Union Pacific (UNP) 10-K 5 Feb 10 2009 FY Annual report Financial data

Document and Entity Information

Document and Entity Information (USD $)
In Millions, except Share data	12 Months Ended Dec. 31, 2009	Jan. 29, 2010	Jun. 30, 2009
Document and Entity Information Abstract
Document type	10-K
Document period end date	2009-12-31
Amendment flag	false
Entity registrant name	UNION PACIFIC CORPORATION
Entity central index key	0000100885
Entity current reporting status	Yes
Entity voluntary filers	No
Current fiscal year end date	--12-31
Entity filer category	Large Accelerated Filer
Entity well known seasoned issuer	Yes
Entity common stock shares outstanding		505,286,368
Entity public float			$28,701

Consolidated Statements of Inco

Consolidated Statements of Income (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Operating revenues:
Freight revenues	$13,373	$17,118	$15,486
Other revenues	770	852	797
Total operating revenues	14,143	17,970	16,283
Operating expenses:
Compensation and benefits	4,063	4,457	4,526
Fuel	1,763	3,983	3,104
Purchased services and materials	1,614	1,902	1,856
Depreciation	1,444	1,387	1,321
Equipment and other rents	1,180	1,326	1,368
Other	687	840	733
Total operating expenses	10,751	13,895	12,908
Operating income	3,392	4,075	3,375
Other income (Note 6)	195	92	116
Interest expense	(600)	(511)	(482)
Income before income taxes	2,987	3,656	3,009
Income taxes (Note 7)	(1,089)	(1,318)	(1,154)
Net income	$1,898	$2,338	$1,855
Share and Per Share (Notes 8):
Earnings per share - basic	3.77	4.58	3.49
Earnings per share - diluted	3.75	4.54	3.46
Weighted average number of shares - basic	503	510.6	531.9
Weighted average number of shares - diluted	505.8	515	536.8
Dividends declared per share	1.08	0.98	0.745

Consolidated Statements of Fina

Consolidated Statements of Financial Position (USD $)
In Millions	Dec. 31, 2009	Dec. 31, 2008
Current assets:
Cash and cash equivalents	$1,850	$1,249
Accounts receivable	666	594
Materials and supplies	475	450
Current deferred income taxes (Note 7)	339	276
Other current assets	350	244
Total current assets	3,680	2,813
Investments	1,036	974
Net properties (Note 10)	37,428	35,701
Other assets	266	234
Total assets	42,410	39,722
Current liabilities:
Accounts payable and other current liabilities (Note 11)	2,470	2,560
Debt due within one year (Note 13)	212	320
Total current liabilities	2,682	2,880
Debt due after one year (Note 13)	9,636	8,607
Deferred income taxes (Note 7)	11,130	10,282
Other long-term liabilities	2,021	2,506
Commitments and contingencies (Note 15)
Total liabilities	25,469	24,275
Common shareholders' equity (Note 3):
Common shares, $2.50 par value, 800,000,000 authorized; 553,497,981 and 552,775,812 issued; 505,039,952 and 503,225,705 outstanding, respectively	1,384	1,382
Paid-in-surplus	3,968	3,949
Retained earnings	15,167	13,813
Treasury stock	(2,924)	(2,993)
Accumulated other comprehensive loss (Note 9)	(654)	(704)
Total common shareholders' equity	16,941	15,447
Total liabilities and common shareholders' equity	$42,410	$39,722

1_Consolidated Statements of Fi

Consolidated Statements of Financial Position (Parentheticals) (USD $)
	Dec. 31, 2009	Dec. 31, 2008
Consolidated Statements of Financial Position Parentheticals Abstract
Common shares, par value	2.5	2.5
Common shares authorized	800,000,000	800,000,000
Common shares issued	553,497,981	552,775,812
Common shares outstanding	505,039,952	503,225,705

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Operating Activities
Net income	$1,898	$2,338	$1,855
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation	1,444	1,387	1,321
Deferred income taxes and unrecognized tax benefits	723	547	332
Net gain on non-operating asset dispositions	(162)	(41)	(52)
Other operating activities, net	(376)	89	(207)
Changes in Current Assets and Liabilities
Accounts receivable, net.	(72)	38	47
Materials and supplies.	(25)	3	(58)
Other current assets.	(106)	51	(104)
Accounts payable and other current liabilities	(90)	(342)	143
Cash provided by operating activities	3,234	4,070	3,277
Investing Activities
Capital investments	(2,384)	(2,780)	(2,496)
Proceeds from asset sales	187	93	122
Acquisition of equipment pending financing	(100)	(388)	(621)
Proceeds from sale of assets financed	100	388	621
Other investing activities, net	22	(77)	(52)
Cash used in investing activities	(2,175)	(2,764)	(2,426)
Financing Activities
Debt issued	843	2,257	1,581
Common share repurchases (Note 16)	0	(1,609)	(1,375)
Debt repaid	(871)	(1,208)	(792)
Dividends paid	(544)	(481)	(364)
Other financing activities, net	114	106	150
Cash used in financing activities	(458)	(935)	(800)
Net change in cash and cash equivalents	601	371	51
Cash and cash equivalents at beginning of year	1,249	878	827
Cash and cash equivalents at end of year	1,850	1,249	878
Supplemental Cash Flow Information
Capital lease financings	842	175	82
Cash dividends declared but not yet paid	132	132	112
Capital investments accrued but not yet paid	96	93	126
Settlement of current liabilities for debt	14	0	0
Common shares repurchased but not yet paid	0	0	82
Cash paid during the year for:
Interest, net of amounts capitalized	(578)	(500)	(467)
Income taxes, net of refunds	($452)	($699)	($839)

