<PAGE> COVER
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1995
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 1-7817
MISSOURI PACIFIC RAILROAD COMPANY
---------------------------------
(Exact name of registrant as specified in its charter)
Delaware 43-1118635
- -------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1416 Dodge Street, Omaha, Nebraska 68179
- ---------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (402) 271-5000
-----------------------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each Class which registered
------------------- ------------------------
Missouri Pacific Railroad Company New York Stock Exchange, Inc.
4-1/4% First Mortgage Bonds due 2005
Missouri Pacific Railroad Company New York Stock Exchange, Inc.
4-3/4% General Income Mortgage Bonds
due 2020 and 2030
Missouri Pacific Railroad Company New York Stock Exchange, Inc.
5% Debentures due 2045
Texas and Pacific Railway Company New York Stock Exchange, Inc.
5% First Mortgage Bonds due 2000
Missouri-Kansas-Texas Railroad Company New York Stock Exchange, Inc.
5-1/2% Subordinated Income Debentures
due 2033
Securities registered pursuant to
Section 12(g) of the Act: None
REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION J(1)
(a) AND (b) OF FORM 10-K AND IS THEREFORE FILING THIS FORM WITH THE REDUCED
DISCLOSURE FORMAT.
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 ].
-----------------------------
None of the Registrant's voting stock is held by non-affiliates. The Registrant
is a wholly-owned, indirect subsidiary of Union Pacific Corporation.
As of February 29, 1996, the Registrant had outstanding 920 shares of Common
Stock, $1 par value, and 80 shares of Class A Stock, $1 par value.
-----------------------------
DOCUMENTS INCORPORATED BY REFERENCE - None
<PAGE> 1
PART I
------
Item 1. Business
--------
Missouri Pacific Railroad Company (the "Registrant") includes the Registrant, a
Class I Railroad incorporated in Delaware and a wholly-owned, indirect
subsidiary of Union Pacific Corporation (the "Corporation" or "Union Pacific"),
as well as a number of wholly-owned and majority-owned subsidiaries of the
Registrant engaged in various railroad and related operations, and various
terminal companies in which the Registrant has minority interests.
The Registrant operates in the midwestern and southwestern states of
Arkansas, Colorado, Illinois, Kansas, Louisiana, Missouri, Nebraska, Oklahoma,
Tennessee and Texas. The Registrant maintains coordinated schedules with other
carriers for the handling of freight to and from the Atlantic Coast, the Pacific
Coast, the Southeast, the Southwest, Canada and Mexico. Export and import
traffic is moved through Gulf Coast ports and across the Texas-Mexico border.
The Registrant's operations have been coordinated with those of Union Pacific
Railroad Company ("UPRR"), another wholly-owned, indirect subsidiary of the
Corporation. The two railroads operate as a unified system and are here after
referred to as (the "Railroad"). See Note 3 to the Registrant's Financial
Statements for information on related party transactions.
In 1995, the Registrant had transportation revenues of $2.4 billion,
approximately 98.4 percent of which were derived from rail freight operations.
Percentages of revenue ton-miles ("RTM") and rail commodity revenue for major
commodities during 1995, 1994 and 1993 were as follows:
1995 1994 1993
---------------- ---------------- ----------------
Commodity Commodity Commodity
RTM Revenue RTM Revenue RTM Revenue
----- --------- ------ --------- ----- ---------
(Percent of Total)
Energy 32.9% 17.1% 29.9% 15.4% 29.0% 14.8%
Chemicals 21.5 29.0 22.6 29.2 22.3 29.1
Metals/Minerals/
Forest 15.5 18.4 16.9 18.7 17.7 20.2
Grain and Grain
Products 17.1 10.8 15.9 10.1 16.7 10.9
Intermodal 5.3 7.8 6.1 8.7 5.2 7.4
Automotive 3.9 12.1 4.2 12.6 4.6 12.1
Food/Consumer/
Government 3.8 4.8 4.4 5.3 4.5 5.5
------ ------ ------ ------ ------ ------
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
====== ====== ====== ====== ====== ======
Amount in
Billions 94.9 $2.3 89.6 $2.3 82.3 $2.1
====== ======= ====== ====== ====== ======
<PAGE> 2
Significant Events
- ------------------
Merger with UPRR - The Corporation intends to merge the Registrant and UPRR in
mid-to-late 1996.
Chicago and North Western Transportation Company ("CNW") - In March 1995, the
Corporation executed a definitive merger agreement to acquire, for $1.2
billion, the remaining 71.6% of outstanding common stock of CNW not previously
owned by Union Pacific. Under this agreement, Union Pacific initiated a cash
tender offer in March 1995 for all outstanding CNW shares at $35 per share,
which was completed in late April 1995. The acquisition of CNW was accounted
for as a purchase and CNW's financial results were consolidated into Union
Pacific beginning in May 1995. In October 1995, CNW was merged into and is
now part of UPRR.
Southern Pacific Rail Corporation ("Southern Pacific") Acquisition - In August
1995, Union Pacific and Southern Pacific entered into a definitive merger
agreement ("the Agreement") providing for the acquisition of Southern Pacific
by Union Pacific. Under the terms of the Agreement, Union Pacific acquired
25% of Southern Pacific's common stock in a first-step cash tender offer.
Following approval of the Southern Pacific acquisition by the Surface
Transportation Board ("STB") of the Department of Transportation--the
successor to the Interstate Commerce Commission ("ICC")--Union Pacific will
complete the acquisition of Southern Pacific by exchanging each of the
remaining Southern Pacific common shares, at the holder's election and subject
to proration, for $25 or 0.4065 shares of Union Pacific common stock. As a
result, Union Pacific will convert 60% of Southern Pacific's outstanding
shares immediately before the acquisition into shares of Union Pacific common
stock, with the remaining 40% of the outstanding shares, including the shares
acquired in the first-step cash tender offer, being acquired for cash.
Union Pacific completed the first-step cash tender offer in September 1995
pursuant to which approximately 39 million common shares or 25% of the
outstanding common shares of Southern Pacific were acquired by Union
Pacific at $25 per share. Union Pacific deposited these shares in an
independent voting trust pending STB approval of the acquisition of Southern
Pacific.
The Corporation filed an application for control of the Southern
Pacific with the STB in late November 1995. The STB has adopted an expedited
schedule under which it intends to render a final decision within 255 days of
filing the original application. Should the acquisition of Southern Pacific
not be approved by the STB, or should the STB impose onerous approval
conditions, the Corporation may be required to or may choose to dispose of its
initial investment in Southern Pacific. Such a disposition could cause Union
Pacific to incur a significant loss on its investment in Southern Pacific.
However, the Corporation believes that the STB will approve its application
for control of the Southern Pacific without onerous conditions.
Southern Pacific operates the nations sixth largest railroad through
15 states and transports freight over approximately 14,500 miles of main-line
track, linking the West Coast and Gulf Coast ports to large population centers
in the Midwest. Southern Pacific generated operating revenues of $3.2 billion
in 1995 and $3.1 billion in 1994. The combination of the Railroad and
Southern Pacific would create the nation's largest railroad.
<PAGE> 3
Competition
- -----------
The Registrant is subject to competition from other railroads, motor carriers
and barge operators, based on both price and service. Most of its railroad
operations are conducted in corridors served by competing railroads and by
motor carriers. Motor carrier competition is particularly strong for
intermodal traffic. Because of the proximity of the Registrant's routes to
major inland and Gulf Coast waterways, barge competition can be particularly
pronounced for bulk commodities.
Employees
- ---------
As is true with employees of all the principal railroads in the country, the
majority of the Registrant's employees are organized along craft lines and
represented by national labor unions. The Registrant continues to enter into
agreements implementing the previous round of national negotiations to meet
local requirements throughout its system. The Registrant has implemented
two-person crews for all through-freight trains and for a portion of yard and
local operations. Expansion of two-person crews is planned for other areas of
the system.
Both the unions and the railroads took the necessary steps in 1995
to commence labor negotiations on a new agreement for all craft lines. In
January 1996, a tentative agreement was reached with the United Transportation
Union ("UTU"), which represents approximately 25% of the Railroad's unionized
employees. The five-year package, which is currently undergoing UTU
ratification, includes a combination of general wage increases and lump-sum
payments ranging from 3% to 3.5% annually, as well as increased work rule
flexibility. In February 1996, a tentative agreement was also reached with
the Brotherhood of Locomotive Engineers ("BLE"). The final terms of the
agreement are anticipated to be similar to those provided for in the UTU
agreement. Ratification votes by the UTU and BLE are expected in the spring
of 1996. Negotiations with other craft lines will continue in 1996.
Governmental Regulation
- -----------------------
The Registrant's operations are currently subject to a variety of Federal,
state and local regulations. A description of the more significant
regulations follows.
The operations of the Registrant are subject to the regulatory
jurisdiction of the STB, the successor to the ICC, other Federal agencies and
various state agencies. The STB has jurisdiction over rates charged on certain
regulated rail traffic; freight car compensation; transfer, extension or
abandonment of rail lines; and acquisition of control of rail common carriers
and motor carriers by rail common carriers. Other Federal agencies have
jurisdiction over safety, movement of hazardous materials, movement and
disposal of hazardous waste, and equipment standards. As a result of the ICC
Termination Act of 1995, effective January 1, 1996, state agencies no longer
have authority to regulate intrastate rail rates, practices and services.
However, various state and local agencies have jurisdiction over disposal of
hazardous wastes and seek to regulate movement of hazardous materials.
<PAGE> 4
Item 2. Properties
----------
Operating Equipment
- -------------------
At December 31, 1995 the Registrant owned or leased from others 1,333
locomotives, 29,381 freight cars and 1,895 units of work equipment.
Substantially all of the Registrant's railroad rolling stock is subject to the
liens of the Registrant's First Mortgage and General Income Mortgage, as well
as the lien of the First Mortgage of the Texas and Pacific Railway Company,
its predecessor in interest (collectively the "Mortgages"). In addition, a
portion of this property is subject to various equipment obligations which are
superior to the liens of one or more of the Mortgages. In connection with its
motor freight operations, the Registrant operated 31 tractors, 23 rampers and
689 trailers at December 31, 1995.
Rail Property
- -------------
The Registrant operates approximately 9,500 miles of track, including 7,900
miles of main line and 1,600 miles of branch line. Approximately 10 percent
of the main line track consists of trackage rights over track owned by others.
The Registrant's right-of-way and tracks are subject to one or more of the
Mortgages.
Item 3. Legal Proceedings
-----------------
The Registrant has received notices from the Environmental
Protection Agency ("EPA") and state environmental agencies alleging
that it is or may be liable under certain Federal or state
environmental legislation for the remediation costs associated with
alleged contamination or for violations of environmental
requirements at various sites throughout the United States,
including sites which are on the Superfund National Priorities List
or state superfund lists. Although specific claims have been made
by the EPA and state regulators with respect to some of these sites,
the ultimate impact of these proceedings and suits by third parties
cannot be predicted at this time because of the number of
potentially responsible parties involved, the degree of
contamination by various wastes, the scarcity and quality of
volumetric data related to many of the sites and/or the speculative
nature of remediation costs. Nevertheless, at many of the superfund
sites, the Registrant believes it will have little or no exposure
because no liability should be imposed under applicable law, one or
more other financially able parties generated all or most of the
contamination, or a settlement of the Registrant's exposure has been
reached although regulatory proceedings at the sites involved have
not been formally terminated. Additional information on the
Registrant's potential environmental costs is set forth under Note
11 to the Registrant's financial statements.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
Omitted in accordance with General Instruction J of Form 10-K.
<PAGE> 5
PART II
-------
Item 5. Market for Registrant's Common Equity and Related Stockholder
-------------------------------------------------------------
Matters
-------
All of the Common Stock and Class A Stock of the Registrant is owned
by a wholly-owned indirect subsidiary of the Corporation.
Accordingly, there is no market for the Registrant's capital stock.
Dividends on the Registrant's Common Stock, which are paid on a
quarterly basis, totalled $119.4 million in 1995 and $94 million in
1994. Through 1993, no dividends had been declared or paid on the
Registrant's Class A Stock; however, a $6.3 million special cash
dividend was paid on the Class A Stock in 1995 and a $3.4 million
special cash dividend was paid on the Class A Stock in 1994. See
Notes 7 and 9 to the Registrant's financial statements for a
discussion of dividend restrictions on the Common Stock and Class A
Stock.
