SecProbe.io

April 28, 2008

Jeffrey P. Totusek
Vice President and Controller
Union Pacific Corporation
1400 Douglas Street
Omaha, NE 68179

 RE:  Union Pacific Corporation
  Form 10-K for the Year Ended December 31, 2007
  File Number: 001-06075

Dear Mr. Totusek:

 We have reviewed your April 1, 2008 correspondence and have the following
comments.  Please file your response to our comments via EDGAR, under the label
“corresp,” within 15 business days from the date of this letter.

Prior Comment Five
1. Please briefly describe for us your track maintenance program and quantify for us
the amount of repairs and maintenance that were expensed as incurred for the
prior two fiscal years.  In addition, quan tify for us the amount of internal payroll
and payroll related costs that were capitali zed as part of proper ty for each of the
prior two fiscal years.
2. We note that you capitalize internal payrol l costs when the costs are associated
with a “qualifying capital project.”  Please tell us whether personnel whose
payroll costs you capitalize are associ ated with both qualifying and non-
qualifying capital projects.  If  personnel are associated with both types of capital
projects, explain to us how you allocate the underlying cost to the two types of
capital projects.  With regard to pe rsonnel who are associated solely with
qualifying capital projects, explain to us  how you allocate the underlying cost
between qualifying capital proj ects and general and administ rative costs.
3. Please describe for us the indirect payr oll costs that you capitalize in connection
with a “qualifying capital project” and expl ain to us how you determined that it is
appropriate to capitalize these costs.  As part of your response, identify any
authoritative accounting literature that you considered.  Please tell us what, if any, consideration you have given, by anal ogy, to paragraph 41 of SOP 93-7 and
paragraph 31 of SOP 98-1.  We note th at both of these paragraphs include

Union Pacific Corporation
April 28, 2008
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guidance that is specifically designed towa rd the capitalization of internal payroll
and payroll related costs and that both utilize the following three prong test to
determine whether it is appropriate to capit alize payroll and payr oll-related costs:
a. an employee must be directly associated with a project;
b. an employee must devote time to a project; and
c. the time must be spent directly on the project.

In addition, both paragraph 41 of SOP 93- 7 and paragraph 31 of SOP 98-1 also
prohibit the capitalizat ion of general and administra tive and overhead costs.
4. Please explain to us the circumstances when you might (i) replace rail alone without the replacement of ties, (ii) repl ace ties alone without the replacement of
rail, (iii) replace both the rail and ties together, and (iv) replac e solely a single rail
of a track.  As part of your response, (i ) describe for us and discuss the frequency
that these circumstances occur and (ii) hi ghlight and discuss the circumstances in
which the replacements are scheduled ahead of time.  (For example, the replacement of a specific rail or tie is sc heduled at the beginning of a particular
year due to the item’s age.)
5. Please also describe for us and discuss the length of rail that is both typically and
atypically replaced and the reasons the lengt h may vary.  For example, is there a
particular length (or lengths) of continuous section of rail that is most frequently
replaced?  As another example, is ther e a minimum section of rail that is
replaced?
6. In addition, please describe for us and di scuss the number of ties that are both
typically and atypically replaced and the re asons the number may vary.  As part of
your response, tell us the circumstances wh en you replace consecutive ties rather
than specifically identified ties within a section of rail.  In addition, describe to us
any circumstances when you have replaced co ncrete ties with concrete ties.
7. Please separately explain to us and provi de a detailed quantitative analysis to
support your determination that (i) the re placement of one quarter of a mile of
continuous rail and (ii) the replacement of more than 250 cross ties per mile, both
appreciabl y “extend the useful life and improve safety and operating efficiency”
of an asset in order to qu alify for capitalization.

It is not clear how thes e expenditures appreciably extend the useful life and
improve safety and operating efficiency of an asset in order to qualify for
capitalization.  We note, for instance, that  one quarter of a mile of rail is not
significant when compared to your 32,205 route miles and 50,900 total miles of

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April 28, 2008
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track.  Similarly, 250 cross ties is not signi ficant to the total number of cross ties
that support your operations.  (Even on a smaller scale, it is our understanding that
250 ties are less than 10% of  the number of ties included within one mile of
track.)

As part of your analysis, please provide quantitative and other descriptive information (e.g., train speed.) of (i) the sp ecific section of tr ack that will undergo
work, both before and after the actual work (i.e., the replacement of its rail or ties), and (ii) the surrounding sections of the track that will undergo work, both before and after the actual work.  In othe r words, we would like to see how a large
continuous section of track is impacted by a small section that is in need of repair,
and then how a large continuous section of track is benefited by the repair of the
small section.
8. Please clarify for us whether the “bridges” you include with other related costs are solely for the construction of new bridges.  If it does not relate to the construction
of new bridges, describe for us the cost s that are incurred and explain to us how
you determine which costs are a ppropriate to capitalize.
9. Similarly, please describe for us the types of costs that are incurred for “signals”
and explain to us why it is appropriate to capitalize these costs.  It is not clear why
the costs that relate to signals are “s ubstantial expenditures that increase the
capacity, improve the safety or efficiency, or extend the useful life of an asset,”
rather than the routine replacement of mi nor parts.  As part of your response,
please clarify for us whether the amount cap italized for signals includes internal
payroll costs.
10. Please (i) identify all the circumstances in  which you perform tr ack surfacing, (ii)
explain to us how you determined it is a ppropriate to capitaliz e costs associated
with track surfacing, and (iii ) tell us the period over which you depreciate the
costs related to track surfacing and explain to us how you determined this period is appropriate.  In a ddition, clarify for us whet her any of the identified
circumstances of track surfacing can occur in close proximity of each other with
regard to a specific section of track.
11. We note the reference in your response to  rail grinding.  Please clarify whether
your reference to rail grinding is that you capitalize the costs a ssociated with the
actual rail grinding or that you capitalize only rail grinding eq uipment without any
capitalization of costs for the actual rail grinding process.  If you capitalize any
costs associated with the act ual rail grinding process, plea se (i) describe for us the
frequency that rail is grin ded, including any non schedul ed grinding, (ii) tell us
the period that you depreciate the capitali zed costs of rail gr inding, (iii) quantify
for us the life of rail both with and wit hout grinding, and (iv) describe for us any
maintenance procedures that may exist as  an alternate to grinding and tell us
whether you employ any of these procedures.

Union Pacific Corporation
April 28, 2008
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You may contact Doug Jones at 202-551-3309 with any questions.  You may also
contact me at 202-551-3812.

        S i n c e r e l y ,

        M i c h a e l  F a y
        B r a n c h  C h i e f