Consolidated Statements of Chan

Consolidated Statements of Changes in Common Shareholders' Equity (USD $)
In Millions	Common Stock (units)	Treasury Stock (units)	Common Stock	Paid-in-Surplus	Retained Earnings	Treasury Stock	Accumulated Other Comprehensive Loss (Note 9)	Total
Common shares (Note 3), beginning balance at Dec. 31, 2006	551.9	-11.6
Stockholders' equity (Note 3), beginning balance at Dec. 31, 2006			$1,381	$3,943	$10,524	($394)	($142)	$15,312
Comprehensive income:
Net income			0	0	1,855	0	0	1,855
Other comp. income/(loss)			0	0	0	0	68	68
Total comp. income (Note 9)			0	0	1,855	0	68	1,923
Cumulative effect of adoption of FIN 48			0	0	(7)	0	0	(7)
Conversion, stock option exercises, forfeitures, and other			0	(17)	0	227	0	210
Conversion, stock option exercises, forfeitures, and other (shares)	0.4	6.2
Share repurchases (Note 16)			0	0	0	(1,457)	0	(1,457)
Share repurchases (shares) (Note 16)	0	-25.2
Cash dividends declared			0	0	(396)	0	0	(396)
Stockholders' equity (Note 3), ending balance at Dec. 31, 2007			1,381	3,926	11,976	(1,624)	(74)	15,585
Common shares (Note 3), ending balance at Dec. 31, 2007	552.3	-30.6
Comprehensive income:
Net income			0	0	2,338	0	0	2,338
Other comp. income/(loss)			0	0	0	0	(630)	(630)
Total comp. income (Note 9)			0	0	2,338	0	(630)	1,708
Conversion, stock option exercises, forfeitures, and other			1	23	0	158	0	182
Conversion, stock option exercises, forfeitures, and other (shares)	0.5	3.2
Share repurchases (Note 16)			0	0	0	(1,527)	0	(1,527)
Share repurchases (shares) (Note 16)	0	-22.2
Cash dividends declared			0	0	(501)	0	0	(501)
Stockholders' equity (Note 3), ending balance at Dec. 31, 2008			1,382	3,949	13,813	(2,993)	(704)	15,447
Common shares (Note 3), ending balance at Dec. 31, 2008	552.8	-49.6
Comprehensive income:
Net income			0	0	1,898	0	0	1,898
Other comp. income/(loss)			0	0	0	0	50	50
Total comp. income (Note 9)			0	0	1,898	0	50	1,948
Conversion, stock option exercises, forfeitures, and other			2	19	0	69	0	90
Conversion, stock option exercises, forfeitures, and other (shares)	0.7	1.1
Share repurchases (Note 16)			0	0	0	0	0	0
Share repurchases (shares) (Note 16)	0	0
Cash dividends declared			0	0	(544)	0	0	(544)
Stockholders' equity (Note 3), ending balance at Dec. 31, 2009			$1,384	$3,968	$15,167	($2,924)	($654)	$16,941
Common shares (Note 3), ending balance at Dec. 31, 2009	553.5	-48.5

2_Consolidated Statements of Ch

Consolidated Statements of Changes in Common Shareholders' Equity (Parentheticals) (USD $)
	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Cash dividends
Cash dividends declared per share	1.08	0.98	0.745

Nature Of Operations

Nature Of Operations
	12 Months Ended Dec. 31, 2009
Nature of Operations Abstract
Nature of Operations	For purposes of this report, unless the context otherwise requires, all references herein to the Corporation, UPC, we, us, and our mean Union Pacific Corporation and its subsidiaries, including Union Pacific Railroad Company, which will be separately referred to herein as UPRR or the Railroad. 1. Nature of OperationsOperations and Segmentation We are a Class I railroad that operates in the United States. We have 32,094 route miles, linking Pacific Coast and Gulf Coast ports with the Midwest and eastern United States gateways and providing several corridors to key Mexican gateways. We serve the western two-thirds of the country and maintain coordinated schedules with other rail carriers for the handling of freight to and from the Atlantic Coast, the Pacific Coast, the Southeast, the Southwest, Canada, and Mexico. Export and import traffic is moved through Gulf Coast and Pacific Coast ports and across the Mexican and Canadian borders.The Railroad, along with its subsidiaries and rail affiliates, is our one reportable operating segment. Although revenues are analyzed by commodity group, we analyze the net financial results of the Railroad as one segment due to the integrated nature of our rail network. The following table provides revenue by commodity group: Millions of Dollars 2009 2008 2007 Agricultural $ 2,666 $ 3,174 $ 2,605 Automotive 854 1,344 1,458 Chemicals 2,102 2,494 2,287 Energy 3,118 3,810 3,134 Industrial Products 2,147 3,273 3,077 Intermodal 2,486 3,023 2,925 Total freight revenues $ 13,373 $ 17,118 $ 15,486 Other revenues 770 852 797 Total operating revenues $ 14,143 $ 17,970 $ 16,283 Although our revenues are principally derived from customers domiciled in the United States, the ultimate points of origination or destination for some products transported are outside the United States.Basis of Presentation The Consolidated Financial Statements are presented in accordance with accounting principles generally accepted in the United States of America (GAAP) as codified in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC).Subsequent Events Evaluation We evaluated the effects of all subsequent events through February 5, 2010, the date of this report, which is concurrent with the date we file this report with the U.S. Securities and Exchange Commission (SEC).