Item 6. Selected Financial Data
-----------------------
Omitted in accordance with General Instruction J of Form 10-K.
Item 7. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations
---------------------
Omitted in accordance with General Instruction J of Form 10-K. In
lieu thereof, a narrative analysis is presented on Page F-17.
Item 8. Financial Statements and Supplementary Data
-------------------------------------------
The financial statements and supplementary information related
thereto, listed on the Index to Financial Statements, are
incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and
---------------------------------------------------------------
Financial Disclosure
--------------------
None.
PART III
--------
Item 10. Directors and Executive Officers of the Registrant
--------------------------------------------------
Omitted in accordance with General Instruction J of Form 10-K.
Item 11. Executive Compensation
----------------------
Omitted in accordance with General Instruction J of Form 10-K.
<PAGE> 6
Item 12. Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------
Omitted in accordance with General Instruction J of Form 10-K.
Item 13. Certain Relationships and Related Transactions
----------------------------------------------
Omitted in accordance with General Instruction J of Form 10-K.
PART IV
-------
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
---------------------------------------------------------------
(a) (1) and (2) Financial Statements and Schedules
----------------------------------------------
See Index to Financial Statements.
(a) (3) Exhibits
------------
2(a) Agreement and Plan of Merger, dated as of August 3,
1995, among the Corporation, UPRR, UP Acquisition
Corporation (the "Purchaser") and Southern Pacific,
is incorporated herein by reference to Annex B to
the Joint Proxy Statement/Prospectus included in
Union Pacific's Registration Statement on Form S-4
(No. 33-64707).
3(a) Registrant's Certificate of Incorporation, amended
effective as of August 12, 1988, is incorporated
herein by reference to Exhibit 3(i) to the
Registrant's Report on Form 10-Q for the quarter
ended June 30, 1988.
3(b) Registrant's By-laws, as amended effective as of
May 26, 1994.
4 Pursuant to various indentures and other
agreements, the Registrant has issued long-term
debt; however, no such agreement has securities or
obligations covered thereby which exceed 10% of the
Registrant's total consolidated assets. The
Registrant agrees to furnish the Commission with a
copy of any such indenture or agreement upon
request by the Commission.
9 Voting Trust Agreement, dated as of August 3, 1995,
among the Corporation, the Purchaser and Southwest
Bank of St. Louis, is incorporated herein by
reference to Annex K to the Joint Proxy
Statement/Prospectus included in Union Pacific's
Registration Statement on Form S-4 (No. 33-64707).
<PAGE> 7
10(a) Shareholders Agreement, dated as of August 3, 1995,
among the Corporation, the Purchaser, The Anschutz
Corporation ("TAC"), Anschutz Foundation (the
"Foundation"), and Mr. Philip F. Anschutz ("Mr.
Anschutz"), is incorporated herein by referenced to
Annex D to the Joint Proxy Statement/Prospectus
included in Union Pacific's Registration Statement
on Form S-4 (No. 33-64707).
10(b) Shareholders Agreement, dated as of August 3, 1995,
among the Corporation, the Purchaser and The Morgan
Stanley Leveraged Equity Fund II, L.P., is
incorporated herein by reference to Annex E to the
Joint Proxy Statement/Prospectus included in Union
Pacific's Registration Statement on Form S-4 (No.
33-64707).
10(c) Shareholders Agreement, dated as of August 3, 1995,
among the Corporation, the Purchaser and Southern
Pacific, is incorporated herein by reference to
Annex F to the Joint Proxy Statement/Prospectus
included in Union Pacific's Registration Statement
on Form S-4 (No. 33-64707).
10(d) Shareholders Agreement, dated as of August 3, 1995,
among Union Pacific Resources Group Inc.
("Resources"), TAC, the Foundation and Mr.
Anschutz, is incorporated herein by reference to
Annex G to the Joint Proxy Statement/Prospectus
included in Union Pacific's Registration Statement
on Form S-4 (No. 33-64707).
10(e) Registration Rights Agreement, dated as of August
3, 1995, among the Corporation, TAC and the
Foundation, is incorporated herein by reference to
Annex H to the Joint Proxy Statement/Prospectus
included in Union Pacific's Registration Statement
on Form S-4 (No. 33-64707).
10(f) Registration Rights Agreement, dated as of August
3, 1995, among Resources, TAC and the Foundation,
is incorporated herein by reference to Annex I to
the Joint Proxy Statement/Prospectus included in
Union Pacific's Registration Statement on Form S-4
(No. 33-64707).
10(g) Registration Rights Agreement, dated as of August
3, 1995, between the Purchaser and Southern
Pacific, is incorporated herein by reference to
Annex J to the Joint Proxy Statement/Prospectus
included in Union Pacific's Registration Statement
on Form S-4 (No. 33-64707).
10(h) Clarification of Anschutz Shareholders Agreement
and Anschutz/Spinco Shareholders Agreement is
incorporated herein by reference to Exhibit 10.8 to
<PAGE> 8
Union Pacific's Registration Statement on Form S-4
(No. 33-64707).
10(i) Clarification of Parent Shareholders Agreement is
incorporated herein by reference to Exhibit 10.9 to
Union Pacific's Registration Statement on Form S-4
(No. 33-64707).
10(j) Clarification of Agreement and Plan of Merger is
incorporated herein by reference to Exhibit 10.10
to Union Pacific's Registration Statement on Form
S-4 (No. 33-64707).
10(k) Agreement, dated September 25, 1995, among the
Corporation, UPRR, the Registrant and Southern
Pacific, Southern Pacific Transportation Company
("SPT"), The Denver & Rio Grande Western Railroad
Company ("D&RGW"), St. Louis Southwestern Railway
Company ("SLSRC") and SPCSL Corp. ("SPCSL"), on the
one hand, and Burlington Northern Railroad Company
("BN") and The Atchison, Topeka and Santa Fe
Railway Company ("Santa Fe"), on the other hand, is
incorporated by reference to Exhibit 10.11 to Union
Pacific's Registration Statement on Form S-4 (No.
33-64707).
10(l) Supplemental Agreement, dated November 18, 1995,
between the Corporation, UPRR, the Registrant and
Southern Pacific, SPT, D&RGW, SLSRC and SPCSL, on
the one hand, and BN and Santa Fe, on the other
hand, is incorporated herein by reference to
Exhibit 10.12 to Union Pacific's Registration
Statement on Form S-4 (No. 33-64707).
24 Powers of attorney executed by the directors of the
Registrant.
27 Financial Data Schedule.
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed by the Registrant during
the quarter ended December 31, 1995.
<PAGE> 9
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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, on this 14th day of
March, 1996.
MISSOURI PACIFIC RAILROAD COMPANY
By /s/ Ronald J. Burns
--------------------------------------
Ronald J. Burns,
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below, on this 14th day of March, 1996, by the
following persons on behalf of the Registrant and in the capacities indicated.
By /s/ Ronald J. Burns
--------------------------------------
Ronald J. Burns,
President and Chief Executive Officer
/s/ L. White Matthews, III
--------------------------------------
L. White Matthews, III,
Chief Financial Officer and a Director
/s/ James R. Young
--------------------------------------
James R. Young,
Vice President-Finance
/s/ Morris B. Smith
--------------------------------------
Morris B. Smith,
Chief Accounting Officer
<PAGE> 10
SIGNATURES - (Continued)
DIRECTORS:
Robert P. Bauman* Richard J. Mahoney*
Richard B. Cheney* Jack L. Messman*
E. Virgil Conway* John R. Meyer*
Richard K. Davidson* Thomas A. Reynolds, Jr.*
Spencer F. Eccles* James D. Robinson, III*
Elbridge T. Gerry, Jr.* Robert W. Roth*
William H Gray, III* Richard D. Simmons*
Judith Richards Hope*
* By /s/ Judy L. Swantak
---------------------------------
Judy L. Swantak, Attorney-in-fact
<PAGE> F-1
MISSOURI PACIFIC RAILROAD COMPANY AND CONSOLIDATED SUBSIDIARY COMPANIES
INDEX TO FINANCIAL STATEMENTS
-----------------------------
Page
----------------
Independent Auditors' Report............................... F-2
Financial Statements:
Statement of Consolidated Financial Position -
At December 31, 1995 and 1994.......................... F-3 - F-4
Statement of Consolidated Income and Retained
Earnings - For the Years Ended December 31, 1995,
1994 and 1993.......................................... F-5
Statement of Consolidated Cash Flows - For the Years
Ended December 31, 1995, 1994 and 1993................. F-6
Accounting Policies...................................... F-7
Notes to Consolidated Financial Statements............... F-8 - F-16
Management's Narrative Analysis of the
Results of Operations.................................... F-17
Schedules are omitted because they are not applicable or the required
information is set forth in the financial statements referred to above.
<PAGE> F-2
INDEPENDENT AUDITORS' REPORT
- ----------------------------
To the Board of Directors
Missouri Pacific Railroad Company
Omaha, Nebraska
We have audited the accompanying statements of consolidated financial position
of Missouri Pacific Railroad Company (a wholly-owned indirect subsidiary of
Union Pacific Corporation) and subsidiary companies (the "Registrant") as of
December 31, 1995 and 1994, and the related statements of consolidated income
and retained earnings and of consolidated cash flows for each of the three
years in the period ended December 31, 1995. These financial statements are
the responsibility of the Registrant's management. Our responsibility is to
express an opinion on the 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 consolidated financial statements present fairly, in all
material respects, the financial position of the Registrant at December 31, 1995
and 1994, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 1995, in conformity with generally
accepted accounting principles.
As discussed in Note 4 to the consolidated financial statements, in January
1993, the Registrant changed its method of accounting for postretirement
benefits other than pensions, income taxes and transportation revenue and
expense recognition.
/s/ DELOITTE & TOUCHE LLP
Omaha, Nebraska
January 18, 1996
<PAGE> F-3
<TABLE>
<CAPTION>
MISSOURI PACIFIC RAILROAD COMPANY AND CONSOLIDATED SUBSIDIARY COMPANIES
STATEMENT OF CONSOLIDATED FINANCIAL POSITION
At December 31, 1995 and 1994
-----------------------------
(Thousands of Dollars)
ASSETS
------
1995 1994
---------- ----------
<S> <C> <C>
Current Assets:
Cash and temporary investments........... $ 7,648 $ 7,640
Accounts receivable - net (Note 5)....... 64,311 75,678
Materials and supplies................... 98,920 102,936
Deferred income taxes (Notes 4 and 6).... 47,755 68,529
Other current assets..................... 21,551 75,555
---------- ----------
Total Current Assets.................. 240,185 330,338
---------- ----------
Investments:
Investments in and advances to
affiliated companies.................. 49,806 49,158
Other investments........................ 44,017 13,020
---------- ----------
Total Investments..................... 93,823 62,178
---------- ----------
Properties, at cost (Notes 7 and 8):
Road..................................... 4,428,724 4,220,652
Equipment................................ 1,724,598 1,717,873
Other.................................... 68,936 73,416
---------- ----------
Total Properties...................... 6,222,258 6,011,941
Less accumulated depreciation and
amortization.......................... 1,898,640 1,808,772
---------- ----------
Properties - Net...................... 4,323,618 4,203,169
---------- ----------
Intangible and Other Assets ................ 39,370 76,069
---------- ----------
Total Assets ......................... $4,696,996 $4,671,754
========== ==========
The accompanying accounting policies and notes to consolidated financial
statements are an integral part of these statements.
</TABLE>
<PAGE> F-4
<TABLE>
<CAPTION>
MISSOURI PACIFIC RAILROAD COMPANY AND CONSOLIDATED SUBSIDIARY COMPANIES
STATEMENT OF CONSOLIDATED FINANCIAL POSITION
At December 31, 1995 and 1994
-----------------------------
(Thousands of Dollars)
LIABILITIES AND STOCKHOLDER'S EQUITY
------------------------------------
1995 1994
---------- ----------
<S> <C> <C>
Current Liabilities:
Accounts payable........................... $ 30,654 $ 26,220
Accrued wages and vacation................. 109,215 107,580
Income and other taxes payable (Note 6).... 75,060 91,206
Interest payable........................... 15,982 14,012
Debt due within one year (Notes 7 and 8)... 23,957 38,664
Due to affiliated companies - net (Note 3). 786,309 816,795
Casualty and other reserves................ 112,698 118,029
Other current liabilities.................. 108,200 173,086
---------- ----------
Total Current Liabilities............... 1,262,075 1,385,592
---------- ----------
Debt Due After One Year (Notes 7 and 8)...... 363,917 389,429
---------- ----------
Deferred Income Taxes (Notes 4 and 6)........ 1,243,719 1,250,141
---------- ----------
Retiree Benefit Obligations (Notes 4 and 10). 163,280 161,198
---------- ----------
Other Liabilities ........................... 202,534 184,964
---------- ----------
Stockholder's Equity (Notes 7 and 9):
Common stock - $1.00 par value; 920 shares
authorized and outstanding............... 1 1
Class A stock - $1.00 par value; 80
shares authorized and outstanding........ - -
Capital surplus............................ 205,342 205,342
Retained earnings.......................... 1,256,128 1,095,087
---------- ----------
Total Stockholder's Equity.............. 1,461,471 1,300,430
---------- ----------
Total Liabilities and
Stockholder's Equity................. $4,696,996 $4,671,754
========== ==========
The accompanying accounting policies and notes to consolidated financial
statements are an integral part of these statements.
</TABLE>
<PAGE> F-5
<TABLE>
<CAPTION>
MISSOURI PACIFIC RAILROAD COMPANY AND CONSOLIDATED SUBSIDIARY COMPANIES
STATEMENT OF CONSOLIDATED INCOME AND RETAINED EARNINGS
For the Years Ended December 31, 1995, 1994 and 1993
(Thousands of Dollars)
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Operating Revenues (Note 4)........... $2,350,400 $2,320,791 $2,149,104
---------- ---------- ----------
Operating Expenses (Notes 3 and 4):
Salaries, wages and employee
benefits......................... 764,689 793,654 783,907
Equipment and other rents........... 285,132 271,163 220,738
Depreciation and amortization....... 220,571 215,731 206,987
Fuel and utilities (Note 5)......... 162,363 153,352 152,091
Materials and supplies.............. 123,848 123,491 125,303
Other costs......................... 314,825 297,709 249,945
---------- ---------- ----------
Total............................ 1,871,428 1,855,100 1,738,971
---------- ---------- ----------
Operating Income...................... 478,972 465,691 410,133
Other Income - Net ................... 48,732 23,290 37,843
Interest Expense (Notes 3 and 7)...... (88,638) (96,147) (103,848)
---------- ---------- ----------
Income Before Income Taxes............ 439,066 392,834 344,128
Income Tax Expense (Note 6)........... 158,625 145,310 145,193
---------- ---------- ----------
Income Before Cumulative Effect
of Changes in Accounting Principles. 280,441 247,524 198,935
Cumulative Effect to January 1, 1993 of
Changes in Accounting Principles
(Note 4)............................ - - (125,168)
---------- ---------- ----------
Net Income....................... $ 280,441 $ 247,524 $ 73,767
========== ========== ==========
Retained Earnings:
Beginning of year................... $1,095,087 $ 941,563 $ 957,796
Net income.......................... 280,441 247,524 73,767
Dividends to parent (Notes 7 and 9). (119,400) (94,000) (90,000)
---------- ---------- ----------
End of Year......................... $1,256,128 $1,095,087 $ 941,563
========== ========== ==========
The accompanying accounting policies and notes to consolidated financial
statements are an integral part of these statements.
</TABLE>
<PAGE> F-6
<TABLE>
<CAPTION>
MISSOURI PACIFIC RAILROAD COMPANY AND CONSOLIDATED SUBSIDIARY COMPANIES
STATEMENT OF CONSOLIDATED CASH FLOWS
For the Years Ended December 31, 1995, 1994 and 1993
----------------------------------------------------
(Thousands of Dollars)
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Net Income.................................... $ 280,441 $ 247,524 $ 73,767
Non-Cash Charges to Income:
Depreciation and amortization............... 220,571 215,731 206,987
Deferred income taxes....................... 16,222 35,347 66,772
Cumulative effect of changes in accounting
principles (Note 4)..................... - - 125,168
Other non-cash charges......... ............ 24,450 16,061 18,344
Changes in current assets and liabilities..... (2,870) (29,794) (71,865)
Cash used for special charge.................. (14,161) (42,271) (88,750)
--------- --------- ---------
Cash from Operations........................ 524,653 442,598 330,423
--------- --------- ---------
Investing Activities:
Capital .................................... (309,689) (289,511) (315,192)
Other - net................................. (24,234) (19,503) (2,870)
--------- --------- ---------
Cash Used in Investing Activities........... (333,923) (309,014) (318,062)
--------- --------- ---------
Financing Activities:
Debt repaid (Note 7)........................ (40,836) (59,347) (105,319)
Dividends to parent ........................ (119,400) (94,000) (90,000)
Advances (to) from affiliated
companies - net........................... (30,486) 20,272 187,416
--------- --------- ---------
Cash Used in Financing Activities .......... (190,722) (133,075) (7,903)
--------- --------- ---------
Net Change in Cash and Temporary
Investments............................... $ 8 $ 509 $ 4,458
========= ========= =========
Changes in Current Assets and Liabilities:
Accounts receivable......................... $ 11,367 $ 8,747 $ (18,351)
Materials and supplies...................... 4,016 (19,373) (686)
Other current assets........................ 54,004 (3,262) (9,173)
Deferred income taxes....................... 20,774 (4,706) 2,974
Accounts payable............................ 4,434 (46) (7,638)
Other current liabilities................... (97,465) (11,154) (38,991)
--------- --------- ---------
Total....................................... $ (2,870) $ (29,794) $ (71,865)
========= ========= =========
The accompanying accounting policies and notes to consolidated financial
statements are an integral part of these statements.
</TABLE>
<PAGE> F-7
MISSOURI PACIFIC RAILROAD COMPANY AND CONSOLIDATED SUBSIDIARY COMPANIES
ACCOUNTING POLICIES
-------------------
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Missouri Pacific
Railroad Company and all subsidiaries (the "Registrant"). The Registrant is a
wholly-owned, indirect subsidiary of Union Pacific Corporation (the
"Corporation"). Investments in affiliated companies (20% to 50% owned) are
accounted for on the equity method. All material intercompany transactions are
eliminated.
MATERIALS AND SUPPLIES
Materials and supplies are carried at the lower of average cost or market.
REVENUE RECOGNITION
Transportation revenues are recognized on a percentage-of-completion basis,
while delivery costs are recognized as incurred (See Note 4).
PROPERTIES
Properties are stated at cost. Upon sale or retirement of units of depreciable
operating property, gains and losses are charged to accumulated depreciation.
With respect to all other property sold or retired (principally land sold for
industrial development or as surplus property), cost and any related accumulated
depreciation are removed from the accounts and gain or loss is recognized in
other income upon disposition.
DEPRECIATION
Provisions for depreciation are computed principally on the straight-line method
based on estimated service lives of depreciable properties.
INTANGIBLE ASSETS
Intangible and other assets include the cost in excess of fair value of net
assets of acquired businesses associated with the Registrant's 1988 purchase of
The Missouri-Kansas-Texas Railroad Company (the "Katy"). Amortization is
recorded over 40 years on a straight-line basis. The Registrant regularly
assesses the recoverability of costs in excess of net assets of acquired
businesses and the underlying assets of all businesses through a review of cash
flows and fair values of such businesses.
FINANCIAL INSTRUMENTS
The Registrant periodically hedges fuel purchases. Unrealized gains and losses
from forward contracts, futures and fuel swap contracts are deferred and
recognized as the fuel is consumed (See Note 5).
USE OF ESTIMATES
The consolidated financial statements of the Registrant include estimates and
assumptions of certain assets, liabilities, revenues and expenses and the
disclosure of certain contingent assets and liabilities. Actual future results
may differ from such estimates.
CHANGE IN PRESENTATION
Certain prior year amounts have been reclassified to conform with the 1995
financial presentation.
<PAGE> F-8
MISSOURI PACIFIC RAILROAD COMPANY AND CONSOLIDATED SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
1. Nature of Operations
Missouri Pacific Railroad Company (the "Registrant") includes the Registrant, a
Class I Railroad incorporated in Delaware and a wholly-owned, indirect
subsidiary of Union Pacific Corporation (the "Corporation"), as well as a
number of wholly-owned and majority-owned subsidiaries of the Registrant
engaged in various railroad and related operations, and various terminal
companies in which the Registrant has minority interests.
The Registrant operates in the Midwestern and Southwestern states of
Arkansas, Colorado, Illinois, Kansas, Louisiana, Missouri, Nebraska, Oklahoma,
Tennessee and Texas. The Registrant maintains coordinated schedules with other
carriers for the handling of freight to and from the Atlantic Coast, the Pacific
Coast, the Southeast, the Southwest, Canada and Mexico. Export and import
traffic is moved through Gulf Coast ports and across the Texas-Mexico border.
The Registrant's operations have been coordinated with those of its affiliate
Union Pacific Railroad Company ("UPRR"), and with Chicago North Western
Transportation Company ("CNW"), which was merged into UPRR effective
May 1, 1995. These railroads operate as a unified system (see Notes 2 and 3),
which is hereafter referred to as (the "Railroad"). The Corporation intends
to merge the Registrant and UPRR in mid-to-late 1996.
The Registrant's future results can be affected by changes in the economic
environment and by fluctuations in fuel prices. Several of the commodities
transported by the Registrant come from industries with cyclical business
operations. As a result, prolonged negative changes in U.S. and global economic
conditions can have an adverse effect on the Registrant's ongoing results. In
addition, operating results of the Registrant can be affected adversely by
increases in diesel fuel costs, to the extent that such costs are not recovered
through higher revenues and improved fuel conservation, or mitigated by hedging
activity (See Note 5).
Approximately 90 percent of the Railroad's 35,000 employees are
represented by one of twelve national labor unions. In 1995, negotiations
began on new labor agreements for all crafts. In January 1996, a tentative
agreement was reached with the United Transportation Union ("UTU") which
represents approximately 25 percent of the Railroad's unionized employees.
The five-year package, which is currently undergoing ratification, includes
a combination of general wage increases and lump-sum payments ranging from
3.0 to 3.5 percent per year, as well as increased work rule flexibility.
Negotiations with other crafts will continue in 1996.
In February 1996, a tentative agreement was also reached with the
Brotherhood of Locomotive Engineers ("BLE"). The final terms of the
agreement are anticipated to be similar to those provided for in the UTU
agreement. Ratification votes by the UTU and BLE are expected in the
spring of 1996. Negotiations with other craft lines will continue in
1996.
In August 1995, the Corporation announced its intention to acquire
Southern Pacific Rail Corporation ("Southern Pacific") and, in September
1995, completed a cash tender offer for 25 percent of Southern Pacific's
outstanding common shares (see Note 2). Should the Corporation be required
or choose to dispose of its
<PAGE> F-9
initial investment in Southern Pacific, a significant loss could be incurred.
2. Acquisitions
Southern Pacific: In August 1995, the Corporation and Southern Pacific entered
into a definitive merger agreement (the "Agreement") providing for the
acquisition of Southern Pacific by the Corporation. Under the terms of the
Agreement, the Corporation completed a first-step cash tender offer in
September 1995, pursuant to which approximately 39 million or 25 percent of
the outstanding common shares of Southern Pacific were acquired at a price of
$25 per share. The cash tender offer was funded by $976 million in borrowings
under the Corporation's existing credit facilities. The common shares
purchased in the first-step cash tender offer were deposited in an independent
voting trust in accordance with a voting trust agreement with Southwest Bank of
St. Louis pending a decision of the Surface Transportation Board ("STB") of the
Department of Transportation--the successor to the Interstate Commerce
Commission--on the Southern Pacific acquisition. The Corporation filed an
application for control of Southern Pacific with the STB in November 1995. The
STB has adopted an expedited schedule pursuant to which it anticipates
rendering a final decision within 255 days of the filing of the original
application.
Following approval of the Southern Pacific acquisition by the STB, the
Corporation will complete the acquisition by exchanging the remaining Southern
Pacific common shares, at the holder's election and subject to proration, for
$25 or 0.4065 shares of the Corporation's common stock. As a result,
60 percent of the Southern Pacific shares outstanding immediately prior to
the acquisition will be converted into shares of the Corporation's common
stock, with the remaining 40 percent of the outstanding shares, including the
shares acquired in the first-step cash tender offer, being acquired for cash.
