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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2008
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 (I.R.S. Employer
incorporation or organization) Identification No.)
1400 DOUGLAS STREET, OMAHA, NEBRASKA
(Address of principal executive offices)
68179
(Zip Code)
(402) 544-5000
(Registrant’ s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each Class
Common Stock (Par Value $2.50 per share)
Name of each exchange on which registered
New York Stock Exchange, Inc.
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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this
chapter) is not contained herein, and will not be contained, to the best of the registrant’ s knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer,
or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ; Accelerated filer Non-accelerated filer Smaller reporting company
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, 2008, the aggregate market value of the registrant’ s Common Stock held by non-affiliates (using the New
York Stock Exchange closing price) was $41.6 billion.
The number of shares outstanding of the registrant’ s Common Stock as of January 30, 2009 was 503,193,533.

Table of contents

  • Page 1
    ... (I.R.S. Employer Identification No.) (Address of principal executive offices) 1400 DOUGLAS STREET, OMAHA, NEBRASKA 68179 (Zip Code) (402) 544-5000 (Registrant' s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each Class Common Stock...

  • Page 2
    ... Procedures ...88 Other Information ...88 Management' s Annual Report on Internal Control Over Financial Reporting ...89 Report of Independent Registered Public Accounting Firm ...90 PART III Directors, Executive Officers, and Corporate Governance...91 Executive Compensation ...91 Security Ownership...

  • Page 3
    ... of our Company increased throughout 2008 as we diligently executed our operating plan, increased asset turns and utilized technology to increase productivity. Investing capital for future growth supports the strong, long-term demand we see ahead for Union Pacific' s transportation services. We will...

  • Page 4
    ..., Compensation and Benefits Archie W. Dunham Retired Chairman ConocoPhillips Board Committees: Finance (Chair), Corporate Governance and Nominating James R. Young Chairman, President and Chief Executive Officer Union Pacific Corporation and Union Pacific Railroad Company SENIOR MANAGEMENT James...

  • Page 5
    ... on the SEC' s Internet site at www.sec.gov. Additionally, our corporate governance materials, including By-Laws, Board Committee charters, governance guidelines and policies, and codes of conduct and ethics for directors, officers, and employees are available on our website. From time to time, the...

  • Page 6
    ..., Item 6; Management' s Discussion and Analysis of Financial Condition and Results of Operations, Item 7; and the Financial Statements and Supplementary Data, Item 8. Operations - UPRR is a Class I railroad 2008 Freight Revenue operating in the United States. We have approximately 32,012 route miles...

  • Page 7
    ... in the Midwest and the western U.S. Energy - Coal transportation accounted for 22% of our 2008 freight revenues. Our transportation network allows us to transport coal and coke to utilities, industrial facilities, interchange points, and water terminals. The water terminals provide access to the...

  • Page 8
    ... well as federally-mandated hazardous materials and security training. We regularly review the sufficiency of our employee training programs for ways to increase preparedness and to improve security. We have an emergency response management center, which operates 24 hours a day. The center receives...

  • Page 9
    ... hazardous materials routing rules and other requirements imposed by federal law. We also design our operating plan to expedite the movement of hazardous material shipments to minimize the time rail cars remain idle at yards and terminals located in or near major population centers. Additionally, we...

  • Page 10
    ... hours of service rules for train and certain other railroad employees, mandates implementation of positive train control (a collision avoidance technology that can override locomotive controls and stop a train before an accident) by the end of 2015, addresses safety at rail crossings, increases...

  • Page 11
    ... information technology in all aspects of our business. If we do not have sufficient capital to acquire new technology or if we are unable to implement new technology, we may suffer a competitive disadvantage within the rail industry and with companies providing other modes of transportation service...

  • Page 12
    ...long-term debt financing and significantly increase the costs associated with utilizing a sale of receivables program and issuing both commercial paper and longterm debt. Strikes or Work Stoppages Could Adversely Affect Our Operations as the Majority of Our Employees Belong to Labor Unions and Labor...

  • Page 13
    ... Taxes - Taxes are a significant part of our expenses. We are subject to federal and state income, payroll, property, sales and use, fuel, and other types of taxes. Changes in tax rates, enactment of new tax laws, revisions of tax regulations, and claims or litigation with taxing authorities could...

