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 Union Pacific Reports Fourth Quarter and Full Year 2017 Results
   Thursday, January 25, 2018 8:00:00 AM ET

Union Pacific Corporation (UNP ) today reported 2017 fourth quarter net income of $7.3 billion, or $9.25 per diluted share compared to $1.39 per diluted share in the fourth quarter 2016. Fourth quarter 2017 results include previously-disclosed adjustments reflecting the impact of corporate tax reform. Excluding those items, 2017 fourth quarter adjusted net income was $1.2 billion, or $1.53 per diluted share, 5 and 10 percent increases, respectively, when compared to 2016.

Financial Performance*
Millions, Except Per Share Amounts and Percentages Operating Income   Net     Diluted Operating
For the Three Months Ended December 31, 2017       Income    Taxes    Income  EPS     Ratio
Reported results (GAAP)                            $2,251    ($5,186) $7,278  $9.25   58.7%
Factors Affecting Comparability:
(Adjustments for Tax Cuts and Jobs Act)
Equity-method affiliates                           (212)     (73)     (139)   (0.18)  3.9 pts
Deferred taxes                                     ---       5,935    (5,935) (7.54)  ---
Adjusted results (non-GAAP)                        $2,039    $676     $1,204  $1.53   62.6%
2016 Reported Results (GAAP)                       $1,965    $687     $1,144  $1.39   62.0%
*  Please reference page 10 of the supplemental financial information for the full non-GAAP disclosure.

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"I am pleased with the results the men and women of Union Pacific achieved by focusing on our six-track value strategy. While we have room for improvement in many areas, that doesn’t include the dedication and hard work of our employees as they Build America," said Lance Fritz, Union Pacific chairman, president and chief executive officer.

Fourth Quarter Summary

Operating revenue of $5.5 billion was up 5 percent in the fourth quarter 2017 compared to the fourth quarter 2016. Fourth quarter business volumes, as measured by total revenue carloads, increased 1 percent compared to 2016. Volume increases in industrial products and chemicals more than offset declines in agricultural products, automotive and coal. Intermodal volume was flat compared to 2016. In addition:

-- Quarterly freight revenue increased 5 percent compared to the fourth quarter 2016, as increased fuel surcharge revenue, core pricing gains, positive volume and positive mix of traffic all contributed to the increase.

-- Union Pacific’s adjusted operating ratio of 62.6 percent increased 0.6 points compared to the fourth quarter 2016.

-- The $2.03 per gallon average quarterly diesel fuel price in the fourth quarter 2017 was 23 percent higher than the fourth quarter 2016.

-- Quarterly train speed, as reported to the Association of American Railroads, was 25.1 mph, 5 percent slower than the fourth quarter 2016.

-- Union Pacific repurchased 9.2 million shares in the fourth quarter 2017 at an aggregate cost of $1.1 billion.

Summary of Fourth Quarter Freight Revenues

-- Industrial Products up 28 percent

-- Chemicals up 7 percent

-- Intermodal up 4 percent

-- Automotive down 1 percent

-- Agricultural Products down 4 percent

-- Coal down 5 percent

2017 Full Year Summary

For the full year 2017, Union Pacific reported net income of $10.7 billion or $13.36 per diluted share, compared to $4.2 billion, or $5.07 per diluted share in 2016. Excluding the previously-disclosed adjustments reflecting the impact of corporate tax reform, adjusted net income was $4.6 billion, or $5.79 per diluted share, 10 and 14 percent increases, respectively, when compared to 2016.

Financial Performance*
Millions, Except Per Share Amounts and Percentages Operating Income Taxes Net Income Diluted EPS Operating Ratio
For the Years Ended December 31, 2017              Income
Reported results (GAAP)                            $8,061    ($3,080)     $10,712    $13.36      62.0%
Factors Affecting Comparability:
(Adjustments for Tax Cuts and Jobs Act)
Equity-method affiliates                           (212)     (73)         (139)      (0.17)      1.0 pts
Deferred taxes                                     ---       5,935        (5,935)    (7.40)      ---
Adjusted results (non-GAAP)                        $7,849    $2,782       $4,638     $5.79       63.0%
2016 Reported Results (GAAP)                       $7,272    $2,533       $4,233     $5.07       63.5%
*  Please reference page 10 of the supplemental financial information for the full non-GAAP disclosure.

