UNION PACIFIC CORP

Previous wording

Three and nine months ended September 30, 2025, compared to

Current wording

Three months ended March 31, 2026, compared to

Previous wording

The preparation of these financial statements requires estimation and judgment that affect the reported amounts of revenues, expenses, assets, and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. If these estimates differ materially from actual results, the impact on the Condensed Consolidated Financial Statements may be material. Our critical accounting estimates are available in Item 7 of our 2024 Annual Report on Form 10-K. During the first nine months of 2025, there have not been any significant changes with respect to our critical accounting estimates.

Current wording

The preparation of these financial statements requires estimation and judgment that affect the reported amounts of revenues, expenses, assets, and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. If these estimates differ materially from actual results, the impact on the Condensed Consolidated Financial Statements may be material. Our critical accounting estimates are available in Item 7 of our 2025 Annual Report on Form 10-K. During the first three months of 2026, there have not been any significant changes with respect to our critical accounting estimates.

Previous wording

The Company reported earnings of $3.01 per diluted share on net income of $1.8 billion and an operating ratio of 59.2% in the third quarter of 2025 compared to earnings of $2.75 per diluted share on net income of $1.7 billion and an operating ratio of 60.3% in the third quarter of 2024. Freight revenues increased 3% on slightly negative carloads in the third quarter of 2025 compared to the same period in 2024 driven by core pricing gains and a more favorable business mix, partially offset by lower fuel surcharge revenue. Increased carloads in coal, industrial chemicals and plastics, and grain and grain products were offset by lower international intermodal carloads, which declined 17% in the third quarter of 2025.

Current wording

The Company reported earnings of $2.87 per diluted share on net income of $1.7 billion and an operating ratio of 60.5% in the first quarter of 2026 compared to earnings of $2.70 per diluted share on net income of $1.6 billion and an operating ratio of 60.7% in the first quarter of 2025. Freight revenues increased 4% in the first quarter of 2026 compared to the same period in 2025 as core pricing gains, higher fuel surcharge revenues, and business mix more than offset a 1% reduction in volume. Higher carloads in domestic intermodal, coal, grain, and industrial chemicals and plastics were more than offset by lower international intermodal carloads, which declined 28% in the first quarter of 2026, and fewer automotive shipments.

Previous wording

Operating expenses slightly increased compared to the third quarter of 2024 due to inflation, acquisition-related expenses (see Note 18 to the Condensed Consolidated Financial Statements, Item 1), and higher depreciation. These increases were partially offset by productivity, lower casualty costs, and lower fuel prices. Compared to third quarter of last year, operating income increased 6% to $2.5 billion, and the operating ratio of 59.2%improved 1.1 points, reflecting top-line growth, solid operational performance, and productivity gains.

Current wording

Operating expenses increased 3% compared to the first quarter of 2025 due to inflation, higher fuel prices, acquisition-related expenses (see Note 17 to the Condensed Consolidated Financial Statements, Item 1), and higher depreciation, partially offset by productivity. Operating income increased 4% to $2.5 billion, and the operating ratio of 60.5%improved 0.2 points, reflecting top-line growth and productivity gains compared to the first quarter of 2025.

Previous wording

Other subsidiary revenues (primarily logistics and commuter rail operations) are generally recognized over time as shipments move from origin to destination. The allocation of revenues between reporting periods is based on the relative transit time in each reporting period with expenses recognized as incurred. Accessorial revenues are recognized at a point in time as performance obligations are satisfied.

Current wording

Other subsidiary revenues (primarily logistics operations) are generally recognized over time as shipments move from origin to destination. The allocation of revenues between reporting periods is based on the relative transit time in each reporting period with expenses recognized as incurred. Accessorial revenues are recognized at a point in time as performance obligations are satisfied.

Previous wording

Each of our commodity groups includes revenues from fuel surcharges. Freight revenues from fuel surcharge programs decreased $33 million to $602 million in the third quarter of 2025 compared to $635 million in the same period of 2024 due the lag impact on fuel prices (it can generally take up to two months for changing fuel prices to affect fuel surcharge recoveries) and lower volumes, partially offset by higher fuel prices. For the year-to-date period of 2025, freight revenues from fuel surcharge programs declined $233 million compared to 2024 driven by lower fuel prices and the related price lag impact, partially offset by higher volume levels.

