UNION PACIFIC CAPITAL TRUST TO REDEEM $500 MILLION OF
                        CONVERTIBLE PREFERRED SECURITIES

         OMAHA, NEB., APRIL 16, 2003 - Union Pacific Corporation (NYSE: UNP)
today announced that it would exercise its option to redeem $500 million of the
$1.5 billion Union Pacific Capital Trust 6 1/4% Convertible Preferred Securities
Term Income Deferrable Equity Securities (TIDES) on May 16, 2003.

         The TIDES redemption is part of Union Pacific's ongoing efforts to
strengthen its financial position and increase shareholder value. In addition to
improving its balance sheet, Union Pacific will also benefit from reducing its
annual interest expense by $31.25 million and decreasing the dilutive effect of
the TIDES by 7.3 million shares. The redemption will have an on-going quarterly
earnings benefit; however, second quarter earnings in 2003 will be reduced by an
estimated $0.03 per diluted share due to the net impact of one-time redemption
costs. The net full-year benefit is expected to be approximately $0.04 per
diluted share in 2003 and is estimated at $0.12 per diluted share in 2004.

         The TIDES were originally offered on April 1, 1998 at a price of $50
each. TIDES will be redeemed, as determined by the Trustee, on a pro rata basis
at a price of $50.52, which includes a one percent redemption premium. TIDES
holders will be receiving official redemption notices with appropriate
instructions from the Trustee, The Bank of New York. Holders with questions
should contact the Trustee at 212-815-5091.

         Union Pacific Corporation is one of America's leading transportation
companies. Its principal operating company, Union Pacific Railroad, is the
largest railroad in North America, covering 23 states across the western
two-thirds of the United States. A strong focus on quality and a strategically
advantageous route structure enable the company to

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serve customers in critical and fast growing markets. It is a leading carrier of
low-sulfur coal used in electrical power generation and has broad coverage of
the large chemical-producing areas along the Gulf Coast. With competitive
long-haul routes between all major West Coast ports and eastern gateways, and as
the only railroad to serve all six gateways to Mexico, Union Pacific has the
premier rail franchise in North America. The Corporation's trucking operations
include Overnite Corporation, which owns less-than-truckload carriers Overnite
Transportation and Motor Cargo.

         ADDITIONAL INFORMATION IS AVAILABLE AT OUR WEBSITE: www.up.com.
INVESTORS MAY CALL JENNIFER HAMANN AT 402-271-4227 AND THE MEDIA CONTACT IS JOHN
BROMLEY AT 402-271-3475.

         This press release contains statements about the Corporation's future
that are not statements of historical fact and are considered forward-looking
statements within the meaning of the federal securities laws. 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 is
based on information available at the time and/or management's good faith belief
with respect to future events, and is subject to risks and uncertainties that
could cause actual performance or results to differ materially from those
expressed in the statements due to, among other factors, changes in global,
political, economic, business, competitive, market and regulatory factors. More
detailed information about such factors is contained in the Corporation's
filings with the Securities and Exchange Commission.

         Forward-looking statements speak only as of 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.

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