Operating revenue totaled $21.2 billion as compared to $19.9 billion in 2016. Adjusted operating income totaled $7.8 billion, an 8 percent increase compared to 2016. In addition:

-- Freight revenue totaled $19.8 billion, a 7 percent increase when compared to 2016. Carloadings were up 2 percent versus 2016, with increases in industrial products and coal business groups.

-- Average diesel fuel prices increased 22 percent to $1.81 per gallon in 2017 from $1.48 per gallon in 2016.

-- Union Pacific’s adjusted operating ratio improved to 63.0 percent, 0.5 points lower than 2016.

-- Train speed, as reported to the Association of American Railroads, was 25.4 mph, 5 percent lower compared to the full year 2016.

-- Union Pacific’s reportable personal injury rate of 0.79 incidents per 200,000 employee hours increased 5 percent compared to the full-year record achieved in 2016.

-- Union Pacific’s capital program in 2017 totaled $3.1 billion.

-- Union Pacific repurchased 36.4 million shares in 2017 at an aggregate cost of $4.0 billion.

2018 Outlook

"We are optimistic the economy will favor a number of our market segments leading to another year of positive volume growth. Increased unit volume, combined with inflation plus core pricing and G55-0 productivity initiatives, should result in another year of revenue growth and improved margins," said Fritz. "We will continue to execute our value-track strategy to benefit our employees, partner with the communities we serve, provide our customers an excellent experience, and generate strong returns for our shareholders."

Fourth Quarter 2017 Earnings Conference Call

Union Pacific will host its fourth quarter 2017 earnings release presentation live over the Internet and via teleconference on Thursday, January 25, 2018, at 8:45 a.m. Eastern Time. The presentation will be webcast live over the internet on Union Pacific’s website at www.up.com/investor. Alternatively, the webcast can be accessed directly through the following link. Participants may join the conference call by dialing 877/407-8293 (or for international participants, 201/689-8349).

ABOUT UNION PACIFIC

Union Pacific Railroad is the principal operating company of Union Pacific Corporation (UNP ). One of America’s most recognized companies, Union Pacific Railroad connects 23 states in the western two-thirds of the country by rail, providing a critical link in the global supply chain. In the past 10 years, 2008-2017, Union Pacific invested approximately $34 billion in its network and operations to support America’s transportation infrastructure. The railroad’s diversified business mix includes Agricultural Products, Automotive, Chemicals, Coal, Industrial Products and Intermodal. 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.

Supplemental financial information is attached.

This presentation 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 generate financial returns, improve network performance and customer service; implementation of corporate strategies; and providing excellent service to its customers and returns to its shareholders. These statements are, or will be, forward-looking statements as defined by the Securities Act of 1933 and 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 2016, which was filed with the SEC on February 3, 2017. 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.

UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
Condensed Consolidated Statements of Income (unaudited)
Millions, Except Per Share Amounts and Percentages, 4th Quarter                              Full Year
For the Periods Ended December 31,                      2017            2016      %              2017           2016        %
Operating Revenues
Freight revenues                                    $   5,087       $   4,832     5     %    $   19,837     $   18,601      7     %
Other revenues                                          363             336       8              1,403          1,340       5
Total operating revenues                                5,450           5,168     5              21,240         19,941      7
Operating Expenses
Compensation and benefits                               1,232           1,186     4              4,984          4,750       5
Purchased services and materials                        585             553       6              2,363          2,258       5
Depreciation                                            532             520       2              2,105          2,038       3
Fuel                                                    547             431       27             1,891          1,489       27
Equipment and other rents                               64              280       (77)           888            1,137       (22)
Other                                                   239             233       3              948            997         (5)
Total operating expenses                                3,199           3,203     -              13,179         12,669      4
Operating Income                                        2,251           1,965     15             8,061          7,272       11
Other income                                            29              40        (28)           290            192         51
Interest expense                                        (188)           (174)     8              (719)          (698)       3
Income before income taxes                              2,092           1,831     14             7,632          6,766       13
Income tax benefit/(expense)                            5,186           (687)     F              3,080          (2,533)     F
Net Income                                          $   7,278       $   1,144     F          $   10,712     $   4,233       F
Share and Per Share
Earnings per share - basic                          $   9.29        $   1.40      F          $   13.42      $   5.09        F
Earnings per share - diluted                        $   9.25        $   1.39      F          $   13.36      $   5.07        F
Weighted average number of shares - basic               783.6           819.2     (4)   %        798.4          832.4       (4)   %
Weighted average number of shares - diluted             787.0           822.7     (4)            801.7          835.4       (4)
Dividends declared per share                        $   0.665       $   0.605     10         $   2.48       $   2.255       10
Operating Ratio                                         58.7    %       62.0  %   (3.3) pts      62.0   %       63.5    %   (1.5) pts
Effective Tax Rate                                      (247.9) %       37.5  %   F              (40.4) %       37.4    %   F
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
Freight Revenues Statistics (unaudited)
                                   4th Quarter                  Full Year
For the Periods Ended December 31, 2017      2016      %        2017       2016       %
Freight Revenues (Millions)
Agricultural Products              $   922   $   961   (4) %    $   3,685  $   3,625  2   %
Automotive                             512       517   (1)          1,998      2,000  -
Chemicals                              917       857   7            3,596      3,474  4
Coal                                   667       699   (5)          2,645      2,440  8
Industrial Products                    1,062     829   28           4,078      3,348  22
Intermodal                             1,007     969   4            3,835      3,714  3
Total                              $   5,087 $   4,832 5   %    $   19,837 $   18,601 7   %
Revenue Carloads (Thousands)
Agricultural Products                  239       258   (7) %        958        980    (2) %
Automotive                             211       219   (4)          838        863    (3)
Chemicals                              270       257   5            1,055      1,074  (2)
Coal                                   312       320   (3)          1,232      1,166  6
Industrial Products                    309       265   17           1,227      1,097  12
Intermodal*                            826       827   -            3,278      3,262  -
Total                                  2,167     2,146 1   %        8,588      8,442  2   %
Average Revenue per Car
Agricultural Products              $   3,856 $   3,732 3   %    $   3,847  $   3,702  4   %
Automotive                             2,426     2,362 3            2,384      2,317  3
Chemicals                              3,403     3,323 2            3,410      3,234  5
Coal                                   2,136     2,183 (2)          2,146      2,092  3
Industrial Products                    3,434     3,123 10           3,324      3,051  9
Intermodal*                            1,220     1,172 4            1,170      1,138  3
Average                            $   2,348 $   2,251 4   %    $   2,310  $   2,203  5   %
* Each intermodal container or trailer equals one carload.
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
Condensed Consolidated Statements of Financial Position (unaudited)
                                                  Dec. 31,                    Dec. 31,
Millions, Except Percentages                      2017                        2016
Assets
Cash and cash equivalents                         $             1,275         $             1,277
Short-term investments                                          90                          60
Other current assets                                            2,673                       2,259