Significant Accounting Policies

Significant Accounting Policies
	12 Months Ended Dec. 31, 2009
Significant Accounting Policies Abstract
Significant Accounting Policies	2. Significant Accounting PoliciesChange in Accounting Principle We have historically accounted for rail grinding costs as a capital asset. Beginning in the first quarter of 2010, we will change our accounting policy for rail grinding costs from a capitalization method, under which we have capitalized the cost of rail grinding and depreciated such capitalized costs, to a direct expense method, under which we will expense rail grinding costs as incurred. The expense as incurred method is preferable, as it eliminates the subjectivity in determining the period of benefit associated with rail grinding over which to depreciate the associated capitalized costs. We will reflect this change as a change in accounting principle from an acceptable accounting principle to a preferable accounting principle. The application of this preferable accounting principle will be presented retrospectively to all periods presented in future earnings releases and SEC filings. When the accounting principle is retrospectively applied, net income for the years ended December 31, 2009, 2008, and 2007 will decrease by approximately $8 million, $3 million, and $7 million, or $0.01, $0.01 and $0.02 per share, respectively. This change in accounting principle is not expected to have a material impact on our consolidated financial position, results of operations, or cash flows.Principles of Consolidation The Consolidated Financial Statements include the accounts of Union Pacific Corporation and all of its subsidiaries. Investments in affiliated companies (20% to 50% owned) are accounted for using the equity method of accounting. All intercompany transactions are eliminated. We currently have no less than majority-owned investments that require consolidation under variable interest entity requirements.Cash and Cash Equivalents Cash equivalents consist of investments with original maturities of three months or less.Investments Investments represent our investments in affiliated companies (20% to 50% owned) that are accounted for under the equity method of accounting and investments in companies (less than 20% owned) accounted for under the cost method of accounting.Materials and Supplies Materials and supplies are carried at the lower of average cost or market.Property and Depreciation See Note 10.Impairment of Long-lived Assets We review long-lived assets, including identifiable intangibles, for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If impairment indicators are present and the estimated future undiscounted cash flows are less than the carrying value of the long-lived assets, the carrying value is reduced to the estimated fair value as measured by the discounted cash flows.Revenue Recognition We recognize freight revenues on a percentage-of-completion basis as freight moves from origin to destination. The allocation of revenue between reporting periods is based on the relative transit time in each reporting period with expenses recognized as incurred. Other revenues are recognized as service is performed or contractual obligations are met. Customer incentives, which are primarily provi

Stock Split

Stock Split
	12 Months Ended Dec. 31, 2009
Stock Split Abstract
Stock Split	3. Stock Split On May 28, 2008, we completed a two-for-one stock split, effected in the form of a 100% stock dividend. The stock split entitled all shareholders of record at the close of business on May 12, 2008, to receive one additional share of our common stock, par value $2.50 per share, for each share of common stock held on that date. All references to common shares and per share amounts have been restated to reflect the stock split for all periods presented.

Stock Options And Other Stock P

Stock Options And Other Stock Plans
	12 Months Ended Dec. 31, 2009
Stock Options and Other Stock Plans Abstract
Stock Options and Other Stock Plans	4. Stock Options and Other Stock PlansWe have 100,962 options outstanding under the 1993 Stock Option and Retention Stock Plan of Union Pacific Corporation (1993 Plan). There are 7,140 restricted shares outstanding under the 1992 Restricted Stock Plan for Non-Employee Directors of Union Pacific Corporation. We no longer grant options or awards of retention shares and units under these plans.In April 2000, the shareholders approved the Union Pacific Corporation 2000 Directors Plan (Directors Plan) whereby 1,100,000 shares of our common stock 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, receives a grant of 2,000 shares of retention shares or retention stock units. Prior to December 31, 2007, each non-employee director received annually an option to purchase at fair value a number of shares of our common stock, not to exceed 10,000 shares during any calendar year, determined by dividing 60,000 by 1/3 of the fair market value of one share of our common stock on the date of such Board of Directors meeting, with the resulting quotient rounded up or down to the nearest 50 shares. As of December 31, 2009, 18,000 restricted shares were outstanding under the Directors Plan and 292,000 options were outstanding under the Directors Plan.The Union Pacific Corporation 2001 Stock Incentive Plan (2001 Plan) was approved by the shareholders in April 2001. The 2001 Plan reserved 24,000,000 shares of our common stock for issuance to eligible employees of the Corporation and its subsidiaries in the form of non-qualified options, incentive stock options, retention shares, stock units, and incentive bonus awards. Non-employee directors were not eligible for awards under the 2001 Plan. As of December 31, 2009, 3,366,230 options were outstanding under the 2001 Plan. We no longer grant any stock options or other stock or unit awards under this plan.The Union Pacific Corporation 2004 Stock Incentive Plan (2004 Plan) was approved by shareholders in April 2004. The 2004 Plan reserved 42,000,000 shares of our common stock for issuance, plus any shares subject to awards made under the 2001 Plan and the 1993 Plan that were outstanding on April 16, 2004, and became available for regrant pursuant to the terms of the 2004 Plan. Under the 2004 Plan, non-qualified options, stock appreciation rights, retention shares, stock units, and incentive bonus awards may be granted to eligible employees of the Corporation and its subsidiaries. Non-employee directors are not eligible for awards under the 2004 Plan. As of December 31, 2009, 8,939,710 and 3,778,997 retention shares and stock units were outstanding under the 2004 Plan.Pursuant to the above plans 33,559,150; 36,961,123; and 38,601,728 shares of our common stock were authorized and available for grant at December 31, 2009, 2008, and 2007, respectively. Stock Options We estimate the fair value of our stock option awards using the Black-Scholes option pricing model. Groups of employees and non-employee directors that have similar historical and expected exercise behavior are considered separately for

