<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A-1
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
[X] SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
[ ] SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from _________ to _________
Commission file number 1-6075
UNION PACIFIC CORPORATION
(Exact name of registrant as specified in its charter)
Utah 13-2626465
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Martin Tower, Eighth and Eaton Avenues 18018
Bethlehem, Pennsylvania (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code (610) 861-3200
___________________________________
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock (Par Value $2.50 per share) New York Stock Exchange, Inc.
___________________________________
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
------ ------
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ X ].
------
___________________________________
As of February 28, 1997 the aggregate market value of the registrant's
Common Stock held by non-affiliates (using the New York Stock Exchange closing
price) was approximately $14,872,259,119.
The number of shares outstanding of the registrant's Common Stock as of
February 28, 1997 was 246,842,475.
Portions of the following documents are incorporated by reference into
this Report: (1) registrant's Annual Report to Stockholders for the year ended
December 31, 1996 (Parts I, II and IV); and (2) registrant's definitive Proxy
Statement for the annual meeting of stockholders to be held on April 18, 1997
(Part III).
<PAGE> 2
The undersigned Registrant hereby amends its Annual Report on Form 10-K
for the fiscal year ended December 31, 1996 to include the following exhibits:
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
Exhibit Number Exhibit
- -------------- -------
(23) Independent Auditors' Consents
(99)(a) Financial Statements for the Fiscal Year ended
December 31, 1996 required by Form 11-K for the Union
Pacific Corporation Thrift Plan.
(99)(b) Financial Statements for the Fiscal Year ended
December 31, 1996 required by Form 11-K for the Union
Pacific Fruit Express Company Agreement Employee
401(k) Retirement Thrift Plan.
(99)(c) Financial Statements for the Fiscal Year ended
December 31, 1996 required by Form 11-K for the Skyway
Retirement Savings Plan.
(99)(d) Financial Statements for the Fiscal Year ended
December 31, 1996 required by Form 11-K for the Union
Pacific Agreement Employee 401(k) Retirement Thrift
Plan.
(99)(e) Financial Statements for the Fiscal Year ended
December 31, 1996 required by Form 11-K for the Union
Pacific Motor Freight Agreement Employee 401(k)
Retirement Thrift Plan.
(99)(f) Financial Statements for the Fiscal Year ended
December 31, 1996 required by Form 11-K for the
Chicago and North Western Railway Company Profit
Sharing and Retirement Savings Program.
(99)(g) Financial Statements for the Fiscal Year ended
December 31, 1996 required by Form 11-K for the
Southern Pacific Rail Corporation Thrift Plan.
<PAGE> 3
UNION PACIFIC CORPORATION
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: June 26, 1997
UNION PACIFIC CORPORATION
(Registrant)
/s/ Joseph E. O'Connor, Jr.
----------------------------------
Joseph E. O'Connor, Jr.,
Vice President and Controller
(Chief Accounting Officer
and Duly Authorized Officer)
<PAGE> 4
EXHIBIT INDEX
-------------
Exhibit Number Exhibit
- -------------- -------
(23) Independent Auditors' Consents
(99)(a) Financial Statements for the Fiscal Year ended
December 31, 1996 required by Form 11-K for the Union
Pacific Corporation Thrift Plan.
(99)(b) Financial Statements for the Fiscal Year ended
December 31, 1996 required by Form 11-K for the Union
Pacific Fruit Express Company Agreement Employee
401(k) Retirement Thrift Plan.
(99)(c) Financial Statements for the Fiscal Year ended
December 31, 1996 required by Form 11-K for the Skyway
Retirement Savings Plan.
(99)(d) Financial Statements for the Fiscal Year ended
December 31, 1996 required by Form 11-K for the Union
Pacific Agreement Employee 401(k) Retirement Thrift
Plan.
(99)(e) Financial Statements for the Fiscal Year ended
December 31, 1996 required by Form 11-K for the Union
Pacific Motor Freight Agreement Employee 401(k)
Retirement Thrift Plan.
(99)(f) Financial Statements for the Fiscal Year ended
December 31, 1996 required by Form 11-K for the
Chicago and North Western Railway Company Profit
Sharing and Retirement Savings Program.
(99)(g) Financial Statements for the Fiscal Year ended
December 31, 1996 required by Form 11-K for the
Southern Pacific Rail Corporation Thrift Plan.
<PAGE>
Exhibit 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Post-Effective Amendment No. 1
to Registration Statement No. 33-12513 and in Registration Statement No.
33-49849 of Union Pacific Corporation on Forms S-8 of our report dated June 17,
1997 appearing in Exhibit 99(a) of Amendment No. 1 to the Annual Report on
Form 10-K of Union Pacific Corporation for the year ended December 31, 1996.
/s/ Deloitte & Touche LLP
New York, New York
June 25, 1997
<PAGE>
Exhibit 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
33-49785 of Union Pacific Corporation on Form S-8 of our report dated June 4,
1997, appearing in Exhibit 99(b) of Amendment No. 1 to the Annual Report on
Form 10-K of Union Pacific Corporation for the fiscal year ended December 31,
1996.
/s/ Deloitte & Touche LLP
Omaha, Nebraska
June 25, 1997
<PAGE>
Exhibit 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
33-51735 of Union Pacific Corporation on Form S-8 of our report dated May 1,
1997 appearing in Exhibit 99(c) of Amendment No. 1 to the Annual Report on
Form 10-K of Union Pacific Corporation for the fiscal year ended December 31,
1996.
/s/ Deloitte & Touche LLP
San Jose, California
June 25, 1997
<PAGE>
Exhibit 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
33-53968 of Union Pacific Corporation on Form S-8 of our report dated June 4,
1997, appearing in Exhibit 99(d) of Amendment No. 1 to the Annual Report on
Form 10-K of Union Pacific Corporation for the fiscal year ended December 31,
1996.
/s/ Deloitte & Touche LLP
Omaha, Nebraska
June 25, 1997
<PAGE>
Exhibit 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
33-54811 of Union Pacific Corporation on Form S-8 of our report dated June 4,
1997, appearing in Exhibit 99(e) of Amendment No. 1 to the Annual Report on
Form 10-K of Union Pacific Corporation for the fiscal year ended December 31,
1996.
/s/ Deloitte & Touche LLP
Omaha, Nebraska
June 25, 1997
<PAGE>
Exhibit 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
333-10797 of Union Pacific Corporation on Form S-8 of our report dated June 4,
1997, appearing in Exhibit 99(f) of Amendment No. 1 to the Annual Report on
Form 10-K of Union Pacific Corporation for the fiscal year ended December 31,
1996.
/s/ Deloitte & Touche LLP
Omaha, Nebraska
June 25, 1997
<PAGE>
Exhibit 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the registration statement No.
333-13115 on Form S-8 of Union Pacific Corporation of our report
dated June 20, 1997 relating to the statements of net assets available for
plan benefits (modified cash basis) of Southern Pacific Rail Corporation
Thrift Plan as of December 31, 1996 and 1995, and the related statements of
changes in net assets available for plan benefits (modified cash basis), for
the years then ended and the related supplemental schedules, which report
appears in Exhibit 99(g) of Amendment No. 1 to the Annual Report on Form 10-K
of Union Pacific Corporation for the fiscal year ended December 31, 1996. Our
report notes these financial statements and supplemental schedules were
prepared on a modified cash basis of accounting, which is a comprehensive
basis of accounting other that generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
San Francisco, California
June 25, 1997
<PAGE> COVER
Exhibit 99(a)
UNION PACIFIC CORPORATION THRIFT PLAN
Financial Statements for the Years Ended
December 31, 1996 and 1995
and Independent Auditors' Report
<PAGE> INDEX
UNION PACIFIC CORPORATION THRIFT PLAN
TABLE OF CONTENTS
- ------------------------------------------------------------------------------
Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED
DECEMBER 31, 1996 AND 1995:
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4-9
Supplemental schedules required by the Employee Retirement Income Security Act
of 1974 are disclosed separately in Master Trust reports filed with the U.S.
Department of Labor.
<PAGE> 1
INDEPENDENT AUDITORS' REPORT
Union Pacific Corporation Thrift Plan:
We have audited the accompanying statements of net assets available for
benefits of the Union Pacific Corporation Thrift Plan (the "Plan") as of
December 31, 1996 and 1995 and the related statements of changes in net assets
available for benefits for the years then ended. These financial statements
are the responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
1996 and 1995, and the changes in net assets available for benefits for the
years then ended in conformity with generally accepted accounting principles.
/s/ DELOITTE & TOUCHE LLP
New York, New York
June 17, 1997
<PAGE> 2
UNION PACIFIC CORPORATION THRIFT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996 AND 1995
- ------------------------------------------------------------------------------
1996 1995
--------- ----------
ASSETS:
Investments at fair value
(Notes 2, 3 and 7) $476,177,320 $382,627,929
------------ ------------
Net assets available for benefits $476,177,320 $382,627,929
============ ============
The accompanying notes are an integral part of these financial statements.
<PAGE> 3
UNION PACIFIC CORPORATION THRIFT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
- ------------------------------------------------------------------------------
1996 1995
------------ ------------
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income (Note 7):
Net appreciation in fair value
of investments $ 64,672,659 $ 73,425,389
Interest 7,138,329 7,177,207
Dividends 11,286,224 7,847,775
------------ ------------
83,097,212 88,450,371
Contributions by (Note 7):
Employees 23,593,530 19,113,441
Company 7,699,682 6,615,099
------------ ------------
31,293,212 25,728,540
Total Additions 114,390,424 114,178,911
------------ ------------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Distributions to participants (Note 7) 20,841,033 15,807,420
------------ ------------
NET INCREASE 93,549,391 98,371,491
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of Year 382,627,929 284,256,438
------------ ------------
End of Year $476,177,320 $382,627,929
============ ============
The accompanying notes are an integral part of these financial statements.
<PAGE> 4
UNION PACIFIC CORPORATION THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF PLAN
The following description of the Union Pacific Corporation Thrift Plan (the
"Plan") provides only general information. Participants should refer to the
Plan document for a more complete description of the Plan's provisions.
General - The Plan was adopted in October 1973 by the Board of Directors of
Union Pacific Corporation (the "Company") and approved by its stockholders in
May 1974. Under the terms of the Plan, non-agreement employees generally
become eligible to participate in the Plan after completing twelve months
continuous service and working at least 1,000 hours.
Contributions - The Company contributes to the Plan on behalf of each
participant an amount equal to 50% of the participant's contribution with such
Company contribution limited to 3% of the participant's base salary. The Plan
meets the requirements of section 401(k) of the Internal Revenue Code, which
(i) permits certain employee contributions to be withheld on a "salary
deferral" basis, so that amounts deducted will not be included in the
employee's income for Federal income tax purposes, (ii) allows employees to
contribute up to 16% of their salary to the Plan, (iii) provides for payroll
based employee stock ownership plan contributions ("PAYSOP"), and (iv) makes
various other changes intended to give participants greater control and
flexibility with respect to Plan investments.
Spin-Off - In September 1996, the Company's Board of Directors declared a
special dividend consisting of the shares of Union Pacific Resources Group
("Resources") common stock owned by the Company (the "Spin-Off"). As a result
of the Spin-Off, each of the Company's stockholders received 0.846946 of a
share of Resources common stock for each share of Company common stock held by
such stockholders at the September 26, 1996 record date for the distribution.
Therefore, each Plan participant's account received 0.846946 of a share of
Resources common stock for each share of Company common stock held in the
account. The shares received have been placed in the Resources Stock Fund
("Resources Stock"). Future contributions to Resources Stock are not
permitted.
Loans to Participants - In June 1985, the loan provisions of the Plan were
approved by the Internal Revenue Service and became effective. The amount of
a loan is limited to one-half of the vested value of a participant's account,
excluding PAYSOP, and subject to a minimum and maximum loan amount. As the
loan is repaid, all principal and interest payments will be credited to the
participant's account, excluding PAYSOP, in the same proportions as the
contributions then being made on behalf of the participant. If no
contributions are then being made, the loan repayments will be invested in
accordance with the participant's most recent investment election, unless he
or she directs otherwise to the extent permitted by the Plan. Participant
loans, which are secured by the participant's individual account balances,
bear a fixed rate of interest set by the Plan Administrator based on interest
rates then being charged on similar loans, and are repayable over periods not
exceeding five years, except loans relating to a principal residence, in which
case the term of the loan shall not exceed fifteen years. The loans bear
interest ranging from 5.5% to 10.5%. The number of loans outstanding at
December 31, 1996 and 1995 was 1,725 and 1,797, respectively.
<PAGE> 5
UNION PACIFIC CORPORATION THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS--(continued)
Participant Accounts - Aggregate monthly employee and Company contributions
may be invested entirely in the Union Pacific Company Stock Fund (Company
Stock), Union Pacific Equity Index Fund (Equity Index), Union Pacific Fixed
Income Fund (Fixed Income), Vanguard/Wellington Fund (Wellington), Vanguard
U.S. Growth Portfolio (U.S. Growth), Vanguard Money Market Reserves-Prime
Portfolio (VMMR Prime Portfolio), Vanguard International Growth Portfolio
(International Growth), Vanguard Bond Index Fund (Bond Index) or any
combination thereof, in multiples of 5% in accordance with separate elections
by each employee. At December 31, 1996 and 1995, 5,731 and 5,265 members of
the Plan held interest in 4,920 and 4,725 Company stock accounts, 2,782 and
2,614 Equity Index accounts, 3,935 and 2,676 Fixed Income accounts, 3,899 and
0 Resources Stock accounts, 1,714 and 1,302 Wellington accounts, 100 and 9
VMMR Prime Portfolio accounts, 1,587 and 925 U.S. Growth accounts, 1,419 and
1,106 International Growth accounts, and 477 and 440 Bond Index accounts,
respectively. In addition, 3,213 and 3,337 members held interest in PAYSOP
accounts at December 31, 1996 and 1995, respectively.
Participants' Plan accounts are maintained on a unit basis. Under this
method, an employee's account value is expressed in units of participation,
representing an undivided interest in the underlying assets and income of the
Fund. The purchase or redemption price of the units is determined daily by
the Trustee, based on the current market values, or contract value in the case
of Guaranteed Investment Contracts (GICs), of the underlying assets of the
Fund.
Vesting - Vesting is based exclusively upon years of service. Participants at
all times have a 100% vested interest in their voluntary contributions plus
actual earnings thereon and their PAYSOP account. A participant's vested
interest in the portion of his/her account derived from Company contributions
increases 25% every year, after two years of credited service, to 100% vested
after five years of credited service. A participant's interest in the
Company's contributions will also become 100% vested if, while employed by the
Company, the participant reaches age 65, dies, or sustains a total and
permanent disability.
Payment of Benefits - A participant may elect to receive a final distribution
under the Plan as either a cash lump sum distribution, or in monthly or annual
installments over a specified period of time not to exceed the lesser of ten
calendar years or the life expectancy of the participant or the joint life
expectancy of the participant and his/her beneficiary as prescribed in the
Treasury Regulations. Final distributions of PAYSOP accounts must be lump sum
distributions. For benefit payments equal to or less than $3,500, the Plan
Administrator may direct the Trustee to make a lump sum payment to the
participant or beneficiary. A participant has the option to receive the value
of his/her PAYSOP account and the portion of his/her account invested in the
Company Stock Fund in cash or in shares of such Company stock; in-kind
distributions will be lump sum and any fractional shares will be distributed
in cash.
A withdrawal may be made by a participant from his/her account in accordance
with the Plan's provisions.
Forfeitures - When certain terminations of participation in the Plan occur,
the nonvested portion of a participant's account, as defined by the Plan,
represents a potential forfeiture. Such potential forfeitures reduce
subsequent Company contributions to the Plan. However, if upon reemployment
the former participant fulfills certain requirements as defined in the Plan,
<PAGE> 6
UNION PACIFIC CORPORATION THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS--(continued)
the previously forfeited nonvested portion of the participant's account may
be restored through Company contributions.
Amounts summarized below represent Company contributions forfeited for the
years ended December 31, 1996 and 1995:
1996 1995
------- -------
Company contributions forfeited................... $24,278 $30,851
Applied against current year contributions........ 18,170 18,643
------- -------
Applied to reduce subsequent year contributions... $ 6,108 $12,208
======= =======
Administrative Expenses - All costs of Plan administration are borne by the
Company.
2. Significant Accounting Policies - The accounts of the Plan have been
prepared in accordance with generally accepted accounting principles. The
financial statements were prepared in accordance with the financial reporting
requirements of the Employee Retirement Income Security Act of 1974 as
permitted by the Securities and Exchange Commission's amendments to Form 11-K
adopted during 1990.
Investments are valued utilizing closing prices except for the investment in
the GICs, which is valued at cost plus reinvested interest. Dividend income
is recorded as of the ex-dividend date. Security transactions are recorded as
of the trade date. Certain 1995 amounts have been reclassified to conform to
the 1996 financial statement presentation.
3. Investments - At December 31, 1996 and 1995, Plan investments were
maintained in commingled funds of the Plan Trustees along with investments of
another Company-administered Thrift Plan, within a Master Trust. The Union
Pacific Resources Company Employee Thrift Plan ("Resources Plan") was the
other participant in the Master Trust at December 31, 1995. Investments for
the Chicago and North Western Railway Company Profit Sharing and Retirement
Savings Program ("C&NW PS/RS") were added to the Master Trust effective
July 31, 1996. The Resources Plan investments were removed from the Master
Trust as a result of the Spin-Off. Assets, liabilities, investment income,
and security gains and losses are allocated monthly to the Plan based on its
equity in the investments of the Master Trust. At December 31, 1996 and 1995,
the Plan held percentage interests in the Master Trust of 99.5 and 82.9 in
Company Stock (including PAYSOP), 77.1 and 66.2 in Equity Index, 98.4 and 65.8
in Fixed Income, 91.9 and 77.7 in the Loan Fund, 97.5 and 74.0 in Wellington,
94.9 and 71.9 in U.S. Growth, 86.7 and 33.3 in the VMMR Prime Portfolio, 98.5
and 75.6 in International Growth, and 100.0 and 70.2 in Bond Index, and 99.6
and 0.0 in Resources Stock.
