1. Union Pacific Corporation (UNP) Ilham Bachtiar, Kyle Castner, Michael Haberkorn, Yichen Sun Presented March 31, 2015

2. Today’s Agenda  Introduction  Macroeconomic Overview  Industry Analysis  UNP Business Overview  Stock Market Performance  Financial Analysis  Valuation  Recommendation

3. Quarter to Quarter GDP Growth Macroeconomic Overview Steady GDP performance in the past year with growth predicting to increase in 2015

4. Macroeconomic Overview The rail road industry is based on trade Source: IBIS World

5. Macroeconomic Overview Over 95% of rail road revenue is generated from bulk freight and intermodal services. Source: IBIS World

6. Macroeconomic Overview Mexico total expected freight traffic expected to increase at 4.1% CAGR thru 2020 Percent Change in Value of U.S.-Mexico Freight Flows (Feb 2013-Feb2014) Source: U.S. Department of Transportation Mexico & OECD GDP Growth

7. Rail Transportation Industry Outlook Growing o Higher Demand Macro recovery Organic growth o Strategic partnership with transportation providers o Higher profit margins due to upgrades o Continuing capital investments Source: IBIS World

8. Industry Porter’s Five Forces Threat of New Entrants: Low Very capital intensive Threat of Substitutes: High Trucks: low oil price Barges, pipelines Rivalry Among Existing Firms: Medium Highly concentrated Buyers Power : Low - Lack of alternatives - Favorable margin Suppliers Power: High A few suppliers of locomotives & rail

9. Chairman, CEO and CFO Chairman: Jack Koraleski o Worked within UNP since 1972 (Marketing and Finance) CEO: Lance Fritz o Worked with UNP since 2000 (Operations and Management) CFO: Robert Knight o Worked within UNP since 2000 (Finance, focus in automotive group)

10. Compensation Charts Chairman CEO CFO

11. Other Management Numbers

12. Company Overview Vision : o Building America Values : o Focus on Performance o Ensure High Ethical Standards o Work as a Team

13. SWOT Analysis StrengthsWeaknesses -Diversified Markets -Strong ROIC -Invest in Technology (PTC) -Transport Hazardous Materials -Labor Upheavals -Commodity volatility -Underfunded Pension OpportunitiesThreats -Increasing U.S. Population Base -Growing GDP -Increasing Environmental Consciousness -Governmental Regulations (STB) -Weather Related -RR security and safety -Low oil prices: truck, coal Source: IBIS World

14. Business Division Freight revenues increased during 2014 compared to 2013 driven by 7% volume growth and core pricing gains of 2.5% In terms of Q (units) sold, Freight Sales increased by 3.2% Source: UNP 10-K

15. Current Stock Information Source: Yahoo Finance MetricValue Current Stock Price $110.10 Trailing P/E19.15 Forward P/E14.8 Dividend Yield2.00% Market Cap 97.21 ($ billions) Est. PEG Ratio1.20 5 Year Dividend Growth 30.00% Current Holding: Apr-25-13 (2 for 1 Jun-9-14) 200 @ $74.10 Current Gain: $7198, 49%

16. Stock Performance

17. Financial Analysis Source: Bloomberg

18. Cost of Capital

19. Revenue Projection

20. DCF

21. Comp Set (Product Segmentation)

22. Comp Ratios and Info

23. Comparable Valuation

24. Recommendation Current price below 20 and 200 Day MA. 20 Day MA above 200 Day MA Momentum Steady growth projections Growth DCF Valuation $74.71 Comparable Analysis Valuation $106.27 Current Stock Price $110.10 SELL 100 Shares Limit $108 Currently owned: 200 shares Current Gain $7,198, 49% Current Holding