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

FOR IMMEDIATE RELEASE:

         OMAHA, NEB., JUNE 5, 2003 - Union Pacific Corporation (NYSE: UNP) today
announced that it would exercise its option to redeem $500 million of the
remaining $1.0 billion Union Pacific Capital Trust 6 1/4% Convertible Preferred
Securities Term Income Deferrable Equity Securities (TIDES) on July 7, 2003.

         The TIDES redemption is part of Union Pacific's ongoing efforts to
improve free cash flow by leveraging interest rates that are at 40-year lows.
The redemption will be financed with the proceeds from the Corporation's recent
$500 million debt issuance, which has an average yield of 4.42%. Union Pacific's
annual interest savings from this refinancing will be approximately $9 million
and the full-year dilutive effect of the TIDES will be reduced by 7.3 million
shares. The redemption will have an on-going earnings benefit; however, this
benefit will be offset by one-time redemption costs of approximately $0.03 per
diluted share in the third quarter of 2003. The estimated earnings impact of
this refinancing will be a reduction of $0.02 per diluted share in the third
quarter and a fourth quarter addition of $0.02 per diluted share. The full year
2004 benefit is estimated at $0.07 per diluted share.

         The TIDES were originally offered on April 1, 1998 at a price of $50
each. TIDES will be redeemed at a price of $50.52, which includes a one percent
redemption premium, plus accrued interest up to July 7, 2003. TIDES holders will
receive appropriate redemption notices with instructions from the Trustee, The
Bank of New York. Holders with questions should contact the Trustee at
212-815-5091.


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         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 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
KATHRYN BLACKWELL AT 402-271-3753.

         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.