Union Pacific 2007 Annual Report Download - page 3

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Fellow Shareholders:
By nearly every measure, 2007 was one of the best years in our Company’s history. We achieved
this success by fulfilling our commitments to customers, communities, employees and our
shareholders.
We operated a safer railroad for our customers, employees and communities.
We overcame the challenges of a weaker economy and record-high diesel fuel prices to set
numerous financial records.
We increased our value to customers through improved service. Customers recognized
these efforts, rewarding us with their highest satisfaction survey marks since our merger
with the Southern Pacific.
We contributed to the communities where we operate by offering good jobs and
supporting economic development and community organizations.
The progress we made in these areas enabled us to deliver strong shareholder returns. During
2007, Union Pacific’s stock price appreciated nearly 37 percent, dividends increased 47 percent,
and shareholders received $1.5 billion through share repurchases.
We expect 2008 will be another record year. Although we will be challenged by economic softness
and volatile diesel fuel prices, we expect to offset these issues as the long-term initiatives we began
a few years ago continue to pay off.
America’s transportation infrastructure needs capacity investment. Union Pacific has pledged to
do its part by investing for growth as we improve our financial returns. The “proof statement”
can be seen in our actions. We invested a record $3.1 billion during 2007, as we earned record
profits and improved our return on invested capital. Our plans for 2008 are similar - generate
record profits, increase returns and invest an additional $3.1 billion for safety, service, growth
and efficiency.
Union Pacific plays a critical role in our nation’s pursuit of energy independence and
environmental responsibility. Railroads are the most fuel efficient, environmentally friendly
mode of ground freight transportation, moving one ton more than 790 miles on a gallon of diesel
fuel. In addition, our numerous technology and process innovations are driving even greater
conservation, already having saved nearly 21 million gallons of diesel fuel in 2007. One example is
a new switch locomotive that reduces emissions as much as 80 percent and is at least 15 percent
more fuel efficient.
The men and women of Union Pacific are the driving force behind our success as a company.
They are prepared to handle the challenges ahead as we recruit, train and develop one of the
nation’s most productive workforces. The Union Pacific team is dedicated to continuing the
strong tradition built over the past 146 years, and we look forward to a very successful future.
Chairman, President and
Chief Executive Officer