  • Page 14
    significant cost increases for rail purchases and difficulty obtaining sufficient rail for maintenance and other projects. We May Be Affected by Acts of Terrorism, War, or Risk of War - Our rail lines, facilities, and equipment, including rail cars carrying hazardous materials, could be direct ...

  • Page 15
    ... 1,300 1,200 1,000 1,000 Top 10 Classification Yards North Platte, Nebraska North Little Rock, Arkansas Proviso (Chicago), Illinois Englewood (Houston), Texas Fort Worth, Texas Roseville, California Livonia, Louisiana West Colton, California Pine Bluff, Arkansas Neff (Kansas City), Missouri 15

  • Page 16
    ... 10 Intermodal Terminals ICTF (Los Angeles), California East Los Angeles, California Marion (Memphis), Tennessee Global II (Chicago), Illinois Dallas, Texas Global I (Chicago), Illinois Seattle, Washington Yard Center (Chicago), Illinois Oakland, California Englewood (Houston), Texas Annual Lifts...

  • Page 17
    ... aggregate net present value of $178 million. We also acquired 83 locomotives through capital lease financings valued at $175 million. Infrastructure Expansion - One of our critical routes is the Sunset Corridor, a 760-mile route running between Los Angeles and El Paso, Texas. This heavily traveled...

  • Page 18
    ... in our Annual Report on Form 10-K for 2005, the EPA considers the Railroad a potentially responsible party for the Omaha Lead Site. The Omaha Lead Site consists of approximately 25 square miles of residential property in the eastern part of Omaha, Nebraska, allegedly impacted by air emissions from...

  • Page 19
    ... the Colorado Department of Public Health and Environment issued a Notice of Violation/Cease and Desist Order to the Railroad in connection with certain alleged violations of the Railroad' s stormwater permits at its Burnham Shops and North Yard facilities in Denver, Colorado. The Order required the...

  • Page 20
    ... federal antitrust laws, which is identical to a claim by the direct purchaser plaintiffs. Additionally, the Attorney General of New Jersey issued a grand jury subpoena to us requesting documents pertaining to our fuel surcharge programs. We met with representatives of the Attorney General' s office...

  • Page 21
    ... - Law and General Counsel 59 of UPC and the Railroad Senior Vice President - Human Resources and Secretary of UPC and the Railroad 55 Vice President and Controller of UPC and Chief 50 Accounting Officer and Controller of the Railroad Executive Vice President - Operations of the Railroad Executive...

  • Page 22
    ... of this restriction in Management' s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources, Item 7. We do not believe the restriction on retained earnings will affect our ability to pay dividends, and we currently expect to pay dividends in 2009...

  • Page 23
    ... common stock repurchases during each month for the fourth quarter of 2008: Total Number of Shares Maximum Number of Total Number Average Purchased as Part of a Shares That May Yet Be of Shares Price Paid Publicly Announced Plan Purchased Under the Purchased [a] Per Share or Program Plan or Program...

  • Page 24
    ... to implementation of new mileage-based fuel surcharge programs in each respective year. See further discussion in Management' s Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations - Operating Revenue, Item 7. Earnings per shares and dividends have been...

  • Page 25
    ... work events, improving asset utilization, and expanding capacity were key drivers of our operational improvement. Lower volume levels also contributed to the increased efficiency. We increased average train speed by 8%, reduced average terminal dwell time by 1%, and improved car utilization...

  • Page 26
    ... activities Dividends paid Free cash flow 2009 Outlook • Safety - Operating a safe railroad benefits our employees, our customers, our shareholders, and the public. We will continue using a multi-faceted approach to safety, utilizing technology, risk assessment, quality control, and training and...

  • Page 27
    ...recovery from our customers through our fuel surcharge programs and expand our fuel conservation efforts. • Capital Plan - In 2009, we expect our total capital investments to be approximately $2.8 billion (which may be revised if business conditions or new laws or regulations affect our ability to...

  • Page 28
    ..., and they use the On-Highway Diesel Price index - published by the Energy Information Administration - for purposes of determining fuel costs. The new programs affect fuel surcharges assessed for certain shipments of agricultural, chemical, and industrial products, and, to a lesser extent, coal. In...

