8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

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 22, 2009

Union Pacific Corporation

(Exact name of registrant as specified in its charter)

Utah	1-6075	13-2626465
(State or other jurisdiction of Incorporation)	(Commission File Number)	(IRS 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

N/A

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

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))

Item 2.02 Results of Operations and Financial Condition.

On January 22, 2009, Union Pacific Corporation (the “Company”) issued a press release announcing its financial results for the quarter and year ended December 31, 2008. 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.

(c) Exhibits.

99.1 Press Release of Union Pacific Corporation, dated January 22, 2009, announcing the Company’s financial results for the quarter and year ended December 31, 2008.

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 22, 2009

UNION PACIFIC CORPORATION
By:	/s/ Robert M. Knight, Jr.
	Robert M. Knight, Jr.
	Executive Vice President – Finance and Chief Financial Officer

EX-99.1

Exhibit 99.1

UNION PACIFIC REPORTS FOURTH QUARTER EARNINGS GROWTH DRIVEN BY

PRODUCTIVITY AND LOWER ENERGY COSTS

Economic Uncertainty Creates Challenges in 2009

FOR IMMEDIATE RELEASE

Fourth Quarter 2008 Highlights

• Diluted earnings per share improved 41 percent to $1.31.

• Operating revenues totaled $4.3 billion, up two percent.

• Operating income grew 32 percent to $1.14 billion.

• Operating ratio was 73.4 percent, a 6 point improvement.

• Net income increased 35 percent to $661 million.

• Customer Satisfaction Index increased 7 points to 85.

Full Year 2008 Highlights

• Diluted earnings per share improved 31 percent to $4.54.

• Operating revenues totaled $18.0 billion, up 10 percent.

• Operating income grew 21 percent to $4.1 billion.

• Operating ratio was 77.3 percent, a 2 point improvement.

• Net income increased 26 percent to $2.3 billion.

• Return on invested capital grew 1.5 points to 10.2 percent.

• Customer Satisfaction Index increased four points to 83.

OMAHA, Neb., January 22, 2009 – Union Pacific Corporation (NYSE: UNP) today reported 2008 fourth quarter net income of $661 million, or $1.31 per diluted share, a 35 percent increase compared to $491 million, or $0.93 per diluted share for the fourth quarter of 2007. The company posted quarterly operating revenues of $4.3 billion in 2008 versus $4.2 billion in the fourth quarter 2007.

“Union Pacific posted solid earnings for the quarter and the year, despite numerous challenges,” said Jim Young, Union Pacific chairman and chief executive officer. “We increased profitability by operating a safe and efficient railroad that delivered excellent service and value for our customers. In the fourth quarter, our operating ratio improved significantly as we benefited from lower fuel costs, better pricing, and productivity gains, all of which helped offset the impact of declining volumes in this difficult economic environment.”

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Fourth Quarter Summary

Although business volumes declined in the quarter, Union Pacific reported operating income of $1.1 billion in the fourth quarter 2008, a 32 percent year-over-year improvement driven by lower fuel costs, continued pricing gains and strong productivity. The company’s freight revenues grew two percent in the quarter to $4.1 billion. In addition:

• The company’s fourth quarter 2008 Customer Satisfaction Index improved seven points to 85, an all-time company high.

• Fourth quarter 2008 average quarterly fuel price declined six percent to $2.46 per gallon, compared to $2.62 per gallon in the fourth quarter 2007.

• Business volumes, as measured by total revenue carloads, were 12 percent lower in 2008 than in the fourth quarter 2007.

• Union Pacific’s operating ratio improved six points to 73.4 percent in the fourth quarter 2008.

Summary of Fourth Quarter Freight Revenues

• Energy was up 20 percent.

• Agricultural was up 10 percent.

• Chemicals were down 1 percent.

• Industrial Products were down 3 percent.

• Intermodal was down 7 percent.

• Automotive was down 17 percent.

