Union Pacific 2009 Annual Report Download - page 61

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61
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Union Pacific Corporation and Subsidiary Companies
For purposes of this report, unless the context otherwise requires, all references herein to the
“Corporation”, “UPC”, “we”, “us”, and “our” mean Union Pacific Corporation and its subsidiaries,
including Union Pacific Railroad Company, which will be separately referred to herein as “UPRR” or the
“Railroad”.
1. Nature of Operations
Operations and Segmentation – We are a Class I railroad that operates in the United States. We have
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 for the handling of freight
to and from the Atlantic Coast, the Pacific Coast, the Southeast, the Southwest, Canada, and Mexico.
Export and import traffic is moved through Gulf Coast and Pacific Coast ports and across the Mexican
and Canadian borders.
The Railroad, along with its subsidiaries and rail affiliates, is our one reportable operating segment.
Although revenues are 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. The following table provides revenue by
commodity group:
Millions of Dollars 2009 2008 2007
Agricultural
$
2,666 $ 3,174 $ 2,605
Automotive 854 1,344 1,458
Chemicals 2,102 2,494 2,287
Energy 3,118 3,810 3,134
Industrial Products 2,147 3,273 3,077
Intermodal 2,486 3,023 2,925
Total freight revenues
$
13,373 $ 17,118 $ 15,486
Other revenues 770 852 797
Total operating revenues
$
14,143 $ 17,970 $ 16,283
Although our revenues are principally derived from customers domiciled in the United States, the
ultimate points of origination or destination for some products transported are outside the United States.
Basis of Presentation – The Consolidated Financial Statements are presented in accordance with
accounting principles generally accepted in the United States of America (GAAP) as codified in the
Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC).
Subsequent Events Evaluation – We evaluated the effects of all subsequent events through February 5,
2010, the date of this report, which is concurrent with the date we file this report with the U.S. Securities
and Exchange Commission (SEC).
2. Significant Accounting Policies
Change in Accounting Principle – We have historically accounted for rail grinding costs as a capital
asset. Beginning in the first quarter of 2010, we will change our accounting policy for rail grinding costs