  • Page 29
    ... increased substantially. Automotive - Double-digit declines in shipments of both finished vehicles and auto parts drove freight revenue lower in 2008 compared to 2007. Price improvements and fuel surcharges partially offset these lower volumes. The manufacturers experienced poor sales and reduced...

  • Page 30
    ..., fuel surcharges, and higher volume produced revenue growth in 2008 versus 2007. Shipments from the SPRB were up 5% compared to 2007 despite mine flooding and network interruptions caused by extensive flooding in the Midwest in June of 2008. Conversely, shipments from the Colorado and Utah mines...

  • Page 31
    ... lower lumber shipments. Delays of rail expansion projects, customer production problems, unfavorable weather, and the ongoing impact of a weak residential construction market reduced stone shipments during the year. Intermodal - Price increases and fuel 2008 Intermodal Revenue surcharges generated...

  • Page 32
    .... Productivity improvements, better resource utilization, and a lower fuel consumption rate helped offset these increases. Compensation and Benefits - Compensation and benefits include wages, payroll taxes, health and welfare costs, pension costs, other postretirement benefits, and incentive costs...

  • Page 33
    ... the Railroad' s lines, structures, and equipment; costs of operating facilities jointly used by UPRR and other railroads; transportation and lodging for train crew employees; trucking and contracting costs for intermodal containers; leased automobile maintenance expenses; and tools and supplies. In...

  • Page 34
    ..., the year-over-year comparison was affected by the settlement of insurance claims totaling $23 million in 2006 related to the January 2005 West Coast storm and a $9 million gain in 2006 from the sale of two Company-owned airplanes. Non-Operating Items % Change % Change 2006 2008 v 2007 2007...

  • Page 35
    ...2.2 pt 2.0 pt (1)% (4)% 7 pt 4 pt Average train speed (miles per hour) Average terminal dwell time (hours) Average rail car inventory (thousands) Gross ton-miles (billions) Revenue ton-miles (billions) Operating ratio Employees (average) Customer satisfaction index 2008 23.5 24.9 300.7 1,020.4 562...

  • Page 36
    resulted from fewer train and engine personnel due to improved network productivity and 1% lower volume levels, partially offset by more employees maintaining our larger locomotive fleet. Customer Satisfaction Index - The customer satisfaction survey asks customers to rate how satisfied they are ...

  • Page 37
    ... financial statements in Item 8 for more information. LIQUIDITY AND CAPITAL RESOURCES As of December 31, 2008, our principal sources of liquidity included cash, cash equivalents, the sale of certain receivables, and our revolving credit facility, as well as the availability of commercial paper...

  • Page 38
    ... the increase in cash used in investing in 2007 versus 2006. The table below details cash capital investments for the years ended December 31, 2008, 2007, and 2006. Millions of Dollars Track Capacity and commercial facilities Locomotives and freight cars Technology and other Total 2008 1,700 742 164...

  • Page 39
    ...all times during these periods), we were in compliance with this covenant. The definition of debt used for purposes of calculating the debt-to-net-worth coverage ratio includes, among other things, certain credit arrangements, capital leases, guarantees and unfunded and vested pension benefits under...

  • Page 40
    ...at that time. Operating Lease Activities During 2008, the Railroad, as lessee, entered into long-term operating lease arrangements covering 82 locomotives, 300 rail cars, and 2,000 intermodal containers with a total equipment cost of approximately $219 million. In total, these new lease arrangements...

  • Page 41
    ..., 2011. Management' s assessments of market conditions and other pertinent facts guide the timing and volume of all repurchases. We expect to fund our common stock repurchases through cash generated from operations, the sale or lease of various operating and non-operating properties, debt issuances...

  • Page 42
    ...rail; and agreements to purchase other goods and services. For amounts where we can not reasonably estimate the year of settlement, they are reflected in the Other column. Includes estimated other post retirement, medical, and life insurance payments and payments made under the unfunded pension plan...

  • Page 43
    ... most of its accounts receivable to Union Pacific Receivables, Inc. (UPRI), a bankruptcy-remote subsidiary, as part of a sale of receivables facility. UPRI sells, without recourse on a 364-day revolving basis, an undivided interest in such accounts receivable to investors. The total capacity to sell...