CNW: In March 1995, the Corporation executed a definitive merger agreement to
acquire the remaining 71.6 percent of CNW's outstanding common stock not
previously owned by the Corporation for approximately $1.2 billion. Prior
to the acquisition, CNW was the nation's eighth largest railroad. For the
year ended December 31, 1994, CNW had operating revenues of $1.13 billion,
net income of $84 million and assets of $2.22 billion. The Corporation
funded the CNW tender offer through the issuance of additional debt. The
acquisition of CNW has been accounted for as a purchase and CNW's financial
results were consolidated into the Corporation effective May 1, 1995.
3. Related Party Transactions
The Registrant is an affiliate of UPRR and has significant interline rail
shipments, equipment rents, and fuel and diesel power exchanges with that
railroad. These transactions are settled in a manner similar to that used for
comparable transactions with nonaffiliated railroads. Balances representing
interline receivables and payables with UPRR are classified as due to
affiliated companies.
Certain management and staff functions of the Registrant have been combined
with those of UPRR. In addition, the affiliated railroads have centralized
purchasing and disbursing functions which are handled by UPRR. Also, repairs to
locomotives and freight cars are made on a system-wide basis without regard to
ownership or usage. Marketing, administrative and other expenses (including,
but not limited to, those discussed above) are allocated to the
Registrant based on revenue contribution, gross ton-miles or time in service.
<PAGE> F-10
Directly-incurred and allocated costs included in operating expenses is as
follows:
<TABLE>
<CAPTION>
(Millions of Dollars) 1995 1994 1993
------ ------ ------
<S> <C> <C> <C>
Directly-incurred..................... $1,370 $1,409 $1,339
Allocated............................. 501 446 400
------ ------ ------
Total................................. $1,871 $1,855 $1,739
====== ====== ======
</TABLE>
Amounts due to and from affiliates, including the Corporation, bear
interest at an annually determined rate which considers the Corporation's
cost of debt. Net intercompany interest expense on such amounts was
$63.3 million, $65.2 million and $65.5 million in 1995, 1994 and 1993,
respectively.
4. Accounting Changes
In January 1993, the Registrant adopted the following accounting changes with a
cumulative after-tax charge to earnings of $125.2 million.
Other Postretirement Benefits ("OPEB"): Statement of Financial Accounting
Standards ("SFAS") No. 106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions", requires that the cost of non-pension benefits for
retirees be accrued during their period of employment. The adoption of
this Statement does not affect future cash funding requirements for these
benefits. The OPEB component of the cumulative effect adjustment was a $73.5
million charge (See Note 10).
Income Taxes: SFAS No. 109, "Accounting For Income Taxes", requires the
balance-sheet approach of accounting for income taxes, where
recorded at the tax rates currently enacted. The Registrant's future results
may be affected by changes in the corporate income tax rate. 1993's income
tax expense (before accounting changes) rose $26.5 million as a result
of the Omnibus Budget Reconciliation Act of 1993 (the "1993 Tax Act")
(See Note 6). The income tax component of the cumulative effect adjustment
was a $42.2 million charge.
Revenue Recognition: The Registrant changed its method of transportation revenue
and expense recognition from accruing both revenues and expenses at the
inception of service to the industry practice of allocating revenues between
reporting periods based on relative transit time, while recognizing expenses
as incurred. The revenue recognition component of the cumulative effect
adjustment was a $9.5 million charge.
Recently Issued Accounting Pronouncements: The Financial Accounting Standards
Board ("FASB") issued Statement No. 121 "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," which
establishes methods for determining when an impairment of long-lived assets
has occurred and for measuring the impairment of long-lived assets. Initial
adoption of Statement 121 is not expected to have a material effect on the
Registrant's operating results or financial condition. The FASB also issued
Statement No. 123, "Accounting for Stock-Based Compensation," which encourages,
but does not require, employers to adopt a fair value method of accounting
for employee stock-based compensation, and which requires increased stock-based
compensation disclosures if expense recognition is not adopted. The
Registrant does not intend to elect expense recognition for stock options
and, therefore, implementation of this Statement will have no effect
on the Registrant's operating results or financial condition.
5. Financial Instruments
Risk Management: Over the past three years, fuel costs approximated 9 percent
of the Railroad's total operating expenses. As a result of the significance
of the fuel costs and the historical volatility of fuel prices, the Registrant
periodically uses forward contracts, futures and swaps to mitigate the impact
of fuel price volatility. The intent of this program is to protect the
Registrant's operating margins and overall profitability from adverse fuel
price changes. Where the Registrant has fixed fuel prices through the use of
swaps, futures or forward contracts, the Registrant has mitigated the downside
risk of adverse price movements; however, it has also limited future gains
from favorable movements. The Registrant addresses market risk related to
these instruments by selecting instruments whose value fluctuations highly
correlate with the underlying item being hedged. Credit risk related to
derivative financial instruments, which is minimal, is managed by requiring
minimum credit standards for counterparties and monthly
<PAGE> F-11
settlements. The fair market value of the Registrant's derivative financial
instrument positions at December 31, 1995 and 1994 was determined based upon
current fair market values as quoted by recognized dealers.
At December 31, 1995, the Registrant--as a participant in the Railroad's
hedging program--had hedged 7 percent of forecasted 1996 fuel consumption at
$0.46 per gallon. At year-end 1995, the Railroad had outstanding swap
agreements covering fuel purchases of $29 million with a gross and net asset
position of $2 million. At December 31, 1994, the Railroad had outstanding
swaps covering fuel purchases of $8 million with a gross and net fair market
value asset position of $0.3 million. Fuel hedging lowered fuel costs by
$0.4 million in 1995 and $11 million in 1994, respectively. The Railroad
did not hedge fuel purchases in 1993.
Off Balance-Sheet Credit Risk: The Registrant has sold, on a revolving basis, an
undivided ownership interest in a designated pool of the Registrant's accounts
receivable to UPRR. The undivided ownership interest has been sold by UPRR to
third parties. Collection risk on the pool of receivables is minimal. Under
the terms of the agreement, UPRR acts as a collection agent for the
Registrant. At both December 31, 1995 and 1994, accounts receivable are
presented net of $137 million in proceeds generated from the receivables sold.
6. Income Taxes
The Registrant is included in the consolidated income tax return of the
Corporation. The consolidated income tax liability of the Corporation is
allocated among the parent and its subsidiaries on the basis of their separate
contributions to the consolidated income tax liability, with full benefit of tax
losses and credits made available through consolidation being allocated to the
individual companies generating such losses and credits.
Components of income tax expense for the Registrant are as follows:
<TABLE>
<CAPTION>
(Thousands of Dollars) 1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Current: Federal.......... $127,572 $103,192 $ 70,619
State............ 14,831 6,771 7,802
-------- -------- --------
Total Current.... 142,403 109,963 78,421
-------- -------- --------
Deferred:Federal.......... 15,003 30,361 64,799
State............ 1,219 4,986 1,973
-------- -------- --------
Total Deferred... 16,222 35,347 66,772
-------- -------- --------
Total .................... $158,625 $145,310 $145,193
======== ======== ========
</TABLE>
The tax effect of differences in the timing of revenues and expenses for tax and
financial reporting purposes is as follows:
<TABLE>
<CAPTION>
(Thousands of Dollars) 1995 1994
---------- ----------
<S> <C> <C>
Net current deferred tax asset................. $ (47,755) $ (68,529)
---------- ----------
Excess tax over book depreciation.............. 1,104,888 1,080,002
State taxes - net.............................. 118,978 118,186
Postretirement benefits........................ (40,846) (40,428)
Other.......................................... 60,699 92,381
---------- ----------
Net long-term deferred tax liability........... 1,243,719 1,250,141
---------- ----------
Net deferred tax liability..................... $1,195,964 $1,181,612
========== ==========
</TABLE>
In August 1993, President Clinton signed the 1993 Tax Act into law raising
the Federal corporate income tax rate to 35 percent from 34 percent retroactive
to January 1. As a result, 1993 income tax expense increased by $26.5 million:
$23.1 million for the one-time, non-cash recognition of deferred income taxes
related to prior periods and $3.4 million of incremental current year Federal
income tax expense.
<PAGE> F-12
A reconciliation between statutory and effective tax rates is as follows:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Statutory tax rate................... 35.0% 35.0% 35.0%
Cumulative effect of Federal rate
increase.......................... - - 6.7
State taxes - net.................... 2.4 2.0 1.8
Dividend exclusion................... (.6) (.6) (.6)
Other................................ (.7) .6 (.7)
---- ---- ----
Effective tax rate................. 36.1% 37.0% 42.2%
==== ==== ====
</TABLE>
Payments of income taxes were $145.8 million in 1995, $108.2 million in
1994 and $101.8 million in 1993. The Corporation believes it has adequately
provided for income taxes.
7. Debt
Long-term debt at December 31, 1995 and 1994 is summarized below:
<TABLE>
<CAPTION>
(Thousands of Dollars) 1995 1994
-------- --------
<S> <C> <C>
Mortgage bonds, 4.25% to 5.00%, due through 2030...... $176,996 $179,690
Equipment obligations, 8.45% to 15.50%,
due through 2001................................... 43,176 71,706
Mortgage, 11.50%, due through 2011.................... 4,028 4,078
Notes Payable, Federal Financing Bank, 7.17% to
10.66%, guaranteed by United States of America,
due through 1997................................... 9,765 11,904
Income debentures, 5.00%, due 2045 and 2054........... 101,720 101,720
Subordinated income debentures, 5-1/2%, due 2033...... 27,099 27,099
Certificates constituting a charge on income -
non-interest bearing, payable only from available
income............................................. 29,348 29,348
Capitalized leases, 7.25% to 14.00%, due through 2003. 19,405 24,133
Other................................................. - 2,422
Unamortized discount.................................. (23,663) (24,007)
-------- --------
Total debt......................................... 387,874 428,093
Less: Debt due within one year........................ 23,957 38,664
-------- --------
Total debt due after one year......................... $363,917 $389,429
======== ========
</TABLE>
Maturities of long-term debt (in thousands of dollars) for each year 1996
through 2000 are $23,957, $22,327, $7,263, $6,580 and $24,760, respectively.
Substantially all properties secure the outstanding equipment obligations and
mortgage bonds.
Certain debt agreements impose dividend restrictions on the Registrant.
The amount of retained earnings available for dividends at December 31, 1995
was $1,104 million.
Terms of certain of the Registrant's mortgage bonds, the 5% income
debentures and the 5-1/2% subordinated income debentures require that interest
be paid only from "available income", as defined in the indenture agreements.
The mortgage bonds and 5% income debentures impose sinking fund and other
restrictions in the event all interest is not paid. All interest was paid on
the mortgage bonds and 5% income debentures for each of 1995, 1994 and 1993.
The Registrant assumed the 5-1/2% subordinated income debentures (the
"Debentures") in connection with the Missouri-Kansas-Texas Railroad Company
("Katy") acquisition. Current interest must be paid only to the extent that
there is available income remaining after allocation to a capital fund for the
purpose of reimbursing the Registrant for certain capital expenditures. Unpaid
interest accumulates to an amount not in excess of 16-1/2% of the principal
amount of the Debentures and is paid only to the extent that there is available
income remaining after payment of the current interest.
<PAGE> F-13
The certificates constituting a charge on income (the "Certificates"),
which were also assumed as part of the Katy acquisition, do not bear interest
and payments to a sinking fund for the Certificates are made only from avail-
able income, as defined in such Certificates. Available income must be
applied to the capital fund, current and accumulated interest on the
Debentures and a sinking fund for the Debentures before any payment is made to
the sinking fund for the Certificates.
Available income of $21.3 million was generated in 1995 with respect to
the Debentures and the Certificates. As a result, an interest payment on the
Debentures of $1.5 million will be made in 1996 for 1995 interest. In
addition, $7.6 million of available income will be applied to the capital
fund, $4.6 million will be applied to the sinking funds for the Debentures
and the Certificates, and $7.6 million will be accrued as dividends on the
Registrant's Class A stock (See Note 9). Amounts payable to sinking funds
may be covered by the cost of securities previously repurchased by the
Registrant or the Katy. Amounts in the capital fund which are unused or
unappropriated for the reimbursement of capital expenditures may not exceed
$4.0 million at any time; and after the application of 1995 available income,
there will be no unused or unappropriated capital fund balance.
