Union PacificUNP

01Union Pacific demonstrates pricing power by passing through fuel cost increases via surcharge programs and achieving core pricing gains even as mix shifts toward lower-ARC domestic intermodal. The fuel surcharge mechanism acts as a cost pass-through that protects margins from commodity price volatility, while the ability to achieve pricing gains above mix headwinds suggests underlying rate power with shippers who have limited modal alternatives for bulk and industrial freight.

02The Railroad, along with its subsidiaries and rail affiliates, is our one reportable business segment due to the integrated nature of the rail network Mexico freight revenues increased 10% to $828 million in the second quarter of 2026 Domestic intermodal growth was up 19% in the quarter due to business development and reduced truck market capacity

03Freight car velocity increased 5% in the second quarter Terminal dwell improved 7% Train length increased 2% due to mainline capacity investments and optimization of the transportation plan

04Operating ratio of 59.7% deteriorated 0.7 points primarily resulting from the impact of higher fuel prices Operating income increased 9% to $2.8 billion reflecting top-line growth Average price per gallon increased 60% compared to last year as a result of supply chain pressures We expect our capital plan to be approximately $3.3 billion in 2026