Current wording

Each of our commodity groups includes revenues from fuel surcharges. Freight revenues from fuel surcharge programs increased to $608 million in the first quarter of 2026 compared to $565 million in the same period of 2025 due to higher fuel prices, which were partially offset by the fuel price lag impact (it generally takes up to two months for changing fuel prices to affect fuel surcharge recoveries) and lower volumes.

Previous wording

Other subsidiary revenues decreased in the third quarter and year-to-date periods of 2025 compared to 2024 primarily driven by the transfer of commuter operations to Metra and a weaker demand for auto parts shipments at our subsidiary that brokers intermodal and transload logistics services. Accessorial revenues increased in the third quarter 2025 compared to 2024 driven by improved intermodal accessorial revenues. For the year-to-date period, accessorial revenues decreased due to the sale of our intermodal equipment in the second quarter of 2024, resulting in lower intermodal accessorial revenues, and the comparison period was also negatively impacted by a one-time contract settlement recognized in the first quarter of 2024.

Current wording

Other subsidiary revenues decreased in the first quarter of 2026 compared to 2025 primarily driven by the transfer of commuter operations to Metra, lower demand for auto part shipments at our subsidiary that brokers intermodal and transload logistics services, and the sale of a portion of revenue-generating assets in late 2025 from our technology subsidiary. Accessorial revenues increased in the first quarter 2026 compared to 2025 driven by increased storage and intermodal accessorial revenues.

Previous wording

Bulk – Bulk includes shipments of grain and grain products, fertilizer, food and refrigerated, and coal and renewables. Freight revenues from bulk shipments increased in the third quarter and year-to-date periods of 2025 compared to 2024 due to 7% volume growth for both periods and core pricing gains, partially offset by business mix (from increased coal shipments) and lower fuel surcharge revenues. The volume increases were driven by higher demand for coal used in electricity generation due to higher natural gas prices and business wins and strength in grain and grain products from increased exports and soybean crush production. Lower food and refrigerated carloads partially offset the volume growth.

Current wording

Bulk – Bulk includes shipments of grain and grain products, fertilizer, food and refrigerated, and coal and renewables. Freight revenues from bulk shipments increased 10% in the first quarter of 2026 compared to 2025 due to 12% volume growth, core pricing gains, and higher fuel surcharge revenues, partially offset by business mix (from increased coal shipments). Bulk carload growth was driven by increased coal shipments from continued higher coal usage in electricity generation due to elevated natural gas prices combined with business wins, and also driven byincreased export grain shipments, partially offset by lower food and refrigerated carloads.

Previous wording

Industrial – Industrial includes shipments of industrial chemicals and plastics, metals and minerals, forest products, and energy and specialized markets. Freight revenues from industrial shipments increased in the third quarter and year-to-date periods of 2025 compared to 2024 due to core pricing gains and volume increases, partially offset by business mix and lower fuel surcharge revenues. Quarterly increases in plastics, industrial chemicals, and steel carloads more than offset the reduced iron ore (as a result of tariff uncertainties) and government carloads. Year-to-date volume growth in industrial chemicals, rock, and plastics was partially offset by lower iron ore, petroleum products, waste shipments, and lumber.

Current wording

Industrial – Industrial includes shipments of industrial chemicals and plastics, metals and minerals, forest products, and energy and specialized markets. Freight revenues from industrial shipments increased 5% in the first quarter of 2026 compared to 2025 due to increased volumes, core pricing gains, and higher fuel surcharge revenues, partially offset by business mix (from higher rock shipments and lower lumber shipments). The 4% quarterly carload improvement was driven by increased demand for industrial chemicals and plastics and construction materials coupled with business development efforts, which more than offset reduced shipments from continued weak lumber demand.

Previous wording

Premium – Premium includes shipments of finished automobiles, automotive parts, and merchandise in intermodal containers, both domestic and interna tional. Premium freight revenues decreased 2% in the third quarter of 2025 compared to 2024 driven by 5% lower volumes, partially offset by business mix and core pricing gains. Third quarter of 2025 intermodal volumes were down 5% driven by a 17% reduction in international intermodal carloads, partially offset by strong domestic intermodal growth. In 2024, international intermodal benefited from heavy demand due to a trade flow shift from the East Coast and Canadian ports to the West Coast that have now shifted back tohistorical trade patterns. Automotive shipments decreased in the third quarter of 2025 compared to 2024 due to reduced production. For the year-to-date period of 2025 compared to 2024, premium freight revenues were flat as 3% volume increases and core pricing gains were offset by lower fuel surcharge revenues and business mix. Year-to-date intermodal volumes are up 4% driven by strong domestic intermodal growth in addition to elevated U.S. West Coast imports in the first half of 2025. Automotive shipments decreased in the year-to-date periods of 2025 compared to 2024 due to reduced production and tariff uncertainties in the first half of the year.

Current wording

Premium – Premium includes shipments of finished automobiles, automotive parts, and merchandise in intermodal containers, both domestic and interna tional. Premium freight revenues decreased 5% in the first quarter of 2026 compared to 2025 driven by 9% lower volumes, which were partially offset by higher fuel surcharge revenues, core pricing gains, and business mix (from reduced international intermodal shipments). First quarter of 2026 intermodal volumes were down 9% driven by a 28% reduction in international intermodal carloads as a result of elevated U.S. West Coast imports in the first quarter of 2025 that did not recur, partially offset by continued strong domestic intermodal growth. Automotive shipments decreased 6% in the first quarter of 2026 compared to 2025 due to lower production as a result of weaker finished vehicle demand.

Previous wording

Mexico business – Freight revenues from each of our commodity groups includes revenues from shipments to and from Mexico, which increased 4% to $752 million in the third quarter of 2025 compared to 2024 driven by 4% volume growth due to increased intermodal and grain shipments, partially offset by lower beverage and steel shipments. For the year-to-date period of 2025, Mexico related freight revenues declined 2% on essentially flat volume driven by lower auto parts, finished vehicles, and beverage carloads, which offset growth in intermodal, grain, and petroleum product shipments.

Current wording

Mexico business – Freight revenues from each of our commodity groups includes revenues from shipments to and from Mexico, which increased 1% to $729 million in the first quarter of 2026 compared to 2025 driven by 3% volume growth due to increased intermodal, partially offset by lower beverage, steel, and automotive shipments.

Previous wording

Operating expenses slightly increased compared to the third quarter and year-to-date periods of 2024 due to inflation, acquisition-related expenses (see Note 18 to the Condensed Consolidated Financial Statements, Item 1), and higher depreciation. These increases were partially offset by productivity and lower fuel prices.

Current wording

Operating expenses increased 3% compared to the first quarter of 2025 due to inflation, higher fuel prices, acquisition-related expenses (see Note 17 to the Condensed Consolidated Financial Statements, Item 1), and higher depreciation expense. These increases were partially offset by productivity.

Previous wording

Compensation and benefits – Compensation and benefits include wages, payroll taxes, health and welfare costs, pension costs, and incentive costs. For the third quarter of 2025, compensation and benefits expense decreased 1% compared to 2024 due to lower employee levels, partially offset by wage inflation and higher incentive compensation. For the year-to-date period, compensation and benefits expense increased 1% compared to 2024 due to wage inflation, volume-related costs, a $55 million crew staffing agreement ratification charge, and higher incentive compensation, partially offset by lower employee levels.

Current wording

Compensation and benefits – Compensation and benefits include wages, payroll taxes, health and welfare costs, pension costs, and incentive costs. For the first quarter of 2026, compensation and benefits expense increased 1% compared to 2025 due to wage inflation and higher incentive compensation costs, which was partially offset by lower employee levels.

Previous wording

Purchased services and materials – Expense for purchased services and materials includes the costs of services purchased from outside contractors and other service providers (including equipment maintenance and contract expense incurred by our subsidiaries for external transportation services); materials used to maintain the Railroad’s lines, structures, and equipment; costs of operating facilities jointly used by UPRR and other railroads; transportation and lodging for train crew employees; trucking and contracting costs for intermodal containers; leased automobile maintenance expense; and tools and supplies. Purchased services and materials increased 6% and 3%, respectively, in the third quarter and year-to-date periods of 2025 compared to 2024 driven by acquisition-related expenses, inflation, and an increase in derailment related expenses, offset by lower costs associated with improved locomotive productivity. The year-to-date period was also impacted by higher volume related cost and a 2024 favorable contract settlement.