  • Page 44
    ... to mitigate the risk of adverse movements in interest rates and fuel prices; however, the use of these derivative financial instruments may limit future benefits from favorable price movements. Market and Credit Risk - We address market risk related to derivative financial instruments by selecting...

  • Page 45
    ... of operations, or cash flows. In December 2008, the FASB issued FSP FAS 132(R)-1, Employers' Disclosure about Postretirement Benefit Plan Assets, which amends Statement 132(R) to require more detailed disclosures about employers' pension plan assets. New disclosures will include more information on...

  • Page 46
    ...the impact of our operations on the environment, including investments in new technologies, using training programs to reduce fuel consumption, and changing our operations to increase fuel efficiency. CRITICAL ACCOUNTING POLICIES Our Consolidated Financial Statements have been prepared in accordance...

  • Page 47
    ... were based on currently known facts. However, future events, such as the number of new claims to be filed each year, average settlement costs, and insurance coverage issues, could cause the actual costs and insurance recoveries to be higher or lower than the projected amounts. Estimates also may...

  • Page 48
    ... quality of volumetric data related to many of the sites, and the speculative nature of remediation costs. Estimates of liability may vary over time due to changes in federal, state, and local laws governing environmental remediation as well as changes to the remediation plan for each site. Current...

  • Page 49
    .... We calculate service lives using Company-specific retirement data. We perform and submit depreciation rate studies to the STB at least every three years for equipment and every six years for road property (i.e., rail and other track material, ties, and ballast). These rate studies are reviewed and...

  • Page 50
    ...our tax returns that do not meet these recognition and measurement standards. Pension and Other Postretirement Benefits - We use third-party actuaries to assist us in properly measuring the liabilities and expenses associated with providing pension and defined contribution medical and life insurance...

  • Page 51
    ...letter preceding Part I regarding long-term demand, capital investments, the economic outlook, and our financial position, statements regarding dividends in Item 5 and statements and information set forth under the captions "2009 Outlook" and "Liquidity and Capital Resources" in this Item 7, and any...

  • Page 52
    ... (and, therefore, such forwardlooking statements and information) are or may be subject to variables or unknown or unforeseeable events or circumstances over which management has little or no influence or control. The Risk Factors in Item 1A of this report could affect our future results and could...

  • Page 53
    Item 8. Financial Statements and Supplementary Data Index to Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firm ...54 Consolidated Statements of Income For the Years Ended December 31, 2008, 2007, and 2006 ...55 Consolidated Statements of Financial ...

  • Page 54
    ... adopted Statement of Financial Accounting Standards No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Corporation' s internal control...

  • Page 55
    CONSOLIDATED STATEMENTS OF INCOME Union Pacific Corporation and Subsidiary Companies Millions, Except Per Share Amounts, for the Years Ended December 31, Operating revenues: Freight revenues Other revenues Total operating revenues Operating expenses: Compensation and benefits Fuel Purchased services...

  • Page 56
    CONSOLIDATED STATEMENTS OF FINANCIAL POSITION Union Pacific Corporation and Subsidiary Companies Millions of Dollars, as of December 31, Assets Current assets: Cash and cash equivalents Accounts receivable, net Materials and supplies Current deferred income taxes (note 6) Other current assets Total...

  • Page 57
    ... in Current Assets and Liabilities Accounts receivable, net Materials and supplies Other current assets Accounts payable and other current liabilities Total Supplemental Cash Flow Information Non-cash investing and financing activities: Capital lease financings Cash dividends declared but not yet...

  • Page 58
    CONSOLIDATED STATEMENTS OF CHANGES IN COMMON SHAREHOLDERS' EQUITY Union Pacific Corporation and Subsidiary Companies Accumulated Other Comprehensive Common Treasury Common Paid-in- Retained Treasury Income/(Loss) Shares Shares Shares Surplus Earnings Stock (note 8) Total 275,799 (9,164) $ 689 $3,...

  • Page 59
    ...Union Pacific Railroad Company, which will be separately referred to herein as "UPRR" or the "Railroad". 1. Nature of Operations and Significant Accounting Policies Operations and Segmentation - We are a Class I railroad that operates in the United States. We have 32,012 route miles, linking Pacific...

  • Page 60
    ..., for other than trading purposes, to manage risk related to changes in fuel prices and interest rates. Stock-Based Compensation - We have several stock-based compensation plans under which employees and non-employee directors receive stock options, nonvested retention shares, and nonvested...

  • Page 61
    ... with pensions and postretirement health benefits. In order to measure the expense associated with these benefits, we must make various assumptions including discount rates used to value certain liabilities, expected return on plan assets used to fund these expenses, salary increases, employee...

  • Page 62
    ... Union Pacific Corporation 2000 Directors Plan (Directors Plan) whereby 1,100,000 shares of our common stock (550,000 pre-split) were reserved for issuance to our non-employee directors. Under the Directors Plan, each non-employee director, upon his or her initial election to the Board of Directors...

  • Page 63
    ... employees and non-employee directors that have similar historical and expected exercise behavior are considered separately for valuation purposes. The table below shows the annual weighted-average assumptions used for valuation purposes: Weighted-Average Assumptions Risk-free interest rate Dividend...

  • Page 64
    ... - In January 2008, our Board of Directors approved performance stock unit grants. Other than higher performance targets, the basic terms of these performance stock units are identical to those granted in January 2006 and January 2007, including using annual return on invested capital (ROIC) as the...

  • Page 65
    ... defined benefit retirement income to eligible non-union employees through qualified and non-qualified (supplemental) pension plans. Qualified and non-qualified pension benefits are based on years of service and the highest compensation during the latest years of employment, with specific reductions...

  • Page 66
    ... at end of year Pre-tax amounts recognized in accumulated other comprehensive income/(loss) as of December 31, 2008 consist of: Millions of Dollars Prior service (cost)/credit Net actuarial loss Total Pension $ (12) (1,023) $ (1,035) OPEB $ 111 (172) $ (61) Total $ 99 (1,195) $ (1,096) 66

  • Page 67
    ...of Dollars Prior service cost (credit) Net actuarial loss Total Pension $ 5 26 $ 31 OPEB $ (35) 15 $ (20) Total $ (30) 41 $ 11 Underfunded Accumulated Benefit Obligation - The accumulated benefit obligation (ABO) is the present value of benefits earned to date, assuming no future salary growth. The...

  • Page 68
    ... Expense Both pension and OPEB expense are determined based upon the annual service cost of benefits (the actuarial cost of benefits earned during a period) and the interest cost on those liabilities, less the expected return on plan assets. The expected long-term rate of return on plan assets is...

  • Page 69
    ... N/A 10.00% 11.00% N/A N/A N/A 5.00% 5.00% N/A N/A N/A 2013 N/A 2013 Percentages Discount rate Expected return on plan assets Salary increase Health care cost trend rate for next year (employees under 65) Health care cost trend rate for next year (employees over 65) Ultimate healthcare cost trend...

  • Page 70
    ... securities Real estate Commodities Total Target Allocation 2009 60% to 70% 20% to 30% 2% to 8% 4% to 6% The investment strategy for pension plan assets is to maintain a broadly diversified portfolio designed to achieve our target of an average long-term rate of return of 8%. While we believe...

  • Page 71
    ... of pension plan assets in securities issued by Union Pacific is specifically prohibited for both the equity and debt portfolios, other than through index fund holdings. Other Retirement Programs Thrift Plan - We provide a defined contribution plan (thrift plan) to eligible non-union employees and...

  • Page 72
    ... purchase accounting transactions, and differences in capitalization methods. Deferred income tax liabilities/(assets) were comprised of the following at December 31: Millions of Dollars Net current deferred income tax asset Property State taxes, net of federal benefits Other Net long-term deferred...

  • Page 73
    ...FASB Statement No. 5, Accounting for Contingencies, or FASB Statement No. 109, Accounting ...Total interest and penalties recognized as part of income tax expense (benefit) were $(9) million for 2008 and $3 million for 2007. For all federal income tax years prior to 1995, the Internal Revenue Service...

  • Page 74
    ...benefits by approximately $5 - 10 million. Of the $26 million balance at December 31, 2008, $7 million is classified as current in the Consolidated Statement...Net income Weighted-average number of shares outstanding: Basic Dilutive effect of stock...98 2.95 Common stock options totaling 1.0 million, 0.8...