At December 31, 1996 and 1995, the total investments at fair value of the
Master Trust were $577,591,251 and $526,488,315, respectively. In addition,
total net appreciation in fair value of investments and total interest and
dividends were $86,837,354 and $95,247,372 and $28,728,709 and $21,156,851,
respectively, for the years ended December 31, 1996 and 1995.
The Plan provides for separate funds for the investment of contributions.
<PAGE> 7
UNION PACIFIC CORPORATION THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS--(continued)
Participants may designate into which fund or funds their contributions and
the Company matching contributions are to be directed within specific limits.
At December 31, 1996 and 1995, Company Stock and PAYSOP are invested primarily
in Union Pacific common stock. Equity Index is invested in the Vanguard Index
Trust 500 Portfolio Fund at December 31, 1996 and 1995, which is designed to
closely track the investment performance of the Standard and Poor's 500
Composite Stock Index. At December 31, 1996 and 1995, Fixed Income is
comprised of investments in GICs bearing interest at 6.05% to 7.85% and 5.94%
to 7.85%, respectively. Interest rates are fixed for the life of each
contract. GICs are held with insurance companies rated at least A-1 by
Standard & Poors. The maturities of these GICs are generally not longer than
five years and their principal and interest are unconditionally guaranteed by
the respective insurance companies. The fair value of GIC's approximates
their contract value. At December 31, 1996 and 1995, Fixed Income is also
comprised of the Vanguard Investment Contract Trust, which is comprised of
contracts issued by financial institutions and backed by high quality bonds
and bond mutual funds. As the GICs expire, the proceeds will be reinvested in
the Vanguard Investment Contract Trust. Wellington is invested in the
Vanguard/Wellington Fund at December 31, 1996, which is comprised of common
stocks and fixed-income securities. At December 31, 1996, U.S. Growth is
invested in Vanguard U.S. Growth Portfolio which is comprised of established
U.S. growth stocks. International Growth is invested in the Vanguard
International Growth Portfolio at December 31, 1996, which is comprised of
foreign common stocks with high growth potential. At December 31, 1996, Bond
Index is invested in the Vanguard Bond Index Fund which is designed to closely
track the investment performance of the Lehman Brothers Aggregate Bond Index.
VMMR Prime Portfolio is a diversified money market investment fund invested
and reinvested in high quality certificates of deposit, bankers' acceptances,
commercial paper, U.S. government securities, and other short-term obligations
with the objective of preserving principal while providing income. At
December 31, 1996, Resources Stock is invested primarily in Resources common
stock.
4. Plan Amendments - Effective July 1, 1996, the Plan was amended to provide
that final distributions may be made in annual installments over a period of
time not to exceed ten years. The loan provisions of the Plan were amended
effective July 1, 1996, to allow a loan term of 12 months, to remove the
limitations based on salary level, to allow loans on rollover contributions
during the first year of employment, and to provide that one partial payment
of at least $500 will be allowed each year. Effective October 15, 1996, the
Plan was amended to reflect the Spin-Off and the related creation of Resources
Stock. Effective September 1, 1996, the Plan was amended to provide that a
participant would be suspended effective when a loan from the C&NW PS/RS
enters a grace period or becomes due and payable. Effective September 11,
1996, Southern Pacific Rail Corporation and any wholly-owned subsidiary
thereof (SP Companies) became Employers under the Plan. Effective
September 11, 1996, the Plan was amended to provide that a Covered Employee
transferred to an SP Company would remain a Covered Employee until December
31, 1997, and any individual eligible to participate in the Southern Pacific
Rail Corporation Thrift Plan between September 11, 1996 and December 31, 1997,
and becoming a Covered Employee during that period would not become an
Eligible Employee prior to January 1, 1998.
5. Federal Income Taxes - The Company has received a letter of determination
from the Internal Revenue Service dated April 18, 1995, and the Plan
Administrator and the Plan's tax counsel believe that the Plan, as
subsequently amended, is currently designed and being operated in compliance
<PAGE> 8
UNION PACIFIC CORPORATION THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS--(continued)
with section 401(a) of the Internal Revenue Code of 1986, as amended. With
respect to the operation of the Plan, Plan management is aware of certain
operational defects which could adversely affect the tax-exempt status of the
Plan. These operational defects will be corrected through the use of the
Voluntary Compliance Resolution (VCR) program. Submission to the VCR program
was made on August 5, 1996.
Inasmuch as it is the opinion of Management that the Plan is qualified,
employees participating in the Plan are not taxed on Company contributions
made on their behalf, on employee contributions made on a pre-tax basis, on
earnings on such Company contributions or pre-tax employee contributions, or
on earnings on after-tax employee contributions, until any such amounts are
distributed. In addition, no provision for Federal income taxes has been made
in the financial statements.
6. Plan Termination - Although the Plan is intended to be continued by the
Company, the Company reserves the right to amend or terminate the Plan. In
the event of a Plan termination or partial termination, or the Company
permanently ceases to make contributions, all invested amounts shall
immediately vest and be nonforfeitable. All funds shall continue to be held
for distribution as provided in the Plan.
7. Fund Information - Investments at par value, investment income,
contributions, and distributions to participants by fund are as follows for
the years ended December 31, 1996 and 1995:
Year Ended Year Ended
December 31, December 31,
1996 1995
------------ ------------
Investments at Fair Value:
Union Pacific Company Stock Fund $127,266,375 $132,265,668
Union Pacific Equity Index 91,508,657 75,624,191
Union Pacific Fixed Income 92,215,165 87,346,365
Common Stock/PAYSOP 10,378,499 8,279,048
Resources Stock Fund 51,360,520 --
Vanguard Wellington Fund 30,566,181 25,833,050
VMMR Prime Portfolio 1,984,161 131,259
Vanguard US Growth Fund 26,813,999 15,468,564
Vanguard International Growth
Portfolio Fund 24,514,297 17,915,064
Vanguard Total Bond Market Fund 3,417,789 3,985,401
Loan Fund 16,151,677 15,779,319
------------ ------------
$476,177,320 $382,627,929
============ ============
<PAGE> 9
UNION PACIFIC CORPORATION THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS--(continued)
Year Ended Year Ended
December 31, December 31,
1996 1995
------------ ------------
Investment Income:
Union Pacific Company Stock Fund $ 25,406,609 $ 47,902,716
Union Pacific Equity Index 17,420,616 19,666,695
Union Pacific Fixed Income 5,494,978 6,353,369
Company Stock/PAYSOP 2,507,552 2,788,556
Resources Stock Fund 18,858,691 --
Vanguard Wellington Fund 4,233,058 5,141,861
VMMR Prime Portfolio 54,700 693
Vanguard U.S. Growth Fund 4,800,095 2,920,833
Vanguard International Growth
Portfolio Fund 2,971,594 2,136,376
Vanguard Total Bond Market Fund 93,817 479,957
Loan Fund 1,255,502 1,059,315
------------ ------------
$ 83,097,212 $ 88,450,371
============ ============
Contributions:
Union Pacific Company Stock Fund $ 8,736,619 $ 8,582,467
Union Pacific Equity Index 6,599,982 5,305,357
Union Pacific Fixed Income 5,699,884 5,843,040
Company Stock/PAYSOP 5,741 2,924
Resources Stock Fund 3,160 --
Vanguard Wellington Fund 4,023,577 2,461,104
VMMR Prime Portfolio 163,231 1,053
Vanguard U.S. Growth Fund 2,834,554 1,122,216
Vanguard International Growth
Portfolio Fund 2,663,227 1,984,564
Vanguard Total Bond Market Fund 563,237 425,815
Loan Fund -- --
------------ ------------
$ 31,293,212 $ 25,728,540
============ ============
Distributions to participants:
Union Pacific Company Stock Fund $ 5,148,631 $ 5,284,198
Union Pacific Equity Index 4,485,174 3,123,367
Union Pacific Fixed Income 5,926,598 5,860,719
Company Stock/PAYSOP 413,842 324,497
Resources Stock Fund 324,621 --
Vanguard Wellington Fund 1,575,834 392,133
VMMR Prime Portfolio 713,289 --
Vanguard U.S. Growth Fund 810,357 207,725
Vanguard International Growth
Portfolio Fund 934,304 341,643
Vanguard Total Bond Market Fund 100,045 62,020
Loan Fund 408,338 211,117
------------ ------------
$ 20,841,033 $ 15,807,420
============ ============
<PAGE> COVER
Exhibit 99(b)
UNION PACIFIC FRUIT EXPRESS COMPANY AGREEMENT EMPLOYEE
401(k) RETIREMENT THRIFT PLAN
Financial Statements and Supplemental Schedules
for the Years Ended December 31, 1996 and 1995
and Independent Auditors' Report
<PAGE> INDEX
UNION PACIFIC FRUIT EXPRESS COMPANY AGREEMENT EMPLOYEE
401(k) RETIREMENT THRIFT PLAN
TABLE OF CONTENTS
- ------------------------------------------------------------------------------
Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1996 AND 1995 AND FOR THE
YEARS THEN ENDED:
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4-8
SUPPLEMENTAL SCHEDULES AS OF DECEMBER 31, 1996 AND FOR THE
YEAR THEN ENDED:
Item 27a - Schedule of Assets Held for Investment Purposes 9
Item 27d - Schedule of Reportable Transactions 10
Schedules not filed herewith are omitted because of the absence of
the conditions under which they are required.
<PAGE> 1
INDEPENDENT AUDITORS' REPORT
Union Pacific Fruit Express Company Agreement
Employee 401(k) Retirement Thrift Plan:
We have audited the accompanying statements of net assets available for
benefits of the Union Pacific Fruit Express Company Agreement Employee 401(k)
Retirement Thrift Plan (the Plan) as of December 31, 1996 and 1995 and the
related statements of changes in net assets available for benefits for
the years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
1996 and 1995, and the changes in net assets available for benefits for the
years then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in
the Table of Contents are presented for the purpose of additional analysis and
are not a required part of the basic financial statements, but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These schedules are the responsibility of the Plan's
management. Such schedules have been subjected to the auditing procedures
applied in the audit of the basic 1996 financial statements and, in our
opinion, are fairly stated in all material respects when considered in
relation to the basic financial statements taken as a whole.
/s/ DELOITTE & TOUCHE LLP
Omaha, Nebraska
June 4, 1997
<PAGE> 2
UNION PACIFIC FRUIT EXPRESS COMPANY AGREEMENT EMPLOYEE
401(k) RETIREMENT THRIFT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996 AND 1995
- ------------------------------------------------------------------------------
1996 1995
-------- --------
ASSETS:
Investments at fair value (Note 3) $301,787 $175,643
-------- --------
Net assets available for benefits $301,787 $175,643
======== ========
The accompanying notes are an integral part of these financial statements.
<PAGE> 3
UNION PACIFIC FRUIT EXPRESS COMPANY AGREEMENT EMPLOYEE
401(k) RETIREMENT THRIFT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
- ------------------------------------------------------------------------------
1996 1995
-------- --------
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income (Note 7):
Net appreciation in fair value of
investments (Note 3) $ 35,133 $ 29,447
Interest 171 125
Dividends 12,049 5,159
-------- --------
47,353 34,731
Employee contributions (Note 7) 83,291 68,321
-------- --------
Total Additions 130,644 103,052
-------- --------
DEDUCTIONS FORM NET ASSETS ATTRIBUTED TO:
Distributions to participants (Note 7) 4,500 695
-------- --------
NET INCREASE 126,144 102,357
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of Year 175,643 73,286
-------- --------
End of Year $301,787 $175,643
======== ========
The accompanying notes are an integral part of these financial statements.
<PAGE> 4
UNION PACIFIC FRUIT EXPRESS COMPANY AGREEMENT EMPLOYEE
401(k) RETIREMENT THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996 AND 1995
- ------------------------------------------------------------------------------
1. DESCRIPTION OF PLAN
The following description of the Union Pacific Fruit Express
Company Agreement Employee 401(k) Retirement Thrift Plan (the
Plan) provides only general information. Participants should
refer to the Plan document for a more complete description of
the Plan's provisions.
General - The Plan is a defined contribution plan covering
employees of the Union Pacific Fruit Express Company (the
Company) who are governed by a collective bargaining agreement
entered into between the Company and a union to which
eligibility to participate in the plan has been extended, and
have completed one year of service or were employees as of the
effective date of the Plan, August 1, 1993. It is subject to
the provisions of the Employee Retirement Income Security Act of
1974 (ERISA), as amended.
Contributions - Participants may contribute 2% to 8% of their
compensation on a salary deferral basis subject to limitations
specified in the Internal Revenue Code. The Company does not
contribute to the Plan.
Participant Accounts - Each participant account is credited with
the participant's contributions and an allocation of the Plan's
earnings. Allocations are based on participant account
balances.
Vesting - Participants are at all times 100% vested in the value
of their account.
Payment of Benefits - Distribution of benefits shall be in a
lump sum no later than 60 days following the close of the plan
year in which the participant's termination of employment
occurs, subject to certain mandatory pay-outs to participants
who have attained age 70-1/2, but have not yet terminated
employment.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The accounts of the Plan have been
prepared in accordance with generally accepted accounting
principles. The financial statements were prepared in
accordance with the financial reporting requirements of ERISA as
permitted by the Securities and Exchange Commission's amendments
to Form 11-K adopted during 1990.
Investment Valuation and Income Recognition - Investments in
the Union Pacific Company Stock Fund, Resources Stock Fund,
Vanguard/Wellington Fund, Vanguard Index Trust-500 Portfolio
Fund, Vanguard U.S. Growth Fund, Vanguard International Growth
Portfolio Fund and the Vanguard Total Bond Market Fund are
valued at fair value as determined by quoted market prices. The
investments in the Vanguard Investment Contract Trust Fund are
valued at fair value as determined by Vanguard Fiduciary Trust
<PAGE> 5
Company. Dividend income is recorded as of the ex-dividend
date. Security transactions are recorded as of the trade date.
3. INVESTMENTS
Plan participants may direct their contributions in various
proportions to any of the seven available investment funds
identified below:
Fund A - Union Pacific Company Stock Fund - This fund is
administered as a separate account by Vanguard Fiduciary Trust
Company and invests primarily in the stock of Union Pacific
Corporation. It also maintains a small cash position invested
in Vanguard Money Market Reserves, to facilitate transactions.
The Company stock fund is divided into fund shares, rather than
shares of company stock.
Fund B - Vanguard Wellington Fund - This fund consists of
investment in the Vanguard Wellington Mutual Fund.
Fund C - Vanguard Index Trust-500 Portfolio Fund - This fund
consists of investment in the Vanguard Index Trust-500 Portfolio
Mutual Fund.
Fund D - Vanguard Investment Contract Trust Fund - This fund
consists of investment in the Vanguard Fiduciary Trust Company
Investment Contract Trust, a collective investment fund for tax-
qualified pension and profit sharing plan assets.
Fund E - Vanguard U.S. Growth Fund - This fund consists of
investment in the Vanguard U.S. Growth Mutual Fund.
Fund F - Vanguard International Growth Portfolio Fund - This fund
consists of investment in the Vanguard International Growth
Portfolio Mutual Fund.
Fund G - Vanguard Total Bond Market Fund - This fund consists of
investment in the Vanguard Total Bond Market Mutual Fund.
In September 1996, The Company's Board of Directors declared a
special dividend consisting of the shares of Union Pacific Resources
Group ("Resources") common stock owned by the Company ("the Spin-Off").
As a result of the Spin-Off, each of the Company's stockholders
received 0.846946 of a share of Resources common stock for each share
of Company common stock held by such shareholders at the
September 26, 1996 record date for the distribution. Therefore, each
Plan participant's account received 0.846946 of a share of Resources
common stock for each share of Company common stock held in the
account. The shares received have been placed in the Resources Stock
Fund ("Resources Stock"). Future contributions to Resources Stock Fund
are not permitted.
<PAGE> 6
<TABLE>
<CAPTION>
The following table presents the fair value of investments.
Investments that represent 5% or more of the Plan's net assets
are separately identified.
December 31, 1996 December 31, 1995
-------------------------- --------------------------
Number Fair Number Fair
of Units Value of Units Value
-------------------------- --------------------------
<S> <C> <C> <C> <C>
Investments at Fair Value as Determined by
Quoted Market Price:
Union Pacific Company Stock Fund 4,682.749 $ 46,172 3,158.845 $ 34,242
Resources Stock Fund 1,630.503 17,104 -- --
Vanguard Wellington Fund 3,644.406 95,301 2,552.599 62,360
Vanguard Index Trust - 500 Portfolio Fund 1,696.993 117,364 1,227.725 70,717
Vanguard U.S. Growth Fund 701.654 16,657 260.343 5,298
Other -- 5,805 -- 1,191
--------- -------- --------- -------
298,403 173,808
Other Investments at Estimated Fair Value 3,383.690 3,384 1,834.850 1,835
-------- --------
Total Investments at Fair Value $301,787 $175,643
======== ========
</TABLE>
<PAGE> 7
During 1996 and 1995, the Plan's investments (including investments
bought, sold, and held during the year), appreciated in value by
$35,133 and $29,447, respectively, as follows:
Years Ended
December 31,
1996 1995
--------- ---------
Net Change in Fair Value
Investments at Fair Value as Determined by
Quoted Market Prices:
Union Pacific Company Stock Fund $ 9,327 $ 5,897
Resources Stock Fund 3,081 --
Mutual Funds 22,725 23,550
------- -------
Net change in fair value $35,133 $29,447
======= =======
4. PLAN ADMINISTRATION
The Plan is administered by the Senior Vice President, Human
Resources of the Corporation. All expenses incurred in the
administration of the Plan are paid by the Company.
