THE UNION PACIFIC RAILROAD
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1 THE UNION PACIFIC RAILROAD November 14, 2006 Joe Adams, Chairman s Special Representative
2 Union Pacific Railroad - Who We Are 2
3 Union Pacific Vision Statement Union Pacific is committed to be a railroad where our customers want to do business, our employees are proud to work, shareholder value is created and the safety of the public and our employees is our top priority. 3
4 Four Operating Regions Route Miles 32,400 Employees 50,000 Annual Payroll $3.6 billion Purchases Made $3.9 billion Locomotives 8,000 Freight Cars 107,000 4
5 Business Lines Auto Chemicals Ag Products 14% 11% 15% 23% 18% Energy Intermodal 19% Industrial Products As a common carrier, we transport all freight, including hazardous materials, when the shipment complies with DOT regulations. 5
6 Hazardous Materials Key routes in blue - >10,000 HM shipments / year 6
7 Engineering 7
8 Engineering 32,400 Route Miles 100 Million Ties 38,000 Crossings 400 Miles of Bridges 60 Miles of Tunnels 8
9 2006 Capital Plan Executive Asset Team $ Millions Maint. of Way $1,387 $1,480 Capacity Comm. Facilities Locomotives Technology Freight Cars/Other Flood / PRB Maint Cash Capital $2,169 $2,250 1) Improve Safety 2) Drive Productivity 3) Accommodate Growth 2006 Capacity Improvements Central Corridor Routes North-South Routes Kansas City Mason City Salt Lake City N. Platte St. Louis Las Vegas DFW Southern Tier Routes San Antonio Houston Lease Financing $691 $500 Total Capital $2,860 $2,750 LA Basin Yuma Phoenix Tucson DFW Terminal Improvements Corridor Improvements 9
10 Engineering Maintenance Captial Spending $ Millions $1,600 $1,400 $1,200 $1,000 $970 $1,066 $1,125 $1,200 $1,224 $1,328 $1,387 $1,480 $ Plan 10
11 Track-caused accidents per million train-miles have dropped 72% since 1980 and 17% since Sources: FRA website: & r02.htm (preliminary 2005 data) FRA, Railroad Safety Statistics Annual Report, , Tables 1-1, 5-9. FRA, Accident/Incident Bulletin, , Tables 19, 36. Note: Excludes grade crossing accidents. 11
12 Chemical Transportation Safety 12
13 Chemicals Franchise Six Months Ended June 30 Revenue: $1,038 Million +15% Revenue Mix Chemicals Density Map Lane thickness depicts carload density Liquid & Dry 24% Soda Ash 20% Plastics 22% LPG/Petro 17% Fertilizer 17% 13
14 Chemical Transportation Safety Toxic Inhalation Hazard (TIH) Minimize handlings Alternative sourcing Tank car design Homeland Security Directives Industry Leader Responsible Care Transcaer 14
15 Responsible Care 15
16 What is Responsible Care? Developed by the chemical manufacturers as a program for continuous improvement of processes Emphasis: Safety, Health, Environment, & Security UP one of the first non-chemical companies to join UP s program certified by RC and ISO (14001) ISO included audits of: Environmental Policy, Planning, Implementation & Operations, Checking and Corrective Actions, and Management Review. 16
17 TransCAER 17
18 TRANSCAER Mission Transportation Community Awareness and Emergency Response To improve community awareness of and emergency preparedness for hazardous materials in transportation. 18
19 Transcaer Organization National Transcaer Task Group Sponsored by several associations. Provides oversight for Transcaer. Develops resources for the regional and state coordinators. The Regional Approach Four regions. Coordinators at the regional and state level. Implementation of the Transcaer Steps. 19
20 TransCAER Purpose Assist communities prepare for and respond to a possible hazardous materials incident Members include: chemical manufacturers, transportation, distributors, private response organizations, and government agencies 20
21 TransCAER Process Work with LEPC s Review existing emergency response plans Establish transportation advisory group Conduct commodity flow study Revise emergency response plan to reflect commodity flow study findings Identify response resources and training needs Plan and implement exercise to test plan Continuously update/modify plan 21
22 TransCAER Exercise 22
23 TransCAER Exercise 23
24 TransCAER Training Aids 24
25 TransCAER Training Aids 25
26 TransCAER Training - Railcar Information 26
27 TransCAER Training Event 27
28 TransCAER Training - Product Information 28
29 TransCAER Training - Response Equipment 29
30 UP Pinnacle Award 30
31 UP Pinnacle Award Awards shippers for safe loading & securement of hazardous materials Must have no NAR s for a calendar year 12 consecutive years Since inception, NAR s have declined 53% 31
32 Summary 32
33 Why Do We Do All This? Continuously Improve Rail Transportation Continuously Improve Operating Efficiency Enhance Safety of Our Employees Ensure Safety of the Communities in Which We Operate 33
34 34
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