Current wording

Purchased services and materials – Expense for purchased services and materials includes the costs of services purchased from outside contractors and other service providers (including equipment maintenance and contract expense incurred by our subsidiaries for external transportation services); materials used to maintain the Railroad’s lines, structures, and equipment; costs of operating facilities jointly used by UPRR and other railroads; transportation and lodging for train crew employees; trucking and contracting costs for intermodal containers; leased automobile maintenance expense; and tools and supplies. Purchased services and materials increased 7% in the first quarter of 2026 compared to 2025 driven by acquisition-related expenses and inflation offset by lower costs associated with improved locomotive productivity.

Previous wording

Depreciation – The majority of depreciation relates to road property, including rail, ties, ballast, and other track material. Depreciation expense increased 3% for both the third quarter and year-to-date periods of 2025 compared to 2024 driven by a higher depreciable asset base.

Current wording

Depreciation – The majority of depreciation expense relates to road property, including rail, ties, ballast, and other track material. Depreciation expense increased 4% for the first quarter of 2026 compared to 2025 driven by a higher depreciable asset base.

Previous wording

Fuel– Fuel includes locomotive fuel and gasoline for highway and non-highway vehicles and heavy equipment. Fuel expense increased in the third quarter of 2025 compared to the same period in 2024 driven by an increase in gross ton-miles, partially offset by a decrease in locomotive diesel fuel prices and an improvement in the fuel consumption rate (computed as gallons of fuel consumed divided by gross ton-miles in thousands). For the year-to-date period of 2025, fuel expense decreased compared to 2024 driven by lower fuel prices and an improvement in the fuel consumption rate, partially offset by increased gross ton-miles. Locomotive diesel fuel prices averaged $2.56 and $2.60 per gallon (including taxes and transportation costs) in the third quarter of 2025 and 2024, respectively. For the year-to-date period, locomotive diesel fuel prices averaged $2.49 per gallon in 2025 compared to $2.71 per gallon in 2024.

Current wording

Fuel– Fuel includes locomotive fuel and gasoline for highway and non-highway vehicles and heavy equipment. Fuel expense increased in the first quarter of 2026 compared to the same period in 2025 driven by an increase in locomotive diesel fuel prices and gross ton-miles, partially offset by 4% improvement in the fuel consumption rate (computed as gallons of fuel consumed divided by gross ton-miles in thousands). Locomotive diesel fuel prices averaged $2.69 and $2.51 per gallon (including taxes and transportation costs) in the first quarter of 2026 and 2025, respectively.

Previous wording

Equipment and other rents – Equipment and other rents expense primarily includes rental expense that the Railroad pays for freight cars owned by other railroads or private companies; freight car, intermodal, and locomotive leases; and office and other rent expense, offset by equity income from certain equity method investments. Equipment and other rents expense decreased 11% in the third quarter of 2025 driven by favorable contract settlements, improved cycle times, and lower car hire related to the year-over-year decline in international intermodal demand, partially offset by lower equity income. The year-to-date period of 2025 compared to 2024 increased 2% driven by increased car hire for autoracks, higher demand for business utilizing freight cars owned by others (mainly intermodal), inflation, and lower equity income, partially offset by lower operating equipment lease expense.

Current wording

Equipment and other rents – Equipment and other rents expense primarily includes rental expense that the Railroad pays for freight cars owned by other railroads or private companies; freight car, intermodal, and locomotive leases; and office and other rent expense, offset by equity income from certain equity method investments. Equipment and other rents expense decreased 9% in the first quarter of 2026 driven by lower car hire expense attributable to improved cycle times andlower operating equipment lease expense, partially offset by lower equity income.

Previous wording

Other– Other expense includes state and local taxes; freight, equipment, and property damage; utilities; insurance; personal injury; environmental remediation; employee travel; telephone and cellular; computer software; bad debt; and other general expenses. Other expense decreased 1% in the third quarter and year-to-date periods of 2025 compared to 2024 driven by lower environmental remediation and freight loss and damage costs, partially offset by higher state and local taxes. The year-to-date period was also negatively impacted by the 2024 gain on the sale of intermodal equipment.