5. TAX STATUS
The Plan obtained a tax determination letter dated July 27,
1995, in which the Internal Revenue Service stated that the
Plan, as then designed, was in compliance with the applicable
requirements of the Internal Revenue Code (the Code). The Plan
has been amended since receiving the determination letter.
However, Plan management believes that the Plan currently is
being operated in compliance with the applicable requirement of
the Internal Revenue Code. Therefore, it is believed that the
Plan was qualified and the related trust was tax-exempt under
provisions of Section 501(a) of the Internal Revenue Code as of
the financial statement date. Therefore, no provision for
income taxes has been included in the Plan's financial
statements.
6. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company
has the right under the Plan at any time, to terminate the Plan
subject to the provisions of ERISA. Regardless of such actions,
the principal and income of the Plan remains for the exclusive
benefit of the Plan's participants and beneficiaries. The
Company may direct the Trustee either to distribute the Plan's
assets to the participants, or to continue the Trust and
distribute benefits as though the Plan had not been terminated.
<PAGE> 8
7. FUND INFORMATION
Investment income, contributions and distributions to participants by fund
are as follows for the years ended December 31, 1996 and 1995:
Year Ended Year Ended
December 31, December 31,
1996 1995
------------- --------------
Investment Income:
Union Pacific Company Stock Fund $10,446 $ 6,553
Resources Stock Fund 3,081 --
Vanguard Wellington Fund 12,061 13,064
Vanguard Index Trust - 500 Portfolio Fund 19,350 14,642
Vanguard Investment Contract Trust Fund 171 125
Vanguard U.S. Growth Fund 1,686 257
Vanguard International Growth Portfolio Fund 490 89
Vanguard Total Bond Market Fund 68 1
------- -------
$47,353 $34,731
======= =======
Contributions:
Union Pacific Company Stock Fund $21,351 $16,939
Resources Stock Fund -- --
Vanguard Wellington Fund 24,300 24,807
Vanguard Index Trust - 500 Portfolio Fund 28,665 23,468
Vanguard Investment Contract Trust Fund 732 1,455
Vanguard U.S. Growth Fund 5,308 773
Vanguard International Growth Portfolio Fund 2,562 836
Vanguard Total Bond Market Fund 373 43
------- -------
$83,291 $68,321
======= =======
Distributions to participants:
Union Pacific Company Stock Fund $ 4,500 $ --
Resources Stock Fund -- --
Vanguard Wellington Fund -- 189
Vanguard Index Trust - 500 Portfolio Fund -- --
Vanguard Investment Contract Trust Fund -- 506
Vanguard U.S. Growth Fund -- --
Vanguard International Growth Portfolio Fund -- --
Vanguard Total Bond Market Fund -- --
------- -------
$ 4,500 $ 695
======= =======
8. RELATED PARTY TRANSACTIONS
Plan investments include the Union Pacific Company Stock Fund
which is invested primarily in the Stock of Union Pacific
Corporation. Union Pacific Corporation is the holding Company
of the Plan sponsor and, therefore, these transactions qualify
as party-in-interest.
The Plan also invests in various funds managed by Vanguard
Fiduciary Trust Company. Vanguard Fiduciary Trust Company is
the trustee as defined by the Plan and, therefore, the related
transactions qualify as party-in-interest.
<PAGE> 9
<TABLE>
<CAPTION>
UNION PACIFIC FRUIT EXPRESS COMPANY AGREEMENT EMPLOYEE
401(k) RETIREMENT THRIFT PLAN
Item 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
- ----------------------------------------------------------------------------------------
Column B Column C Column D Column E
Description of Investment,
Identity of Issue, Including Collateral, Rate
Borrower, Lessor of interest, Maturity Date, Current
or Similar Party Par or Maturity Value Cost Value
<S> <C> <C> <C>
Union Pacific Company Stock
Fund * 4,682.749 units $33,209 $46,172
Resources Stock Fund 1,630.503 units 14,023 17,104
Vanguard Wellington Fund * 3,644.406 units 82,540 95,301
Vanguard Index Trust -
500 Portfolio Fund * 1,696.993 units 87,948 117,364
Vanguard U.S. Growth Fund* 701.654 units 16,072 16,657
Vanguard International Growth
Portfolio Fund * 304.975 units 4,784 5,020
Vanguard Investment Contract
Trust Fund * 3,383.690 units 3,384 3,384
Vanguard Total Bond
Market Fund * 79.745 units 776 785
-------- --------
$242,736 $301,787
======== ========
* Represents a party-in-interest
</TABLE>
<PAGE>10
<TABLE>
<CAPTION>
UNION PACIFIC FRUIT EXPRESS COMPANY AGREEMENT EMPLOYEE
401(k) RETIREMENT THRIFT PLAN
Item 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1996
- -----------------------------------------------------------------------------------------------------------------
Series of Transactions, When Aggregated, Involving an
Amount in Excess of 5% of the Current Value of Plan Assets:
Column A Column B Column C Column D Column E Column F Column G
Total Total
Dollar Dollar
Identity of Number of Number of Value of Value of Net Gain
Party Involved Description of Asset Purchases Sales Purchases Sales or (Loss)
<S> <C> <C> <C> <C> <C> <C>
Vanguard Fiduciary Union Pacific Company
Trust Company * Stock Fund 28 3 $22,709 $6,083 $ 352
Vanguard Fiduciary Vanguard Wellington
Trust Company * Fund 27 3 $31,388 $3,420 $ 620
Vanguard Fiduciary Vanguard Index Trust
Trust Company * 500 Portfolio Fund 30 2 $31,965 $ 2,274 $ 408
Vanguard Fiduciary Vanguard Investment
Trust Company * Contract Trust Fund 30 2 $ 8,743 $7,194 $ --
Vanguard Fiduciary Vanguard U.S. Growth Fund
Trust Company * 29 1 $15,590 $4,718 $ (52)
Vanguard Fiduciary Vanguard International
Trust Company * Growth Fund 28 1 $ 6,352 $2,758 $ 103
* Represents a party-in-interest
</TABLE>
<PAGE> COVER
Exhibit 99(c)
SKYWAY RETIREMENT SAVINGS PLAN
Financial Statements for the Years Ended
December 31, 1996 and 1995, Supplemental
Schedules for the Year Ended December 31, 1996
and Independent Auditors' Report
<PAGE> INDEX
SKYWAY RETIREMENT SAVINGS PLAN
TABLE OF CONTENTS
- -----------------------------------------------------------------------------
Page
Independent Auditors' Report 1
Financial Statements for the Years Ended December 31, 1996 and 1995:
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4-7
Supplemental Schedules for the Year Ended December 31, 1996:
Item 27a - Assets Held for Investment Purposes 8
Item 27d - Reportable Plan Transactions 9
<PAGE> 1
INDEPENDENT AUDITORS' REPORT
The Administrative Committee of the
Skyway Retirement Savings Plan:
We have audited the accompanying statements of net assets
available for benefits of the Skyway Retirement Savings Plan
(the Plan) as of December 31, 1996 and 1995, and the related
statements of changes in net assets available for benefits for
the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is
to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in
all material respects, the net assets available for benefits of
the Plan as of December 31, 1996 and 1995, and the changes in
net assets available for benefits for the years then ended in
conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on
the basic financial statements taken as a whole. The accompanying
supplemental schedules of assets held for investment as of
December 31, 1996 and reportable Plan transactions for the year
ended December 31, 1996 are presented for the purpose of additional
analysis and are not a required part of the basic financial
statements, but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of
1974. These schedules are the responsibility of the Plan's
management. Such supplemental schedules have been subjected to
the auditing procedures applied in our audit of the basic
1996 financial statements and, in our opinion, are fairly
stated in all material respects when considered in relation to
the basic financial statements taken as a whole.
/s/ DELOITTE & TOUCHE LLP
San Jose, California
May 1, 1997
<PAGE> 2
SKYWAY RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996 AND 1995
- ------------------------------------------------------------------------------
ASSETS 1996 1995
---------- ----------
INVESTMENTS
Vanguard Windsor II - at fair value $2,103,245 $1,339,429
Vanguard Investment Contract Trust - at contract
value 1,136,733 1,228,841
Vanguard Index Trust 500 Portfolio - at fair value 1,447,980 985,987
Vanguard International Growth Portfolio - at
fair value 1,144,940 864,414
Union Pacific Company Stock Fund - at fair value 848,248 848,031
Union Pacific Resource Group Stock fund - at
fair value 320,474 -
Vanguard Total Bond Market Fund - at fair value 644,483 570,476
Participant loans - at face value 410,528 570,476
---------- ----------
Total investments 8,056,631 6,085,825
CONTRIBUTIONS RECEIVABLE 71,519 67,451
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $8,128,150 $6,153,276
========== ==========
See notes to financial statements.
<PAGE> 3
SKYWAY RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 1996 AND 1995
- ------------------------------------------------------------------------------
1996 1995
---------- ----------
CONTRIBUTIONS:
Employee $1,509,826 $1,335,213
Employer Matching 326,023 333,572
Less forfeited employer matching funds (65,194) (28,193)
---------- ----------
Total contributions 1,770,655 1,640,592
---------- ----------
INVESTMENT INCOME:
Interest and dividends 383,480 255,458
Net appreciation in fair value of investments 765,142 846,716
Total investment income 1,148,622 1,102,174
---------- ----------
BENEFIT PAYMENTS (944,403) (1,028,786)
---------- ----------
NET INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS 1,974,874 1,713,980
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 6,153,276 4,439,296
---------- ----------
End of year $8,128,150 $6,153,276
========== ==========
See notes to financial statements.
<PAGE> 4
SKYWAY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996 AND 1995
- ---------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
The following description of the Skyway Retirement Savings Plan (the Plan)
provides only general information. Participants should refer to the Plan
agreement and amendments for a more complete description of the Plan's
provisions.
General - The Plan, established January 1983 by Skyway Freight
Systems, Inc. (the Company), is a defined contribution plan covering all
full-time employees who have completed one year and 1,000 hours of service.
The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA). Vanguard Fiduciary Trust Company (Vanguard)
serves as trustee of the Plan.
Contributions - Participants may elect to make tax deferred contributions
of up to 10% of their compensation (subject to certain Internal Revenue
Code limitations). Rollover contributions from a participant's former
qualified plan or individual retirement account are also allowed.
Employer contributions are determined at the discretion of the Company's
Board of Directors. For the years ended December 31, 1996 and 1995, the
Company contributed an amount equal to 25% of each participant's
contributions, limited to 10% of the individual participant's annual
compensation. Forfeited matching contributions revert to the Company
and may be used in the following year to reduce the amount the Company
must contribute for the matching contribution.
Participant Accounts - Each participant's account is credited with the
participant's contributions and an allocation of (a) the Company's
contributions and (b) Plan earnings.
Vesting - Participants are immediately vested as to participant
contributions and earnings thereon. Vesting in the remainder of their
accounts is based on years of continuous employment. Participants are
fully vested after seven years of employment, attainment of age 65, or
if employment is terminated by disability or death, regardless of years
of service. Upon employee termination, all nonvested amounts will be
forfeited.
Spin-Off - During 1996, the Union Pacific Corporation spun off Union
Pacific Resource Group. Each Plan participant's account received
0.846946 shares of Union Pacific Resource Group common stock for each
share of Union Pacific common stock held in the account. Participants
are not allowed to make additional purchases of Union Pacific Resource
Group common stock.
Investment Options - Participants may direct the investment of their
accounts in any of the following seven investment options:
Vanguard Windsor II - Funds are invested with a growth and income
objective in common stocks.
Vanguard Investment Contract Trust - Funds are invested in contracts
issued by insurance companies and banks, and in similar types of fixed
income investments.
Vanguard Index Trust 500 Portfolio - Funds are invested in all of the
stocks included in the Standard & Poor's 500 Index.
<PAGE> 5
Vanguard International Growth Portfolio - Funds are invested in
potential growth companies based outside of the United States.
Union Pacific Company Stock Fund - Funds are invested in common stock
of Union Pacific Corporation.
Union Pacific Resource Group Stock Fund- Funds are invested in common
stock of Union Pacific Resource Group, Inc.
Vanguard Total Bond Market Fund - Funds are invested in corporate bonds.
Investment decisions may be changed on a daily basis.
Payment of Benefits - On termination of employment or attainment of age
65, whichever is later, a participant may elect to receive the benefit in
one of the following forms: (1) a lump-sum amount equal to the value of the
vested portion of the participant's account; (2) installments, payable
at least annually over a period of years determined by the Plan's
Administrative Committee; (3) a nontransferable annuity contract providing
for a monthly guaranteed income for a specified number of years; or (4) a
combination of the above.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The financial statements of the Plan are prepared
under the accrual method of accounting.
Payment of Benefits - Benefits are recorded when paid.
Investments are stated at fair value as determined by quoted market
prices except for the Vanguard Investment Contract Trust, which is
stated at contract value, and participant loans, which are stated at face
value.
Administrative expenses of the Plan are paid by the Company.
3. PARTICIPANT LOANS
The Plan permits participants to borrow against the lesser of 50% of the
vested portion of their account balance, or 100% of their before-tax
contribution amount, to a maximum of $50,000. The loans bear interest
at prime rate plus 1% and are payable over a maximum five-year period.
Loan repayment generally is made through payroll deductions.
4. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and
to terminate the Plan subject to the provisions of ERISA. In the event
of Plan termination, participants immediately become fully vested.
5. ASSETS OF TERMINATED EMPLOYEES
At December 31, 1996 and 1995, approximately $24,000 and $265,000,
respectively, of vested Plan assets were payable to terminated employees
who have withdrawn from participation in the Plan.
<PAGE> 6
6. INCOME TAX STATUS
A favorable determination letter has been received from the Internal
Revenue Service as to the qualified status of the Plan as amended through
December 15, 1994. Therefore, management believes the Plan was qualified
and tax-exempt as of and for the years ended December 31, 1996 and 1995.
Accordingly, no provision for federal or state income taxes has been made.
7. INVESTMENT CONTRACT ACCOUNTS
The Plan maintains contract accounts with Vanguard Group, Incorporated in
its Investment Contract Account.
The Plan's investment contract accounts are fully benefit responsive and
therefore have been presented in the financial statements at contract
value. The fair value of the Plan's investment contract accounts
approximate the contract value at December 31, 1996.
The average yield on investment contract accounts for the year ended
December 31, 1996 and 1995 was 6.07% and 6.23%, respectively. The
average crediting interest rates for the respective years were 6.00% and
6.12%.
8. FUND INFORMATION
Contributions, benefit payments and investment income by fund for the
years ended December 31, 1996 and 1995 are as follows:
1996 1995
---------- ----------
Contributions:
Employee Contributions:
Vanguard Windsor II $ 351,478 $ 277,426
Vanguard Investment Contract Trust 212,402 209,279
Vanguard Index Trust 500 Portfolio 318,753 249,402
Vanguard International Growth Portfolio 251,915 258,342
Union Pacific Company Stock Fund 233,849 212,921
Union Pacific Resource Group Stock Fund -- --
Vanguard Total Bond Market Fund 141,429 127,843
---------- ----------
$1,509,826 $1,335,213
========== ==========
Employer matching contributions:
Vanguard Windsor II $ 82,560 $ 67,346
Vanguard Investment Contract Trust (43,293) 35,073
Vanguard Index Trust 500 Portfolio 71,051 60,600
Vanguard International Growth Portfolio 61,064 61,075
Union Pacific Company Stock Fund 54,851 50,568
Union Pacific Resource Group Stock Fund -- --
Vanguard Total Bond Market Fund 34,596 30,717
---------- ----------
$ 260,829 $ 305,379
========== ==========
<PAGE> 7
1996 1995
---------- ----------
Benefit payments:
Vanguard Windsor II $ 171,898 $ 250,171
Vanguard Investment Contract Trust 204,618 160,078
Vanguard Index Trust 500 Portfolio 166,416 98,296
Vanguard International Growth Portfolio 146,338 304,165
Union Pacific Company Stock Fund 132,546 159,252
Union Pacific Resource Group Stock Fund 10,528 --
Vanguard Total Bond Market Fund 62,011 25,536
Participant loans 50,048 31,288
---------- ----------
$ 944,403 $1,028,786
========== ==========
Investment income:
Vanguard Windsor II $ 371,776 $ 346,362
Vanguard Investment Contract Trust 71,316 70,647
Vanguard Index Trust 500 Portfolio 243,011 226,727
Vanguard International Growth Portfolio 136,962 109,739
Union Pacific Company Stock Fund 194,511 256,554
Union Pacific Resource Group Stock Fund 82,864 --
Vanguard Total Bond Market Fund 23,098 76,986
Participant loans 25,084 15,159
---------- ----------
$1,148,622 $1,102,174
========== ==========
* * * * *
<PAGE> 8
SKYWAY RETIREMENT SAVINGS PLAN
ITEM 27a - SUPPLEMENTAL SCHEDULE OF ASSETS HELD FOR INVESTMENT
PURPOSES
DECEMBER 31, 1996
- ------------------------------------------------------------------------------
Number Market
of Units Cost Value
Vanguard Windsor II 88,260 $ 371,776 $ 346,362
Vanguard Investment Contract Trust 1,136,733 71,316 70,647
Vanguard Index Trust 500 Portfolio 20,937 243,011 226,727
Vanguard International Growth Portfolio 69,559 136,962 109,739
Union Pacific Company Stock Fund 1 86,029 194,511 256,554
Union Pacific Resource Group Stock Fund 1 30,550 82,864 -
Vanguard Total Bond Market Fund 65,496 23,098 76,986
Participant loans 2 - 25,084 15,159
1 Represents a party-in-interest.
2 Consists of 120 individual loans with interest at prime plus 1% and terms
ranging from one to five years.
