Standard&Poor's Ratings Services' ratings on Omaha-based Union Pacific Corp. reflect the favorable risk characteristics of the U.S. freight railroad industry, as well as the company's solid competitive position, moderate financial policies, and strong liquidity. Price competition from other railroads and trucking companies in selected commodities and the capital intensity of the industry somewhat offset these strengths. Although growth in freight volumes has moderated, we expect Union Pacific to continue to benefit from strong operating efficiency and moderate pricing gains, resulting in satisfactory operating profitability, FFO to debt in the 40% area, and total debt to capital in the mid-40% area. We characterize the company's business risk as strong, financial risk as intermediate, and its liquidity as strong. Union