Current wording

Other– Other expense includes state and local taxes; freight, equipment, and property damage; utilities; insurance; personal injury; environmental remediation; employee travel; telephone and cellular; computer software; bad debt; and other general expenses. Other expense increased 1% in the first quarter of 2026 compared to 2025 driven by higher equipment and property damage costs, property taxes, and bad debt expense. These increases are partially offset by lower personal injury costs.

Previous wording

Other income, net – Other income increased in the third quarter and year-to-date periods of 2025 compared to 2024 driven by higher real estate income. The year-to-date period of 2025 was also negatively impacted by the interest received in the second quarter of 2024 from the IRS on refund claims. See Note 6 to the Condensed Consolidated Financial Statements, Item 1, for additional detail.

Current wording

Other income, net – Other income increased in the first quarter of 2026 compared to 2025 driven by higher real estate income. See Note 6 to the Condensed Consolidated Financial Statements, Item 1, for additional detail.

Previous wording

Interest expense – Interest expense increased in the third quarter and year-to-date periods of 2025 compared to 2024 as a result of higher effective interest rates and higher weighted-average debt levels. The effective interest rate for both 2025 periods was 4.1% compared to 4.0% for both periods in 2024. The weighted-average debt levels were $32.2 billion and $31.4 billion for third quarter of 2025 and 2024, respectively, and $32.2 billion and $31.8 billion for the year-to-date periods of 2025 and 2024, respectively.

Current wording

Interest expense – Interest expense decreased slightly in the first quarter of 2026 compared to 2025 as a result of lower weighted-average debt levels. The effective interest rate was 4.1% for both periods. The weighted-average debt levels were $31.4 billion and $31.9 billion for first quarter of 2026 and 2025, respectively.

Previous wording

Income tax expense – Income tax expense increased 2% in the third quarter of 2025 compared to 2024 due to higher pre-tax income and decreased 4% in the year-to-date period compared to 2024. In the second quarter of 2025, the state of Kansas enacted legislation modifying the corporate income tax apportionment formula for future years resulting in a $115 million reduction of our deferred tax expense. In the second quarter of 2024, the state of Arkansas enacted legislation to reduce its corporate income tax rate for future years resulting in an $8 million reduction of our deferred tax expense. Our effective tax rates were 22.9% and 23.7% for the third quarter of 2025 and 2024, respectively, and 21.7% and 23.5% for the year-to-date periods of 2025 and 2024, respectively.

Current wording

Income tax expense – Income tax expense increased 5% in the first quarter of 2026 compared to 2025 due to higher pre-tax income. Our effective tax rates were 23.7% and 23.6% for the first quarter of 2026 and 2025, respectively.

Previous wording

Gross and revenue ton-miles – Gross ton-miles are calculated by multiplying the weight of loaded and empty freight cars by thenumber of miles hauled. Revenue ton-miles are calculated by multiplying the weight of freight by the number of rate miles. Gross ton-miles and revenue ton-miles increased 3% and 5%, respectively, in the third quarter of 2025 compared to 2024, while corresponding carloads were flat. For the year-to-date period, gross ton-miles, revenue ton-miles, and carloads increased 4%, 5%, and 3%, respectively, compared to 2024. Changes in business mix drove the variances between gross ton-miles, revenue ton-miles, and carloads due to higher coal shipments that are generally heavier.

Current wording

Gross and revenue ton-miles – Gross ton-miles are calculated by multiplying the weight of loaded and empty freight cars by thenumber of miles hauled. Revenue ton-miles are calculated by multiplying the weight of freight by the number of rate miles. Gross ton-miles and revenue ton-miles increased 4% and 7%, respectively, in the first quarter of 2026 compared to 2025, while corresponding carloads decreased 1%. Changes in business mix drove the variances between gross ton-miles, revenue ton-miles, and carloads due to higher coal and grain shipments that are generally heavier and decreased intermodal shipments that are generally lighter.

Previous wording

Freight car velocity – Freight car velocity measures the average daily miles per car on our network. The two key drivers of this metric are the speed of the train between terminals (average train speed) and the time a rail car spends at the terminals (average terminal dwell time). Freight car velocity increased 8% and 7%, respectively, in the third quarter and year-to-date periods of 2025 compared to 2024 driven by improvements in terminal dwell and train speed.