Retirement Plans

Retirement Plans
	12 Months Ended Dec. 31, 2009
Retirement Plans Abstract
Retirement Plans	5. Retirement PlansPension and Other Postretirement BenefitsPension Plans We provide 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 made for early retirements.Other Postretirement Benefits (OPEB) We provide defined contribution medical and life insurance benefits for eligible retirees. These benefits are funded as medical claims and life insurance premiums are paid.Plan AmendmentEffective January 1, 2010, Medicare-eligible retirees who are enrolled in the Union Pacific Retiree Medical Program will receive a contribution to a Health Reimbursement Account, which can be used to pay eligible out-of-pocket medical expenses. The impact of the plan amendment is reflected in the projected benefit obligation (PBO) at December 31, 2009.Funded StatusWe are required by GAAP to separately recognize the overfunded or underfunded status of our pension and OPEB plans as an asset or liability. The funded status represents the difference between the PBO and the fair value of the plan assets. The PBO is the present value of benefits earned to date by plan participants, including the effect of assumed future salary increases. The PBO of the OPEB plan is equal to the accumulated benefit obligation, as the present value of the OPEB liabilities is not affected by salary increases. Plan assets are measured at fair value. We use a December 31 measurement date for plan assets and obligations for all our retirement plans. Changes in our PBO and plan assets are as follows for the years ended December 31: Funded Status Pension OPEB Millions of Dollars 2009 2008 2009 2008 Projected Benefit Obligation Projected benefit obligation at beginning of year $ 2,272 $ 2,112 $ 418 $ 326 Service cost 38 34 2 3 Interest cost 140 137 18 24 Plan amendments - - (78) (9) Actuarial loss (gain) 140 132 (21) 101 Gross benefits paid (142) (143) (25) (27) Projected benefit obligation at end of year $ 2,448 $ 2,272 $ 314 $ 418 Plan Assets Fair value of plan assets at beginning of year $ 1,543 $ 2,058 $ - $ - Actual return on plan assets 350 (592) - - Voluntary funded pension plan contributions 280 200 - - Other funded pension plan contributions - 8 - - Non-qualified plan benefit contributions 13 12 25 27 Gross benefits paid (142) (143) (25) (27) Fair value of plan assets at end of year $ 2,044 $ 1,543 $ - $ - Funded status at end of year $ (404) $ (729) $ (314) $ (418) Amounts recognized in the statement of financial position as of December 31, 2009 and 2008 consist of: Pension OPEB Millions of Dollars 2009 2008 2009 2008 Noncurrent assets $ 1 $ - $ - $ - Current liabilities (13) (12) (28) (30) Noncurrent liabilities (392) (717) (286) (388) Net amounts recognized at end of year $ (404) $ (729) $ (314) $ (418) Pre-tax amounts recognized in accu

Other Income

Other Income
	12 Months Ended Dec. 31, 2009
Other Income Abstract
Other Income.	6. Other IncomeOther income included the following for the years ended December 31: Millions of Dollars 2009 2008 2007 Rental income $ 73 $ 87 $ 68 Net gain on non-operating asset dispositions 162 41 52 Interest income 5 21 50 Sale of receivables fees (9) (23) (35) Non-operating environmental costs and other (36) (34) (19) Total $ 195 $ 92 $ 116 In June of 2009, we completed a $118 million sale of land to the Regional Transportation District (RTD) in Colorado, resulting in a $116 million pre-tax gain. The agreement with the RTD involves a 33-mile industrial lead track in Boulder, Colorado.

Income Taxes

Income Taxes
	12 Months Ended Dec. 31, 2009
Income Taxes Abstract
Income Taxes	7. Income TaxesComponents of income tax expense/(benefit) were as follows for the years ended December 31: Millions of Dollars 2009 2008 2007 Current $ 366 $ 771 $ 822 Deferred 685 681 354 Unrecognized tax benefits 38 (134) (22) Total income tax expense $ 1,089 $ 1,318 $ 1,154 For the years ended December 31, reconciliation between statutory and effective tax rates is as follows: Tax Rate Percentages 2009 2008 2007 Federal statutory tax rate 35.0% 35.0% 35.0% State statutory rates, net of federal benefits 3.2 3.0 2.9 Deferred tax adjustments (0.8) (0.7) 1.0 Tax credits (0.8) (0.9) (0.6) Other (0.1) (0.3) 0.1 Effective tax rate 36.5% 36.1% 38.4% In February of 2009, California enacted legislation that changed how corporate taxpayers determine the amount of their income subject to California tax. This change reduced our 2009 deferred tax expense by $14 million.In 2007, the State of Illinois enacted legislation that changed how we determine the amount of our income subject to Illinois tax. This legislation increased our 2007 deferred tax expense by $27 million. In January of 2008, Illinois enacted technical corrections legislation that made additional changes in how we determine the amount of our income subject to Illinois tax. This legislation reduced our 2008 deferred tax expense by $16 million.Deferred tax assets and liabilities are recorded for the expected future tax consequences of events that are reported in different periods for financial reporting and income tax purposes. The majority of our deferred tax liabilities relate to differences between the tax bases and financial reporting amounts of our land and depreciable property, due to accelerated tax depreciation, revaluation of assets in purchase accounting transactions, and differences in capitalization methods. Deferred income tax liabilities/(assets) were comprised of the following at December 31: Millions of Dollars 2009 2008 Net current deferred income tax asset $ (339) $ (276) Property 10,494 10,006 State taxes, net of federal benefits 726 675 Other (90) (399) Net long-term deferred income tax liabilities 11,130 10,282 Net deferred income tax liability $ 10,791 $ 10,006 When appropriate, we record a valuation allowance against deferred tax assets to reflect that these tax assets may not be realized. In determining whether a valuation allowance is appropriate, we consider whether it is more likely than not that all or some portion of our deferred tax assets will not be realized, based on managements judgments using available evidence about future events. Our total valuation allowance at December 31, 2009 was $8 million. There was no valuation allowance at December 31, 2008.Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. Unrecognized tax benefits are tax benefits claimed in our tax returns that do not meet these recognition and measurement standards. A reconciliation of cha

