The ratings on Omaha, Neb.-based Union Pacific Corp. reflect the favorable risk characteristics of the U.S. freight railroad industry, as well as the company's strong competitive position and its moderate financial policies. Price competition from other railroads and trucking companies in selected commodities and the capital intensity of the industry somewhat offset these strengths. Union Pacific operates a large rail network covering 23 states across the western U.S. It has a well-diversified traffic base, consisting of energy (largely coal; 23% of 2009 freight revenue), agricultural products (20%), intermodal (19%), industrial products (16%), chemicals (16%), and automotive (6%). In 2009, the freight railroad reduced variable operating expenses by 23%, partially offsetting a volume decline of 16% from 2008. Union Pacific's operating