<PAGE> 9
<TABLE>
<CAPTION>
SKYWAY RETIREMENT SAVINGS PLAN
ITEM 27d - SUPPLEMENTAL SCHEDULE OF REPORTABLE PLAN TRANSACTIONS*
YEAR ENDED DECEMBER 31, 1996
- -------------------------------------------------------------------------------------------
Cost Proceeds Gain
<S> <C> <C> <C>
Vanguard Windsor II (67 Transactions) $919,197
Vanguard Investment Contract Trust (107 Transactions) 620,237
Vanguard Index Trust 500 Portfolio (67 Transactions) 581,083
Vanguard International Growth Portfolio (50 transactions) 433,830
Union Pacific Company Stock Fund (51 transactions) 340,186
Vanguard Investment Contract Trust (83 Transactions) $712,346 $ 712,346 $ --
Vanguard Windsor II (87 Transactions) 326,902 381,197 $ 54,295
Vanguard Index Trust 500 Portfolio (86 Transactions) 271,489 331,855 60,366
* Reportable Plan transactions are defined as
transactions that exceed 5% of the fair market value
of Plan assets at the beginning of the year.
</TABLE>
<PAGE> COVER
Exhibit 99(d)
UNION PACIFIC AGREEMENT EMPLOYEE
401(k) RETIREMENT THRIFT PLAN
Financial Statements and Supplemental Schedules
for the Years Ended December 31, 1996 and 1995
and Independent Auditors' Report
<PAGE> INDEX
UNION PACIFIC AGREEMENT EMPLOYEE
401(k) RETIREMENT THRIFT PLAN
TABLE OF CONTENTS
- ---------------------------------------------------------------------
Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1996 AND 1995 AND
FOR THE YEARS THEN ENDED:
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4-8
SUPPLEMENTAL SCHEDULES AS OF DECEMBER 31, 1996 AND FOR
THE YEAR THEN ENDED:
Item 27a - Schedule of Assets Held for Investment Purposes 9
Item 27d - Schedule of Reportable Transactions 10
Schedules not filed herewith are omitted because of the absence of
the conditions under which they are required.
<PAGE> 1
INDEPENDENT AUDITORS' REPORT
Union Pacific Agreement Employee 401(k)
Retirement Thrift Plan:
We have audited the accompanying statements of net assets available
for benefits of the Union Pacific Agreement Employee 401(k) Retirement Thrift
Plan (the Plan) as of December 31, 1996 and 1995 and the related statements of
changes in net assets available for benefits for the years then ended. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
1996 and 1995 and the changes in net assets available for benefits for the
years then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in
the Table of Contents are presented for the purpose of additional analysis and
are not a required part of the basic financial statements, but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These schedules are the responsibility of the Plan's
management. Such schedules have been subjected to the auditing procedures
applied in the audit of the basic 1996 financial statements and, in our
opinion, are fairly stated in all material respects when considered in
relation to the basic financial statements taken as a whole.
/s/ DELOITTE & TOUCHE LLP
Omaha, Nebraska
June 4, 1997
<PAGE> 2
UNION PACIFIC AGREEMENT EMPLOYEE
401(k) RETIREMENT THRIFT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996 AND 1995
- ---------------------------------------------------------------------
1996 1995
----------- -----------
ASSETS:
Investments at fair value (Note 3) $92,719,672 $55,139,991
----------- -----------
Net assets available for benefits $92,719,672 $55,139,991
=========== ===========
The accompanying notes are an integral part of these financial statements.
<PAGE> 3
UNION PACIFIC AGREEMENT EMPLOYEE
401(k) RETIREMENT THRIFT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
- ---------------------------------------------------------------------
1996 1995
----------- -----------
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income (Note 7):
Net appreciation in fair value
of investments (Note 3) $10,564,969 $ 9,657,059
Interest 330,166 234,540
Dividends 3,212,755 1,451,500
----------- -----------
14,107,890 11,343,099
Employee contributions (Note 7) 24,829,233 16,805,417
----------- -----------
Total Additions 38,937,123 28,148,516
----------- -----------
DEDUCTION FROM NET ASSETS ATTRIBUTED TO:
Distribution to participants (Note 7) 1,357,442 943,344
----------- -----------
NET INCREASE 37,579,681 27,205,172
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of Year 55,139,991 27,934,819
----------- -----------
End of Year $92,719,672 $55,139,991
=========== ===========
The accompanying notes are an integral part of these financial statements.
<PAGE> 4
UNION PACIFIC AGREEMENT EMPLOYEE
401(k) RETIREMENT THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996 AND 1995
- ---------------------------------------------------------------------
1. DESCRIPTION OF PLAN
The following description of the Union Pacific Agreement Employee
401(k) Retirement Thrift Plan (the Plan) provides only general
information. Participants should refer to the Plan document for
a more complete description of the Plan's provisions.
General - The Plan is a defined contribution plan covering
employees of the Union Pacific Railroad Company and its Railroad
affiliates (the Company) who are represented for the purposes of
collective bargaining by a rail union, to which eligibility to
participate in the plan has been extended. The Plan covers employees
who have completed one year of service or were employees as of the
effective date of the Plan, July 1, 1990. It is subject to
the provisions of the Employee Retirement Income Security Act of
1974 (ERISA), as amended.
Contributions - Participants may contribute 2% to 8% of their
compensation on a salary deferral basis subject to limitations
specified in the Internal Revenue Code. The Company does not
contribute to the Plan.
Participant Accounts - Each participant account is credited with
the participant's contributions and an allocation of the Plan's
earnings. Allocations are based on participant account
balances.
Vesting - Participants are at all times 100% vested in the value
of their account.
Payment of Benefits - Distribution of benefits shall be in a
lump sum no later than 60 days following the close of the plan
year in which the participant's termination of employment
occurs, subject to certain mandatory pay-outs to participants
who have attained age 70-1/2, but have not yet terminated
employment.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The accounts of the Plan have been
prepared in accordance with generally accepted accounting
principles. The financial statements were prepared in
accordance with the financial reporting requirements of ERISA as
permitted by the Securities and Exchange Commission's amendments
to Form 11-K adopted during 1990.
Investment Valuation and Income Recognition - Investments in the
Union Pacific Company Stock Fund, Resources Stock Fund, Vanguard
Wellington Fund, Vanguard Index Trust-500 Portfolio Fund,
Vanguard U.S. Growth Fund, Vanguard International Growth Portfolio
Fund and the Vanguard Total Bond Market Fund are valued at fair
value as determined by quoted market prices. The investments in
the Vanguard Investment Contract Trust Fund are valued at fair
value as determined by Vanguard Fiduciary Trust Company.
<PAGE> 5
Dividend income is recorded as of the ex-dividend date.
Security transactions are recorded as of the trade date.
3. INVESTMENTS
Plan participants may direct their contributions in various
proportions to any of the seven available investment funds
identified below:
Fund A - Union Pacific Company Stock Fund - This fund is
administered as a separate account by Vanguard Fiduciary Trust
Company and invests primarily in the stock of Union Pacific
Corporation. It also maintains a small cash position invested
in Vanguard Money Market Reserves, to facilitate transactions.
The Company stock fund is divided into fund shares, rather
than shares of company stock.
Fund B - Vanguard Wellington Fund - This fund consists of
investment in the Vanguard Wellington Mutual Fund.
Fund C - Vanguard Index Trust-500 Portfolio Fund - This fund
consists of investment in the Vanguard Index Trust-500 Portfolio
Mutual Fund.
Fund D - Vanguard Investment Contract Trust Fund - This fund
consists of investment in the Vanguard Fiduciary Trust Company
Investment Contract Trust, a collective investment fund for tax-
qualified pension and profit sharing plan assets.
Fund E - Vanguard U.S. Growth Fund - This fund consists of
investment in the Vanguard U.S. Growth Mutual Fund.
Fund F - Vanguard International Growth Portfolio Fund - This fund
consists of investment in the Vanguard International Growth
Portfolio Mutual Fund.
Fund G - Vanguard Total Bond Market Fund - This fund consists of
investment in the Vanguard Total Bond Market Mutual Fund.
In September 1996, The Company's Board of Directors declared a
special dividend consisting of the shares of Union Pacific Resources
Group ("Resources") common stock owned by the Company ("the Spin-Off").
As a result of the Spin-Off, each of the Company's stockholders
received 0.846946 of a share of Resources common stock for each share
of Company common stock held by such shareholders at the
September 26, 1996 record date for the distribution. Therefore, each
Plan participant's account received 0.846946 of a share of Resources
common stock for each share of Company common stock held in the
account. The shares received have been placed in the Resources Stock
Fund ("Resources Stock"). Future contributions to Resources Stock Fund
are not permitted.
<PAGE> 6
<TABLE>
<CAPTION>
The following table presents the fair value of investments. Investments
that represent 5% or more of the Plan's net assets are separately identified.
December 31, 1996 December 31, 1995
---------------------------- ----------------------------
Number Fair Number Fair
of Units Value of Units Value
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Investments at Fair Value Determined
by Quoted Market Price:
Union Pacific Company Stock Fund $1,455,658.553 $14,352,794 1,016,452.978 $11,018,350
Resources Stock Fund 493,540.126 5,177,236 -- --
Vanguard Wellington Fund 845,091.198 22,099,135 611,225.539 14,932,240
Vanguard Index Trust - 500 Portfolio Fund 499,790.113 34,565,484 368,706.110 21,237,472
Vanguard U.S. Growth Fund 202,362.143 4,804,077 48,688.571 990,812
Other -- 4,706,223 -- 2,181,244
----------- -----------
85,704,949 50,360,118
----------- -----------
Investments at Estimated Fair Value:
Vanguard Investment Contract Trust Fund 7,014,723.420 7,014,723 4,779,873.470 4,779,873
----------- -----------
$92,719,672 $55,139,991
=========== ===========
</TABLE>
<PAGE>7
During 1996 and 1995 the Plan's investment (including investments bought,
sold, and held during the year), appreciated in value by $10,564,969 and
$9,657,059 respectively as follows:
Year Ended
December 31,
----------------------------
Net Change in Fair Value 1996 1995
Investments at Fair Value as Determined by
Quoted Market Price:
Union Pacific Company Stock Fund $ 2,927,426 $ 2,656,355
Resources Stock Fund 979,849 --
Mutual Funds 6,657,694 7,000,704
----------- -----------
Net change in fair value $10,564,969 $ 9,657,059
=========== ===========
4. PLAN ADMINISTRATION
The Plan is administered by the Senior Vice President, Human Resources of
the Corporation. All expenses incurred in the administration of the Plan
are paid by the Company.
5. TAX STATUS
The Plan obtained a tax determination letter dated July 27, 1995, in
which the Internal Revenue Service stated that the Plan, as then designed,
was in compliance with the applicable requirements of the Internal Revenue
Code (the Code). The Plan has been amended since receiving the
determination letter. However, Plan management believes that the Plan
currently is being operated in compliance with the applicable requirement
of the Internal Revenue Code. Therefore, it is believed that the Plan was
qualified and the related trust was tax-exempt under provisions of Section
501(a) of the Internal Revenue Code as of the financial statement date.
Therefore, no provision for income taxes has been included in the Plan's
financial statements.
6. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan at any time, to terminate the Plan subject to the
provisions of ERISA. Regardless of such actions, the principal and income
of the Plan remains for the exclusive benefit of the Plan's participants
and beneficiaries. The Company may direct the Trustee either to distribute
the Plan's assets to the participants, or to continue the Trust and
distribute benefits as though the Plan had not been terminated.
<PAGE> 8
7. FUND INFORMATION
Investment income, contributions, and distributions to participants by fund
are as follows for the years ended December 31, 1996 and 1995:
Year Ended Year Ended
December 31, December 31,
1996 1995
------------- --------------
Investment Income:
Union Pacific Company Stock Fund $ 3,271,547 $ 2,906,421
Resources Stock Fund 979,849 --
Vanguard Wellington Fund 2,821,356 3,049,684
Vanguard Index Trust - 500 Portfolio Fund 5,730,512 4,783,462
Vanguard Investment Contract Trust Fund 330,166 234,540
Vanguard U.S. Growth Fund 553,670 155,034
Vanguard International Growth Portfolio Fund 400,405 193,334
Vanguard Total Bond Market Fund 20,385 20,624
----------- -----------
$14,107,890 $11,343,099
=========== ===========
Contributions:
Union Pacific Company Stock Fund $ 4,741,092 $ 3,538,563
Resources Stock Fund -- --
Vanguard Wellington Fund 5,981,467 4,410,060
Vanguard Index Trust - 500 Portfolio Fund 8,406,639 5,850,039
Vanguard Investment Contract Trust Fund 1,847,997 1,539,332
Vanguard U.S. Growth Fund 1,752,820 424,127
Vanguard International Growth Portfolio Fund 1,736,846 932,616
Vanguard Total Bond Market Fund 362,372 110,680
----------- -----------
$24,829,233 $16,805,417
=========== ===========
Distributions to participants:
Union Pacific Company Stock Fund $ 274,615 $ 177,571
Resources Stock Fund 15,538 --
Vanguard Wellington Fund 396,073 213,372
Vanguard Index Trust - 500 Portfolio Fund 461,026 387,928
Vanguard Investment Contract Trust Fund 152,800 128,888
Vanguard U.S. Growth Fund 12,101 7,040
Vanguard International Growth Portfolio Fund 42,826 24,705
Vanguard Total Bond Market Fund 2,463 3,840
----------- -----------
$ 1,357,442 $ 943,344
=========== ===========
8. RELATED PARTY TRANSACTIONS
Plan investments include the Union Pacific Company Stock Fund which is
invested primarily in the Stock of Union Pacific Corporation. Union Pacific
Corporation is the holding Company of the Plan sponsor and, therefore, these
transactions qualify as party-in-interest.
The Plan also invests in various funds managed by Vanguard Fiduciary Trust
Company. Vanguard Fiduciary Trust Company is the trustee as defined by the
Plan and, therefore, the related transactions qualify as party-in-interest.
<PAGE> 9
<TABLE>
<CAPTION>
UNION PACIFIC AGREEMENT EMPLOYEE
401(k) RETIREMENT THRIFT PLAN
Item 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
- ----------------------------------------------------------------------------------------
Column B Column C Column D Column E
Description of Investment,
Identity of Issue, Including Collateral, Rate
Borrower, Lessor of interest, Maturity Date, Current
or Similar Party Par or Maturity Value Cost Value
<S> <C> <C> <C>
Union Pacific Company Stock
Fund * 1,455,658.533 units $10,370,637 $14,352,794
Resources Stock Fund 493,540.126 units 4,218,899 5,177,236
Vanguard Wellington Fund * 845,091.198 units 19,108,500 22,099,135
Vanguard Index Trust -
500 Portfolio Fund * 499,790.113 units 25,707,974 34,565,484
Vanguard Investment Contract
Trust Fund * 7,014,723.420 units 7,014,723 7,014,723
Vanguard U.S. Growth Fund * 202,362.143 units 4,526,779 4,804,077
Vanguard International Growth
Portfolio Fund * 248,062.367 units 3,810,567 4,083,107
Vanguard Total Bond
Market Fund * 63,324.862 units 619,445 623,116
----------- -----------
$75,377,524 $92,719,672
=========== ===========
* Represents a party-in-interest
</TABLE>
<PAGE> 10
<TABLE>
<CAPTION>
UNION PACIFIC AGREEMENT EMPLOYEE
401(k) RETIREMENT THRIFT PLAN
Item 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1996
- ------------------------------------------------------------------------------------------------------------------
Series of Transactions, When Aggregated, Involving an
Amount in Excess of 5% of the Current Value of Plan Assets:
Column A Column B Column C Column D Column E Column F Column G
Total Total
Dollar Dollar
Identity of Number of Number of Value of Value of Net Gain
Party Involved Description of Asset Purchases Sales Purchases Sales or(Loss)
<S> <C> <C> <C> <C> <C> <C>
Vanguard Fiduciary
Trust Company * Union Pacific Company Stock Fund 161 210 $ 7,820,804 $3,037,434 $365,779
Vanguard Fiduciary
Trust Company * Vanguard Wellington Fund 117 216 $ 7,990,143 $2,009,057 $297,241
Vanguard Fiduciary Vanguard Index Trust - 500 Portfolio
Trust Company * Fund 196 207 $10,786,620 $2,489,185 $465,381
Vanguard Fiduciary Vanguard Investment Contract Trust 232 207 $ 4,793,851 $2,558,965 $ -
Trust Company * Fund
Vanguard Fiduciary
Trust Company * Vanguard U.S. Growth Fund 209 119 $ 4,287,796 $ 691,292 $ 44,405
Vanguard Fiduciary Vanguard International Growth 169 142 $ 2,810,290 $ 897,357 $ 66,170
Trust Company * Portfolio Fund
* Represents a party-in-interest
</TABLE>
<PAGE> COVER
Exhibit 99(e)
UNION PACIFIC MOTOR FREIGHT COMPANY AGREEMENT EMPLOYEE
401(k) RETIREMENT THRIFT PLAN
Financial Statements and Supplemental Schedules
for the Years Ended December 31, 1996 and 1995
and Independent Auditors' Report
<PAGE> INDEX
UNION PACIFIC MOTOR FREIGHT COMPANY AGREEMENT EMPLOYEE
401(k) RETIREMENT THRIFT PLAN
TABLE OF CONTENTS
- ------------------------------------------------------------------------
Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1996 AND 1995 AND
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995:
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4-9
SUPPLEMENTAL SCHEDULES AS OF DECEMBER 31, 1996 AND FOR
THE YEAR THEN ENDED:
Item 27a - Schedule of Assets Held for Investment Purposes 10
Item 27d - Schedule of Reportable Transactions 11
Schedules not filed herewith are omitted because of the absence of
the conditions under which they are required.
