“We work hard to maintain a high standard of quality and efficiency for our customers,” said Paul Hammes, Union Pacific vice president and general manager-Agricultural Products. “We are honored by this recognition of our efforts from ConAgra Mills and look forward to producing even better results in the coming years.”

ConAgra Mills presented the award as part of its second annual Vendor Partner Awards. Union Pacific’s selection was based upon the quality of service logs, attention to on-time delivery, how aggressively it aided ConAgra Mills in obtaining new business, and external customer surveys.

“We are extremely honored to be recognized by WWL Vehicle Services Americas,” said Linda Brandl, Union Pacific vice president and general manager – Automotive. “Consistently providing high levels of service and value is how we build and maintain strong relationships with our customers. While we are proud of our 2010 accomplishments, we are working to deliver even better performance in 2011 and beyond.”

Union Pacific directly serves five vehicle assembly plants and distributes imported vehicles from seven West Coast ports and one Gulf Coast port. Union Pacific operates or accesses 43 vehicle distribution centers, covering most major western U.S. cities.

“Union Pacific achieved another strong quarter, delivering best-ever quarterly earnings,” said Jim Young, Union Pacific chairman and chief executive officer.  ”We saw the benefits of our diverse franchise, with volume growth in five of our six commodity groups.  We generated record second quarter operating income and cash from operations despite the impact of severe flooding in the Midwest.”

Second Quarter Summary

Second quarter business volumes, as measured by total revenue carloads, grew 3 percent versus 2010.  Five of Union Pacific’s six business groups reported volume growth, with strong growth in shipments of agricultural products and chemicals.  Intermodal volumes were down slightly during the quarter compared to 2010.  Quarterly operating revenue increased 16 percent in the second quarter 2011 to $4.9 billion versus $4.2 billion in the second quarter 2010.  In addition:

• Each of Union Pacific’s six business groups reported freight revenue growth in the second quarter.  Increased fuel cost recoveries, core pricing gains, and volume growth contributed to these increases.
• Quarterly diesel fuel prices increased 44 percent from an average of $2.29 per gallon in the second quarter 2010 to an average of$3.29 per gallon in the second quarter 2011.
• Union Pacific’s operating ratio of 71.3 percent was 1.9 points worse than the previous second-quarter record set in 2010.  The impact of higher fuel prices negatively impacted operating ratio and earnings by 2.0 points and $0.02 per diluted share compared to 2010.
• Flood-related issues increased operating expenses by $14 million, or $0.02 per diluted share and resulted in missed coal revenue of approximately $20 million, or $0.02 per diluted share net of estimated cost savings.
• The Customer Satisfaction Index of 92 set a new all-time quarterly best record, three points better than the second quarter 2010.
• Quarterly train speed, as reported to the Association of American Railroads, was 26.1 mph, decreasing one percent compared to the second quarter 2010.
• The Company repurchased 3.6 million shares in the second quarter 2011 at an average share price of $100.75 and an aggregate cost of approximately $360 million.

Summary of Second Quarter Freight Revenues

• Agricultural up 22 percent
• Chemicals up 19 percent
• Industrial Products up 16 percent
• Energy up 14 percent
• Automotive up 14 percent
• Intermodal up 13 percent

2011 Outlook

“Looking to the second half of the year, we expect stronger performance despite some economic uncertainties and ongoing flood challenges,” said Young.  ”With our diverse franchise and strong value proposition, we’re well-positioned to leverage volume growth and achieve pricing gains that will improve financial returns for our shareholders.”

The magazine chose Union Pacific based upon its support of women and minorities, efforts to support work/life balance, and supplier diversity commitment based on feedback from the magazine’s readers and website visitors.

“Attracting and retaining a skilled and diverse workforce is critical to our success as a company,” said Barb Schaefer, Union Pacific senior vice president – Human Resources. “We are honored to receive this recognition from Diversity Careers in Engineering and Information Technology for the third year in a row for our commitment to using ability and talent as our main criteria for employment.”

Union Pacific actively promoted diversity by increasing its minority- and women-owned supplier base for materials and service providers by 55 percent from 2005 to 2009. The company also supports employee resource groups, which help nurture a diverse culture, promote diversity issues and support recruiting, retention and advancement efforts for women and minorities.

The Exchange Offers, which commenced on May 23, 2011, expired at 11:59 p.m., New York City time on June 20.  According to information provided by the exchange agent for the Exchange Offers, Union Pacific received valid tenders from holders of $1,011,566,000aggregate principal amount of Existing Notes.

On June 23, Union Pacific expects to deliver an aggregate principal amount of$750,000,000 of New Notes and will pay an aggregate of $266,857,370.35 cash consideration for the Existing Notes accepted for exchange, plus accrued and unpaid interest on such Existing Notes.