  • Page 75
    ...Loss) Comprehensive income/(loss) was as follows: Millions of Dollars Net income Other comprehensive income/(loss): Defined benefit plans Foreign currency translation Derivatives Total other comprehensive income/(loss) [a] Total comprehensive income [a] $ 2008 2007 2006 2,338 $ 1,855 $ 1,606 65...

  • Page 76
    ... property and equipment, as well as the average composite depreciation rate for each category: Millions of Dollars, Except Percentages Land Road Rail and other track material Ties Ballast Other [a] Total Road Equipment Locomotives Freight cars Work equipment and other Total Equipment Technology...

  • Page 77
    ... intended use. However, many of our assets are self-constructed. A large portion of our capital expenditures is for track structure expansion (capacity projects) and replacement (program projects), which is typically performed by our employees. Approximately 13% of our full-time equivalent employees...

  • Page 78
    ...the hedging instruments and hedged items at inception, as well as our risk-management objectives, strategies for undertaking ...rates and fuel prices; however, the use of these derivative financial instruments may limit future benefits from favorable price movements. Market and Credit Risk - We address...

  • Page 79
    ... most of its accounts receivable to Union Pacific Receivables, Inc. (UPRI), a bankruptcy-remote subsidiary, as part of a sale of receivables facility. UPRI sells, without recourse on a 364-day revolving basis, an undivided interest in such accounts receivable to investors. The total capacity to sell...

  • Page 80
    ... utilized under the sale of receivables program was $560 million. 13. Debt Total debt as of December 31, 2008 and 2007, net of interest rate swaps designated as fair value hedges, is summarized below: Millions of Dollars Notes and debentures, 3.0% to 7.9% due through 2054 [a] Capitalized leases...

  • Page 81
    ...all times during these periods), we were in compliance with this covenant. The definition of debt used for purposes of calculating the debt-to-net-worth coverage ratio includes, among other things, certain credit arrangements, capital leases, guarantees and unfunded and vested pension benefits under...

  • Page 82
    ...has a floating rate based on London Interbank Offered Rates, plus a spread, and is prepayable in whole or in part without a premium prior to maturity. The agreement documenting the loan has provisions similar to our revolving credit facility, including identical debt-to-net-worth covenant and change...

  • Page 83
    ...out-of-court settlements. We offer a comprehensive variety of services and rehabilitation programs for employees who are injured at work. Our personal injury liability is discounted to present value using applicable U.S. Treasury rates. Approximately 88% of the recorded liability related to asserted...

  • Page 84
    ... were based on currently known facts. However, future events, such as the number of new claims to be filed each year, average settlement costs, and insurance coverage issues, could cause the actual costs and insurance recoveries to be higher or lower than the projected amounts. Estimates also may...

  • Page 85
    ... based on information available for each site, financial viability of other potentially responsible parties, and existing technology, laws, and regulations. The ultimate liability for remediation is difficult to determine because of the number of potentially responsible parties, site-specific cost...

  • Page 86
    ... to fund our common stock repurchases through cash generated from operations, the sale or lease of various operating and nonoperating properties, debt issuances, and cash on hand. Number of Shares Purchased [a] 2008 2007 First quarter Second quarter Third quarter Fourth quarter Total 6,512,278 6,337...

  • Page 87
    ... of operations, or cash flows. In December 2008, the FASB issued FSP FAS 132(R)-1, Employers' Disclosure about Postretirement Benefit Plan Assets, which amends Statement 132(R) to require more detailed disclosures about employers' pension plan assets. New disclosures will include more information on...

  • Page 88
    ... to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified by the SEC, and that such information is accumulated and communicated to management, including the CEO and CFO...

  • Page 89
    ...Exchange Act Rules 13a-15(f) and 15d-15(f)). The Corporation' s internal control system was designed to provide reasonable assurance to the Corporation' s management and Board of Directors regarding the preparation and fair presentation of published financial statements. All internal control systems...

  • Page 90
    ... and financial statement schedule and included an explanatory paragraph regarding the Corporation' s adoption, in 2006, of Statement of Financial Accounting Standards No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans. Omaha, Nebraska February 5, 2009...