Earnings Per Share

Earnings Per Share
	12 Months Ended Dec. 31, 2009
Earnings Per Share Disclosure Abstract
Earnings Per Share	8. Earnings Per Share The following table provides a reconciliation between basic and diluted earnings per share for the years ended December 31: Millions of Dollars, Except Per Share Amounts 2009 2008 2007 Net income $ 1,898 $ 2,338 $ 1,855 Weighted-average number of shares outstanding: Basic 503.0 510.6 531.9 Dilutive effect of stock options 1.5 3.4 4.2 Dilutive effect of retention shares and units 1.3 1.0 0.7 Diluted 505.8 515.0 536.8 Earnings per share basic $ 3.77 $ 4.58 $ 3.49 Earnings per share diluted $ 3.75 $ 4.54 $ 3.46 Common stock options totaling 4.6 million, 1.0 million, and 0.8 million for 2009, 2008, and 2007, respectively, were excluded from the computation of diluted earnings per share because the exercise prices of these options exceeded the average market price of our common stock for the respective periods, and the effect of their inclusion would be anti-dilutive.

Comprehensive Income

Comprehensive Income (Loss)
	12 Months Ended Dec. 31, 2009
Comprehensive Income (Loss) Abstract
Comprehensive Income (Loss)	9. Comprehensive Income/(Loss)Comprehensive income/(loss) was as follows: Millions of Dollars 2009 2008 2007 Net income $ 1,898 $ 2,338 $ 1,855 Other comprehensive income/(loss): Defined benefit plans 44 (604) 65 Foreign currency translation 6 (26) 2 Derivatives - - 1 Total other comprehensive income/(loss) [a] 50 (630) 68 Total comprehensive income $ 1,948 $ 1,708 $ 1,923 [a] Net of deferred taxes of $(101) million, $390 million, and $52 million during 2009, 2008, and 2007, respectively. The after-tax components of accumulated other comprehensive loss were as follows: Dec. 31, Dec. 31, Millions of Dollars 2009 2008 Defined benefit plans $ (615) $ (659) Foreign currency translation (35) (41) Derivatives (4) (4) Total $ (654) $ (704)

Properties

Properties
	12 Months Ended Dec. 31, 2009
Properties Abstract
Properties	10. Properties The following tables list the major categories of property and equipment, as well as the weighted-average composite depreciation rate for each category: Millions of Dollars, Except Percentages Accumulated Net Book Depreciation As of December 31, 2009 Cost Depreciation Value Rate for 2009 Land $ 4,891 $ N/A $ 4,891 N/A Road: Rail and other track material [a] 11,926 4,530 7,396 3.6% Ties 7,254 1,767 5,487 2.7% Ballast 3,841 869 2,972 2.9% Other [b] 12,988 2,237 10,751 2.4% Total road 36,009 9,403 26,606 2.9% Equipment: Locomotives 6,156 2,470 3,686 5.0% Freight cars 1,885 1,015 870 4.2% Work equipment and other 168 32 136 3.6% Total equipment 8,209 3,517 4,692 4.8% Technology and other 477 204 273 12.5% Construction in progress 966 - 966 N/A Total $ 50,552 $ 13,124 $ 37,428 N/A Millions of Dollars, Except Percentages Accumulated Net Book Depreciation As of December 31, 2008 Cost Depreciation Value Rate for 2008 Land $ 4,861 $ N/A $ 4,861 N/A Road: Rail and other track material [a] 11,366 4,263 7,103 4.2% Ties 6,827 1,626 5,201 2.7% Ballast 3,635 789 2,846 2.9% Other [b] 12,520 2,044 10,476 2.3% Total road 34,348 8,722 25,626 3.1% Equipment: Locomotives 5,157 2,243 2,914 4.7% Freight cars 1,985 1,033 952 4.1% Work equipment and other 158 29 129 3.6% Total equipment 7,300 3,305 3,995 4.5% Technology and other 468 187 281 12.7% Construction in progress 938 - 938 N/A Total $ 47,915 $ 12,214 $ 35,701 N/A [a] Includes a weighted-average composite rate for rail in high-density traffic corridors as discussed below. [b] Other includes grading, bridges and tunnels, signals, buildings, and other road assets. Property and Depreciation Our railroad operations are highly capital intensive, and our large base of homogeneous, network-type assets turns over on a continuous basis. Each year we develop a capital program for the replacement of assets and for the acquisition or construction of assets that enable us to enhance our operations or provide new service offerings to customers. Assets purchased or constructed throughout the year are capitalized if they meet applicable minimum units of property criteria. Properties and equipment are carried at cost and are depreciated on a straight-line basis over their estimated service lives, which are measured in years, except for rail in high-density traffic corridors (i.e., all rail lines except for those subject to abandonment, yard and switching tracks, and electronic yards), which are measured in millions of gross tons per mile of track. We use the group method of depreciation in which all items with similar characteristics, use, and expected life are grouped together in asset classes, and are depreciated using composite depreciation rates. The group method of depreciation treats each asset class as a pool of resources, not as singular items. We currently have more than 60 depreciable asset classes, and we may increase or decrease the number of

Accounts Payable and Other Curr

Accounts Payable and Other Current Liabilities
	12 Months Ended Dec. 31, 2009
Accounts Payable And Other Current Liabilities Abstract
Accounts Payable and Other Current Liabilities	11. Accounts Payable and Other Current Liabilities Dec. 31, Dec. 31, Millions of Dollars 2009 2008 Accounts payable $ 612 $ 629 Accrued wages and vacation 339 367 Accrued casualty costs 379 390 Income and other taxes 224 207 Dividends and interest 347 328 Equipment rents payable 89 93 Other 480 546 Total accounts payable and other current liabilities $ 2,470 $ 2,560

Financial Instruments

Financial Instruments
	12 Months Ended Dec. 31, 2009
Financial Instruments Abstract
Financial Instruments	12. Financial InstrumentsStrategy and Risk We may use derivative financial instruments in limited instances for other than trading purposes to assist in managing our overall exposure to fluctuations in interest rates and fuel prices. We are not a party to leveraged derivatives and, by policy, do not use derivative financial instruments for speculative purposes. Derivative financial instruments qualifying for hedge accounting must maintain a specified level of effectiveness between the hedging instrument and the item being hedged, both at inception and throughout the hedged period. We formally document the nature and relationships between the hedging instruments and hedged items at inception, as well as our risk-management objectives, strategies for undertaking the various hedge transactions, and method of assessing hedge effectiveness. Changes in the fair market value of derivative financial instruments that do not qualify for hedge accounting are charged to earnings. We may use swaps, collars, futures, and/or forward contracts 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 interest rate and fuel price movements.Market and Credit Risk We address market risk related to derivative financial instruments by selecting instruments with value fluctuations that highly correlate with the underlying hedged item. We manage credit risk related to derivative financial instruments, which is minimal, by requiring high credit standards for counterparties and periodic settlements. At December 31, 2009 and 2008, we were not required to provide collateral, nor had we received collateral, relating to our hedging activities.Determination of Fair Value We determine the fair values of our derivative financial instrument positions based upon current fair values as quoted by recognized dealers or the present value of expected future cash flows.Interest Rate Fair Value Hedges We manage our overall exposure to fluctuations in interest rates by adjusting the proportion of fixed and floating rate debt instruments within our debt portfolio over a given period. We generally manage the mix of fixed and floating rate debt through the issuance of targeted amounts of each as debt matures or as we require incremental borrowings. We employ derivatives, primarily swaps, as one of the tools to obtain the targeted mix. In addition, we also obtain flexibility in managing interest costs and the interest rate mix within our debt portfolio by evaluating the issuance of and managing outstanding callable fixed-rate debt securities.Swaps allow us to convert debt from fixed rates to variable rates and thereby hedge the risk of changes in the debts fair value attributable to the changes in interest rates. We account for swaps as fair value hedges using the short-cut method; therefore, we do not record any ineffectiveness within our Consolidated Financial Statements. The following is a summary of our interest rate derivatives qualifying as fair value hedges: Millions of Dollars, Except Percentages 2009 2008 Amount of debt hedged $ 250 $ 250 Percen

Debt

Debt
	12 Months Ended Dec. 31, 2009
Debt Abstract
Debt	13. DebtTotal debt as of December 31, 2009 and 2008, net of interest rate swaps designated as fair value hedges, is summarized below: Millions of Dollars 2009 2008 Notes and debentures, 3.0% to 7.9% due through 2054 [a] $ 7,277 $ 6,934 Capitalized leases, 4.7% to 9.5% due through 2028 2,061 1,270 Equipment obligations, 6.2% to 7.8% due through 2031 219 255 Tax-exempt financings, 2.5% to 5.7% due through 2026 182 185 Commercial paper 0 100 Floating rate term loan, due through 2013 100 100 Medium-term notes, 9.2% to 10.0% due through 2020 61 61 Mortgage bonds, 4.8% due through 2030 58 58 Other 0 76 Unamortized discount (110) (112) Total debt [a] 9,848 8,927 Less current portion (212) (320) Total long-term debt $ 9,636 $ 8,607 [a] 2009 and 2008 included a write-up of $15 million and $19 million, respectively, due to market value adjustments for debt with qualifying fair value hedges that are recorded on the Consolidated Statements of Financial Position. Debt Maturities The following table presents aggregate debt maturities as of December 31, 2009, excluding market value adjustments. Millions of Dollars 2010 $ 532 2011 619 2012 824 2013 775 2014 798 Thereafter 6,300 Total debt $ 9,848 As of December 31, 2009, we have reclassified as long-term debt approximately $320 million of debt due within one year that we intend to refinance. This reclassification reflects our ability and intent to refinance any short-term borrowings and certain current maturities of long-term debt on a long-term basis. At December 31, 2008, we reclassified as long-term debt approximately $400 million of debt due within one year that we intended to refinance at that time.Mortgaged Properties Equipment with a carrying value of approximately $3.4 billion and $2.7 billion at December 31, 2009 and 2008, respectively, serves as collateral for capital leases and other types of equipment obligations in accordance with the secured financing arrangements utilized to acquire such railroad equipment.As a result of the merger of Missouri Pacific Railroad Company (MPRR) with and into UPRR on January 1, 1997, and pursuant to the underlying indentures for the MPRR mortgage bonds, UPRR must maintain the same value of assets after the merger in order to comply with the security requirements of the mortgage bonds. As of the merger date, the value of the MPRR assets that secured the mortgage bonds was approximately $6.0 billion. In accordance with the terms of the indentures, this collateral value must be maintained during the entire term of the mortgage bonds irrespective of the outstanding balance of such bonds.Credit Facilities On December 31, 2009, we had $1.9 billion of credit available under our revolving credit facility (the facility). The facility is designated for general corporate purposes and supports the issuance of commercial paper. We did not draw on the facility during 2009. Commitment fees and interest rates payable under the facility are similar to fees and rates available to comparably rated, investment-grade borrowers. The facility allows for borrowings at flo