The Registrant's total interest payments approximate interest expense net
of intercompany interest described in Note 3.
At December 31, 1995, the carrying amount of the Registrant's long and
short-term debt exceeded its fair value by approximately 23 percent, estimated
using quoted market prices and the Registrant's current borrowing rates.
8. Lease Commitments
The Registrant leases a general office building, computer equipment and
transportation equipment under long-term and contingent lease agreements and is
allocated a portion of such leases from its affiliate, UPRR. The following
amounts relating to capital leases are included in properties:
<TABLE>
<CAPTION>
(Thousands of Dollars) 1995 1994
------- -------
<S> <C> <C>
Leased properties ......................... $64,207 $77,093
Accumulated amortization .................. (47,167) (55,526)
------- -------
Net ....................................... $17,040 $21,567
======= =======
</TABLE>
Future minimum lease payments for capital and operating leases with
initial or remaining noncancellable lease terms in excess of one year as of
December 31, 1995 are as follows:
<TABLE>
<CAPTION>
Operating Capital
(Thousands of Dollars) Leases Leases
-------- -------
<S> <C> <C>
1996 .................................. $ 83,327 $ 8,140
1997 .................................. 72,325 6,265
1998 .................................. 68,541 3,342
1999 .................................. 63,522 2,245
2000 .................................. 56,724 1,202
Later years ........................... 406,619 878
-------- -------
Total minimum lease payments ..... $751,058 22,072
========
Amount representing interest .......... 2,667
-------
Present value of net minimum
capital lease payments .............. $19,405
=======
</TABLE>
A summary of rental expense charged to operations is as follows:
<TABLE>
<CAPTION>
(Thousands of Dollars) 1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Minimum rentals under long-term
operating leases ..................... $ 74,107 $ 22,557 $ 22,716
Contingent rentals under operating
leases (net):
Transportation equipment............ 277,206 258,667 213,070
Joint facility...................... 9,453 11,566 (3,200)
Computer equipment.................. 8,652 9,205 8,065
-------- -------- --------
Total................................... $369,418 $301,995 $240,651
======== ======== ========
</TABLE>
<PAGE> F-14
9. Capital Stock
Concurrently with the acquisition of the Katy, 80 shares of the Registrant's
$1.00 par value common stock were exchanged for 80 shares of $1.00 par value
Class A stock. The remaining 920 shares of common stock outstanding and the 80
shares of Class A stock have identical voting rights and other privileges except
with respect to dividends.
The Class A stock is entitled to a cash dividend whenever a dividend is
declared on the common stock, in an amount which equals 8% of the sum of the
dividends on both the Class A stock and the common stock. However, dividends
may be declared and paid on the Class A stock only when there is unappropriated
available income in respect of prior calendar years which is sufficient to make
a sinking fund payment equal to 25% of such dividend for the benefit of the
Debentures or the Certificates. To the extent that dividends are paid on the
common stock but not the Class A stock because the amount of unappropriated
available income is insufficient to make such a sinking fund payment, a special
cash dividend on the Class A stock shall be paid when sufficient unappropriated
available income exists to make the sinking fund payment. Such insufficiency
does not affect the Registrant's right to declare dividends on the common
stock. Available income for 1995 will be sufficient to provide for a
$7.6 million special cash dividend on the Class A stock to be paid in 1996
(see Note 7). After such payment, dividends in arrears on the Class A stock
will total $29 million.
There are no other dividend restrictions on the Registrant's capital stock
other than those described in Note 7.
10. Retirement Plans
The Registrant participates and is allocated a portion of the expense and
liability associated with the Corporation's retiree benefit plans covering
substantially all salaried, non-agreement employees. Pension plan benefits are
based on years of service and compensation during the last years of employ-
ment. Contributions to the plans are calculated based on the Projected Unit
Credit actuarial funding method and are not less than the minimum funding
standards set forth in the Employee Retirement Income Security Act of 1974,
as amended. Pension expense allocated to the Registrant from the Corporation
amounted to $19.4 million in 1995, $19.7 million in 1994 and $17.7 million
in 1993.
The Registrant also participates and is allocated a portion of the expense
and liability associated with postretirement health care and life insurance
benefits covering substantially all salaried and certain hourly employees. The
Corporation and the Registrant adopted the provisions of SFAS No. 106 (See Note
4) in January 1993. Railroad agreement employees' health care benefits are
covered by a separate multi-employer plan and therefore are not subject to the
provisions of Statement No. 106. The Registrant's cash payments for these
benefits (which were not affected by the adoption of SFAS No. 106) were $4.5
million in 1995 and $5 million in 1994 and 1993, respectively. The Registrant's
share of the Corporation's total OPEB liability at December 31, 1995 and 1994
was $120 million and $119 million, respectively. The Registrant's share of the
Corporation's postretirement benefit expense was $5.5 million in 1995, $4.5
million in 1994 and $9 million in 1993. The Corporation does not currently
pre-fund health care and life insurance benefit costs.
The Corporation's retiree benefit information as reported in Note 10 to the
Corporation's Annual report to Stockholders is as follows:
Pensions:
Pension cost for the entire Corporation is as follows:
<TABLE>
<CAPTION>
(Millions of Dollars) 1995 1994 1993
---- ---- ----
<S> <C> <C> <S>
Service cost - benefits earned during the period $ 28 $ 30 $ 25
Interest on projected benefit obligation 80 73 73
Return on assets:
Actual (gain) loss (181) 8 (109)
Deferred gain (loss) 111 (76) 47
Net amortization costs 8 12 10
---- ---- ----
Charge to operations $ 46 $ 47 $ 46
==== ==== ====
</TABLE>
<PAGE> F-15
The projected benefit obligation was determined using a discount rate of
7.25 percent in 1995 and 8.0 percent in 1994. The estimated rate of salary
increase approximated 5.25 percent in 1995 and 6.0 percent in 1994. The
expected long-term rate of return on plan assets was 8.0 percent in both
years. The change in assumptions will not significantly affect 1996 pension
cost. As of year-end 1995 and 1994, approximately 32 percent of the funded
plans' assets were held in fixed-income and short-term securities, with the
remainder in equity securities.
The funded status of the Corporation's plans is as follows:
<TABLE>
<CAPTION>
Assets Exceed Accumulated
Accumulated Benefits (a)
Benefits Exceed Assets
(Millions of Dollars) 1995 1994 1995 1994
------ ---- ---- ----
<S> <C> <C> <C> <C>
Plan assets at fair value $1,024 $871 $ -- $ --
------ ---- ---- -----
Actuarial present value of benefit obligations:
Vested benefits 841 726 34 30
Non-vested benefits 54 39 2 2
------ ---- ---- ----
Accumulated benefit obligation 895 765 36 32
Additional benefits based on estimated
future salaries 193 200 22 28
------ ---- ---- ----
Projected benefit obligation 1,088 965 58 60
------ ---- ---- ----
Plan assets under projected
benefit obligation 64 94 58 60
Unamortized net transition asset (obligation) 8 9 (18) (24)
Unrecognized prior service cost (54) (37) (27) (29)
Unrecognized net gain (loss) 163 109 (25) (29)
Minimum liability -- -- 48 54
------ ---- ---- ----
Pension liability $ 181 $175 $ 36 $ 32
====== ==== ==== ====
(a) Represents the Corporation's non-qualified unfunded supplemental plans.
</TABLE>
Other Postretirement Benefits:
Components of the postretirement health care and life insurance benefit
expense for the entire Corporation are as follows:
<TABLE>
<CAPTION>
(Millions of Dollars) 1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Service cost - benefits earned during the period $ 8 $ 8 $ 6
Interest costs on accumulated benefit obligation 20 18 17
Net amortization costs (12) (12) --
---- ---- ----
Charge to operations $16 $14 $23
==== ==== ====
</TABLE>
The liability for the Corporation's postretirement benefit plans is as follows:
<TABLE>
<CAPTION>
(Millions of Dollars) 1995 1994
---- ----
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees $192 $170
Fully eligible active employees 30 19
Other active employees 91 77
---- ----
Total accumulated postretirement benefit obligation 313 266
Unrecognized prior service gain 50 62
Unrecognized net gain 27 39
---- ----
Postretirement benefits liability $390 $367
==== ====
</TABLE>
The accumulated postretirement benefit obligation was determined using a
discount rate of 7.25 percent in 1995 and 8.0 percent in 1994. The health care
cost trend rate is assumed to decrease gradually from 11.9 percent for 1996
to 5.0 percent for 2010 and all future years. If the assumed health care
cost trend rate increases by one percentage point in each subsequent year, the
aggregate of the service and interest cost components of annual postretirement
benefit expense would increase by $3 million and the accumulated plan benefit
obligation would rise by $33 million.
<PAGE> F-16
11. Contingent Liabilities
There are various lawsuits pending against the Registrant. The Registrant
is also subject to Federal, state and local environmental laws and
regulations, and is currently participating in the investigation and
remediation of numerous sites. Where the remediation costs can be reasonably
determined, and where such remediation is probable, the Registrant has
recorded a liability. The Registrant does not expect that the lawsuits or
environmental costs will have a material adverse effect on its consolidated
financial position or its results of operations.
12. Supplemental Quarterly Financial Information (Unaudited)
Selected unaudited quarterly financial information for 1995 and 1994 are as
follows:
<TABLE>
<CAPTION>
First Second Third Fourth Total
-------- -------- -------- --------- ----------
<S> <C> <C> <C> <C> <C>
(Thousands of Dollars)
Operating 1995 $584,925 $592,771 $585,846 $586,858 $2,350,400
Revenues: 1994 568,216 588,670 583,197 580,708 2,320,791
Operating 1995 $104,640 $144,209 $119,443 $110,680 $ 478,972
Income: 1994 94,510 131,691 133,702 105,788 465,691
Net Income: 1995 $ 54,902 $ 90,853 $ 71,274 $ 63,412 $ 280,441
1994 50,794 72,559 71,666 52,505 247,524
</TABLE>
<PAGE> F-17
MISSOURI PACIFIC RAILROAD COMPANY AND CONSOLIDATED SUBSIDIARY COMPANIES
MANAGEMENT'S NARRATIVE ANALYSIS OF THE RESULTS OF OPERATIONS
1995 COMPARED TO 1994
---------------------
Operating Revenues
Operating revenues increased $30 million (1%) to $2.4 billion, reflecting a 1%
increase in carloadings partially offset by a 2% decline in average revenue per
car. Carloadings increased in energy (12%), automotive (8%), and grain (5%),
while decreases occurred in intermodal (10%) and food/consumer/government (8%).
Chemicals and metals/minerals carloadings were flat year-over-year.
Operating Expenses
Operating expenses totaled $1.9 billion, $16 million higher than a year ago.
Equipment and other rents increased $14 million, reflecting an increase in
locomotive and freight car leases, as well as an increase in rental rates due to
rate inflation and extended cycle times (reflecting an increase in Mexican
traffic). Fuel and utilities expense grew $9 million, driven by gross ton-mile
growth and a rise in diesel fuel prices. Depreciation expense was up $5 million
because of additional capital expenditures. Miscellaneous contract fees were
also up $13 million due to higher off-line maintenance and repair expenses.
These cost increases were partially countered by a $29 million decrease in
salaries, wages and employee benefits--reflecting a railroad-retirement tax
refund, productivity improvements and reduced accruals for lump-sum agreement
contract payments.
Operating Income
Operating income increased $13 million (3%) to $479 million as a result of
volume improvements.
Other Changes
Interest expense decreased $8 million as a result of lower interest on equipment
trust obligations. Other income increased $15 million due to payments from the
Southern Pacific for trackage rights, gains from real estate sales and interest
received on various tax settlements.
<PAGE> 1
EXHIBIT INDEX
-------------
Exhibit Number
- --------------
2(a) Agreement and Plan of Merger, dated as of August 3, 1995, among
the Corporation, UPRR, UP Acquisition Corporation (the
"Purchaser") and Southern Pacific, is incorporated herein by
reference to Annex B to the Joint Proxy Statement/Prospectus
included in Union Pacific's Registration Statement on Form S-4
(No. 33-64707).