2008 Full Year Summary

For the full year 2008, Union Pacific reported net income of $2.3 billion, or $4.54 per diluted share, compared to $1.9 billion, or $3.46 per diluted share in 2007. The company posted operating revenues of $18.0 billion in 2008 compared to $16.3 billion in 2007. Operating income increased to $4.1 billion, a 21 percent improvement over 2007.

• Freight revenues grew 11 percent to $17.1 billion.

• Average fuel price per gallon increased 39 percent to $3.15 from $2.27.

• Business volumes were down five percent.

Outlook

“Although we expect 2009 will be a difficult year for our Company, our customers and our employees, we are challenging ourselves to deliver an even higher level of performance,” Young said. “In this tough economic environment, we remain dedicated to providing excellent service to our customers, making strategic investments for long-term growth and producing strong financial returns.”

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About Union Pacific

Union Pacific Corporation owns one of America’s leading transportation companies. Its principal operating company, Union Pacific Railroad, links 23 states in the western two-thirds of the country and serves the fastest-growing U.S. population centers. Union Pacific’s diversified business mix includes Agricultural Products, Automotive, Chemicals, Energy, Industrial Products and Intermodal. The railroad offers competitive long-haul routes from all major West Coast and Gulf Coast ports to eastern gateways. Union Pacific connects with Canada’s rail systems and is the only railroad serving all six major gateways to Mexico, making it North America’s premier rail franchise.

Supplemental financial information is attached.

Additional information is available at our Web site: www.up.com.

Contact for investors is Jennifer Hamann at (402) 544-4227.

Contact for media is Donna Kush at (402) 544-3753.

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This press release and related materials contain statements about the Corporation’s future that are not statements of historical fact, including specifically expectations regarding the Corporation’s outlook regarding economic conditions, future operating performance, ability to make, and plans for, strategic investments, and financial returns. 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: expectations as to continued or increasing demand for rail transportation services; expectations regarding operational improvements, including the effectiveness of network management initiatives that have been or will be implemented to improve operations, customer service, and shareholder returns; expectations as to increased returns, cost savings, revenue growth, and earnings; expectations regarding fuel price and our ability to mitigate fuel costs; the time by which certain objectives will be achieved, including expected improvements in operations and implementation of network management initiatives; estimates of costs relating to environmental remediation and restoration; proposed new products and services; expectations that claims, lawsuits, environmental costs, commitments, contingent liabilities, labor negotiations or agreements, or other matters will not have a material adverse effect on our consolidated financial position, results of operations, or liquidity; statements concerning projections, predictions, expectations, estimates or forecasts as to the Corporation’s and its subsidiaries’ business, financial, and operational results, and future economic performance; and statements of 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 Corporation’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 Corporation’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 Corporation’s Annual Report on Form 10-K for 2007, which was filed with the SEC on February 28, 2008. The Corporation 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 Corporation 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 Corporation does update one or more forward-looking statements, no inference should be drawn that the Corporation will make additional updates with respect thereto or with respect to other forward-looking statements. References to our Web site are provided for convenience and, therefore, information on or available through the Web site is not, and should not be deemed to be, incorporated by reference herein.

UNION PACIFIC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In Millions, Except per Share Amounts and Percentages)