<PAGE> 1
INDEPENDENT AUDITORS' REPORT
Union Pacific Motor Freight Company Agreement
Employee 401(k) Retirement Thrift Plan:
We have audited the accompanying statements of net assets available
for benefits of the Union Pacific Motor Freight Company Agreement
Employee 401(k) Retirement Thrift Plan (the Plan) as of
December 31, 1996 and 1995 and the related statements of changes in
net assets available for benefits for the years then ended. These
financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the net assets available for benefits of the
Plan as of December 31, 1996 and 1995 and the changes in net assets
available for benefits for the years ended December 31, 1996 and
1995 in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on
the basic financial statements taken as a whole. The supplemental
schedules listed in the Table of Contents are presented for the
purpose of additional analysis and are not a required part of the
basic financial statements, but are supplementary information
required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These schedules are the responsibility of
the Plan's management. Such schedules have been subjected to the
auditing procedures applied in the audit of the basic 1996 financial
statements and, in our opinion, are fairly stated in all material
respects when considered in relation to the basic financial statements
taken as a whole.
/s/ DELOITTE & TOUCHE LLP
Omaha, Nebraska
June 4, 1997
<PAGE> 2
UNION PACIFIC MOTOR FREIGHT COMPANY AGREEMENT EMPLOYEE
401(k) RETIREMENT THRIFT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996 AND 1995
- ---------------------------------------------------------------------
1996 1995
----------- -----------
ASSETS:
Investments at fair value (Note 3) $305,267 $182,336
-------- --------
Net assets available for benefits $305,267 $182,336
======== ========
The accompanying notes are an integral part of these financial statements.
<PAGE> 3
UNION PACIFIC MOTOR FREIGHT COMPANY AGREEMENT EMPLOYEE
401(k) RETIREMENT THRIFT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
- ---------------------------------------------------------------------
1996 1995
----------- -----------
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income (Note 7):
Net appreciation in fair value
of investments (Note 3) $ 41,561 $ 32,848
Interest 1,324 779
Dividends 8,866 4,367
-------- --------
51,751 37,994
Employee contributions (Note 7) 90,667 82,198
-------- --------
Total Additions 142,418 120,192
-------- --------
DEDUCTION FROM NET ASSETS ATTRIBUTED TO:
Distribution to participants (Note 7) 19,487 21,739
-------- --------
NET INCREASE 122,931 98,453
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of Year 182,336 83,883
-------- --------
End of Year $305,267 $182,336
======== ========
The accompanying notes are an integral part of these financial statements.
<PAGE> 4
UNION PACIFIC MOTOR FREIGHT COMPANY AGREEMENT EMPLOYEE
401(k) RETIREMENT THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
- ---------------------------------------------------------------------
1. DESCRIPTION OF PLAN
The following description of the Union Pacific Motor Freight
Company Agreement Employee 401(k) Retirement Thrift Plan (the
Plan) provides only general information. Participants should
refer to the Plan document for a more complete description of
the Plan's provisions.
General - The Plan is a defined contribution plan covering
employees of the Union Pacific Motor Freight Company (the
Company) who are governed by a collective bargaining agreement
entered into between the Company and a Union to which
eligibility to participate in the plan has been extended, and
have completed one year of service or were employees as of the
effective date of the Plan, January 1, 1994. It is subject to
the provisions of the Employee Retirement Income Security Act of
1974 (ERISA), as amended.
Contributions - Participants may contribute 2% to 8% of their
compensation on a salary deferral basis subject to limitations
specified in the Internal Revenue Code. The Company does not
contribute to the Plan.
Participant Accounts - Each participant account is credited with
the participant's contributions and an allocation of the Plan's
earnings. Allocations are based on participant account
balances.
Vesting - Participants are at all times 100% vested in the value
of their account.
Payment of Benefits - Distribution of benefits shall be in a
lump sum no later than 60 days following the close of the plan
year in which the participant's termination of employment
occurs, subject to certain mandatory pay-outs to participants
who have attained age 70-1/2, but have not yet terminated
employment.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The accounts of the Plan have been
prepared in accordance with generally accepted accounting
principles. The financial statements were prepared in
accordance with the financial reporting requirements of ERISA as
permitted by the Securities and Exchange Commission's amendments
to Form 11-K adopted during 1990.
Investment Valuation and Income Recognition - Investments in the
Union Pacific Company Stock Fund, Resources Stock Fund, Vanguard
Wellington Fund, Vanguard Index Trust-500 Portfolio Fund,
Vanguard U.S. Growth Fund, Vanguard International Growth Portfolio
Fund and the Vanguard Total Bond Market Fund are valued at fair
value as determined by quoted market prices. The investments in
the Vanguard Investment Contract Trust Fund are valued at fair
value as determined by Vanguard Fiduciary Trust Company.
<PAGE> 5
Dividend income is recorded as of the ex-dividend date.
Security transactions are recorded as of the trade date.
3. INVESTMENTS
Plan participants may direct their contributions in various
proportions to any of the seven available investment funds
identified below:
Fund A - Union Pacific Company Stock Fund - This fund is
administered as a separate account by Vanguard Fiduciary Trust
Company and invests primarily in the stock of Union Pacific
Corporation. It also maintains a small cash position invested
in Vanguard Money Market Reserves, to facilitate transactions.
The Resources stock fund is divided into fund shares, rather
than shares of company stock.
Fund B - Vanguard Wellington Fund - This fund consists of
investment in the Vanguard Wellington Mutual Fund.
Fund C - Vanguard Index Trust-500 Portfolio Fund - This fund
consists of investment in the Vanguard Index Trust-500 Portfolio
Mutual Fund.
Fund D - Vanguard Investment Contract Trust Fund - This fund
consists of investment in the Vanguard Fiduciary Trust Company
Investment Contract Trust, a collective investment fund for tax-
qualified pension and profit sharing plan assets.
Fund E - Vanguard U.S. Growth Fund - This fund consists of
investment in the Vanguard U.S. Growth Mutual Fund.
Fund F - Vanguard International Growth Portfolio Fund - This fund
consists of investment in the Vanguard International Growth
Portfolio Mutual Fund.
Fund G - Vanguard Total Bond Market Fund - This fund consists of
investment in the Vanguard Total Bond Market Mutual Fund.
In September 1996, The Company's Board of Directors declared a
special dividend consisting of the shares of Union Pacific Resources
Group ("Resources") common stock owned by the Company ("the Spin-Off").
As a result of the Spin-Off, each of the Company's stockholders
received 0.846946 of a share of Resources common stock for each share
of Company common stock held by such shareholders at the
September 26, 1996 record date for the distribution. Therefore, each
Plan participant's account received 0.846946 of a share of Resources
common stock for each share of Company common stock held in the
account. The shares received have been placed in the Resources Stock
Fund ("Resources Stock"). Future contributions to Resources Stock Fund
are not permitted.
<PAGE> 6
<TABLE>
<CAPTION>
The following table presents the fair value of investments.
Investments that represent 5% or more of the Plan's net assets
are separately identified.
December 31, 1996 December 31, 1995
---------------------------- ----------------------------
Number Fair Number Fair
of Units Value of Units Value
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Investments at Fair Value Determined
by Quoted Market Price:
Union Pacific Company Stock Fund 9,832.248 $ 96,946 6,341.668 $ 68,743
Resources Stock Fund 3,303.817 $ 34,657 -- --
Vanguard Wellington Fund 1,946.050 50,889 1,413.295 34,527
Vanguard Index Trust - 500 Portfolio Fund 1,143.817 79,106 912.077 52,536
Other -- 19,381 -- 7,591
-------- --------
280,979 163,397
Investments at Estimated Fair Value:
Vanguard Investment Contract Trust Fund 24,287.800 24,288 18,939.220 18,939
-------- --------
$305,267 $182,336
======== ========
</TABLE>
<PAGE> 7
Years Ended
December 31,
----------------------------
Net Change in Fair Value 1996 1995
Investments at Fair Value as Determined by
Quoted Market Price:
Union Pacific Company Stock Fund $ 19,292 $ 16,158
Resources Stock Fund 6,960 --
Mutual Funds 15,309 16,690
-------- --------
Net change in fair value $ 41,561 $ 32,848
======== ========
4. PLAN ADMINISTRATION
The Plan is administered by the Senior Vice President, Human Resources of
the Corporation. All expenses incurred in the administration of the Plan
are paid by the Company.
5. TAX STATUS
The Plan obtained a tax determination letter dated September 16, 1994, in
which the Internal Revenue Service stated that the Plan, as then designed,
was in compliance with the applicable requirements of the Internal Revenue
Code (the Code). The Plan has been amended since receiving the
determination letter. However, Plan management believes that the plan
currently is being operated in compliance with the applicable requirement
of the Internal Revenue Code. Therefore, it is believed that the Plan was
qualified and the related trust was tax-exempt under provisions of Section
501(a) of the Internal Revenue Code as of the financial statement date.
Therefore, no provision for income taxes has been included in the Plan's
financial statements.
6. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan at any time, to terminate the Plan subject to the
provisions of ERISA. Regardless of such actions, the principal and income
of the Plan remains for the exclusive benefit of the Plan's participants
and beneficiaries. The Company may direct the Trustee either to distribute
the Plan's assets to the participants, or to continue the Trust and
distribute benefits as though the Plan had not been terminated.
<PAGE> 8
7. FUND INFORMATION
Investment income, contributions, and distributions to participants by fund
are as follows for the years ended December 31, 1996 and 1995:
Year Ended Year Ended
December 31, December 31,
1996 1995
------------- --------------
Investment Income:
Union Pacific Company Stock Fund $ 21,574 $ 17,714
Resources Stock Fund 6,960 --
Vanguard Wellington Fund 6,260 7,079
Vanguard Index Trust - 500 Portfolio Fund 13,347 11,745
Vanguard Investment Contract Trust Fund 1,324 779
Vanguard U.S. Growth Fund 1,332 107
Vanguard International Growth Portfolio Fund 884 550
Vanguard Total Bond Market Fund 70 20
-------- --------
$ 51,751 $ 37,994
======== ========
Contributions:
Union Pacific Company Stock Fund $ 32,459 $ 32,700
Resources Stock Fund -- --
Vanguard Wellington Fund 18,311 15,752
Vanguard Index Trust - 500 Portfolio Fund 22,102 21,093
Vanguard Investment Contract Trust Fund 8,292 7,364
Vanguard U.S. Growth Fund 4,909 1,088
Vanguard International Growth Portfolio Fund 3,104 3,740
Vanguard Total Bond Market Fund 1,490 461
-------- --------
$ 90,667 $ 82,198
======== ========
Distributions to participants:
Union Pacific Company Stock Fund $ 3,532 $ 8,744
Resources Stock Fund 259 --
Vanguard Wellington Fund 4,717 8,496
Vanguard Index Trust - 500 Portfolio Fund 10,303 4,239
Vanguard Investment Contract Trust Fund 676 --
Vanguard U.S. Growth Fund -- 68
Vanguard International Growth Portfolio Fund -- 192
Vanguard Total Bond Market Fund -- --
-------- --------
$ 19,487 $ 21,739
======== ========
<PAGE> 9
8. RELATED PARTY TRANSACTIONS
Plan investments include the Union Pacific Company Stock Fund
which is invested primarily in the Stock of Union Pacific
Corporation. Union Pacific Corporation is the holding Company
of the Plan sponsor and, therefore, these transactions qualify
as party-in-interest.
The Plan also invests in various funds managed by Vanguard
Fiduciary Trust Company. Vanguard Fiduciary Trust Company is
the trustee as defined by the Plan and, therefore, the related
transactions qualify as party-in-interest.
9. SUBSEQUENT EVENTS
On March 1, 1997, the Company was purchased by Rail Terminal
Services.
<PAGE> 10
<TABLE>
<CAPTION>
UNION PACIFIC MOTOR FREIGHT COMPANY AGREEMENT EMPLOYEE
401(k) RETIREMENT THRIFT PLAN
Item 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
- -------------------------------------------------------------------------------------
Column B Column C Column D Column E
Description of Investment,
Identity of Issue, Including Collateral, Rate
Borrower, Lessor of interest, Maturity Date Current
or Similar Party or Maturity Value Cost Value
<S> <C> <C> <C>
Union Pacific Company Stock
Fund * 9,832.248 units $ 68,990 $ 96,946
Resources Stock Fund 3,303.817 units 27,758 34,657
Vanguard Wellington Fund * 1,946.050 units 45,072 50,899
Vanguard Index Trust -
500 Portfolio Fund * 1,143.817 units 60,091 79,106
Vanguard Investment Contract
Trust Fund * 24,287.800 units 24,288 24,288
Vanguard U.S. Growth Fund * 449.003 units 10,043 10,659
Vanguard International Growth
Portfolio Fund * 405.792 units 6,128 6,679
Vanguard Total Bond
Market Fund * 207.535 units 2,038 2,043
-------- --------
$244,408 $305,267
======== ========
* Represents a party-in-interest
</TABLE>
<PAGE> 11
<TABLE>
<CAPTION>
UNION PACIFIC MOTOR FREIGHT COMPANY AGREEMENT EMPLOYEE
401(k) RETIREMENT THRIFT PLAN
Item 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1996
- -----------------------------------------------------------------------------------------------------------------
Series of Transactions, When Aggregated, Involving an
Amount in Excess of 5% of the Current Value of Plan Assets:
Column A Column B Column C Column D Column E Column F Column G
Total Total
Dollar Dollar
Identity of Number of Number of Value of Value of Net Gain
Party Involved Description of Asset Purchases Sales Purchases Sales or (Loss)
<S> <C> <C> <C> <C> <C> <C>
Vanguard Fiduciary Union Pacific Company
Trust Company * Stock Fund 30 6 $46,841 $9,793 $ 834
Vanguard Fiduciary Vanguard Wellington
Trust Company * Fund 29 5 $22,915 $9,015 $ 934
Vanguard Fiduciary Vanguard Index Trust
Trust Company * 500 Portfolio Fund 29 5 $26,891 $12,008 $1,572
Vanguard Investment Vanguard Investment
Trust Company * Contract Trust Fund 41 5 $15,251 $9,902 $ --
* Represents a party-in-interest
</TABLE>
<PAGE> COVER
Exhibit 99(f)
CHICAGO AND NORTH WESTERN RAILWAY COMPANY
PROFIT SHARING AND RETIREMENT SAVINGS PROGRAM
Financial Statements and Supplemental Schedules
for the Years Ended December 31, 1996 and 1995
and Independent Auditors' Report
<PAGE> INDEX
CHICAGO AND NORTH WESTERN RAILWAY COMPANY
PROFIT SHARING AND RETIREMENT SAVINGS PROGRAM
TABLE OF CONTENTS
______________________________________________________________________________
Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1996 AND 1995
AND FOR THE YEARS THEN ENDED:
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4-11
SUPPLEMENTAL SCHEDULES AS OF DECEMBER 31, 1996 AND FOR
THE YEAR THEN ENDED:
Item 27a - Schedule of Assets held for Investment Purposes 12
Item 27d - Schedule of Reportable Transactions 13
Additional supplemental schedules required by the Employee Retirement Income
Security Act of 1974 are disclosed separately in Master Trust reports filed
with the Department of Labor or are omitted because of the absence of
conditions under which they are required.
<PAGE> 1
INDEPENDENT AUDITORS' REPORT
Chicago and North Western Railway Company
Profit Sharing and Retirement Savings Program Committee
We have audited the accompanying statements of net assets
available for benefits of the Chicago and North Western Railway
Company Profit Sharing and Retirement Savings Program (the
Program) as of December 31, 1996 and 1995, and the related
statements of changes in net assets available for benefits for
the years then ended. These financial statements are the
responsibility of the Program's management. Our responsibility
is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in
all material respects, the net assets available for benefits of
the Program as of December 31, 1996 and 1995, and the changes
in net assets available for benefits for the years then ended
in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion
on the basic financial statements taken as a whole. The
supplemental schedules listed in the Table of Contents are
presented for the purpose of additional analysis and are not a
required part of the basic financial statements, but are
supplementary information required by the Department of Labor's
Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974. These schedules
are the responsibility of the Program's management. Such
schedules have been subjected to the auditing procedures applied
in the audit of the basic 1996 financial statements and, in our
opinion, are fairly stated in all material respects when
considered in relation to the basic financial statements taken
as a whole.