Current wording

Freight car velocity – Freight car velocity measures the average daily miles per car on our network. The two key drivers of this metric are the speed of the train between terminals (average train speed) and the time a rail car spends at the terminals (average terminal dwell time). Freight car velocity increased 9% in the first quarter of 2026 compared to 2025 driven by an 11% decrease in terminal dwell and an 8% improvement in train speed.

Previous wording

Locomotive productivity – Locomotive productivity is gross ton-miles per average daily locomotive horsepower available. Locomotive productivity increased 4% and 3% in the third quarter and year-to-date periods of 2025, respectively, driven by improved network fluidity and asset utilization.

Current wording

Locomotive productivity – Locomotive productivity is gross ton-miles per average daily locomotive horsepower available. Locomotive productivity increased 6% in the first quarter of 2026, driven by improved network fluidity and asset utilization as the average active fleet decreased 4% even as gross ton-miles increased.

Previous wording

Train length – Train length is the average maximum train length on a route measured in feet. Our train length increased 2% in both the third quarter and year-to-date periods of 2025 compared to 2024 due to train length improvement initiatives, specifically driven by increased coal and grain train volume moving on longer trains.

Current wording

Train length – Train length is the average maximum train length on a route measured in feet. Even with lower international intermodal volumes, train length increased 3% in the first quarter of 2026 compared to 2025 due to train length improvement initiatives, specifically driven by proprietary technology and mainline capacity investments.

Previous wording

Service performance index (SPI) – SPI is a ratio of the service customers are currently receiving relative to the best monthly performance over the last three years. Measuring our performance relative to a historical benchmark demonstrates our focus on continuously improving service for our customers. Our SPI is calculated for intermodal and manifest products. Intermodal SPI improved 12 and 7 points, respectively, in the third quarter and year-to-date periods of 2025 compared to 2024, while we adjusted to changing intermodal demand levels as volumes were down 5% during the third quarter and up 4% for the year-to-date period. Manifest SPI improved 11 points in both the third quarter and year-to-date periods of 2025 compared to 2024 driven by improved network fluidity, while we handled higher volume.

Current wording

Service performance index (SPI) – SPI is a ratio of the service customers are currently receiving relative to the best monthly performance over the last three years. Measuring our performance relative to a historical benchmark demonstrates our focus on continuously improving service for our customers. Our SPI is calculated for intermodal and manifest products. Intermodal SPI improved 4 points in the first quarter of 2026 compared to 2025. Manifest SPI improved 5 points in the first quarter of 2026 compared to 2025. The improvements in SPI are driven by the continued network fluidity as we adjusted to changing customer demand for higher grain shipments, reduced intermodal shipments, and continued strong coal carloads.

Previous wording

Workforce productivity – Workforce productivity is average daily car miles per employee. Workforce productivity improved 6% in the third quarter and 8% in the year-to-date periods of 2025 compared to 2024, respectively, as average daily car miles increased 2% and 5%, respectively, while employees decreased 4% and 3%, respectively, compared to 2024. We continually align our active train, engine, and yard (TE&Y) workforce to meet customer needs in a dynamic demand environment, while maintaining operational fluidity. As a result, our active TE&Y decreased 4% during the third quarter of 2025 on slightly negative volume levels compared to the same period in 2024. For the year-to-date period of 2025, we were able to handle 3% more volume with 2% fewer active TE&Y employees over the same period.

Current wording

Workforce productivity – Workforce productivity is average daily car miles per employee. Workforce productivity improved 7% in the first quarter of 2026 compared to 2025, as average daily car miles increased 1% while employee levels declined 5% compared to 2025. We continually align our active train, engine, and yard (TE&Y) workforce to meet customer demands in a dynamic economic environment, while maintaining operational fluidity. As a result, our active TE&Y decreased 4% during the first quarter of 2026 on a 1% reduction in carload levels compared to the same period in 2025.