3(a) Registrant's Certificate of Incorporation, amended effective as
of August 12, 1988, is incorporated herein by reference to
Exhibit 3(i) to the Registrant's Report on Form 10-Q for the
quarter ended June 30, 1988.
3(b) Registrant's By-laws, as amended effective as of May 26, 1994.
4 Pursuant to various indentures and other agreements, the
Registrant has issued long-term debt; however, no such agreement
has securities or obligations covered thereby which exceed 10%
of the Registrant's total consolidated assets. The Registrant
agrees to furnish the Commission with a copy of any such
indenture or agreement upon request by the Commission.
9 Voting Trust Agreement, dated as of August 3, 1995, among the
Corporation, the Purchaser and Southwest Bank of St. Louis, is
incorporated herein by reference to Annex K to the Joint Proxy
Statement/Prospectus included in Union Pacific's Registration
Statement on Form S-4 (No. 33-64707).
10(a) Shareholders Agreement, dated as of August 3, 1995, among the
Corporation, the Purchaser, The Anschutz Corporation ("TAC"),
Anschutz Foundation (the "Foundation"), and Mr. Philip F.
Anschutz ("Mr. Anschutz"), is incorporated herein by referenced
to Annex D to the Joint Proxy Statement/Prospectus included in
Union Pacific's Registration Statement on Form S-4 (No. 33-64707).
10(b) Shareholders Agreement, dated as of August 3, 1995, among the
Corporation, the Purchaser and The Morgan Stanley Leveraged
Equity Fund II, L.P., is incorporated herein by reference to
Annex E to the Joint Proxy Statement/Prospectus included in
Union Pacific's Registration Statement on Form S-4 (No. 33-64707).
10(c) Shareholders Agreement, dated as of August 3, 1995, among the
Corporation, the Purchaser and Southern Pacific, is incorporated
herein by reference to Annex F to the Joint Proxy
Statement/Prospectus included in Union Pacific's Registration
Statement on Form S-4 (No. 33-64707).
10(d) Shareholders Agreement, dated as of August 3, 1995, among Union
Pacific Resources Group Inc. ("Resources"), TAC, the Foundation
and Mr. Anschutz, is incorporated herein by reference to Annex G
to the Joint Proxy Statement/Prospectus included in Union
Pacific's Registration Statement on Form S-4 (No. 33-64707).
10(e) Registration Rights Agreement, dated as of August 3, 1995, among
the Corporation, TAC and the Foundation, is incorporated herein
by reference to Annex H to the Joint Proxy Statement/Prospectus
included in Union Pacific's Registration Statement on Form S-4
(No. 33-64707).
<PAGE> 2
10(f) Registration Rights Agreement, dated as of August 3, 1995, among
Resources, TAC and the Foundation, is incorporated herein by
reference to Annex I to the Joint Proxy Statement/Prospectus
included in Union Pacific's Registration Statement on Form S-4
(No. 33-64707).
10(g) Registration Rights Agreement, dated as of August 3, 1995,
between the Purchaser and Southern Pacific, is incorporated
herein by reference to Annex J to the Joint Proxy
Statement/Prospectus included in Union Pacific's Registration
Statement on Form S-4 (No. 33-64707).
10(h) Clarification of Anschutz Shareholders Agreement and
Anschutz/Spinco Shareholders Agreement is incorporated herein by
reference to Exhibit 10.8 to Union Pacific's Registration
Statement on Form S-4 (No. 33-64707).
10(i) Clarification of Parent Shareholders Agreement is incorporated
herein by reference to Exhibit 10.9 to Union Pacific's
Registration Statement on Form S-4 (No. 33-64707).
10(j) Clarification of Agreement and Plan of Merger is incorporated
herein by reference to Exhibit 10.10 to Union Pacific's
Registration Statement on Form S-4 (No. 33-64707).
10(k) Agreement, dated September 25, 1995, among the Corporation,
UPRR, the Registrant and Southern Pacific, Southern Pacific
Transportation Company ("SPT"), The Denver & Rio Grande Western
Railroad Company ("D&RGW"), St. Louis Southwestern Railway
Company ("SLSRC") and SPCSL Corp. ("SPCSL"), on the one hand,
and Burlington Northern Railroad Company ("BN") and The
Atchison, Topeka and Santa Fe Railway Company ("Santa Fe"), on
the other hand, is incorporated by reference to Exhibit 10.11 to
Union Pacific's Registration Statement on Form S-4 (No. 33-64707).
10(l) Supplemental Agreement, dated November 18, 1995, between the
Corporation, UPRR, the Registrant and Southern Pacific, SPT,
D&RGW, SLSRC and SPCSL, on the one hand, and BN and Santa Fe, on
the other hand, is incorporated herein by reference to Exhibit
10.12 to Union Pacific's Registration Statement on Form S-4
(No. 33-64707).
24 Powers of attorney executed by the directors of the Registrant.
27 Financial Data Schedule.
<PAGE> COVER
EXHIBIT 3(b)
BY-LAWS
OF
MISSOURI PACIFIC RAILROAD COMPANY
(As Amended Effective as of May 26, 1994)
<PAGE> 1
ARTICLE I
STOCKHOLDERS MEETINGS
SECTION 1. Meetings, annual or special, of the stockholders of this
Company may be held at such place or places as shall be ordered by the Board of
Directors or Executive Committee, but, unless otherwise ordered, such meetings
shall be held in Salt Lake City, Utah.
SECTION 2. Annual meetings of the stockholders, for the purpose of
electing directors and transacting any other business, shall be held at such
time as shall be ordered by the Board of Directors or Executive Committee, but,
unless otherwise ordered, shall be held at 11:00 a.m. on the third Friday of
April in each year.
SECTION 3. A special meeting of the stockholders may be held at any time
upon order of the Board of Directors or Executive Committee. The objects of a
special meeting shall be stated in the order therefor, and the business
transacted shall be confined to such objects.
SECTION 4. Notice of all meetings of the stockholders shall be given,
either personally or by mail, not less than ten nor more than sixty days prior
thereto. The notice of all special meetings shall state the objects thereof.
The failure to give notice of an annual meeting, or any irregularity in the
notice, shall not affect the validity of such annual meeting or of any
proceedings thereat. Any stockholder may consent in writing to the holding of
a special meeting without notice, and the attendance of any stockholder at a
special meeting, whether in person or by proxy, shall constitute a waiver by
him of call and notice thereof and a consent to the holding of said meeting and
the transaction of any corporate business thereat.
SECTION 5. The Board of Directors or the Executive Committee may either
close the stock transfer books for not less than ten nor more than sixty days
preceding any annual or special meeting of stockholders, or the Board of
Directors or the Executive Committee, without closing the transfer books, may
fix in advance a day and hour not less than ten nor more than fifty days
preceding any such meeting as the time for the determination of stockholders
entitled to vote at such meeting. Stockholders of record at the time the
transfer books are closed or at the time so fixed by the Board of Directors or
the Executive Committee, as the case may be, and only such stockholders, shall
be entitled to vote at such meeting. Each share of stock shall entitle such
record holder thereof to one vote, in person or by proxy in writing.
SECTION 6. The Chairman of the Board, and in his absence the Chairman of
the Executive Committee, and in their absence the President or one of the Vice
Presidents, shall call meetings of the stockholders to order and act as
Chairman of such meetings. In the absence of all of these officers, the Board
of Directors may appoint a chairman of the meeting to act in such event; but if
the Board shall not make such appointment, then, in the absence of all of these
officers, any stockholder or proxy of any stockholder may call the meeting to
order, and a chairman shall be elected.
SECTION 7. The Secretary of the Company shall act as secretary at all
meetings of the stockholders; but the Board of Directors or Executive Committee
may designate an Assistant Secretary for that purpose before the meeting, and
if no such designation shall have been made, then the presiding officer at the
meeting may appoint any person to act as secretary of the meeting.
<PAGE> 2
SECTION 8. At each meeting of the stockholders the polls shall be opened
and closed, the ballots and proxies shall be received and taken charge of, and
all questions touching the qualifications of voters, the validity of proxies,
and the acceptance or rejection of votes, shall be decided by three inspectors.
Such inspectors shall be appointed before the meeting by the Board of Directors
or by the Executive Committee, and if no such appointment shall have been made,
then by the presiding officer at the meeting; and if for any reason any of the
inspectors previously appointed shall fail to attend, or refuse or be unable to
serve, then inspectors, in place of any so failing to attend or refusing or
unable to serve, shall be appointed by the presiding officer at the meeting.
Such inspectors need not be stockholders.
SECTION 9. The representation of a majority of the outstanding capital
stock of the Company by the holders thereof in person or by proxy shall be
requisite to constitute a quorum for the holding of any meeting of the
stockholders; except that any proportion of the outstanding stock less than a
majority may adjourn a meeting from day to day until a quorum shall be present.
A majority of the capital stock represented at any meeting shall be necessary
to determine any question or election thereat. The time and place to which any
adjournment is taken shall be publicly announced at the meeting, and no further
notice thereof shall be necessary.
ARTICLE II
BOARD OF DIRECTORS
SECTION 1. The business and affairs of the Company shall be managed by
the Board of Directors, which shall consist of nineteen members. At each
annual meeting of the stockholders, directors shall be elected to hold office
until the next annual meeting of stockholders, and each director shall hold
office for the term for which he is elected and until his successor shall have
been elected and qualified. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of directors then in office, though less than a quorum, and the
directors so chosen shall hold office until the next annual election and until
their successors are duly elected and shall qualify.
SECTION 2. Regular meetings of the Board of Directors shall be held at
such times as the Board shall from time to time designate, and no further
notice of such regular meetings shall be required. Special meetings shall be
held whenever called by order of the Chairman of the Board, the Chairman of the
Executive Committee, or the Executive Committee or any five members of the
Board. Notice of special meetings shall be given, at least one day prior
thereto, by personal service of written notice upon the directors or by
delivering the same at or mailing or telegraphing the same to their respective
residences or offices. But any director may consent in writing to the holding
of a special meeting without notice, and the attendance of any director at a
special meeting shall constitute a waiver by him of call and notice thereof and
a consent to the holding of said meeting and the transaction of any corporate
business thereat. Meetings of the Board of Directors may be held at such place
or places as shall be ordered by the Executive Committee or by a majority of
the directors in office, but, unless otherwise ordered, all meetings of the
Board of Directors shall be held at the general office of the Company in the
City and State of New York.
SECTION 3. A majority of the directors in office shall constitute a
quorum at all meetings of the Board. If a quorum be not present at any
meeting, a majority of the directors present may adjourn the meeting until a
later day or hour.
<PAGE> 3
ARTICLE III
EXECUTIVE COMMITTEE
SECTION 1. There shall be an Executive Committee consisting of such
number of directors as shall be elected thereto by the Board of Directors,
whose terms of office shall continue during the pleasure of the Board, such
number to also include the Chairman of the Board and the Chairman of the
Executive Committee, ex officio. The Executive Committee shall, when the Board
of Directors is not in session, have all the powers of the Board of Directors
to manage and direct all the business and affairs of the Company, including the
power to declare dividends and authorize the issuance of stock, in such manner
as said Committee shall deem best for the Company's interests, in all cases in
which specific directions shall not have been given by the Board of Directors.
SECTION 2. Meetings of the Executive Committee may be called at any time
by the Chairman of the Board, the Chairman of the Executive Committee, or a
majority of the members of the Committee, to convene at such time and place as
may be designated.
SECTION 3. A majority of the members of the Committee shall constitute a
quorum. If a quorum be not present at any meeting, the member or members of
the Committee present may adjourn the meeting until a later day or hour; or the
member or members present, whether constituting a quorum or not, at his or
their option, shall have the power to appoint a substitute or substitutes from
the members of the Board of Directors to act during the temporary absence of
any member or members of the Committee.
ARTICLE IV
OFFICERS AND AGENTS
SECTION 1. There shall be elected by the Board of Directors from its
members a Chairman of the Board, a Chairman of the Executive Committee, and a
Chief Executive Officer, and there shall also be elected by the Board of
Directors a President, a Chief Operating Officer, a Chief Legal Officer, a
Chief Financial Officer, a Chief Planning and Corporate Development Officer, a
Chief External Affairs Officer, a Chief Accounting Officer, an Executive Vice
President, an Executive Vice President-Marketing and Sales, an Executive Vice
President-Operation, a Senior Vice President-Marketing and Sales, a Vice
President-Operation, a Vice President-Taxes, a Controller, a Secretary, a
Treasurer and such other Vice Presidents as the Board shall determine, and
there shall also be appointed by the Board of Directors or Executive Committee
such Assistant Secretaries, Assistant Treasurers, General Tax Counsels and
other officers and agents as the Board of Directors or Executive Committee
shall from time to time determine.