/s/ DELOITTE & TOUCHE LLP
Omaha, Nebraska
June 10, 1997
<PAGE> 2
CHICAGO AND NORTH WESTERN RAILWAY COMPANY
PROFIT SHARING AND RETIREMENT SAVINGS PROGRAM
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996 AND 1995
______________________________________________________________________________
1996 1995
------------ ------------
ASSETS
CASH AND SHORT TERM INVESTMENTS $ -- $ 2,181,488
------------ ------------
INVESTMENTS, at fair value
(Notes 3, 5, and 9) 101,413,931 78,230,963
INVESTMENTS, at contract value
(Notes 3,6, and 9): Investment
contract with insurance company 37,737,581 56,645,221
------------ ------------
Total Investments 139,151,512 134,876,184
------------ ------------
RECEIVABLES:
Employer's contribution -- 5,717,530
Participants' contributions -- 107,898
Interest -- 1,174,864
------------ ------------
Total Receivables -- 7,000,292
------------ ------------
Total Assets 139,151,512 144,057,964
------------ ------------
LIABILITIES
ACCRUED EXPENSES -- 77,072
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS $139,151,512 $143,980,892
============ ============
The accompanying notes are an integral part of these financial statements.
<PAGE> 3
CHICAGO AND NORTH WESTERN RAILWAY COMPANY
PROFIT SHARING AND RETIREMENT SAVINGS PROGRAM
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
______________________________________________________________________________
1996 1995
------------ ------------
ADDITIONS TO NET ASSETS ATTRIBUTABLE TO:
Investment income (Note 9):
Net appreciation in fair value of
investments $ 12,828,800 $ 15,146,687
Interest and dividends 10,287,291 11,656,419
------------ ------------
23,116,091 26,803,106
------------ ------------
Contributions (Note 9):
Employer -- 5,937,720
Participants' -- 3,240,538
------------ ------------
-- 9,178,258
------------ ------------
Total Additions 23,116,091 35,981,364
------------ ------------
DEDUCTIONS FROM NET ASSETS ATTRIBUTABLE TO:
Distributions to participants (Note 9) 27,923,207 21,223,637
Administrative expenses -- 77,072
------------ ------------
Total Deductions 27,923,207 21,300,709
------------ ------------
TRANSFERS TO SUPPLEMENTAL PENSION PLAN 22,264 504,472
------------ ------------
NET INCREASE (DECREASE) (4,829,380) 14,176,183
------------- ------------
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of Year 143,980,892 129,804,709
------------ ------------
End of Year $139,151,512 $143,980,892
============ ============
The accompanying notes are an integral part of these financial statements.
<PAGE> 4
CHICAGO AND NORTH WESTERN RAILWAY COMPANY
PROFIT SHARING AND RETIREMENT SAVINGS PROGRAM
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996 AND 1995
______________________________________________________________________________
1. DESCRIPTION OF PROGRAM
The following description of the Chicago and North Western Railway
Company Profit Sharing and Retirement Savings Program (the Program),
prior to the adoption of amendments as described in Note 2, provides only
general information. Participants should refer to the Program document
for a more complete description of the Program's provisions.
General - The Program was initially established to provide retirement
benefits to eligible employees of Chicago and North Western Railway
Company (the Company) and other common control employers who adopt the
Program. It is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA), as amended.
Contributions - Participants may contribute up to 15% of their
compensation on a salary or non-salary deferral basis subject to
limitations specified in the Internal Revenue Code. The Company matches
employee contributions at a rate of 20% computed on an amount up to the
first 5% of the employee's salary contributed. This minimum employer
contribution represents the first step in the method discussed below.
The amount of the Company's annual contribution is determined based upon
the Company's profit, or, if larger, based upon the amount of the
employee contributions. Employer contributions are allocated on a four
step basis, subject to Internal Revenue Code limitations:
1) The employer contribution is allocated to those employees making
employee contributions by matching up to 20% of the amount of each
participant's employee contributions for each Program year up to a
maximum base of 5% of the employee's salary contributed;
2) If any employer contribution remains unallocated, such amount is
allocated to employees in proportion to the amount by which their
compensation (to the salary maximum) exceeds the wage base subject
to Railroad Retirement Tax, as defined in Section 3121a of the
Internal Revenue Code, with a maximum employer contribution up to
11.4% (or, up to 12% if IRS regulations permit) of such excess
amount for each Program year;
3) If any employer contribution remains unallocated, such amount is
allocated to employees making employee contributions by matching
up to 20% of the amount of each participant's employee
contributions for each Program year up to a maximum base of 5% of
the employee's salary contributed;
4) If any employer contribution remains unallocated, such amount is
allocated in proportion to each employee's total compensation (up
to the salary maximum) for each Program year.
As indicated above, step (2) in the employer contribution allocation
formula can provide up to 11.4% of the pay received by a participant in
excess of the Railroad Retirement Tax taxable wage base. This is the
only step of the allocation formula which integrates with Railroad
Retirement.
<PAGE> 5
Participant Accounts - Each participant account is credited with the
participant's contributions and an allocation of the Plan's earnings.
Allocations are based on participant account balances.
Vesting - A participant is fully vested if he/she:
1) Reached his/her 65th birthday; or
2) Is involuntarily terminated without cause as determined by the
Program Administrator, in accordance with established Company
policies if such termination occurs on or after his/her 60th
birthday; or
3) Reached his/her 60th birthday and has at least 5 years of service;
or
4) Has a disability or dies; or
5) Has a termination of employment on account of a force reduction;
or
6) Has five years of service
Payment of Benefits - Under the terms of the Program, benefits are to
be paid in the form of a joint and survivor annuity. Assets of a
participant's account may, as determined by the participant (with spousal
consent when required), be paid to him/her in a lump sum or in
installments. In order to provide a joint and survivor annuity (or
single life annuity where spousal consent is obtained or there is no
spouse) assets of the participant's account are transferred to the
Chicago and North Western Railway Company Supplemental Pension Plan for
payment of the annuity. The annuity may, at the option of the Program
administrator, be purchased from a third party institution or paid from
the assets of the Supplemental Pension Plan.
2. PROGRAM AMENDMENTS
Effective October 24, 1995, the Program was amended such that, the
Program was frozen effective December 31, 1995. No new participants were
allowed in the Program after December 31, 1995. Except for contributions
made in 1996 with respect to 1995 in the customary manner of the prior
Program as in effect during 1995, there will be no contributions made to
the Program after December 31, 1995. Effective January 1, 1995
participants were fully vested in amounts credited to their account.
Effective July 15, 1996, the Program was amended and restated. Program
investment options were increased from four to ten. The ten available
options are the Union Pacific Common Stock Fund (Company Stock), the
Union Pacific Equity Index Fund (Equity Index), the Union Pacific Fixed
Income Fund (Fixed Income), the Vanguard Bond Market Fund (Bond Index),
the Vanguard Market Reserves - Prime Portfolio Fund (VMMR Prime
Portfolio), the Wellington Fund (Wellington), the Vanguard World Fund -
U.S. Growth Portfolio (U.S. Growth), the Vanguard World Fund -
International Growth Portfolio (International Growth), the Vanguard
Windsor Fund (Windsor) and the NWNL Guaranteed Investment Contract Fund
(NWNL GIC). In conjunction with the amendment and restatement, Program
assets, except for the investment contract with our insurance company,
were transferred to Vanguard Fiduciary Trust Company under a Master Trust
Agreement.
Loans to Participants - Effective September 1, 1996, participants may
borrow from their fund accounts a minimum of $1,000 up to a maximum equal
to the lesser of $50,000 or 50% of their account balance. Loan
transactions are treated as a transfer to (from) the investment fund from
(to) the Loan Fund. Loan terms range from 1-5 years or up to 15 years
for the purchase of a principle residence. The loans are secured by the
<PAGE> 6
balance in the participant's account and bear interest at a rate
commensurate with local prevailing rates as determined quarterly by the
Plan administrator. Principal and interest is paid ratably, generally
through monthly payroll deductions.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The accounts of the Program have been maintained in
accordance with generally accepted accounting principles. The financial
statements were prepared in accordance with the financial reporting
requirements of ERISA as permitted by the Securities and Exchange
Commission's amendments to Form 11-K adopted during 1990.
Investment Valuation and Income Recognition - The Program's investments
are stated at fair value except for its investment contract with an
insurance company which is valued at contract value (Note 6). If
available, quoted market prices are used to value investments. The
amounts shown in Note 5 for securities that have no quoted market price
represent estimated fair value as determined by Vanguard Fiduciary Trust
Company. Purchases and sales of securities are recorded on the
trade-date basis. Interest income is recorded on the accrual basis.
Dividends are recorded on the ex-dividend basis.
Administrative Expenses - All administrative expenses of the Program with
the exception of investment management fees are paid by the Company.
Investment management fees are paid by the Program.
Reclassifications - Certain 1995 amounts have been reclassified to
conform to the 1996 financial statement presentation.
4. RESOURCES STOCK FUND
In September 1996, The Company's Board of Directors declared a special
dividend consisting of the shares of Union Pacific Resources Group
("Resources") common stock owned by the Company ("the Spin-Off"). As a
result of the Spin-Off, each of the Company's stockholders received
0.846946 of a share of Resources common stock for each share of Company
common stock held by such shareholders at the September 26, 1996 record
date for the distribution. Therefore, each Plan participant's account
received 0.846946 of a share of Resources common stock for each share of
Company common stock held in the Fund. The shares received have been
placed in the Resources Stock Fund ("Resources Stock"). Future
contributions to Resources Stock Fund are not permitted.
5. INVESTMENTS
At December 31, 1996, Program investments were maintained in commingled
funds of the Plan Trustee along with investments of another Company-
administered Thrift Plan, within a Master Trust. Assets, liabilities,
investment income, and security gains and losses are allocated monthly to
the Plan based on its equity in the investments of the Master Trust.
At December 31, 1996, the Program held percentage interests in the Master
trust of 0.50 in Company Stock, 0.40 in Resources Stock, 100.0 in
Windsor, 22.90 in Equity Index, 1.60 in Fixed Income, 8.10 in the Loan
Fund, 2.50 in Wellington, 5.10 in U.S. Growth, 13.30 in the VMMR Prime
Portfolio, 1.50 in International Growth, and 0.00 in Bond Index.
At December 31, 1996, the total investments at fair value of the Master
Trust was $577,591,251. In addition, total net appreciation in fair
value of investments and total interest and dividends of the Master Trust
were $86,837,354 and $28,728,709, respectively, for the year ended
December 31, 1996.
At December 31, 1996, Company Stock is invested primarily in Union
Pacific Common Stock. Equity Index is invested in the Vanguard Index
Trust 500 Portfolio Fund at December 31, 1996, which is designed to
<PAGE> 7
closely track the investment performance of the Standard and Poors' 500
Composite Stock Index. At December 31, 1996, Fixed Income is comprised
of investments in GICs bearing interest at 5.19% to 7.85%. Interest
rates are fixed for the life of each contract. GICs are held with
insurance companies rated at least A-1 by Standard & Poors. The
maturities of these GICs range from 1-3 years and their principal and
interest are unconditionally guaranteed by the respective insurance
companies. The fair value of the GIC's approximates their contract
value. At December 31, 1996, Fixed Income is also comprised of the
Vanguard Investment Contract Trust, which is comprised of contracts
issued by financial institutions and backed by high quality bonds and
bond mutual funds. As the GICs expire, the proceeds will be reinvested
in the Vanguard Investment Contract Trust. Wellington is invested in the
Vanguard/Wellington Fund at December 31, 1996, which is comprised of
common stocks and fixed-income securities. At December 31, 1996, U.S.
Growth is invested in Vanguard U.S. Growth Fund which is comprised of
established U.S. growth stocks. International Growth is invested in the
Vanguard International Growth Portfolio at December 31, 1996, which is
comprised of foreign common stocks with high growth potential. At
December 31, 1996, Bond Index is invested in the Vanguard Total Bond
Market Fund which is designed to closely track the investment performance
of the Salomon Brothers Broad Investment-Grade Bond Index. At December
31, 1996, VMMR Prime Portfolio is a diversified money market investment
fund invested and reinvested in high quality certificates of deposit,
bankers' acceptances, commercial paper, U.S. Government securities, and
other short-term obligations with the objective of preserving principal
while providing income. At December 31, 1996, Windsor is invested in the
Vanguard Windsor Fund, a diversified fund invested and reinvested
primarily in shares of stocks of companies. At December 31, 1996, NWNL
GIC is primarily invested in an investment contract with Northwestern
National Life Insurance Company (See Note 6). At December 31, 1996,
Resources Stock is invested primarily in Resources common stock.
Prior to amendment effective July 15, 1996, Program participants could
direct their contributions in various proportions to either Fund B or
Fund C. Participant unmatched contributions prior to 1987 could be
invested in either Fund D or Fund E, in accordance with participant
directions.
Fund B - Based upon Program guidelines, this Fund was invested in
common stocks, similar equity securities, or other similar investments
including, but not limited to, bank pooled or common funds, mutual
funds or insurance company separate accounts. At December 31, 1995,
assets in this Fund were invested primarily in Vanguard Windsor Fund
Incorporated and Vanguard Index Trust 500 Portfolio mutual funds.
Fund C - Based upon Program guidelines, this Fund was invested in
contracts issued by an insurance company, and upon determination by
the Board of Directors, could also include, but not be limited to,
guaranteed income contracts, group annuity contracts, immediate
participation guarantee contracts, or deposit administration
contracts. At December 31, 1995, assets in this Fund were invested
primarily in a guaranteed insurance contract with Northwestern
National Life Insurance Company.
Fund D - Based upon Program guidelines, this Fund was invested in the
Windsor Fund maintained by the Vanguard Group of Investment Companies.
Fund E - Based upon the Program guidelines, this Fund was invested
primarily in the Vanguard Money Market Reserves Prime Portfolio.
<PAGE> 8
Except for its investment contract with an insurance company included in
the NWNL GIC fund at December 31, 1996 and included in Fund C at December
31, 1996 (Note 6), the following table presents the fair value of
investments. Investments that represent 5% or more of the Program's net
assets are separately identified.
<TABLE>
<CAPTION>
December 31, 1996 December 31, 1995
---------------------------- ----------------------------
Number Fair Number Fair
of Units Value of Units Value
<S> <C> <C> <C> <C>
Investments at Fair Value
as Determined by Quoted
Market Price:
Vanguard Windsor Fund
Incorporated -- $ -- 3,841,686 $55,819,700
Vanguard Index Trust
500 Portfolio -- -- 376,241 21,795,663
Common stock -- -- 9,250 410,469
------------ -----------
-- 78,025,832
Investments at Estimated
Fair Value:
Program interest in
Master Trust -- 101,413,931 -- --
Vanguard Money Market
Reserves -- -- 205,131 205,131
------------ ------------
$101,413,931 $78,230,963
============ ============
</TABLE>
<PAGE> 9
6. INVESTMENT CONTRACT WITH INSURANCE COMPANY
The Program has entered into a benefit responsive investment contract
with Northwestern National Life Insurance Company (Northwestern
National). This contract is included in the financial statements at
contract value, which approximates fair value. Contract value represents
contributions made under the contract, plus earnings, less Program
withdrawals and administrative expenses. Northwestern National maintains
the contributions in a pooled account. The crediting interest rate under
this contract at December 31, 1996 and 1995, and for the years then ended
was 7% and 8%, respectively. Under this contract a penalty may be
incurred for early withdrawal from the contract by the plan sponsor, plan
termination and various other employer initiated events.
7. TAX STATUS
The Program obtained a tax determination letter dated April 16, 1996, in
which the Internal Revenue Service stated that the Program, as amended
through October 24, 1995, was in compliance with the applicable
requirements of the Internal Revenue Code (the Code). The Program has
been amended since receiving the determination letter. However, Program
management believes that the program currently is being operated in
compliance with the applicable requirement of the Internal Revenue Code.
Therefore, it is believed that the Program was qualified and the related
trust was tax-exempt under provisions of Section 501(a) of the Internal
Revenue Code as of the financial statement date. Therefore, no provision
for income taxes has been included in the Program's financial statements.
8. PROGRAM TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Program at any time, to terminate the Program subject to
the provisions of ERISA. Regardless of such actions, the principal and
income of the Program remains for the exclusive benefit of the Program's
participants and beneficiaries. The Company may direct the Trustee
either to distribute the Program's assets to the participants, or to
continue the Trust and distribute benefits as though the Program had not
been terminated.