	4th Quarter								Year-to-Date
For the Periods Ending December 31,	2008			2007			%		2008			2007			%
	(unaudited)								(unaudited)
Operating Revenues *
Freight Revenues	$	4,080		$	3,988		2		$	17,118		$	15,486		11
Other Revenues		206			209		(1	)		852			797		7
Total Operating Revenues		4,286			4,197		2			17,970			16,283		10
Operating Expenses *
Compensation and Benefits		1,101			1,121		(2	)		4,457			4,526		(2	)
Fuel		732			903		(19	)		3,983			3,104		28
Purchased Services and Materials		458			456		—			1,902			1,856		2
Depreciation		353			337		5			1,387			1,321		5
Equipment and Other Rents		320			333		(4	)		1,326			1,368		(3	)
Other		181			183		(1	)		840			733		15
Total Operating Expenses		3,145			3,333		(6	)		13,895			12,908		8
Operating Income		1,141			864		32			4,075			3,375		21
Other Income		25			40		(38	)		92			116		(21	)
Interest Expense		(127	)		(125	)	2			(511	)		(482	)	6
Income Before Income Taxes		1,039			779		33			3,656			3,009		22
Income Tax Expense		(378	)		(288	)	31			(1,318	)		(1,154	)	14
Net Income	$	661		$	491		35		$	2,338		$	1,855		26
Share and per Share
Earnings per Share – Basic	$	1.31		$	0.94		39		$	4.58		$	3.49		31
Earnings per Share – Diluted	$	1.31		$	0.93		41		$	4.54		$	3.46		31
Weighted Average Number of Shares – Basic		503.2			523.5		(4	)		510.6			531.9		(4	)
Weighted Average Number of Shares – Diluted		506.5			528.6		(4	)		515.0			536.8		(4	)
Dividends Declared per Share	$	0.27		$	0.22		23		$	0.98		$	0.745		32
Operating Ratio		73.4	%		79.4	%	(6.0	)pts		77.3	%		79.3	%	(2.0	)pts
Effective Tax Rate		36.4	%		37.0	%	(0.6	)pts		36.1	%		38.4	%	(2.3	)pts

* Certain prior year amounts have been reclassified to conform to the current period financial statement presentation. The reclassifications include reporting freight revenues instead of commodity revenues. In addition, we modified our operating expense categories to report fuel used in railroad operations as a stand-alone category, to combine purchased services and materials into one line, and to reclassify certain other expenses among operating expense categories. These reclassifications had no impact on previously reported operating revenues, operating expenses, operating income or net income. See Union Pacific Web site under Investor Relations for reclassified 2007, 2006 and 2005 quarterly numbers.

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UNION PACIFIC CORPORATION

FREIGHT REVENUES STATISTICS

	4th Quarter						Year-to-Date
For the Periods Ending December 31,	2008		2007		%		2008		2007		%
	(unaudited)						(unaudited)
Freight Revenues (Millions):
Agricultural	$	792	$	719	10		$	3,174	$	2,605	22
Automotive		305		369	(17	)		1,344		1,458	(8	)
Chemicals		578		583	(1	)		2,494		2,287	9
Energy		983		818	20			3,810		3,134	22
Industrial Products		717		742	(3	)		3,273		3,077	6
Intermodal		705		757	(7	)		3,023		2,925	3
Total	$	4,080	$	3,988	2		$	17,118	$	15,486	11
Revenue Carloads (Thousands):
Agricultural		228		239	(5	)		947		902	5
Automotive		150		203	(26	)		667		826	(19	)
Chemicals		195		227	(14	)		885		928	(5	)
Energy		590		597	(1	)		2,348		2,299	2
Industrial Products		270		319	(15	)		1,249		1,325	(6	)
Intermodal		724		859	(16	)		3,165		3,453	(8	)
Total		2,157		2,444	(12	)		9,261		9,733	(5	)
Average Revenue per Car:
Agricultural	$	3,472	$	3,006	16		$	3,352	$	2,888	16
Automotive		2,040		1,823	12			2,017		1,766	14
Chemicals		2,957		2,564	15			2,818		2,464	14
Energy		1,664		1,368	22			1,622		1,363	19
Industrial Products		2,662		2,324	14			2,620		2,322	13
Intermodal		974		883	10			955		847	13
Average	$	1,891	$	1,632	16		$	1,848	$	1,591	16

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UNION PACIFIC CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Millions of Dollars, Except Percentages)