Previous wording

Operating ratio – Operating ratio is our operating expe nses reflected as a percentage of operating revenues. For the third quarter of 2025, our operating ratio of 59.2% improved 1.1 points driven by productivity initiatives and core pricing gains, partially offset by inflation, and acquisition-related expenses. For the year-to-date period of 2025 compared to 2024, our operating ratio improved 0.8 points to 59.6% as a result of core pricing gains, productivity, and volume growth which more than offset the impact of unfavorable business mix, inflation, the year-over-year impact of changes in fuel price, a crew staffing agreement ratification charge in the second quarter of 2025, and acquisition-related expenses. In addition, the year-to-date period was negatively impacted by a gain on the sale of intermodal equipment in the second quarter of 2024 and contract settlements in the first quarter of 2024.

Current wording

Operating ratio – Operating ratio is our operating expe nses reflected as a percentage of operating revenues. For the first quarter of 2026, our operating ratio of 60.5% improved 0.2 points driven by productivity initiatives and core pricing gains, partially offset by inflation and acquisition-related expenses.

Previous wording

[1]The trailing twelve months income statement information ended September 30, 2025, is recalculated by taking the twelve months ended December 31, 2024, subtracting the nine months ended September 30, 2024, and adding the nine months ended September 30, 2025.

Current wording

[1]The trailing twelve months income statement information ended March 31, 2026, is recalculated by taking the twelve months ended December 31, 2025, subtracting the three months ended March 31, 2025, and adding the three months ended March 31, 2026.

Previous wording

Adjusted debt (total debt plus operating lease liabilities plus after-tax unfunded pension and OPEB (other post-retirement benefit) obligations) to adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, and adjustments for other income and interest on present value of operating leases) is considered a non-GAAP financial measure by SEC Regulation G and Item 10 of SEC Regulation S-K and may not be defined and calculated by other companies in the same manner. We believe this measure is important to management and investors in evaluating the Company’s ability to sustain given debt levels (including leases) with the cash generated from operations. In addition, a comparable measure is used by rating agencies when reviewing the Company’s credit rating. Adjusted debt to adjusted EBITDA should be considered in addition to, rather than as a substitute for, other information provided in accordance with GAAP. The most comparable GAAP measure is debt to net income ratio. The tables above provide reconciliations from net income to adjusted EBITDA, debt to adjusted debt, and debt to net income to adjusted debt to adjusted EBITDA. At September 30, 2025, and December 31, 2024, the incremental borrowing rate on operating leases was 4.0% and 3.8%, respectively. Pension and OPEB were funded at September 30, 2025, and December 31, 2024.

Current wording

Adjusted debt (total debt plus operating lease liabilities plus after-tax unfunded pension and OPEB (other post-retirement benefit) obligations) to adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, and adjustments for other income and interest on present value of operating leases) is considered a non-GAAP financial measure by SEC Regulation G and Item 10(e) of SEC Regulation S-K and may not be defined and calculated by other companies in the same manner. We believe this measure is important to management and investors in evaluating the Company’s ability to sustain given debt levels (including leases) with the cash generated from operations. In addition, a comparable measure is used by rating agencies when reviewing the Company’s credit rating. Adjusted debt to adjusted EBITDA should be considered in addition to, rather than as a substitute for, other information provided in accordance with GAAP. The most comparable GAAP measure is debt to net income ratio. The tables above provide reconciliations from net income to adjusted EBITDA, debt to adjusted debt, and debt to net income to adjusted debt to adjusted EBITDA. At March 31, 2026, and December 31, 2025, the incremental borrowing rate on operating leases was 4.1% and 4.0%, respectively. Pension and OPEB were funded at March 31, 2026, and December 31, 2025.

Previous wording

Cash provided by operating activities increased in the first nine months of 2025 compared to the same period of 2024 driven by higher net income and lower income taxes paid.

Current wording

Cash provided by operating activities increased 10% in the first three months of 2026 compared to the same period of 2025 driven by higher net income.

Previous wording

Cash used in investing activities increased in the first nine months of 2025 compared to the same period of 2024 driven by the timing of capital investments, including an increase in early lease buyouts, and lower proceeds from a 2024 sale of intermodal equipment.

Current wording

Cash used in investing activities increased 5% in the first three months of 2026 compared to the same period of 2025 driven by an increase in early lease buyouts.

Previous wording

[b]Locomotives and freight cars include early lease buyouts of $311 million in 2025 and $96 million in 2024.

Current wording

[b]Locomotives and freight cars include early lease buyouts of $176 million in 2026 and $127 million in 2025.