<PAGE> 10
9. FUND INFORMATION
Net assets available for benefits, participant contributions, withdrawals
and investment income by fund are as follows for the years ended
December 31, 1996 and 1995:
1996 1995
------------ ------------
Net assets available for benefits:
Company stock $ 653,871 $ --
Equity index 27,110,164 --
Fixed income 1,482,186 --
Bond index 169 --
VMMR Prime Portfolio 304,040 --
Wellington 777,296 --
U.S. Growth 1,436,948 --
International Growth 371,142 --
Windsor 67,652,196 --
NWNL GIC 37,737,581 --
Resources stock 211,718 --
Loan Fund 1,414,201 --
Fund B -- 82,326,722
Fund C -- 60,388,841
Fund D and E -- 1,265,329
------------ ------------
Total $139,151,512 $143,980,892
------------ ------------
Employer contributions:
Company stock $ -- $ --
Equity index -- --
Fixed income -- --
Bond index -- --
VMMR Prime Portfolio -- --
Wellington -- --
U.S. Growth -- --
International Growth -- --
Windsor -- --
NWNL GIC -- --
Resources stock -- --
Loan Fund -- --
Fund B -- 3,806,945
Fund C -- 2,130,775
Fund D and E -- --
------------ ------------
Total $ -- $ 5,937,720
------------ ------------
Participant's contributions:
Company stock $ -- $ --
Equity index -- --
Fixed income -- --
Bond index -- --
VMMR Prime Portfolio -- --
Wellington -- --
U.S. Growth -- --
International Growth -- --
Windsor -- --
NWNL GIC -- --
Resources stock -- --
Loan Fund -- --
Fund B -- 2,175,610
Fund C -- 1,064,928
Fund D and E -- --
------------ ------------
Total $ -- $ 3,240,538
------------ ------------
<PAGE>11
Distribution to participants:
Company stock $ -- $ --
Equity index 277,582 --
Fixed income -- --
Bond index -- --
VMMR Prime Portfolio 17,424 --
Wellington -- --
U.S. Growth -- --
International Growth -- --
Windsor 714,074 --
NWNL GIC 1,259,788 --
Resources stock -- --
Loan Fund -- --
Fund B 13,724,297 10,506,455
Fund C 11,844,618 10,649,493
Fund D and E 85,424 67,689
------------ ------------
Total $27,923,207 $21,223,637
------------ ------------
Investment income:
Company stock $ 116,708 $ --
Equity index 4,083,412 --
Fixed income 13,144 --
Bond index 181 --
VMMR Prime Portfolio 7,941 --
Wellington 38,184 --
U.S. Growth 55,671 --
International Growth 14,216 --
Windsor 10,918,491 --
NWNL GIC 993,921 --
Resources stock 3,873 --
Loan Fund 22,975 --
Fund B 4,885,681 21,814,453
Fund C 1,905,907 4,725,544
Fund D and E 55,786 263,109
------------ ------------
Total $ 23,116,091 $ 26,803,106
============ ============
10.MERGER AGREEMENT
On March 16, 1995, the Corporation executed a definitive merger agreement
pursuant to which it acquired the remaining 71.6% of the Chicago and
North Western Transportation Company's (CNW) stock. Under this agreement
the Corporation initiated a tender offer on March 23, 1995 and completed
the acquisition of the CNW on April 24, 1995. As a result of the
acquisition, and effective April 24, 1995, the Program is being
administered by the Senior Vice President, Human Resources of the
Corporation.
11.RELATED PARTY TRANSACTIONS
Program investments include the Union Pacific Company Stock Fund which is
invested primarily in the Stock of Union Pacific Corporation. Union
Pacific Corporation is the holding Company of the Program sponsor and,
therefore, these transactions qualify as party-in-interest.
The Plan also invests in various funds managed by Vanguard Fiduciary
Trust Company and LaSalle National Trust. Vanguard Fiduciary Trust
Company is the Trustee as defined by the Program and LaSalle National
Trust was the Program Trustee prior to the appointment of Vanguard
Fiduciary Trust Company; therefore, the related transactions qualify as
party-in-interest.
<PAGE> 12
CHICAGO AND NORTH WESTERN RAILWAY COMPANY
PROFIT SHARING AND RETIREMENT SAVINGS PROGRAM
Item 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
YEAR ENDED DECEMBER 31, 1996
______________________________________________________________________________
Column B Column C Column D Column E
Description of Investment
Identity of Issue Including Collateral Rate of
Borrower, Lessor Interest, Maturity Date Current
or Similar Party or Maturity Value Cost Value
Northwestern National
Life Insurance
Company Contract Group annuity contract fund
No.GA-135969-1-0101 37,737,581 shares $37,737,581 $37,737,581
<PAGE> 13
<TABLE>
<CAPTION>
CHICAGO AND NORTH WESTERN RAILWAY COMPANY
PROFIT SHARING AND RETIREMENT SAVINGS PROGRAM
Item 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1996
_____________________________________________________________________________________________________________________
Single Transactions Involving an Amount in
Excess of 5% of the Current Value of Plan Assets:
Column A Column B Column C Column D Column G Column H Column I
Current Value
of Asset on
Identity of Purchase Selling Cost of Transaction Net Gain
Party Involved Description of Asset Price Price Asset Date or (Loss)
<S> <C> <C> <C> <C> <C> <C>
LaSalle National Trust * Short-Term Investment Fund $8,265,483 $ -- $8,265,483 $8,265,483 $ --
LaSalle National Trust * Short-Term Investment Fund $9,102,182 $ -- $9,102,182 $9,102,182 $ --
LaSalle National Trust * Short-Term Investment Fund $ -- $9,105,020 $9,105,020 $9,105,020 $ --
LaSalle National Trust * Short-Term Investment Fund $ -- $8,262,422 $8,262,422 $8,262,422 $ --
Northwestern National Life
Insurance Company, Contract Group Annuity Contract
#GA-13569-1-001 Fund $ -- $8,265,483 $8,265,483 $8,265,483 $ --
</TABLE>
<TABLE>
<CAPTION>
Series of Transactions, When Aggregated, Involving an Amount in Excess of %5 of the current Value of Plan Assets:
Column A Column B Column C Column D Column E Column F Column G
Dollar Dollar
Identity of Number of Number Value of Value of Net Gain
Party Involved Description of Asset Purchases of Sales Purchases Sales or(Loss)
<S> <C> <C> <C> <C> <C> <C>
Vanguard Fiduciary Trust
Company * Windsor Fund Incorporated 8 13 $10,979,015 $9,575,418 $1,307,354
Vanguard Fiduciary Trust
Company * Index Trust 500 Portfolio 11 10 $ 6,065,435 $4,079,254 $1,001,804
Northwestern National Life
Insurance Company
Contract #GA-13569-1-001 Group Annuity Contract Fund 44 76 $6,177,865 $25,084,905 $ --
LaSalle National Trust * Short-Term Investment Fund 58 45 $50,890,874 $53,073,362 $ --
*Represents a party-in-interest
</TABLE>
<PAGE> COVER
Exhibit 99(g)
SOUTHERN PACIFIC RAIL CORPORATION THRIFT PLAN
Financial Statements and Supplemental Schedules
(Modified Cash Basis)
December 31, 1996 and 1995
(With Independent Auditors' Report Thereon)
<PAGE> INDEX
SOUTHERN PACIFIC RAIL CORPORATION
THRIFT PLAN
Financial Statements and Supplemental Schedules
(Modified Cash Basis)
December 31, 1996 and 1995
Table of Contents
Page
Independent Auditors' Report 1
Consent of Independent Auditors 2
Statements of Net Assets Available for Plan
Benefits (Modified Cash Basis) - December 31,
1996 and 1995 3
Statements of Changes in Net Assets Available
for Plan Benefits (Modified Cash Basis) - Years
ended December 31, 1996 and 1995 4
Notes to Financial Statements (Modified Cash
Basis) 5-12
Supplemental Schedules - (Modified Cash Basis)
Item 27a - Schedule of Assets Held for Investment
Purposes (Modified Cash Basis) - December 31,
1996 Schedule 1
Item 27d - Schedule of Reportable Transactions
(Modified Cash Basis) - Year ended December 31,
1996 Schedule 2
<PAGE> 1
Independent Auditors' Report
The Thrift Plan Committee
Southern Pacific Rail Corporation Thrift Plan:
We have audited the accompanying statements of net assets available for plan
benefits (modified cash basis) of Southern Pacific Rail Corporation Thrift
Plan (the Plan) as of December 31, 1996 and 1995, and the related statements
of changes in net assets available for plan benefits (modified cash basis)
for the years then ended, and the supplemental schedules as listed in the
accompanying table of contents. These financial statements and supplemental
schedules are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements and supplemental
schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
As described in note 2(a), these financial statements and supplemental
schedules were prepared on a modified cash basis of accounting, which is a
comprehensive basis of accounting other than generally accepted accounting
principles.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of Southern
Pacific Rail Corporation Thrift Plan as of December 31, 1996 and 1995, and
changes in net assets available for benefits for the years then ended, on the
basis of accounting described in note 2(a).
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedules
of (1) Item 27a - Schedule of Assets Held for Investment Purposes (Modified
Cash Basis), and (2) Item 27d - Schedule of Reportable Transactions (Modified
Cash Basis) are presented for the purpose of additional analysis and are not a
required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act
of 1974. The supplemental schedules have been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ KPMG Peat Marwick LLP
San Francisco, California
June 20, 1997
<PAGE> 2
SOUTHERN PACIFIC RAIL CORPORATION
THRIFT PLAN
Statements of Net Assets Available for Plan Benefits
(Modified Cash Basis)
December 31, 1996 and 1995
1996 1995
------------ ------------
Assets:
Investments, at fair value
(Note 3):
Common stock fund $ 2,707,119 2,148,384
Commingled funds 62,546,639 43,290,298
Short-term investments 4,443,075 3,010,085
------------ ------------
69,696,833 48,448,767
Investments, at contract value
(note 3):
Fixed income annuity contracts 118,576,813 127,786,622
------------ ------------
Total investments 188,273,646 176,235,389
Receivable from broker 19,417 8,726
Investment income receivable 695,265 730,618
------------ ------------
Total assets $188,988,328 $176,974,733
------------ ------------
Liabilities:
Unsettled stock sale 1,412 6,815
------------ ------------
Net assets available for
plan benefits $188,986,916 $176,967,918
============ ============
See accompanying nots to financial statements
<PAGE> 3
SOUTHERN PACIFIC RAIL CORPORATION
THRIFT PLAN
Statements of Changes in Net Assets Available for Plan
Benefits
(Modified Cash Basis)
Years ended December 31, 1996 and 1995
1996 1995
------------ ------------
Additions to net assets attributed to:
Investment income:
Interest $ 8,325,983 $ 8,929,902
Dividends 14,673 25
Net appreciation in fair value of
investments (Note 3) 9,741,416 11,757,093
------------ ------------
Total investment income 18,082,072 20,687,020
------------ ------------
Contributions:
Employer 2,816,930 2,908,910
Participants 6,507,155 6,645,656
------------ ------------
Total contributions 9,324,085 9,554,566
------------ ------------
Total additions 27,406,157 30,241,586
Deductions from net assets attributed to:
Distributions to participants - cash 14,963,502 15,021,561
Distributions to participants - non-cash -- 10,649,546
Investment and administrative expenses 423,657 345,212
------------ ------------
Total deductions 15,387,159 26,016,319
------------ ------------
Increase in net assets available for
plan benefits 12,018,998 4,225,267
Net assets available for plan
benefits:
Beginning of year 176,967,918 172,742,651
------------ ------------
End of year $188,986,916 $176,967,918
============ ============
See accompanying notes to financial statements.
<PAGE> 4
SOUTHERN PACIFIC RAIL CORPORATION
THRIFT PLAN
Notes to Financial Statements
(Modified Cash Basis)
(1) Description of Plan
(a) General
The following description of the Southern Pacific Rail Corporation Thrift
Plan (the Plan) is provided for general information purposes only.
Participants should refer to the Plan document for a more complete
description of the Plan's provisions.
The Plan is a defined contribution plan which was established by Rio
Grande Holding, Inc. (RGH) on January 1, 1982 as an individual account
savings and investment plan for employees of RGH and its subsidiaries
(the RGH participants). RGH is a wholly owned subsidiary of Southern
Pacific Rail Corporation (SPRC). SPRC adopted the Plan and became its
sponsor. SPRC and its subsidiaries that are participating in the Thrift
Plan are collectively referred to as the Company. The Plan is subject to
the provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
Southern Pacific Transportation Company's employees not subject to a
collective bargaining agreement and not paid on an hourly basis are
eligible to participate in the Plan any time after the first anniversary
of their employment if they have not incurred a break in service. In
addition, certain employees which are currently covered under collective
bargaining agreements who were previously not covered have been allowed
to continue participation in the Plan.
On February 1, 1994, the Plan amended its eligibility requirement,
allowing new employees to participate immediately in the Thrift Plan and
to accept rollovers.
(b) Contributions
Plan participants may elect to make employee contributions in an amount
not less than 1% nor more than 16% of their salary. These contributions
may be made on either an after-tax or a before-tax basis, or a
combination of the two, provided the total contribution does not exceed
the lesser of 16% of salary or the applicable Internal Revenue Code
annual limitation of $9,500. The employer matches the first 3% of
employee contributions (whether before-tax or after-tax) on a dollar-for-
dollar basis. All contributions are subject to limitations imposed by
the Internal Revenue Code such as those under Sections 401(a)(17),
401(k), 401(m), 402(g) and 415.
(c) Participant's Accounts
Each participant's account is credited with his or her own contributions,
employer contributions and an allocation of the Plan's earnings (or
losses) based on the type of investments selected and their performance.
The allocation of earnings (or losses) is based on each participant's
account balance by investment type.
(d) Vesting
Participant and employer contributions are fully vested when made.
<PAGE> 5
SOUTHERN PACIFIC RAIL CORPORATION
THRIFT PLAN
Notes to Financial Statements
(Modified Cash Basis)
(e) Investment Options
Upon enrollment in the plan, a participant may direct contributions in 1%
increments in any of six investment options:
Fixed Investment Fund - Funds are invested in high quality
investment contracts with a diversified group of insurance
companies, banks and other financial institutions.
Value Equity Fund - Funds are invested in shares of the Invesco
Retirement Trust Equity Fund (a trust company commingled fund). The
fund primarily invests in common stocks and securities convertible
into common stock.
Balanced Fund - Funds are invested in shares of the Invesco
Retirement Trust Flex Fund (a trust company commingled fund). The
fund contains a mix of stocks and high quality bonds.
International Equity Fund - Funds are invested in the Capital
Guardian International (Non-U.S.) Equity Fund (a trust company
commingled fund). The fund invests in a portfolio comprised
primarily of securities of non-U.S. issuers and securities whose
principal markets are outside of the United States.
Stock Fund - Funds are invested in common stock of Union Pacific
Rail Corporation.
Growth Equity Fund - Funds are invested in shares of the Invesco
Trust Company Common Stock Fund (a trust company commingled fund).
The funds consists primarily of small and large capitalization
stocks with strong earnings growth.
Participants may change their investment options monthly.
Effective December 31, 1994 SFP Stock and SFP subsidiary stock (which was
held in the SFPAC stock fund) was eliminated from the plan as an
investment option. Each participant whose account was invested in that
fund was permitted to elect to withdraw, in kind, shares of stock with a
fair market value equal to the total value allocated to the participants
After-Tax Contributions Account and Company matching contributions
account as of the date of withdrawal. All such shares not withdrawn were
sold and the proceeds were invested in the Fixed Investment Fund.
(f) Resources Stock Fund
In September 1996, Union Pacific Corporation's (UPC) Board of Directors
declared a special dividend consisting of the shares of Union Pacific
Resources Group ("Resources") common stock owned by UPC ("the Spin-Off").
As a result of the Spin-Off, each of UPC's stockholders received
0.846946 of a share of Resources common stock for each share of UPC
common stock held by such shareholders at the September 26, 1996 record
date for the distribution. The shares were transferred at market value
from the UPC Stock Fund to the Resources Stock Fund. Therefore, each Plan
participant's account received 0.846946 of a share of Resources common
stock for each share of UPC common stock held in the Fund. The shares
received have been placed in the Resources Stock Fund ("Resources Stock").
Future contributions to Resources Stock Fund are not permitted.
<PAGE> 6
SOUTHERN PACIFIC RAIL CORPORATION
THRIFT PLAN
Notes to Financial Statements
(Modified Cash Basis)
(g) Payment of Benefits
Benefits are payable to a participant upon retirement, disability, death or
termination of employment. Subject to certain hardship rules and limits, a
participant may also withdraw employer or employee contributions under
other circumstances. The benefit to which a participant is entitled is the
benefit that can be provided from that participant's account net of any
witholding for federal income taxes.
(h) Investment Management Fee and Administrative Expenses
In 1996 and 1995 respectively, the Plan paid investment management fees of
$418,047 and $304,230. Administration expenses paid totaled $5,610 and
$40,982 respectively. The majority of administrative expenses in both 1996
and 1995 were paid by the Company.
(i) Plan Termination
SPRC may terminate the Plan at any time. In the event of termination, Plan
net assets will be allocated and distributed to the participants based on
their respective account balances.
(2) Summary of Significant Accounting Policies
(a) Basis of Accounting
The accounts of the Plan are maintained, and the accompanying financial
statements and information have been prepared, on the cash basis modified
to carry investments at fair value, and to reflect the accrual of
investment income and brokerage transactions. Consequently, revenues and
related assets are recognized when received rather than when earned except
for investment carrying value, investment income and brokerage
transactions and expenses are recognized when paid rather than when the
obligation is incurred. Accordingly, the financial statements are not
intended to present net assets available for plan benefits and changes in
net assets available for plan benefits in accordance with generally
accepted accounting principles.
(b) Investment Valuation and Income Recognition
The plan's assets are stated at fair value except for its investment
contracts which are valued at contract value. Shares of commingled funds
are valued at quoted market prices which represent the net asset value of
shares held by the plan at year end. The stock is valued at its quoted
market price. The investment contracts held in the fixed investment fund
are fully benefit responsive and as such are valued at contract value.
Contract value represents contributions made under the contract, plus
earnings, less participant withdrawals. Purchases and sales of securities
are recorded on a trade-date basis. Investment income is recorded on the
accrual basis. Dividends are recorded on the ex-dividend date. The
difference between cost and market value from one period to the next is
recognized a net appreciation in fair value of investments in the
accompanying state of changes in net assets available for benefits.
(c) Use of Estimates
The preparation of the financial statements requires management to make
certain estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of income
and expenses during the reporting period. Actual results could differ
from those estimates.
<PAGE> 7
SOUTHERN PACIFIC RAIL CORPORATION
THRIFT PLAN
Notes to Financial Statements
(Modified Cash Basis)
(3) Investments
Chase Manhattan Bank, trustee of the plan, held the Plan's investments and
executed transactions therein. The following table presents the fair value
of the underlying investments at December 31, 1996 and 1995. Investments
that represent 5% or more of the Plan's net assets are separately
identified.