	Dec. 31, 2008			Dec. 31, 2007
	(unaudited)
Assets
Cash and Cash Equivalents	$	1,249		$	878
Other Current Assets		1,564			1,716
Investments		974			923
Net Properties		35,701			34,158
Other Assets		234			358
Total Assets	$	39,722		$	38,033
Liabilities and Shareholders’ Equity
Debt Due within One Year	$	320		$	139
Other Current Liabilities		2,560			2,902
Debt Due after One Year		8,607			7,543
Deferred Income Taxes		10,282			10,050
Other Long-Term Liabilities		2,506			1,814
Total Liabilities		24,275			22,448
Total Shareholders’ Equity		15,447			15,585
Total Liabilities and Shareholders’ Equity	$	39,722		$	38,033
Debt to Capital		36.6	%		33.0	%
Adjusted Debt to Capital *		47.4	%		44.1	%
Return on Invested Capital *		10.2	%		8.7	%

* Adjusted Debt to Capital and Return on Invested Capital are non-GAAP measures; however, we believe that they are important in evaluating our financial performance. See Union Pacific Web site a reconciliation to GAAP.

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UNION PACIFIC CORPORATION

CONDENSED CONSOLIDATED CASH FLOWS

(Millions of Dollars)

	Year-to-Date
For the Periods Ending December 31,	2008			2007
	(unaudited)
Operating Activities
Net Income	$	2,338		$	1,855
Depreciation		1,387			1,321
Deferred Income Taxes		547			332
Other – Net		(202	)		(231	)
Cash Provided by Operating Activities		4,070			3,277
Investing Activities
Capital Investments		(2,780	)		(2,496	)
Other – Net		16			70
Cash Used in Investing Activities		(2,764	)		(2,426	)
Financing Activities
Debt Issued		2,257			1,581
Common Shares Repurchased		(1,609	)		(1,375	)
Debt Repaid		(1,208	)		(792	)
Dividends Paid		(481	)		(364	)
Other – Net		106			150
Cash Used In Financing Activities		(935	)		(800	)
Net Change in Cash and Cash Equivalents		371			51
Cash and Cash Equivalents
Beginning of year		878			827
End of period	$	1,249		$	878
Free Cash Flow *
Cash Provided by Operating Activities	$	4,070		$	3,277
Cash Used in Investing Activities		(2,764	)		(2,426	)
Dividends Paid		(481	)		(364	)
Free Cash Flow	$	825		$	487

* Free cash flow is a non-GAAP measure; however, we believe that it is important in evaluating our financial performance and measures our ability to generate cash without incurring additional financing.

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UNION PACIFIC CORPORATION

OPERATING AND PERFORMANCE STATISTICS

	4th Quarter						Year-to-Date
For the Periods Ending December 31,	2008		2007		%		2008		2007		%
	(unaudited)						(unaudited)
Operating / Performance Statistics
Gross Ton-Miles (GTMs) (Millions)		243,641		267,248	(9	)		1,020,370		1,052,319	(3	)
Employees (Average)		46,877		48,770	(4	)		48,242		50,089	(4	)
GTMs (Millions) per Employee		5.20		5.48	(5	)		21.15		21.01	1
Customer Satisfaction Index		85		78	7	pts		83		79	4	pts
Fuel Statistics
Average Fuel Price per Gallon Consumed	$	2.46	$	2.62	(6	)	$	3.15	$	2.27	39
Fuel Consumed in Gallons (Millions)		289		333	(13	)		1,229		1,326	(7	)
Fuel Consumption Rate *		1.188		1.245	(5	)		1.204		1.261	(4	)
AAR Reported Performance Measures
Average Train Speed (Miles per Hour)		25.1		22.3	13			23.5		21.8	8
Average Terminal Dwell Time (Hours)		25.3		25.4	—			24.9		25.1	(1	)
Average Rail Car Inventory		292,856		307,682	(5	)		300,692		309,912	(3	)
Revenue Ton-Miles (Millions)
Agricultural		21,560		21,735	(1	)		88,588		80,532	10
Automotive		3,169		4,217	(25	)		13,982		17,482	(20	)
Chemicals		12,641		13,964	(9	)		54,807		56,521	(3	)
Energy		65,393		65,613	(0	)		258,362		251,408	3
Industrial Products		15,421		17,711	(13	)		70,714		75,109	(6	)
Intermodal		17,014		20,232	(16	)		76,178		80,793	(6	)
Total		135,198		143,472	(6	)		562,631		561,845	—