She succeeds Richard R. McClish, who is retiring, and will report to Chairman and Chief Executive Officer Jim Young.

“Lynn brings process improvement expertise that should create new ways for Union Pacific to deliver safety, service and efficiency to our operations, which will translate into providing even greater value to our customers,” Young said. “Her breadth of experience gained working in diversified business groups will bring new perspectives to the railroad.”

Kelley will be responsible for Union Pacific’s continuous improvement, industrial engineering and quality processes. She joins the railroad from Textron Inc., where she served as vice president – Operational Excellence, overseeing the company’s engineering, operations, procurement, quality and continuous improvement councils. Kelley previously was vice president – Quality and Textron Six Sigma, was a member of Textron’s executive leadership team and a corporate officer. She earned a Ph.D. from Wayne State University, an M.B.A. fromMichigan State University’s Executive MBA Program, and a B.B.A., Business Management from the University of Detroit-Mercy. Kelley published books in the fields of statistics and operational excellence.

McClish joined Union Pacific in 2004 from R.R. Donnelly & Sons, where he served as chief process officer and interim chief information officer.  His career also included senior management positions at General Electric Plastics.

“Dick developed a platform and process that spurred continuous improvement across our entire rail network,” Young said. “His focus on process improvement and lean management were critical contributions to Union Pacific’s success. We wish him well in his retirement.”

Union Pacific earned platinum status each year since the award’s inception in 2005 and is one of only six U.S. employers to earn platinum status each of the last five years. The company is the only railroad or transportation provider among the companies honored by the NBGH, which recognized employers that responded to the need to improve their workers’ health, productivity, and quality of life.

Union Pacific Wellness, the railroad’s health promotion initiative, encourages employees to lead a healthy life. The program assesses and provides intervention support for 11 health risk factors: asthma, blood pressure, cholesterol, depression, diabetes, fatigue, inactivity, nutrition, smoking, stress and weight. Risk identification and reduction programs consist of wellness assessments and biometric screenings, lifestyle management, tobacco cessation, system health facilities, education programs, research grants and injury prevention.

“Our employees work hard to provide great service to our customers. We want them to enjoy good health so they can reap the benefits of their hard work by spending quality time with families and friends, and we know that helping employees achieve their wellness goals contributes to a safer work environment.  Our health and wellness focus is a factor in making Union Pacific an employer of choice and we are honored to be recognized by the National Business Group on Health,” said Barb Schaefer, Union Pacific senior vice president – Human Resources.

Union Pacific plans to hire more than 4,000 people in 2011. The railroad recently was recognized as the most admired trucking, transportation and logistics company by Fortune and was named among the country’s 100 best corporate citizens by Corporate Responsibility.

“For nearly 150 years, Union Pacific has helped connect a continent and transport the products America needs,” said Robert W. Turner, senior vice president – Corporate Relations. “Today, we provide global transportation solutions by moving goods for the import and export markets.

“Our success is attributed to the hard work and dedication of our employees, communicating with stakeholders and delivering value for customers. We continuously strive to improve the ways we protect the environment, serve as an employer of choice, provide great customer service and deliver shareholder results.”

Following are highlights of Union Pacific’s 2010 Sustainability and Citizenship Report.

• The company announced a fuel consumption rate reduction goal of 1 percent annually from 2011 to 2015, as measured on a gross-ton mile basis. Attaining this goal would represent a 23 percent fuel-efficiency improvement since 2000.
• The railroad reduced its greenhouse gas emissions rate from locomotives by 3 percent on a gross-ton mile basis compared to 2009.
• Union Pacific improved fuel efficiency by 3 percent, saving more than 27 million gallons of diesel fuel compared to 2009.
• Employees recorded the safest year in company history with a 1.37 reportable injury rate, a 6 percent improvement over 2009.
• The company conducted more than 7,300 safety outreach and training events, reaching more than 450,000 people.
• Union Pacific donated more than $14 million and supported more than 2,500 nonprofits through a combination of Union Pacific Foundation, matching gifts and corporate contributions.
• The railroad delivered record earnings per share, operating income, net income and operating ratio.
• The company earned an all-time best customer satisfaction score.

In formulating its 2010 Sustainability and Citizenship Report, Union Pacific considered the Global Reporting Initiative’s 2006 Sustainability Reporting Guidelines, which provide a standard framework and guidance for organizations to report on their sustainability performance.

The Exchange Offers are being conducted upon the terms and subject to the conditions set forth in an offering memorandum dated May 23, 2011, and the related letter of transmittal.

The Exchange Offers are only made, and copies of the offering documents will only be made available, to a holder of the Existing Notes that has certified its status as a “qualified institutional buyer” as defined in Rule 144A under the Securities Act of 1933 or a person who is not a “U.S. person” as defined under Regulation S under the Securities Act.