Investments                                                     1,809                       1,457
Net properties                                                  51,605                      50,389
Other assets                                                    354                         276
Total assets                                      $             57,806        $             55,718
Liabilities and Common Shareholders’ Equity
Debt due within one year                          $             800           $             758
Other current liabilities                                       3,139                       2,882
Debt due after one year                                         16,144                      14,249
Deferred income taxes                                           10,936                      15,996
Other long-term liabilities                                     1,931                       1,901
Total liabilities                                               32,950                      35,786
Total common shareholders’ equity                               24,856                      19,932
Total liabilities and common shareholders’ equity $             57,806        $             55,718
Debt to Capital                                                 40.5%                       43.0%
Adjusted Debt to Capital*                                       43.9%                       47.3%
Return on Average Common Shareholders’ Equity                   47.8%                       20.8%
Return on Invested Capital as Adjusted (ROIC)**                 27.6%                       12.7%
*  Adjusted Debt to Capital is a non-GAAP measure; however, management believes that it is an important measure in evaluating the total amount of leverage in our capital structure, including off-balance sheet lease obligations. See page 8 for a reconciliation to GAAP.
** 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.
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
Condensed Consolidated Statements of Cash Flows (unaudited)
Millions,                                      Full Year
For the Periods Ended December 31,             2017                    2016
Operating Activities
Net income                                     $           10,712      $           4,233
Depreciation                                               2,105                   2,038
Deferred income taxes                                      (5,067)                 831
Other - net                                                (520)                   423
Cash provided by operating activities                      7,230                   7,525
Investing Activities
Capital investments*                                       (3,257)                 (3,505)
Purchases of short-term investments                        (120)                   (580)
Maturities of short-term investments                       90                      520
Other - net                                                201                     172
Cash used in investing activities                          (3,086)                 (3,393)
Financing Activities
Common shares repurchased                                  (4,013)                 (3,105)
Debt issued                                                2,735                   1,983
Dividends paid                                             (1,982)                 (1,879)
Debt repaid                                                (840)                   (1,013)
Debt exchange                                              -                       (191)
Other - net                                                (46)                    (41)
Cash used in financing activities                          (4,146)                 (4,246)
Net Change in Cash and Cash Equivalents                    (2)                     (114)
Cash and cash equivalents at beginning of year             1,277                   1,391
Cash and Cash Equivalents at End of Year       $           1,275       $           1,277
Free Cash Flow**
Cash provided by operating activities          $           7,230       $           7,525
Cash used in investing activities                          (3,086)                 (3,393)
Dividends paid                                             (1,982)                 (1,879)
Free cash flow                                 $           2,162       $           2,253
*  Capital investments include locomotive and freight car early lease buyouts of $173 million in 2017 and $90 million in 2016.
** 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.
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
Operating and Performance Statistics (unaudited)
                                       4th Quarter                           Full Year
For the Periods Ended December 31,     2017         2016            %        2017         2016            %
Operating/Performance Statistics
Gross ton-miles (GTMs) (millions)      229,597      223,839         3     %  898,746      856,895         5     %
Employees (average)                    41,589       42,214          (1)      41,992       42,919          (2)
GTMs (millions) per employee           5.52         5.30            4        21.40        19.97           7
Locomotive Fuel Statistics
Average fuel price per gallon consumed $       2.03 $          1.65 23    %  $       1.81 $          1.48 22    %
Fuel consumed in gallons (millions)    260          253             3        1,004        974             3
Fuel consumption rate*                 1.135        1.131           -        1.117        1.137           (2)
AAR Reported Performance Measures
Average train speed (miles per hour)   25.1         26.5            (5)   %  25.4         26.6            (5)   %
Average terminal dwell time (hours)    32.5         29.0            12       30.3         28.1            8
Revenue Ton-Miles (Millions)
Agricultural Products                  22,406       24,153          (7)   %  89,897       92,244          (3)   %
Automotive                             4,581        4,705           (3)      18,288       18,192          1
Chemicals                              17,190       16,132          7        66,449       66,964          (1)
Coal                                   33,459       33,487          -        130,603      117,101         12
Industrial Products                    21,963       17,082          29       84,163       68,579          23
Intermodal                             19,251       19,559          (2)      77,321       77,059          -
Total                                  118,850      115,118         3     %  466,721      440,139         6     %
* Fuel consumption is computed as follows: gallons of fuel consumed divided by gross ton-miles in thousands.
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
Condensed Consolidated Statements of Income (unaudited)
                                                    2017
Millions, Except Per Share Amounts and Percentages, 1st Qtr     2nd Qtr     3rd Qtr     4th Qtr        Full Year
Operating Revenues
Freight revenues                                    $     4,794       4,906       5,050       5,087    $     19,837
Other revenues                                            338         344         358         363            1,403
Total operating revenues                                  5,132       5,250       5,408       5,450          21,240
Operating Expenses
Compensation and benefits                                 1,257       1,197       1,298       1,232          4,984
Purchased services and materials                          566         597         615         585            2,363
Depreciation                                              520         525         528         532            2,105
Fuel                                                      460         434         450         547            1,891
Equipment and other rents                                 276         273         275         64             888
Other                                                     260         219         230         239            948
Total operating expenses                                  3,339       3,245       3,396       3,199          13,179
Operating Income                                          1,793       2,005       2,012       2,251          8,061
Other income                                              67          43          151         29             290
Interest expense                                          (172)       (179)       (180)       (188)          (719)
Income before income taxes                                1,688       1,869       1,983       2,092          7,632
Income tax benefit/(expense)                              (616)       (701)       (789)       5,186          3,080
Net Income                                          $     1,072 $     1,168 $     1,194 $     7,278    $     10,712
Share and Per Share
Earnings per share - basic                          $     1.32  $     1.45  $     1.50  $     9.29     $     13.42
Earnings per share - diluted                        $     1.32  $     1.45  $     1.50  $     9.25     $     13.36
Weighted average number of shares - basic                 811.5       804.1       794.5       783.6          798.4
Weighted average number of shares - diluted               814.8       807.2       797.6       787.0          801.7
Dividends declared per share                        $     0.605 $     0.605 $     0.605 $     0.665    $     2.48
Operating Ratio                                           65.1%       61.8%       62.8%       58.7%          62.0%
Effective Tax Rate                                        36.5%       37.5%       39.8%       (247.9%)       (40.4%)
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
Freight Revenues Statistics (unaudited)
                             2017
                             1st Qtr    2nd Qtr    3rd Qtr    4th Qtr    Full Year
Freight Revenues (Millions)
Agricultural Products        $    942   $    907   $    914   $    922   $    3,685
Automotive                        504        513        469        512        1,998
Chemicals                         885        898        896        917        3,596
Coal                              648        619        711        667        2,645
Industrial Products               907        1,030      1,079      1,062      4,078
Intermodal                        908        939        981        1,007      3,835
Total                        $    4,794 $    4,906 $    5,050 $    5,087 $    19,837
Revenue Carloads (Thousands)
Agricultural Products             250        237        232        239        958
Automotive                        212        215        200        211        838
Chemicals                         257        269        259        270        1,055
Coal                              304        285        331        312        1,232
Industrial Products               278        315        325        309        1,227
Intermodal*                       787        824        841        826        3,278
Total                             2,088      2,145      2,188      2,167      8,588
Average Revenue per Car
Agricultural Products        $    3,773 $    3,813 $    3,951 $    3,856 $    3,847
Automotive                        2,373      2,393      2,341      2,426      2,384
Chemicals                         3,448      3,334      3,457      3,403      3,410
Coal                              2,134      2,173      2,143      2,136      2,146
Industrial Products               3,261      3,271      3,325      3,434      3,324
Intermodal*                       1,154      1,140      1,166      1,220      1,170
Average                      $    2,297 $    2,287 $    2,307 $    2,348 $    2,310
* Each intermodal container or trailer equals one carload.
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
Non-GAAP Measures Reconciliation to GAAP
Debt to Capital*
                             Dec. 31,              Dec. 31,
Millions, Except Percentages 2017                  2016
Debt (a)                     $          16,944     $          15,007
Equity                                  24,856                19,932
Capital (b)                  $          41,800     $          34,939
Debt to capital (a/b)                   40.5%                 43.0%
