efficient,
and environmentally responsible manner. Union Pacific Corporation was
incorporated in Utah in 1969 and maintains its principal executive offices at
1400 Douglas Street, Omaha, NE 68179. The telephone number at that address is
(402) 544-5000. The common stock of Union Pacific Corporation is listed on the
New York Stock Exchange (NYSE) under the symbol “UNP”. For purposes of this
report, unless the context otherwise requires, all references herein to "Union
Pacific", “UPC”, “Corporation”, “Company”, “we”, “us”, and “our” shall mean
Union Pacific Corporation and its subsidiaries, including Union Pacific Railroad
Company, which we separately refer to as “UPRR” or the “Railroad”. STRATEGY The
Company’s growth strategy focuses on growing customer value through innovative
supply chain solutions and aspiring to Serve, Grow, Win – Together. Serve:
Driving operational excellence to create a safer, more reliable, and efficient
service product. Precision scheduled railroading (PSR) is the foundation for
delivering customer-centered operational excellence by: 1. Shifting the focus of
operations from moving trains to moving cars. 2. Minimizing car dwell, car
classification events, and locomotive power requirements. 3. Utilizing
general-purpose trains by blending existing train service. 4. Balancing train
movements to improve the utilization of resources. We aim to move cars faster
and reduce the number of times each car is touched, resulting in terminal
consolidation opportunities, improved asset utilization, and fewer car
classifications, which in turn leads to products getting to the market quicker
and more reliably. The result is a better customer experience, which enables us
to grow our market share. Grow: By harnessing the potential of the best rail
franchise in the industry, we expect to generate growth in three ways –
increasing profitable carloads that fit our network and transportation plan,
providing more products and services to create value for our customers, and
increasing the geographic reach of our franchise through innovative supply chain
solutions. Win: Driving strong financial performance resulting in significant
shareholder returns. Execution of our plans to both serve and grow, leads to
higher revenues with improved margins and greater cash generation, creating long
term enterprise value. Together: Engaging our four stakeholder groups –
Communities, Customers, Employees, and Shareholders. Our comprehensive approach
to Environmental, Social, and Governance issues, “Building a Sustainable Future
2030,” is designed to address the evolving interests of our stakeholders and is
built on five areas of concentration – Building Responsible Foundations,
Investing in our Workforce, Driving Sustainable Solutions, Championing
Environmental Stewardship, and Strengthening our Communities. We believe that
operational excellence and an engaged workforce with deep market knowledge and
strong customer relationships supports best-in-class safety, a customer
experience that drives growth, and shareholder returns. As we work to transform
our railroad into the safest, most reliable, and most efficient in North
America, our values continue guiding us. Our passion for performance will help
us win; our high ethical standards will lead us to win in a way that supports
all of our stakeholders; and our teamwork will make sure we win together. 6

OPERATIONS The Railroad, along with its subsidiaries and rail affiliates, is our
one reportable operating segment. Although we provide revenues by commodity
group, we analyze the net financial results of the Railroad as one segment due
to the integrated nature of our rail network. Additional information regarding
our business and operations, including revenues, financial information and data,
and other information regarding environmental matters, is presented in Risk
Factors, Item 1A; Legal Proceedings, Item 3; Management’s Discussion and
Analysis of Financial Condition and Results of Operations, Item 7; and the
Financial Statements and Supplementary Data, Item 8 (which include information
regarding revenues, statements of income, and total assets). Operations – UPRR
is a Class I railroad operating in the U.S. We have 32,534 route miles,
connecting Pacific Coast and Gulf Coast ports with the Midwest and Eastern U.S.
gateways and providing several corridors to key Mexican gateways. We serve the
western two-thirds of the country and maintain coordinated schedules with other
rail carriers to move freight to and from the Atlantic Coast, the Pacific Coast,
the Southeast, the Southwest, Canada, and Mexico. Export and import traffic
moves through Gulf Coast, Pacific Coast, and East Coast ports and across the
Mexican and Canadian borders. In 2022, we generated freight revenues totaling
$23.2 billion from the following three commodity groups: 2022 Freight Revenues
Bulk – The Company's Bulk shipments consist of grain and grain products,
fertilizer, food and refrigerated, and coal and renewables. In 2022, this group
generated 33% of our freight revenues. We access most major grain markets,
connecting the Midwest and Western U.S. producing areas to export terminals in
the Pacific Northwest and Gulf Coast ports as well as Mexico. We also serve
significant domestic markets, including grain processors, animal feeders, and
ethanol producers in the Midwest and West. Fertilizer movements originate in the
Gulf Coast region, Midwest, Western U.S., and Canada (through interline access)
for delivery to major agricultural users in those areas as well as abroad. The
Railroad’s network supports the transportation of coal shipments to independent
and regulated power companies and industrial facilities throughout the U.S.
Through interchange gateways and ports, UPRR’s reach extends to Eastern U.S.
utilities as well as to Mexico and other international destinations. Coal
traffic originating in the Powder River Basin (PRB) area of Wyoming is the
largest portion of the Railroad’s coal business. Renewable shipments for
customers committed to sustainability consist primarily of biomass exports and
wind turbine components. Industrial – Our extensive network facilitates the
movement of numerous commodities between thousands of origin and destination
points throughout North America. The Industrial group consists of several
categories, including construction, industrial chemicals, plastics, forest
products, specialized products (primarily waste, salt, and roofing), metals and
ores, petroleum, liquid petroleum gases (LPG), soda ash, and sand.
Transportation of these products accounted for 35% of our freight revenues in
2022. Commercial, residential, and governmental infrastructure investments drive
shipments of steel, aggregates, cement, and wood products. Industrial and light
manufacturing plants receive steel, nonferrous materials, minerals, and other
raw materials. The industrial chemicals market consists of a vast number of
chemical compounds that support the manufacturing of more complex chemicals.
Plastics shipments support automotive, housing, and the durable and disposable
consumer goods markets. Forest product shipments include lumber and paper
commodities. Lumber shipments originate primarily in the Pacific Northwest or
Western Canada and move throughout the U.S. for use in new home construction and
repairs and remodeling. Paper shipments primarily support packaging needs. Oil
and gas drilling generates demand for raw steel, finished pipe, stone, and
drilling fluid commodities. The Company’s petroleum and LPG shipments are
primarily impacted by refinery utilization rates, regional crude pricing
differentials, pipeline capacity, and the use of asphalt for road programs. Soda
ash originates in southwestern Wyoming and California, destined for chemical and
glass producing markets in North America and abroad. 7

Premium – In 2022, Premium shipments generated 32% of Union Pacific’s total
freight revenues. Premium includes finished automobiles, automotive parts, and
merchandise in intermodal containers, both domestic and international.
International business consists of import and export traffic moving in 20 or
40-foot shipping containers, that mainly pass through West Coast ports, destined
for one of the Company's many inland intermodal terminals. Domestic business
includes container and trailer traffic picked up and delivered within North
America for intermodal marketing companies (primarily shipper agents and
logistics companies) as well as truckload carriers. We are the largest
automotive carrier west of the Mississippi River and operate or access 39
vehicle distribution centers. The Railroad’s extensive franchise accesses six
vehicle assembly plants and connects to West Coast ports, all six major Mexico
gateways, and the Port of Houston to accommodate both import and export
shipments. In addition to transporting finished vehicles, the Company provides
expedited handling of automotive parts in both boxcars and intermodal containers
destined for Mexico, the U.S., and Canada. Seasonality – Some of the commodities
we carry have peak shipping seasons, reflecting either or both the nature of the
commodity (such as certain agricultural and food products that have specific
growing and harvesting seasons) and the demand cycle for the commodity (such as
intermodal traffic that generally peaks during the third quarter to meet
back-to- school and holiday-related demand for consumer goods during the fourth
quarter). The peak shipping seasons for these commodities can vary considerably
each year depending upon various factors, including the strength of domestic and
international economies and currencies; consumer demand; the strength of
harvests, which can be adversely affected by severe weather; market prices for
agricultural products; and supply chain disruptions. Proud & Engaged Workforce –
Our employees are central to our Serve, Grow, Win – Together strategy, and
Investing in our Workforce is one of the five areas of concentration in our
"Building a Sustainable Future 2030" strategy. Our People: Our award-winning,
multigenerational workforce includes talented people from all walks of life, in
many stages of life. Made up of management and craft professionals, we are
focused on attracting, retaining, and developing talent across our entire
system. As of December 31, 2022, the Company employed 33,179 employees. Our
workforce includes five generations from Traditionalists (born before 1946) to
Generation Z (born after 1998). The average age is 46.5 with average tenure of
15.8 years. Union Pacific works with 13 major rail unions, representing
approximately 83% of our workforce. Most craft professionals and more than 45
railroads participate in negotiations on a national multi-employer basis. The
National Carriers Conference Committee of the National Railway Labor Conference,
consisting of the top labor officers in most Class I railroads, is the
bargaining committee for the industry. Railroads are governed by the Railway
Labor Act (RLA), a federal statute enacted in 1926 to bring the railroads and
unions to agreement without disruptions to rail transportation. The RLA includes
numerous safeguards to help overcome bargaining stalemates. The recent round of
labor negotiations related to years 2020-2024 concluded in December 2022. See
Management’s Discussion and Analysis of Financial Condition and Results of
Operations – Other Matters – Labor Agreements, Item 7, of this report for
information about the conclusion of the 2020-2024 negotiations. The next round
of negotiations begins on January 1, 2025, related to years 2025-2029. Our
Culture: We incorporate our commitment to safety, high ethical standards,
passion for performance, and teamwork into our day-to-day operations as we
service our customers. Safety is central to everything we do at Union Pacific.
Together, we are committed to cultivating a safety-focused culture, so our
employees return home safely every day. To achieve this, our employees identify
risks, initiate action to mitigate those risks, and have the courage to care to
keep each other safe. 8