Leases

Leases
	12 Months Ended Dec. 31, 2009
Leases Abstract
Leases	14. LeasesWe lease certain locomotives, freight cars, and other property. The Consolidated Statement of Financial Position as of December 31, 2009 and 2008 included $2,754 million, net of $927 million of accumulated depreciation, and $2,024 million, net of $869 million of accumulated depreciation, respectively, for properties held under capital leases. A charge to income resulting from the depreciation for assets held under capital leases is included within depreciation expense in our Consolidated Statements of Income. Future minimum lease payments for operating and capital leases with initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2009 were as follows: Millions of Dollars Operating Leases Capital Leases 2010 $ 576 $ 290 2011 570 292 2012 488 247 2013 425 256 2014 352 267 Later years 2,901 1,623 Total minimum lease payments $ 5,312 $ 2,975 Amount representing interest N/A (914) Present value of minimum lease payments N/A $ 2,061 The majority of capital lease payments relate to locomotives. Rent expense for operating leases with terms exceeding one month was $686 million in 2009, $747 million in 2008, and $810 million in 2007. When cash rental payments are not made on a straight-line basis, we recognize variable rental expense on a straight-line basis over the lease term. Contingent rentals and sub-rentals are not significant.

Commitments and Contingencies

Commitments and Contingencies
	12 Months Ended Dec. 31, 2009
Commitments And Contingencies Abstract
Commitments and Contingencies	15. Commitments and ContingenciesAsserted and Unasserted Claims Various claims and lawsuits are pending against us and certain of our subsidiaries. We cannot fully determine the effect of all asserted and unasserted claims on our consolidated results of operations, financial condition, or liquidity; however, to the extent possible, where asserted and unasserted claims are considered probable and where such claims can be reasonably estimated, we have recorded a liability. We do not expect that any known lawsuits, claims, environmental costs, commitments, contingent liabilities, or guarantees will have a material adverse effect on our consolidated results of operations, financial condition, or liquidity after taking into account liabilities and insurance recoveries previously recorded for these matters.Personal Injury The cost of personal injuries to employees and others related to our activities is charged to expense based on estimates of the ultimate cost and number of incidents each year. We use third-party actuaries to assist us in measuring the expense and liability, including unasserted claims. The Federal Employers Liability Act (FELA) governs compensation for work-related accidents. Under FELA, damages are assessed based on a finding of fault through litigation or 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 13% of the recorded liability related to asserted claims, and approximately 87% related to unasserted claims at December 31, 2009. Because of the uncertainty surrounding the ultimate outcome of personal injury claims, it is reasonably possible that future costs to settle these claims may range from approximately $545 million to $602 million. We record an accrual at the low end of the range as no amount of loss is more probable than any other. Our personal injury liability activity was as follows: Millions of Dollars 2009 2008 2007 Beginning balance $ 621 $ 593 $ 631 Accruals 79 201 165 Payments (155) (173) (203) Ending balance at December 31 $ 545 $ 621 $ 593 Current portion, ending balance at December 31 $ 158 $ 186 $ 204 Asbestos We are a defendant in a number of lawsuits in which current and former employees and other parties allege exposure to asbestos. We engage a third party with extensive experience in estimating resolution costs for asbestos-related claims to assist us in assessing our potential liability. This liability is updated annually and excludes future defense and processing costs. The liability for resolving both asserted and unasserted claims was based on the following assumptions: The ratio of future claims by alleged disease would be consistent with historical averages. The number of claims filed against us will decline each year. The average settlement values for asserted and unasserted claims will be equivalent to historical averages. The percentage of claims dismissed in the future will be equivalent to historical averages. Our liability for asbestos-related claims is

Share Repurchase Program

Share Repurchase Program
	12 Months Ended Dec. 31, 2009
Share Repurchase Program Abstract
Share Repurchase Program	16.Share Repurchase Program On January 30, 2007, our Board of Directors authorized the repurchase of up to 40 million shares of Union Pacific Corporation common stock through the end of 2009. On May 1, 2008, our Board of Directors authorized the repurchase of an additional 40 million common shares by March 31, 2011. As of December 31, 2009, we have repurchased a total of $3 billion of Union Pacific Corporation common stock since the original repurchase plan was authorized. Managements assessments of market conditions and other pertinent facts guide the timing and volume of all repurchases. If we elect to make repurchases of our common stock under this program in 2010, we expect to fund such repurchases through cash generated from operations, the sale or lease of various operating and non-operating properties, debt issuances, and cash on hand. NumberofShares Purchased [a] Average Price Paid [a] 2009 2008 2009 2008 First quarter 0 6,512,278 $ 0 $ 61.83 Second quarter 0 6,337,197 0 75.83 Third quarter 0 5,943,111 0 74.85 Fourth quarter 0 3,383,282 0 58.72 Total 0 22,175,868 $ 0 $ 68.84 Remaining number of shares that may yet be repurchased [a] 32,577,090 [a] All share numbers and prices have been restated to reflect the stock split completed on May 28, 2008 (see Note 3).