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

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UNION PACIFIC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In Millions, Except per Share Amounts and Percentages)

	2008
	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year-to- Date
		(unaudited)
Operating Revenues *
Freight Revenues	$	4,059		$	4,349		$	4,630		$	4,080		$	17,118
Other Revenues		211			219			216			206			852
Total Operating Revenues		4,270			4,568			4,846			4,286			17,970
Operating Expenses *
Compensation and Benefits		1,132			1,101			1,123			1,101			4,457
Fuel		957			1,159			1,135			732			3,983
Purchased Services and Materials		469			494			481			458			1,902
Depreciation		340			346			348			353			1,387
Equipment and Other Rents		342			338			326			320			1,326
Other		242			199			218			181			840
Total Operating Expenses		3,482			3,637			3,631			3,145			13,895
Operating Income		788			931			1,215			1,141			4,075
Other Income		25			19			23			25			92
Interest Expense		(126	)		(128	)		(130	)		(127	)		(511	)
Income Before Income Taxes		687			822			1,108			1,039			3,656
Income Tax Expense		(244	)		(291	)		(405	)		(378	)		(1,318	)
Net Income	$	443		$	531		$	703		$	661		$	2,338
Share and per Share
Earnings per Share – Basic	$	0.86		$	1.03		$	1.39		$	1.31		$	4.58
Earnings per Share – Diluted	$	0.85		$	1.02		$	1.38		$	1.31		$	4.54
Weighted Average Number of Shares – Basic		518.4			514.3			506.6			503.2			510.6
Weighted Average Number of Shares – Diluted		522.8			519.0			511.3			506.5			515.0
Dividends Declared per Share	$	0.22		$	0.22		$	0.27		$	0.27		$	0.98
Operating Ratio		81.5	%		79.6	%		74.9	%		73.4	%		77.3	%
Effective Tax Rate		35.5	%		35.4	%		36.6	%		36.4	%		36.1	%

* Certain prior year amounts have been reclassified to conform to the current period financial statement presentation. The reclassifications include reporting freight revenues instead of commodity revenues. In addition, we modified our operating expense categories to report fuel used in railroad operations as a stand-alone category, to combine purchased services and materials into one line, and to reclassify certain other expenses among operating expense categories. These reclassifications had no impact on previously reported operating revenues, operating expenses, operating income or net income. See Union Pacific Web site under Investor Relations for reclassified 2007, 2006 and 2005 quarterly numbers.

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UNION PACIFIC CORPORATION

FREIGHT REVENUES STATISTICS

	2008
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		Year-to- Date
	(unaudited)
Freight Revenues (Millions):
Agricultural	$	756	$	778	$	848	$	792	$	3,174
Automotive		363		352		324		305		1,344
Chemicals		603		654		659		578		2,494
Energy		857		919		1,051		983		3,810
Industrial Products		773		877		906		717		3,273
Intermodal		707		769		842		705		3,023
Total	$	4,059	$	4,349	$	4,630	$	4,080	$	17,118
Revenue Carloads (Thousands):
Agricultural		240		236		243		228		947
Automotive		188		176		153		150		667
Chemicals		225		241		224		195		885
Energy		582		561		615		590		2,348
Industrial Products		304		346		329		270		1,249
Intermodal		796		811		834		724		3,165
Total		2,335		2,371		2,398		2,157		9,261
Average Revenue per Car:
Agricultural	$	3,151	$	3,301	$	3,486	$	3,472	$	3,352
Automotive		1,930		2,005		2,114		2,040		2,017
Chemicals		2,676		2,714		2,951		2,957		2,818
Energy		1,473		1,639		1,709		1,664		1,622
Industrial Products		2,540		2,537		2,747		2,662		2,620
Intermodal		889		947		1,010		974		955
Average	$	1,738	$	1,835	$	1,931	$	1,891	$	1,848

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