Union Pacific 2005 Annual Report Download - page 15

unable to implement new technology, we may suffer a competitive disadvantage within the rail industry and with
companies providing other modes of transportation service, which could have a material adverse effect on our
results of operations, financial position, and liquidity. Additionally, if we experience significant disruption or
failure of one or more of our information technology systems, including computer hardware, software, and
communications equipment, we could experience a service interruption, safety failure, or security breach, or other
operational difficulties, which could have a material adverse impact on our results of operations, financial
condition, and liquidity.
We May Be Affected by Acts of Terrorism, War, or Risk of War – Our rail lines, facilities, and equipment, including
rail cars carrying hazardous materials, could be direct targets or indirect casualties of terrorist attacks. Terrorist
attacks, or other similar events, any government response thereto, and war or risk of war may adversely affect our
results of operations, financial condition, and liquidity. In addition, insurance premiums for some or all of our
current coverages could increase dramatically, or certain coverages may not be available to us in the future.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
With operations in 23 states, we employ a variety of assets in the management and operation of our rail business.
These assets include real estate, track and track structure, equipment, and facilities. We own and lease real estate
that we use in our operations, and we also own real estate that is not required for our business, which we sell from
time to time. Our equipment includes owned and leased locomotives and rail cars; heavy maintenance equipment
and machinery; other equipment and tools in our shops, offices and facilities; and vehicles for maintenance,
transportation of crews, and other activities. We operate numerous facilities, including terminals for intermodal
and other freight; rail yards for train-building, switching, storage-in-transit (the temporary storage of customer
goods in rail cars prior to shipment) and other activities; offices to administer and manage our operations;
dispatch centers to direct traffic on our rail network; crew quarters to house train crews along our network; and
shops and other facilities for fueling, maintenance, and repair of locomotives and repair and maintenance of rail
cars and other equipment. We spent approximately $2.2 billion in cash capital during 2005 for, among other
things, building and maintaining track, structures and infrastructure, upgrading and augmenting equipment, and
implementing new technologies (see the capital expenditures table in Management’s Discussion and Analysis of
Financial Condition and Results of Operations – Liquidity and Capital Resources – Financial Condition, Item 7).
Certain of our properties are subject to federal, state, and local laws and regulations governing the protection
of the environment (see discussion of environmental issues in Business – Governmental and Environmental
Regulation, Item 1, and Management’s Discussion and Analysis of Financial Condition and Results of Operations
– Critical Accounting Policies – Environmental, Item 7).
Track – The Railroad operates on 32,426 main line and branch line route miles in 23 states in the western
two-thirds of the United States. We own 26,586 route miles, with the remainder of route miles operated pursuant
to trackage rights or leases. Route miles as of December 31, 2005, are as follows:
Route Miles
Main line ........................................................................... 27,301
Branch line ......................................................................... 5,125
Yards, sidings and other main lines ...................................................... 20,241
Total .............................................................................. 52,667
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