Operations and segmentation – We are a Class I railroad operating in the U.S. Our network includes 32,889 route miles, connecting Pacific Coast and Gulf Coast ports with the Midwest and Eastern U.S. gateways and providing several corridors to key Mexican and Canadian gateways. We own 26,294 miles and operate on the remainder pursuant to trackage rights or leases. We serve the western two-thirds of the country and maintain coordinated schedules with other rail carriers for the handling of freight to and from the Atlantic Coast, the Pacific Coast, the Southeast, the Southwest, Canada, and Mexico. Export and import traffic is moved through Gulf Coast, Pacific Coast, and East Coast ports and across the Mexican and Canadian borders.

The Railroad, along with its subsidiaries and rail affiliates, is our one reportable operating segment. Although we provide and analyze revenues by commodity group, we treat the financial results of the Railroad as one segment due to the integrated nature of our rail network. The accounting policies of the Railroad segment are the same as those described in Note 2 Significant Accounting Policies.

The Company’s Chief Operating Decision Maker (CODM) is our Chief Executive Officer. The CODM assesses performance for our rail network and decides how to allocate resources based on net income as reported on our Consolidated Statements of Income. The measure of segment assets is reported on our Consolidated Statements of Financial Position as total assets.

Our operating revenues are primarily derived from contracts with customers for the transportation of freight from origin to destination. Although our revenues are principally derived from customers domiciled in the U.S., the ultimate points of origination or destination for some products we transport are outside the U.S. Freight revenues from each of our commodity groups, as described in the table below, includes revenues from shipments to and from Mexico, which amounted to $2.9 billion in 2025, $3.0 billion in 2024, and $2.8 billion in 2023. Our significant segment expenses as monitored by the CODM are shown in the table below. This breakout of revenues and expenses is used by the CODM to monitor and assess the financial performance of our rail network by comparing actual results to prior years and plans.


Millions	2025		2024		2023
Bulk	$	7,586	$	7,207	$	7,358
Industrial	8,604		8,440		8,238
Premium	7,030		7,164		6,975
Total freight revenues	$	23,220	$	22,811	$	22,571
Other subsidiary revenues	718		788		872
Accessorial revenues	475		554		584
Other	97		97		92
Total operating revenues	$	24,510	$	24,250	$	24,119
Operating [a] [c]	6,816		6,793		6,727
Administrative [a] [c]	735		760		763
Locomotive fuel	2,335		2,418		2,815
Acquisition-related (Note 20)	72		-		-
Other segment items [b] [c]	2,241		2,168		2,414
Depreciation	2,465		2,398		2,318
Other income, net	(629)		(350)		(491)
Interest expense	1,309		1,269		1,340
Income tax expense	2,028		2,047		1,854
Net income	$	7,138	$	6,747	$	6,379

[a] Operating and Administrative includes compensation and benefits, purchased services and materials, equipment and other rents, non-locomotive fuel, and other expenses.

Basis of presentation – The Consolidated Financial Statements are presented in accordance with accounting principles generally accepted in the U.S. (GAAP) as codified in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC).