The ratings on Union Pacific Corp. reflect its solid competitive position as the largest railroad in the U.S., and the favorable risk characteristics of the U.S. railroad industry, offset by a financial profile still recovering from the impact of serious traffic congestion during the late 1990s. The congestion from the acquisition of Southern Pacific Corp. resulted in losses and higher debt levels. Although operations are now beyond merger integration challenges, further operating improvements are still expected. Union Pacific has a well-diversified traffic base, including coal (21% of revenues), chemicals (16%), and intermodal (19%). This diverse traffic base and large network covering the western U.S. supports a solid competitive position. Less-than-truckload trucking subsidiary Overnite Transportation (around 10% of revenue), which was