SECTION 2. The Chairman of the Board shall perform such duties and
possess such powers as may be prescribed or conferred by the Board of Directors
or the Chairman of the Executive Committee.
SECTION 3. The Chairman of the Executive Committee shall preside at
meetings of the Executive Committee and Board of Directors, and shall have
general supervision of all business of the Company and of the interest of the
Company in all companies controlled by it and shall perform such other duties
and possess such powers as may be prescribed or conferred by the Board of
Directors.
SECTION 4. The Chief Executive Officer shall have charge of all
departments and offices of the Company and of the interest of the Company in
all companies controlled by it and shall perform such other duties and possess
such powers as may be prescribed or conferred by the Board of Directors or the
Chairman of the Executive Committee.
SECTION 5. The President shall perform such duties and possess such
powers as may be prescribed or conferred by the Chief Executive Officer.
<PAGE> 4
SECTION 6. The Chief Operating Officer shall have day to day operating
responsibilities for the affairs of the Company, reporting to the Chief
Executive Officer, and shall perform such other duties as may be prescribed or
conferred by the Chief Executive Officer.
SECTION 7. The Chief Legal Officer shall have general supervision of all
legal business of the Company except as provided in Sections 16 and 22 of this
ARTICLE IV, and shall perform such other duties as may be prescribed or
conferred by the Chairman of the Executive Committee.
SECTION 8. The Chief Financial Officer shall have general supervision of
the financial affairs and investments of the Company and shall perform such
other duties as may be prescribed or conferred by the Chairman of the Executive
Committee.
SECTION 9. The Chief Planning & Corporate Development Officer shall have
general supervision of the strategic planning and corporate development
functions of the Company and shall perform such other duties as may be
prescribed or conferred by the Chairman of the Executive Committee.
SECTION 10. The Chief External Affairs Officer shall have general
supervision of the government affairs and corporate relations functions of the
Company and shall perform such other duties as may be prescribed or conferred
by the Chairman of the Executive Committee.
SECTION 11. The Executive Vice President shall perform such duties and
possess such powers as may be prescribed or conferred by the Chief Executive
Officer.
SECTION 12. The Executive Vice President-Marketing and Sales shall have
charge of all marketing and sales activities of the Company and shall perform
such other duties as may be assigned to him by the Chief Executive Officer.
SECTION 13. The Executive Vice President-Operation shall have charge of
the maintenance and operation of the railroads of the Company and shall perform
such other duties as may be assigned to him by the Chief Operating Officer.
SECTION 14. The Senior Vice President-Marketing and Sales shall, under
the control of the Executive Vice President-Marketing and Sales, have day to
day responsibility for the marketing and sales activities of the Company, and
shall perform such other duties as may be assigned to him by the Executive Vice
President-Marketing and Sales.
SECTION 15. The Vice President-Operation shall, under the supervision of
the Executive Vice President-Operation, have day to day operation of the
railroads of the Company and shall perform such other duties as may be assigned
to him by the Executive Vice President-Operation.
SECTION 16. The Vice President-Taxes shall, under the control of the
Chief Financial Officer, have charge of all aspects of federal, foreign, state
and local taxes and shall perform such other duties as may be assigned to him
by the Chief Financial Officer.
SECTION 17. The other Vice Presidents elected from time to time shall
perform such duties and possess such powers as may be prescribed or conferred
by the Board of Directors or the Chief Executive Officer.
SECTION 18. Except as otherwise provided herein or directed by the Board
of Directors, the Chief Accounting Officer shall have immediate charge of the
general books, accounts and statistics of the Company and shall be the
custodian of all vouchers, drafts, invoices and other evidences of payment and
all bonds, interest coupons and other evidences of indebtedness which shall
have been canceled. He is authorized to approve for payment by the Treasurer
vouchers, payrolls, drafts or other accounts. He shall have prepared periodi-
cally or specially as requested by him with the approval of and in forms
prescribed by the Chief Financial Officer, statements of operating revenues and
expenses and
<PAGE> 5
estimates thereof and of expenditures and estimates on all other
accounts; and copies of all statistical data that may be compiled in regular
course and also other information in reference to the financial affairs and
operations of the Company and of any subsidiary company that may be required by
the Chief Financial Officer or the Board of Directors. He shall submit for
each regular meeting of the Board of Directors, and, at such other times as may
be required by said Board or the Chief Financial Officer, statements of
operating results, of cash resources and requirements and of appropriations
for Capital Expenditures, and shall perform such other duties as the Chief
Financial Officer may from time to time direct.
SECTION 19. The Controller, under the supervision of the Vice
President-Finance, shall have immediate charge, supervision and control of the
accounting of each company engaged principally in transportation operations
which the Company controls through the ownership of stock or otherwise, other
than the books, accounts and records kept under the direction of the Chief
Accounting Officer of the Company. He shall cause to be enforced and
maintained the classifications and other accounting rules and regulations
prescribed by the Interstate Commerce Commission, and shall cause to be
prepared and compiled such statements, statistics and other data as may be
prescribed by the Vice President-Finance, and he shall perform such other
duties as may be assigned to him by the Vice President-Finance. He shall
require reports from all other officers and agents under his jurisdiction
who receive or disburse funds for the Company's account at such time and in
such form as he may deem advisable, showing all receipts and disbursements for
such account custody of all vouchers, drafts, invoices and other
evidences of such disbursements. He is authorized to approve for payment
all vouchers, payrolls, drafts or other accounts when approved by the Chief
Executive Officer or Vice President-Finance or by such person as shall be
designated by them in writing, and he may delegate such authority by
appointment in writing, with the approval of the Chief Executive Officer or
Vice President-Finance, to one or more officers or employees of the Accounting
Department under his jurisdiction.
SECTION 20. The Secretary shall attend all meetings of the stockholders,
the Board of Directors and the Executive Committee, and keep a record of all
their proceedings. He shall procure and keep in his files certified copies of
the minutes of all meetings of the stockholders, boards of directors and
executive committees of all companies a majority of whose capital stock is
owned by this Company. He shall be the custodian of the seal of the Company.
He shall have the power to affix the seal of the Company to instruments, the
execution of which is authorized by these By-Laws or by action of the Board of
Directors or Executive Committee, and to attest the same. He shall have
supervision of the issuance, transfer and registration of the capital stock and
debt securities of the Company. He shall perform such other duties as may be
assigned to him by the Board of Directors, the Chairman of the Board or the
Chairman of the Executive Committee.
The Assistant Secretaries shall have power to affix the seal of the
Company to instruments, the execution of which is authorized by these By-laws
or by action of the Board of Directors or Executive Committee, and to attest
the same, and shall exercise such of the other powers and perform such of the
other duties of the Secretary as shall be assigned to them by the Secretary.
SECTION 21. Except as otherwise provided herein or directed by the Board
of Directors, the Treasurer shall be the custodian of all moneys, stocks,
bonds, notes and other securities of the Company. He is authorized to receive
and receipt for stocks, bonds, notes and other securities belonging to the
Company or which are received for its account. All stocks, bonds, notes and
other securities in the custody of the Treasurer shall be held in the safe
deposit vaults of the Company subject to access thereto as shall from time to
time be ordered by the Board of Directors. Stocks, bonds, notes and other
securities shall be deposited in the safe deposit vaults, or withdrawn from
them, only on warrants signed and countersigned by such persons as shall be
authorized by the Board of Directors or the Chief Executive Officer. The
Treasurer is authorized and empowered to receive and collect all moneys due to
the Company and to receipt therefor. All moneys received by the Treasurer
shall be deposited to the credit of the Company in such depositories as shall
be designated by the Chief Executive Officer or as otherwise provided by the
Board of Directors; and the Treasurer may endorse for deposit therein all
checks, drafts, or vouchers drawn to the order of the Company or payable
<PAGE> 6
to it. He is also authorized to draw checks against any funds to the credit
the Company in any of its depositories. All such checks shall be signed and
countersigned as shall be authorized by the Board of Directors, except as
otherwise provided by the Board of Directors. The Treasurer is authorized to
make disbursements in settlement of vouchers, payrolls, drafts or other ac-
counts, when approved for payment by the Chief Accounting Officer; or such
other person as shall be authorized by the Board of Directors or the Chief
Executive Officer; for payments which have been otherwise ordered or provided
for by the Board of Directors or the Chief Executive Officer; for interest on
bonds and dividends on stock when due and payable; for vouchers, pay checks,
drafts and other accounts properly certified to by the duly authorized officers
of the Company and approved for payment by or on behalf of the Chief Accounting
Officer; and for vouchers, pay checks, drafts and other accounts approved by
the officers duly authorized to approve for payment of any company which this
Company controls through ownership of stock or otherwise, as may be designated
in writing from time to time by the Chief Executive Officer to the Treasurer.
He shall cause to be kept in his office true and full accounts of all receipts
and disbursements of his office. He shall also perform such other duties as
shall be assigned to him by the Chief Financial Officer.
The Assistant Treasurers may exercise all the powers of the Treasurer
herein conferred in respect of the receipt of moneys and securities,
endorsement for deposit and signature of checks.
SECTION 22. The General Tax Counsels shall be responsible for all
tax-related legal advice (including federal tax planning an
and legislation; tax aspects of strategic, operational and financing
transactions; and ERISA/Benefits tax matters), and shall perform such other
duties as shall be assigned to them by the Vice President-Taxes.
ARTICLE V
SUPERVISION, REMOVAL AND SALARIES OF
OFFICERS AND EMPLOYEES
SECTION 1. Any officer or committee elected or appointed by the Board of
Directors may be removed as such at any time by the affirmative vote of a
majority of the whole Board. Any other officer or employee of the Company may
be removed at any time by vote of the Board of Directors or of the Executive
Committee. All officers, agents and employees other than those appointed by
the Board of Directors or Executive Committee may be removed by the officer ap-
pointing them.
SECTION 2. All officers, agents and employees of the Company, in the
exercise of the powers conferred and the performance of the duties imposed upon
them, by these By-Laws or otherwise, shall at all times be subject to the
direction, supervision and control of the Board of Directors or the Executive
Committee.
SECTION 3. No office or position shall be created and no person shall be
employed at a salary of more than $200,000 per annum, and no salary shall be
increased to an amount in excess of $200,000 per annum, without the approval of
the Board of Directors or Executive Committee, nor shall special compensation
be paid to any officer or employee, unless authorized by the Board of Directors
or Executive Committee; provided, however, that this section shall be
applicable only to salaried positions.
SECTION 4. The Board of Directors may from time to time vest general
authority in the Chairman of the Board, the Chairman of the Executive
Committee, the Chief Operating Officer or any such other officer of the Company
as any of the foregoing shall designate, for the sole determination of
disposition of any matter which otherwise would be required to be considered by
the Board of Directors or the Executive Committee under the provisions of this
Article.
<PAGE> 7
ARTICLE VI
CONTRACTS AND EXPENDITURES
SECTION 1. All capital expenditures, leases and property dispositions
must be authorized by the Board of Directors or Executive Committee, except
that general or specific authority with regard to such matters may be delegated
to such officers of the Company as the Board of Directors may from time to time
direct.
SECTION 2. Expenditures chargeable to operating expenses may be made by
or under the direction of the Head of the department in which they are
required, without explicit or further authority from the Board of Directors or
Executive Committee, subject to direction, restriction or prohibition by the
Chairman of the Board, the Chairman of the Executive Committee, the Chief
Executive Officer, the President or the Chief Operating Officer.
SECTION 3. No contract shall be made without the approval of the Board
of Directors or Executive Committee, except as authorized by the Board of
Directors or these By-Laws.
SECTION 4. Contracts for work, labor and services and materials and
supplies, the expenditures for which will be chargeable to operating expenses,
may be made in the name and on behalf of the Company by the Chairman of the
Board, the Chairman of the Executive Committee, the Chief Executive Officer,
the President or the Chief Operating Officer, or by such officer as he shall
designate, without further authority.