Accounting Pronouncements

Accounting Pronouncements
	12 Months Ended Dec. 31, 2009
Accounting Pronouncements Abstract
Accounting Pronouncements	17. Accounting Pronouncements In January 2010, the FASB issued Accounting Standards Update No. 2010-06, Improving Disclosures about Fair Value Measurements. The Update provides amendments to FASB ASC 820-10 that require entities to disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers. In addition the Update requires entities to present separately information about purchases, sales, issuances, and settlements in the reconciliation for fair value measurements using significant unobservable inputs (Level 3). The disclosures related to Level 1 and Level 2 fair value measurements are effective for us in 2010 and the disclosures related to Level 3 fair value measurements are effective for us in 2011. The Update requires new disclosures only, and will have no impact on our consolidated financial position, results of operations, or cash flows.In June 2009, the FASB issued Statement No. 166, Accounting for Transfers of Financial Assetsan amendment of FASB Statement No. 140 (FAS 166). FAS 166 limits the circumstances in which transferred financial assets can be derecognized and requires enhanced disclosures regarding transfers of financial assets and a transferors continuing involvement with transferred financial assets. In addition, the concept of a qualifying special-purpose entity is no longer relevant for accounting purposes. Therefore, formerly qualifying special-purpose entities (as defined under previous accounting standards) should be evaluated for consolidation by reporting entities on and after the effective date in accordance with the applicable consolidation guidance.FAS 166 will be effective for us beginning in 2010. After adoption, transfers of undivided interests in accounts receivable to investors under our sale of receivables program will no longer qualify for sale treatment, but rather will be accounted for as secured borrowings in our Consolidated Statements of Financial Position. We are still evaluating the impact on our Consolidated Statements of Cash Flows related to the adoption of this standard. The value of the outstanding undivided interest held by investors under our sale of receivables program at December 31, 2009 was $400 million.In June 2009, the FASB issued Statement No. 167, Amendments to FASB Interpretation No. 46(R) (FAS 167). FAS 167 retains the scope of Interpretation 46(R), Consolidation of Variable Interest Entities, with the addition of entities previously considered qualifying special-purpose entities, as the concept of these entities was eliminated in FASB Statement No.166, Accounting for Transfers of Financial Assetsan amendment of FASB Statement No. 140. FAS 167 will be effective for us beginning in 2010. The adoption of FAS 167 will not affect our consolidated financial position, results of operations, or cash flows.In June 2009, the FASB issued Statement No. 168, The FASB Accounting Standards CodificationTM and the Hierarchy of Generally Accepted Accounting Principlesa replacement of FASB Statement No. 162 (FAS 168). The Codification became the source of authoritative GAAP recognized by the FASB to be

Selected Quarterly Data

Selected Quarterly Data (Unaudited)
	12 Months Ended Dec. 31, 2009
Selected Quarterly Data (Unaudited) Abstract
Selected Quarterly Data (Unaudited)	18. Selected Quarterly Data (Unaudited) Millions of Dollars, Except Per Share Amounts 2009 Mar. 31 Jun. 30 Sep. 30 Dec. 31 Operating revenues $ 3,415 $ 3,303 $ 3,671 $ 3,754 Operating income 672 751 967 1,002 Net income 362 468 517 551 Net income per share Basic 0.72 0.93 1.03 1.09 Diluted 0.72 0.92 1.02 1.08 2008 Mar. 31 Jun. 30 Sep. 30 Dec. 31 Operating revenues $ 4,270 $ 4,568 $ 4,846 $ 4,286 Operating income 788 931 1,215 1,141 Net income 443 531 703 661 Net income per share Basic 0.86 1.03 1.39 1.31 Diluted 0.85 1.02 1.38 1.31

Schedule Of Valuation And Quali

Schedule Of Valuation And Qualifying Accounts
	12 Months Ended Dec. 31, 2009
Schedule Of Valuation And Qualifying Accounts Abstract
Schedule Of Valuation And Qualifying Accounts	SCHEDULE II VALUATION AND QUALIFYING ACCOUNTSUnion Pacific Corporation and Subsidiary Companies Millions of Dollars, for the Years Ended December 31, 2009 2008 2007 Allowance for doubtful accounts: Balance, beginning of period $ 105 $ 75 $ 99 Charges/(reduction) to expense 2 23 (7) Net recoveries/(write-offs) (37) 7 (17) Balance, end of period $ 70 $ 105 $ 75 Allowance for doubtful accounts are presented in the Consolidated Statements of Financial Position as follows: Current $ 3 $ 10 $ 3 Long-term 67 95 72 Balance, end of period $ 70 $ 105 $ 75 Accrued casualty costs: Balance, beginning of period $ 1,206 $ 1,170 $ 1,277 Charges to expense 199 322 328 Cash payments and other reductions (319) (286) (435) Balance, end of period $ 1,086 $ 1,206 $ 1,170 Accrued casualty costs are presented in the Consolidated Statements of Financial Position as follows: Current $ 379 $ 390 $ 371 Long-term 707 816 799 Balance, end of period $ 1,086 $ 1,206 $ 1,170