* Total debt divided by total debt plus equity. We believe this measure is important to management and investors in evaluating our balance sheet strength and is important in managing our credit ratios and financing relationships.
Adjusted Debt to Capital, Reconciliation to GAAP*
                                                         Dec. 31,    Dec. 31,
Millions, Except Percentages                             2017        2016
Debt                                                     $    16,944 $    15,007
Net present value of operating leases                         2,140       2,435
Unfunded pension and OPEB, net of taxes of $238 and $261      396         436
Adjusted debt (a)                                             19,480      17,878
Equity                                                        24,856      19,932
Adjusted capital (b)                                     $    44,336 $    37,810
Adjusted debt to capital (a/b)                                43.9%       47.3%
* Total debt plus net present value of operating leases plus after-tax unfunded pension and OPEB obligation divided by total debt plus net present value of operating leases plus after-tax unfunded pension and OPEB obligation plus equity. Operating leases were discounted using 4.6% at December 31, 2017, and 4.7% at December 31, 2016. The discount rate reflects our effective interest rate. We believe this measure is important to management and investors in evaluating the total amount of leverage in our capital structure including off-balance sheet lease obligations.
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
Non-GAAP Measures Reconciliation to GAAP
Return on Average Common Shareholders’ Equity
Millions, Except Percentages                          2017            2016            2015
Net income                                            $       10,712  $       4,233   $       4,772
Average equity                                        $       22,394  $       20,317  $       20,946
Return on average common shareholders’ equity                 47.8%           20.8%           22.8%
Return on Invested Capital as Adjusted (ROIC)*
Millions, Except Percentages                          2017            2016            2015
Net income                                            $       10,712  $       4,233   $       4,772
Interest expense                                              719             698             622
Interest on average present value of operating leases         105             121             135
Taxes on interest                                             (309)           (306)           (285)
Net operating profit after taxes as adjusted (a)      $       11,227  $       4,746   $       5,244
Average equity                                        $       22,394  $       20,317  $       20,946
Average debt                                                  15,976          14,604          12,807
Average present value of operating leases                     2,288           2,581           2,814
Average invested capital as adjusted (b)              $       40,658  $       37,502  $       36,567
Return on invested capital as adjusted (a/b)                  27.6%           12.7%           14.3%
* ROIC is 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 this measure is 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 criteria in determining certain elements of equity compensation for our executives. 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.
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
Non-GAAP Measures Reconciliation to GAAP
Financial Performance*
Millions, Except Per Share Amounts and Percentages      Operating      Income       Net          Diluted Operating
For the Three Months Ended December 31, 2017            Income         Taxes        Income       EPS     Ratio
Reported results (GAAP)                            $    2,251     $    (5,186) $    7,278   $    9.25    58.7 %
Factors Affecting Comparability:
Adjustments for Tax Cuts and Jobs Act
Equity-method affiliates                                (212)          (73)         (139)        (0.18)  3.9  pts
Deferred taxes                                          -              5,935        (5,935)      (7.54)  -
Adjusted results (non-GAAP)                        $    2,039     $    676     $    1,204   $    1.53    62.6 %
Millions, Except Per Share Amounts and Percentages      Operating      Income       Net          Diluted Operating
For the Year Ended December 31, 2017                    Income         Taxes        Income       EPS     Ratio
Reported results (GAAP)                            $    8,061     $    (3,080) $    10,712  $    13.36   62.0 %
Factors Affecting Comparability:
Adjustments for Tax Cuts and Jobs Act
Equity-method affiliates                                (212)          (73)         (139)        (0.17)  1.0  pts
Deferred taxes                                          -              5,935        (5,935)      (7.40)  -
Adjusted results (non-GAAP)                        $    7,849     $    2,782   $    4,638   $    5.79    63.0 %
* The above tables reconcile our results for the quarter and year ended December 31, 2017 to adjusted results that exclude the impact of certain items identified as affecting comparability. We use adjusted operating income, adjusted income taxes, adjusted net income, adjusted diluted earnings per share ("EPS") and adjusted operating ratio, as applicable, among other measures, to evaluate our actual operating performance. We believe these non-GAAP measures provide relevant and useful information for management and investors because they clarify our actual operating performance by excluding certain significant items that are not considered indicative of future financial trends and allow investors to review performance in the same way as our management. 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, operating income, income taxes, net income, diluted EPS, and operating ratio, as indicators of operating performance.

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View original content with multimedia:http://www.prnewswire.com/news-releases/union-pacific-reports-fourth-quarter-and-full-year-2017-results-300588029.html

SOURCE Union Pacific Corporation

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