December 31,
--------------------------
1996 1995
------------ ------------
Fixed income annuity contracts, at
contract value:
Allstate Life Insurance Company:
Group Annuity Contract No. 5572,
6.45%, April 1, 1999 $ 5,918,697 $ 5,560,072
Group Annuity Contract No. 5607,
7.32%, June 1, 1999 1,036,254 1,036,054
CDC Investment Management Company:
Contract No. 114-01, 6.62%,
April 15, 1998 5,088,226 5,088,338
Canada Life Assurance Company:
Contract No. 45842, 7.17%,
July 1, 1999 5,146,283 5,144,331
Commonwealth Life Insurance Co.:
ADA-00288-ST, floating interest rate,
perpetual with 30 day notice
for termination 3,482,213 3,288,032
Continental Life Assurance Co.:
Group Annuity Contract
No. 12664, 8.51%, May 1, 1997 2,631,544 4,849,691
Group Annuity Contract
No. 12750, 7.08%, March 29, 1996 -- 6,472,139
Group Annuity Contract
No. 3000-11D,
7.86%, January 12, 1996 -- 93,425
John Hancock Mutual Life Insurance Co.
Guaranteed Investment Contract
No. 7942, 6.56%, May 1, 2004 5,450,114 5,113,392
Insurance Contract No. 7767,
variable rate, February 1, 2000 3,014,309 502,272
*Indicates asset is greater than 5% of net assets available for plan
benefits at beginning of the year.
<PAGE> 8
SOUTHERN PACIFIC RAIL CORPORATION
THRIFT PLAN
Notes to Financial Statements
(Modified Cash Basis)
December 31,
--------------------------
1996 1995
------------ ------------
Insurance Contract No. 8653,
6.54%, November 22, 1999 $ 5,046,206 $ --
Mass Mutual Insurance Co.:
Guaranteed Investment Contract
No. 10479, 6.88%, July 5, 2002 4,586,252 5,349,948
Guaranteed Investment Contract
No. 10744, 6.11%, July 5, 2002 7,716,349 8,867,525
Metropolitan Life Insurance
Co.: Group Annuity Contract
No. 12500, 8.18%, September 2, 1996 -- 4,743,721
Group Annuity Contract No. 14018,
7.6%, January 2, 2001 3,313,839 2,140,405
New York Life Insurance Co.:
Group Annuity Contract No. 06200,
8.35%, May 13, 1996 -- 5,230,423
Group Annuity Contract No. 06497,
6.98%, February 2, 1997 5,287,973 5,287,805
Group Annuity Contract No. 06497-004,
6.65%, October 31, 1995 6,008,666 --
Peoples Security Life Insurance Co.:
Contract No. 00064TR-4, 7.87%,
July 20, 1999 4,971,858 4,968,837
Contract No. 00064TR-3, 6.14%,
February 25, 1998 3,950,794 4,881,605
Contract No. 00064TR-2, 6.45%,
November 15, 2000 4,841,077 4,805,026
Contract No. 00064TR-1,
6.17%, May 17, 1999 4,906,845 4,869,542
Provident Life and Accident
Insurance Co. Contract
No. 630-05805*, 7.00%,
various maturity
dates through July 31, 1997 20,831,515 20,835,513
Prudential Insurance Co.:
Group Annuity Contract No. 748715,
6.16%, September 30, 1998 1,236,058 2,046,495
Group Annuity Contract No. 7375,
7.31%, April 18, 1996 -- 6,382,539
Group Annuity Contract No. 7395-212,
7.05%, April 18, 1996 $ -- $ 4,425,824
*Indicates asset is greater than 5% of net assets available for plan
benefits at beginning of the year.
<PAGE> 9
December 31,
--------------------------
1996 1995
------------ ------------
Prudential Investments - MBIA
Group Annuity Contract No.
7375-211, 7.31%, July 25, 1997 $ 3,407,298 $ --
Group Annuity Contract No.7375-212
7.05%, December 1, 1998 4,737,845 --
Sun Life Assurance Co.:
Contract No. S-0905-G, 7.28%,
June 10, 1999 5,966,598 5,561,706
Traveler's Insurance Co.:
Group Annuity Contract
No. 13999,
8.20%, March 1, 1996 -- 241,962
------------ -------------
Total fixed income annuity
contracts 118,576,813 127,786,622
------------ ------------
Common Stock Fund, at market
value:
Southern Pacific Rail Corporation -- 2,148,384
Union Pacific Corporation 2,078,341 --
Union Pacific Resources Group 628,778 --
------------ -----------
Total common stock fund 2,707,119 2,148,384
------------ -----------
Commingled Funds, at market
value:
Value Equity Fund:
Invesco Institutional
Series Trust Equity Fund* 34,779,427 26,940,068
Balanced Fund:
Invesco Institutional Series
Trust Flex Fund* 16,683,492 11,050,017
Growth Equity Fund:
Invesco Common Stock Fund 7,495,640 3,156,291
International Equity Fund:
CGTC International Non-U.S.
Equity Record 3,588,080 2,143,922
------------ ------------
Total commingled funds 62,546,639 43,290,298
------------ ------------
Short term investments, at
market value:
Chase Temporary Investment Fund 4,443,075 3,010,085
------------ ------------
Total investments $188,273,646 $176,235,389
============ ============
*Indicates asset is greater than 5% of net assets available for plan
benefits at beginning of the year.
<PAGE> 10
SOUTHERN PACIFIC RAIL CORPORATION
THRIFT PLAN
Notes to Financial Statements
(Modified Cash Basis)
Net appreciation in the fair value of the Plan's investments (including
investments bought, sold, as well as held during the year) for the years
ended December 31, 1996 and 1995 is summarized as follows:
1996 1995
----------- -----------
Common stock $ 695,489 $ 496,813
Commingled funds 9,045,927 11,260,278
----------- -----------
$ 9,741,416 $11,757,091
=========== ===========
(4) Tax Status
The Plan was amended on April 9, 1995. This revision amended and restated
the Plan to reflect changes required by the Tax Reform Act of 1986. The
Plan received a favorable determination letter from the Internal Revenue
Service on February 8, 1996 which stated that the Plan is qualified under
the provisions of Section 401(a) of the Internal Revenue Code, as
amended, and exempt from federal income taxes under Section 501(a).
(5) Related Party Transaction
Certain Plan investments are shares of temporary investment funds managed
by Chase Manhattan Bank. Chase Manhattan Bank is the trustee as defined
by the Plan, by the Plan and qualifies as a party-in-interest. Investment
and administrative expenses paid to the trustee by the Plan amounted to
$4,500 and $12,364 for the year ended December 31, 1996 and 1995,
respectively. In addition, as of September 11, 1996 (the merger date) the
Plan held stock issued by Union Pacific Corporation. Prior to the merger,
the Plan held stock issued by the Plan sponsor, Southern Pacific Rail
Corporation (Note 6).
(6) Merger with Union Pacific
On September 11, 1996, a subsidiary of Union Pacific Corporation (UPC)
completed its acquisition of SPRC through an exchange of cash and UPC
stock for all of the outstanding shares of SPRC not already owned by UPC.
As a result, SPRC shares owned by the Plan were exchanged for a
combination of cash and UPC stock. The 90,162 shares owned by the Plan
were converted into 25,601 shares of UPC stock and $679,525 of cash was
transferred to the Fixed Investment Fund. Also, the Plan was amended to
permit Plan participants to invest in UPC stock to replace the previous
option to invest in SPRC stock. Therefore, the common stock fund
represents shares of UPC at December 31, 1996 and shares of SPRC at
December 31, 1995.
<PAGE> 11
SOUTHERN PACIFIC RAIL CORPORATION
THRIFT PLAN
Notes to Financial Statements
(Modified Cash Basis)
(7) Voluntary Compliance Resolution Applications
In December of 1996, the Plan administrator filed a Voluntary Compliance
Resolution (VCR) application with the Internal Revenue Service relating
to operational defects of the Plan. The defects identified are 1) the
existence of unallocated amounts in a suspense account resulting from the
transfer of assets and liabilities from the Santa Fe Southern Pacific
Savings and Investment Plan, 2) contributions made on behalf of one
participant exceeded the limit under Section 415 of the Internal Revenue
Code of 1986, 3) in two instances, the Plan administrator ceased making
installment payments to participants at their request without making an
immediate lump sum distribution as required under the Plan, 4) one
participant received an overpayment, and 5) the Plan administrator
incorrectly calculated the installment payments for one participant and
began commencement of the installment payments two months late. The IRS
had not yet responded to this VCR application. The Plan administrator
is currently in the process of reviewing the Plan activity, determining
the necessary corrections and the magnitude of those corrections. The
Plan administrator expects that the proposed corrections will be accepted
by the IRS with no adverse implications to the Plan's tax status.
In October 1994, the Plan Administrator filed a Voluntary Compliance
Resolution (VCR) application with the IRS relating to the failure to
timely distribute the minimum distribution required under section
401(a)(9) to one employee. The Plan sponsor corrected the situation by
distributing to the employee from her account the required amounts due of
approximately $66,158. During 1996 the VCR application and proposed
correction was accepted by the IRS with no adverse implications to the
Plan's tax status.
(8) Subsequent Event
Effective May 1997, the Plan changed the Trustee and Administrator of
the Plan from Chase Manhattan and Howard Johnson, respectively, to Vanguard.
The Plan's assets were transferred to Vanguard in May 1997.
<PAGE> 12
SOUTHERN PACIFIC RAIL CORPORATION
THRIFT PLAN
Notes to Financial Statements
(Modified Cash Basis)
(9) Fund Information
Investments, investment income, contributions and distributions
to participants by fund are as follows for the years ended December 31,
1996 and 1995:
Year Ended Year Ended
December 31, December 31,
1996 1995
------------ ------------
Investments:
Fixed Investment Fund $123,019,888 $130,769,265
Value Equity Fund 34,779,427 26,940,068
Balanced Fund 16,683,492 11,050,017
International Equity Fund 3,588,080 2,143,922
Stock Fund 2,078,775 2,175,826
Resources Stock Fund 628,344 --
Growth Equity Fund 7,495,640 3,156,291
------------ ------------
$188,273,646 $176,235,389
------------ ------------
Investment Income:
Fixed Investment Fund $ 8,325,983 $ 8,854,248
Value Equity Fund 5,705,655 6,453,492
SFPAC Stock Fund -- 2,097,637
Balanced Fund 2,011,292 2,096,786
International Equity Fund 385,150 244,050
Stock Fund 701,234 502,259
Resources Stock Fund 8,928 --
Growth Equity Fund 943,830 438,548
------------ ------------
$ 18,082,072 $ 20,687,020
------------ ------------
Contributions:
Fixed Investment Fund $ 5,148,402 $ 5,937,853
Value Equity Fund 2,105,276 2,070,458
SFPAC Stock Fund -- --
Balanced Fund 1,083,166 922,664
International Equity Fund 307,963 219,556
Stock Fund 134,221 139,387
Resources Stock Fund -- --
Growth Equity Fund 545,057 264,648
------------ ------------
$ 9,324,085 $ 9,554,566
------------ ------------
Distributions to Participants:
Fixed Investment Fund $ 12,255,829 $ 12,358,036
Value Equity Fund 1,731,128 1,608,570
SFPAC Stock Fund -- 11,104,648
Balanced Fund 644,223 386,990
International Equity Fund 67,148 60,238
Stock Fund 52,701 71,246
Resources Stock Fund -- --
Growth Equity Fund 212,473 81,379
------------ ------------
$ 14,963,502 $ 25,671,107
------------ ------------
<PAGE> 13
<TABLE>
<CAPTION>
Schedule 1
Page 1 of 3
SOUTHERN PACIFIC RAIL CORPORATION
THRIFT PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
(Modified Cash Basis)
Year ended December 31, 1996
Cost Current
Description of Investment basis value
- -------------------------------------------------------------------------------------------- ----- -----
<S> <C> <C> <C>
Investment Contracts:
Fixed Investment Fund:
Allstate Life Insurance Company 6.45% investment contract due April 1, 1999 $ 5,918,697 $ 5,918,697
Allstate Life Insurance Company 7.32% investment contract due June 1, 1999 1,036,254 1,036,254
CDC Investment Management Company 6.62% investment contract due April 15, 1998 5,088,226 5,088,226
Canada Life Assurance Company 7.17% investment contract due July 1, 1999 5,146,283 5,146,283
Commonwealth Life Insurance Company Floating rate contract, 30 day termination notice 3,482,213 3,482,213
Continental Life Assurance Company 8.51% investment contract due May 1, 1997 2,631,544 2,631,544
John Hancock Mutual Life Insurance
Company 6.56% investment contract due May 1, 2004 5,450,114 5,450,114
John Hancock Mutual Life Insurance
Company Variable rate investment contract
due February 1, 2000 3,014,309 3,014,309
John Hancock Mutual Life Insurance
Company 6.54% investment contract due November 22, 1999 5,046,206 5,046,206
Mass Mutual Insurance Company Variable investment contract due July 5, 2002 4,586,252 4,586,252
Mass Mutual Insurance Company Variable investment contract due July 5, 2002 7,716,349 7,716,349
Metropolitan Life Insurance Company 6.8% investment contract due January 2, 2001 3,313,839 3,313,839
New York Life Insurance Company 7.33% investment contract due February 3, 1997 5,287,973 5,287,973
New York Life Insurance Company 6.94% investment contract due February 25, 1998 6,008,666 6,008,666
Peoples Security Life Insurance
Company 6.45% investment contract due May 1, 1997 3,950,794 3,950,794
Peoples Security Life Insurance
Company 6.14% investment contract due May 1, 1997 4,906,845 4,906,845
Peoples Security Life Insurance
Company 6.17% investment contract due April 25, 1997 4,841,077 4,841,077
Peoples Security Life Insurance
Company 7.87% investment contract due April 25, 1997 4,971,858 4,971,858
Provident Life and Accident
Insurance Company Investment contract due 20,831,515 20,831,515
</TABLE>
<PAGE> 14
<TABLE>
<CAPTION>
Schedule 1
----------
Page 2 OF 3
SOUTHERN PACIFIC RAIL CORPORATION
THRIFT PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
(Modified Cash Basis)
Year ended December 31, 1996
Cost Current
Description of Investment basis value
- -------------------------------------------------------------------------------------------- ----- -----
<S> <C> <C> <C>
Prudential Insurance Company 6.16% investment contract due September 30, 1998 $ 1,236,058 $ 1,236,058
Prudential Insurance Company 7.31% investment contract due July 25, 1997 3,407,298 3,407,298
Prudential Insurance Company 7.05% investment contract due December 1, 1997 4,737,845 4,737,845
Sun Life Assurance Company 7.28% investment contract due June 10, 1999 5,966,598 5,966,598
----------- -----------
Total investment contracts 118,576,813 118,576,813
----------- -----------
Common stock:
Union Pacific Corporation ** 34,567 shares of common stock 1,367,637 2,078,341
Union Pacific Res. Group Inc.**21,682 Shares of Stock 394,336 628,778
----------- -----------
Total common stock 1,761,973 2,707,119
----------- -----------
Commingled Funds:
Value Equity Fund:
Invesco Institutional Series
Trust Equity Fund 1,306,024.30 shares of commingled fund 23,454,779 34,779,427
Balanced Fund:
Invesco Institutional Series
Trust Flex Fund 631,950.44 shares of commingled fund 12,784,799 16,683,492
Growth Equity Fund:
Invesco Common Stock Fund 182,021.37 shares of commingled fund 6,190,402 7,495,640
International Equity Fund:
CGTC International Non-
U.S. Equity Record 269,375.36 shares of commingled fund 3,029,283 3,588,080
----------- -----------
Total commingled funds 45,459,263 62,546,639
----------- -----------
**Includes party-in-interest
</TABLE>
<PAGE> 15
<TABLE>
<CAPTION>
Schedule 1
-----------
Page 3 OF 3
SOUTHERN PACIFIC RAIL CORPORATION
THRIFT PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
(Modified Cash Basis)
Year ended December 31, 1996
Cost Current
Description of Investment basis value
- ------------------------------------------------------------------ ----- -----
<S> <C> <C>
Temporary Investment Funds:
Chase Temporary Investment Fund:
Domestic Liquidity Fund $ 4,443,075 $ 4,443,075
------------ ------------
Total Temporary Investment Funds 4,443,075 4,443,075
------------ ------------
Total Investments $170,241,124 $188,273,646
============ ============
**Includes party-in-interest
</TABLE>
<PAGE> 16
<TABLE>
<CAPTION>
Schedule 2
----------
Page 1 of 1
SOUTHERN PACIFIC RAIL CORPORATION
THRIFT PLAN
Item 27d - Schedule of Reportable Transactions
(Modified Cash Basis)
Year ended December 31, 1996
Purchase/ Number
Transaction sales Gain/ of
Issuer Name type Cost price (loss) transactions
------ ---- ---- ---- ----- ---- ------------
<S> <C> <C> <C> <C> <C> <C>
Chase Bank Domestic Liquidity Fund Purchase $ 36,421,820 -- -- 149
Sale 34,989,193 34,989,193 -- 83
Note: Reportable transactions are included as defined in 29 CFR 2520.103-6 of the Department of
Labor's Rules and Regulations for Reporting and Disclosure Under the Employee Retirement
Income Security Act of 1974. In general terms, reportable transactions are those
transactions, or series of transactions when aggregated within the plan year, which
involve an amount in excess of 5% of net assets available for plan benefits as of the
beginning of the year.
</TABLE>
