Union Pacific 2009 Annual Report Download - page 6

6
OPERATIONS
The Railroad, along with its subsidiaries and rail affiliates, is our one reportable operating segment.
Although revenue is analyzed by commodity group, we analyze the net financial results of the Railroad as
one segment due to the integrated nature of our rail network. Additional information regarding our
business and operations, including revenue and financial information and data and other information
regarding environmental matters, is presented in Risk Factors, Item 1A; Legal Proceedings, Item 3;
Selected Financial Data, Item 6; Management’ s Discussion and Analysis of Financial Condition and
Results of Operations, Item 7; and the Financial Statements and Supplementary Data, Item 8 (which
include information regarding revenues, statements of income, and total assets).
Operations – UPRR is a Class I railroad
operating in the United States. We have
approximately 32,094 route miles, linking
Pacific Coast and Gulf Coast ports with
the Midwest and eastern United States
gateways and providing several corridors
to key Mexican gateways. We serve the
western two-thirds of the country and
maintain coordinated schedules with other
rail carriers to move freight to and from
the Atlantic Coast, the Pacific Coast, the
Southeast, the Southwest, Canada, and
Mexico. Export and import traffic moves
through Gulf Coast and Pacific Coast
ports and across the Mexican and
Canadian borders. Our freight traffic consists of bulk, manifest, and premium business. Bulk traffic is
primarily coal, grain, rock, or soda ash in unit trains – trains transporting a single commodity from one
source to one destination. Manifest traffic is individual carload or less than train-load business, including
commodities such as lumber, steel, paper, and food. The transportation of finished vehicles and
intermodal containers is part of our premium business. In 2009, we generated freight revenues totaling
$13.4 billion from the following six commodity groups:
Agricultural – Transporting agricultural products, including whole grains, commodities produced from
these grains, and food and beverage products, provided 20% of our 2009 freight revenues. With access to
most major grain markets, we provide a critical link between the Midwest and western producing areas
and export terminals in the Pacific Northwest (the PNW) and Gulf ports, as well as Mexico. Unit trains of
grain efficiently shuttle between producers and export terminals or domestic markets. We also serve
significant domestic markets, including grain processors, animal feeders, and ethanol producers in the
Midwest, West, South, and Rocky Mountain states. Primary food commodities consist of a variety of
fresh and frozen fruits and vegetables, dairy products, and beverages, which are moved to major U.S.
population centers for distribution and consumption. Express Lane and Produce Unit Train compete with
the trucking industry by providing premium perishable services that move fruits and vegetables from the
PNW and California to destinations in the East. We transport frozen meat and poultry to the West Coast
ports for export, while beverages, primarily beer, enter the U.S. from Mexico.
Automotive – We are the largest automotive carrier west of the Mississippi River, serving vehicle
assembly plants and distributing imported vehicles from six West Coast ports and Houston. We off-load
finished vehicles at 38 vehicle distribution centers for delivery by truck to all major western U.S. cities. In
addition to transporting finished vehicles, we provide expedited handling of automotive parts in both
boxcars and intermodal containers to several assembly plants. We carry automotive materials bound for
assembly plants in Mexico, the U.S., and Canada, and we also transport finished vehicles from
2009 Freight Revenue
Agricultural
20%
Chemicals
16%
Energy
23%
Industrial
Products
16%
Intermodal
19%
Automotive
6%