  • Page 91
    ...segments of the Proxy Statement and is incorporated herein by reference. Additional information regarding compensation of directors, including Board committee members, is set forth in the By-Laws of UPC and the Stock Unit Grant and Deferred Compensation Plan for the Board of Directors, both of which...

  • Page 92
    ... Owners and Management segment of the Proxy Statement and is incorporated herein by reference. The following table summarizes the equity compensation plans under which Union Pacific Corporation common stock may be issued as of December 31, 2008. Number of securities remaining available for future...

  • Page 93
    ... as part of this filing are listed on the index to the Financial Statements and Supplementary Data, Item 8, on page 53. (2) Financial Statement Schedules Schedule II - Valuation and Qualifying Accounts Schedules not listed above have been omitted because they are not applicable or not required or...

  • Page 94
    ...undersigned, thereunto duly authorized, on this 6th day of February, 2009. UNION PACIFIC CORPORATION By /s/ James R. Young James R. Young, Chairman, President, Chief Executive Officer, and Director Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below...

  • Page 95
    SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS Union Pacific Corporation and Subsidiary Companies Millions of Dollars, for the Years Ended December 31, Allowance for doubtful accounts: Balance, beginning of period Charges/(reduction) to expense Net recoveries/(write-offs) Balance, end of period ...

  • Page 96
    ... PACIFIC CORPORATION Exhibit Index Exhibit No. Description Filed with this Statement 10(a) 10(b) 10(c) Form of 2009 Long Term Plan Stock Unit Agreement. Form of Stock Unit Agreement for Executives dated February 5, 2009. Supplemental Thrift Plan (409A Non-Grandfathered Component) of Union Pacific...

  • Page 97
    ... and Restated Stock Unit Agreement. 2008 Long Term Plan Amended and Restated Stock Unit Agreement. Ratio of Earnings to Fixed Charges. List of the Corporation' s significant subsidiaries and their respective states of incorporation. Independent Registered Public Accounting Firm' s Consent. Powers of...

  • Page 98
    ... No. 2 to UPC' s Registration Statement on Form S-4 (No. 3364707). Agreement, dated September 25, 1995, among UPC, UPRR, Missouri Pacific Railroad Company (MPRR), SP, Southern Pacific Transportation Company (SPT), The Denver & Rio Grande Western Railroad Company (D&RGW), St. Louis Southwestern...

  • Page 99
    ... 31, 2005. Form of Non-Qualified Stock Option Agreement for Executives, is incorporated herein by reference to Exhibit 10(c) to the Corporation' s Annual Report on Form 10-K for the year ended December 31, 2005. Executive Incentive Plan (2005) - Deferred Compensation Program, dated December 21...

  • Page 100
    ... CHARGES Union Pacific Corporation and Subsidiary Companies Millions of Dollars, Except for Ratios 2008 Fixed charges: Interest expense including amortization of debt discount $ 511 Portion of rentals representing an interest factor 226 Total fixed charges Earnings available for fixed charges: Net...

  • Page 101
    Exhibit 21 SIGNIFICANT SUBSIDIARIES OF UNION PACIFIC CORPORATION State of Incorporation Delaware Utah Name of Corporation Union Pacific Railroad Company ...Southern Pacific Rail Corporation ... 101

  • Page 102
    ..., of Statement of Financial Accounting Standards No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans) and the effectiveness of the Corporation' s internal control over financial reporting, appearing in this Annual Report on Form 10-K of Union Pacific Corporation...

  • Page 103
    ... the undersigned directors of Union Pacific Corporation, a Utah corporation (the Company), do hereby appoint each of James R. Young, Barbara W. Schaefer, and Thomas E. Whitaker his or her true and lawful attorney-in-fact and agent, to sign on his or her behalf the Company' s Annual Report on Form 10...

  • Page 104
    Exhibit 31(a) CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER I, James R. Young, certify that: 1. I have reviewed this annual report on Form 10-K of Union Pacific Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact ...

  • Page 105
    Exhibit 31(b) CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER I, Robert M. Knight, certify that: 1. I have reviewed this annual report on Form 10-K of Union Pacific Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact...

  • Page 106
    ... OF THE SARBANES-OXLEY ACT OF 2002 In connection with the accompanying Annual Report of Union Pacific Corporation (the Corporation) on Form 10-K for the period ending December 31, 2008, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, James R. Young, Chairman...