Previous wording

[c]Weather-related damages for the nine months ended September 30, 2025 and 2024, are immaterial.

Current wording

[c]Weather-related damages for the three months ended March 31, 2026 and 2025, are immaterial.

Previous wording

In 2025, we expect our capital plan to be approximately $3.4 billion, consistent with 2024. We plan to continue to make investments to support our growth strategy, improve the safety, resiliency, and operational efficiency of the network, harden our infrastructure, and replace older assets, including modernization of our locomotive fleet and acquiring freight cars to support replacement and growth opportunities. In addition, the plan includes investments in growth-related projects to drive more carloads to the network and enhance productivity. This includes siding construction and extension projects, terminal investments supporting our manifest network, and investments in certain ramps to efficiently handle volume from new and existing intermodal customers. The capital plan may be revised if business conditions warrant or if laws or regulations affect our ability to generate sufficient returns on these investments.

Current wording

In 2026, we expect our capital plan to be approximately $3.3 billion. We plan to continue to make investments to support our growth strategy, improve the safety, resiliency, and operational efficiency of the network, harden our infrastructure, and replace older assets, including modernization of our locomotive fleet and acquiring freight cars to support replacement and growth opportunities. In addition, the plan includes investments in growth-related projects to drive more carloads to the network and enhance productivity through technology. This includes terminal investments supporting our manifest network and intermodal ramps to efficiently handle new and existing customers, along with siding investments (extensions and new), and second mainline track projects. The capital plan may be revised if business conditions warrant or if laws or regulations affect our ability to generate sufficient returns on these investments.

Previous wording

Cash used in financing activities increased in the first nine months of 2025 compared to the same period of 2024 driven by more share repurchases, including the 2025 accelerated share repurchase programs, partially offset by an increase of debt issued and less debt repaid.

Current wording

Cash used in financing activities increased in the first three months of 2026 compared to the same period of 2025 driven by a decrease in debt issued and increase in debt repaid, partially offset by the pause of our share repurchases as part of the pending acquisition of Norfolk Southern.

Previous wording

Free cash flow – Free cash flow is defined as cash provided by operating activities less cash used in investing activities and dividends paid. Cash flow conversion rate is defined as cash provided by operating activities less cash used for capital investments as a ratio of net income.

Current wording

Free cash flow and cash flow conversion rate – Free cash flow is defined as cash provided by operating activities less cash used in investing activities and dividends paid. Cash flow conversion rate is defined as cash provided by operating activities less cash used for capital investments as a ratio of net income.

Previous wording

During the third quarter of 2025, we generated $2.5 billion of cash provided by operating activities and paid our quarterly dividend. Also within the third quarter of 2025, we announced the pending acquisition of Norfolk Southern described in Note 18 of the Condensed Consolidated Financial Statements, Item 1, and paused our share repurchase program. On September 30, 2025, we had $808 million of cash and cash equivalents, $2.0 billion of credit available under our revolving credit facility, and up to $600 million undrawn on the Receivables Facility. We have been, and we expect to continue to be, in compliance with our debt covenants.

Current wording

During the first quarter of 2026, we generated $2.4 billion of cash provided by operating activities and paid our quarterly dividend. In the third quarter of 2025, we announced the pending acquisition of Norfolk Southern described in Note 17 of the Condensed Consolidated Financial Statements, Item 1, and paused our share repurchases. On March 31, 2026, we had $735 million of cash and cash equivalents, $300 million of short-term investments, $2.0 billion of credit available under our revolving credit facility, and up to $600 million undrawn on the Receivables Facility. We have been, and we expect to continue to be, in compliance with our debt covenants.

Previous wording

[a]Excludes finance lease obligations of $108 million as well as unamortized discount and deferred issuance costs of ($1,688) million. Includes an interest component of $26,248 million.

Current wording

[a]Excludes finance lease obligations of $84 million as well as unamortized discount and deferred issuance costs of ($1,668) million. Includes an interest component of $25,598 million.

Previous wording

[c]Includes leases for locomotives, freight cars, other equipment, and real estate. Includes an interest component of $125 million.

Current wording

[c]Includes leases for locomotives, freight cars, other equipment, and real estate. Includes an interest component of $103 million.