Favorable industry risk characteristics. A large and strategically located rail network, serving major freight sources and destinations with a diversified revenue and customer base. Moderate financial policies. Some vulnerability to economic pressures in selected commodities. Capital intensity of operations. Our 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 on selected commodities and the company's high capital requirements, typical of the industry, somewhat offset these strengths. We characterize the company's business risk as "strong," its financial risk as "intermediate," and its liquidity as "strong" under our criteria. Union Pacific operates