SECTION 5. All written contracts and agreements to which the Company may
become a party shall be approved as to form by or under the direction of
counsel for the Company.
SECTION 6. The Chairman of the Board, the Chairman of the Executive
Committee, the Chief Executive Officer, the President, the Chief Operating
Officer and the Vice Presidents shall severally have the power to execute on
behalf of the Company any deed, bond, indenture, certificate, note, contract or
other instrument authorized or approved by the Board of Directors or the
Executive Committee, and to cause the corporate seal to be thereto affixed and
attested by the Secretary or an Assistant Secretary.
SECTION 7. The Board of Directors may from time to time vest general or
specific authority in such officers of the Company as the Board of Directors
shall designate for the sole determination of disposition of any matter which
otherwise would be required to be considered by the Board of Directors or the
Executive Committee under the provisions of this Article.
ARTICLE VII
EXECUTION AND CANCELLATION OF BONDS
Section 1. No negotiable or mortgage bond shall be signed by any officer
of the Company until an issue of the same has been authorized by the Board of
Directors, and then only for the amount authorized.
SECTION 2. All such bonds shall require the authentication of a trustee,
and shall, until otherwise provided by the Board of Directors, be signed by the
Chairman of the Executive Committee, the Chief Executive Officer, the President
or a Vice President, and by the Secretary or an Assistant Secretary thereunto
authorized by resolution of the Board of Directors or the Executive Committee.
SECTION 3. For the purpose of facilitating the execution of bonds of the
Company, the Board of Directors or the Executive Committee may appoint one or
more persons, who need not be members of the Board of Directors, each bearing
the title "Vice President" and having power to sign bonds.
<PAGE> 8
SECTION 4. No bond shall be cancelled or destroyed, except in accordance
with the provisions of the indenture under which it is issued, or by order of
the Board of Directors or Executive Committee.
ARTICLE VIII
ISSUE AND CANCELLATION OF STOCK CERTIFICATES
SECTION 1. The Board of Directors shall provide for the issue, transfer
and registration of the capital stock of the Company in the City and State of
New York, and in any other locality which it may designate, and shall appoint
the necessary officers, transfer agents and registrars of transfers for that
purpose.
SECTION 2. Until otherwise provided by the Board of Directors, stock
certificates shall be signed by the Chairman of the Executive Committee, the
Chief Executive Officer, the President or a Vice President, and also by the
Secretary or an Assistant Secretary thereunto authorized by the Board of
Directors or by the Executive Committee.
SECTION 3. For the purpose of facilitating the execution of stock
certificates of the Company, the Board of Directors or the Executive Committee
may appoint one or more persons who need not be members of the Board of
Directors, each bearing the title "Vice President" and having power to sign
stock certificates.
SECTION 4. Unless authorized by the Board of Directors or Executive
Committee, no new certificate shall be issued to a transferee except upon
surrender and cancellation of the old certificate.
SECTION 5. The registrar of transfers shall in every case be a trust
company to be appointed by the Board of Directors, in accordance with the
requirements of the New York Stock Exchange, and such registration shall be
performed in accordance with the rules and regulations of said Exchange.
ARTICLE IX
FINAL
SECTION 1. The Company shall indemnify to the full extent permitted by
law any person made or threatened to be made a party to any action, suit or
proceeding, whether criminal, civil, administrative or investigative, by reason
of the fact that such person is or was a director, officer or employee of the
Company or serves or served at the request of the Company any other enterprise
as a director, officer or employee. For purposes of this By-Law, the term
"other enterprise" shall include any corporation, partnership, joint venture,
trust or employee benefit plan; and service "at the request of the Company"
shall include service as a director, officer or employee of the Company which
imposes duties on, or involves services by, such director, officer or employee
with respect to an employee benefit plan, its participants or beneficiaries.
This Section 1 shall not apply to any action, suit or proceeding pending or
threatened on the date of adoption hereof provided that the right of the
Company to indemnify any person with respect thereto shall not be limited
hereby.
SECTION 2. Any indemnification under Section 1 of this Article (unless
ordered by a court) shall be made by the Company only as authorized in the
specific case upon a determination that indemnification of the director,
officer or employee is proper in the circumstances because such person has met
the applicable standard of conduct required by law. Such determination shall
be made (i) by the Board of Directors by a majority vote of a quorum consisting
of directors who were not parties to such action, suit or proceeding, or (ii)
if such a quorum is not obtainable, or even if obtainable, if a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, or (iii) by the stockholders.
<PAGE> 9
SECTION 3. The indemnification provided by Section 1 of this Article
shall not be deemed exclusive of any other rights to which any person seeking
indemnification may be entitled under any law, agreement, vote of stockholders
or disinterested directors or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer or employee and shall inure to the benefit of the heirs, executors and
administrators of such a person. Any amendment or repeal of Section 1 or
Section 2 of this Article IX or this Section 3 shall not limit the right of any
person to indemnity with respect to actions taken or omitted to be taken by
such person prior to such amendment or repeal.
SECTION 4. The corporate seal of this Company shall be circular in form,
with the words and figures, "Missouri Pacific Railroad Company Corporate Seal
1977 Delaware."
SECTION 5. These By-Laws may be altered, amended or repealed at a
general meeting of the stockholders by a majority vote of those present in
person or by proxy; or at any meeting of the Board of Directors by a majority
vote of all the members of the Board.
<PAGE> 1
EXHIBIT 24
MISSOURI PACIFIC RAILROAD COMPANY
Powers of Attorney
The undersigned, a director of Missouri Pacific Railroad Company, a
Delaware corporation (the "Company"), hereby appoints each of Drew Lewis, Judy
L. Swantak and Thomas E. Whitaker his true and lawful attorney-in-fact and
agent, to sign on his behalf the Company's Annual Report on Form 10-K for the
year ended December 31, 1995, and any and all amendments thereto, and to file
the same, with all exhibits thereto, with the Securities and Exchange
Commission.
/s/ ROBERT P. BAUMAN
---------------------------
Robert P. Bauman
The undersigned, a director of Missouri Pacific Railroad Company, a
Delaware corporation (the "Company"), hereby appoints each of Drew Lewis, Judy
L. Swantak and Thomas E. Whitaker his true and lawful attorney-in-fact and
agent, to sign on his behalf the Company's Annual Report on Form 10-K for the
year ended December 31, 1995, and any and all amendments thereto, and to file
the same, with all exhibits thereto, with the Securities and Exchange
Commission.
/s/ RICHARD B. CHENEY
---------------------------
Richard B. Cheney
The undersigned, a director of Missouri Pacific Railroad Company, a
Delaware corporation (the "Company"), hereby appoints each of Drew Lewis, Judy
L. Swantak and Thomas E. Whitaker his true and lawful attorney-in-fact and
agent, to sign on his behalf the Company's Annual Report on Form 10-K for the
year ended December 31, 1995, and any and all amendments thereto, and to file
the same, with all exhibits thereto, with the Securities and Exchange
Commission.
/s/ E. VIRGIL CONWAY
---------------------------
E. Virgil Conway
The undersigned, a director of Missouri Pacific Railroad Company, a
Delaware corporation (the "Company"), hereby appoints each of Drew Lewis, Judy
L. Swantak and Thomas E. Whitaker his true and lawful attorney-in-fact and
agent, to sign on his behalf the Company's Annual Report on Form 10-K for the
year ended December 31, 1995, and any and all amendments thereto, and to file
the same, with all exhibits thereto, with the Securities and Exchange
Commission.
/s/ RICHARD K. DAVIDSON
---------------------------
Richard K. Davidson
The undersigned, a director of Missouri Pacific Railroad Company, a
Delaware corporation (the "Company"), hereby appoints each of Drew Lewis, Judy
L. Swantak and Thomas E. Whitaker his true and lawful attorney-in-fact and
agent, to sign on his behalf the Company's Annual Report on Form 10-K for the
year ended December 31, 1995, and any and all amendments thereto, and to file
the same, with all exhibits thereto, with the Securities and Exchange
Commission.
/s/ SPENCER F. ECCLES
---------------------------
Spencer F. Eccles
<PAGE> 2
The undersigned, a director of Missouri Pacific Railroad Company, a
Delaware corporation (the "Company"), hereby appoints each of Drew Lewis, Judy
L. Swantak and Thomas E. Whitaker his true and lawful attorney-in-fact and
agent, to sign on his behalf the Company's Annual Report on Form 10-K for the
year ended December 31, 1995, and any and all amendments thereto, and to file
the same, with all exhibits thereto, with the Securities and Exchange
Commission.
/s/ ELBRIDGE T. GERRY, JR.
---------------------------
Elbridge T. Gerry, Jr.
The undersigned, a director of Missouri Pacific Railroad Company, a
Delaware corporation (the "Company"), hereby appoints each of Drew Lewis, Judy
L. Swantak and Thomas E. Whitaker his true and lawful attorney-in-fact and
agent, to sign on his behalf the Company's Annual Report on Form 10-K for the
year ended December 31, 1995, and any and all amendments thereto, and to file
the same, with all exhibits thereto, with the Securities and Exchange
Commission.
/s/ WILLIAM H. GRAY, III
---------------------------
William H. Gray, III
The undersigned, a director of Missouri Pacific Railroad Company, a
Delaware corporation (the "Company"), hereby appoints each of Drew Lewis, Judy
L. Swantak and Thomas E. Whitaker her true and lawful attorney-in-fact and
agent, to sign on her behalf the Company's Annual Report on Form 10-K for the
year ended December 31, 1995, and any and all amendments thereto, and to file
the same, with all exhibits thereto, with the Securities and Exchange
Commission.
/s/ JUDITH RICHARDS HOPE
---------------------------
Judith Richards Hope
The undersigned, a director of Missouri Pacific Railroad Company, a
Delaware corporation (the "Company"), hereby appoints each of Drew Lewis, Judy
L. Swantak and Thomas E. Whitaker his true and lawful attorney-in-fact and
agent, to sign on his behalf the Company's Annual Report on Form 10-K for the
year ended December 31, 1995, and any and all amendments thereto, and to file
the same, with all exhibits thereto, with the Securities and Exchange
Commission.
/s/ RICHARD J. MAHONEY
---------------------------
Richard J. Mahoney
The undersigned, a director of Missouri Pacific Railroad Company, a
Delaware corporation (the "Company"), hereby appoints each of Drew Lewis, Judy
L. Swantak and Thomas E. Whitaker his true and lawful attorney-in-fact and
agent, to sign on his behalf the Company's Annual Report on Form 10-K for the
year ended December 31, 1995, and any and all amendments thereto, and to file
the same, with all exhibits thereto, with the Securities and Exchange
Commission.
/s/ L. WHITE MATTHEWS, III
---------------------------
L. White Matthews, III
<PAGE> 3
The undersigned, a director of Missouri Pacific Railroad Company, a
Delaware corporation (the "Company"), hereby appoints each of Drew Lewis, Judy
L. Swantak and Thomas E. Whitaker his true and lawful attorney-in-fact and
agent, to sign on his behalf the Company's Annual Report on Form 10-K for the
year ended December 31, 1995, and any and all amendments thereto, and to file
the same, with all exhibits thereto, with the Securities and Exchange
Commission.
/s/ JACK L. MESSMAN
---------------------------
Jack L. Messman
The undersigned, a director of Missouri Pacific Railroad Company, a
Delaware corporation (the "Company"), hereby appoints each of Drew Lewis, Judy
L. Swantak and Thomas E. Whitaker his true and lawful attorney-in-fact and
agent, to sign on his behalf the Company's Annual Report on Form 10-K for the
year ended December 31, 1995, and any and all amendments thereto, and to file
the same, with all exhibits thereto, with the Securities and Exchange
Commission.
/s/ JOHN R. MEYER
---------------------------
John R. Meyer
The undersigned, a director of Missouri Pacific Railroad Company, a
Delaware corporation (the "Company"), hereby appoints each of Drew Lewis, Judy
L. Swantak and Thomas E. Whitaker his true and lawful attorney-in-fact and
agent, to sign on his behalf the Company's Annual Report on Form 10-K for the
year ended December 31, 1995, and any and all amendments thereto, and to file
the same, with all exhibits thereto, with the Securities and Exchange
Commission.
/s/ THOMAS A. REYNOLDS, Jr.
---------------------------
Thomas A. Reynolds, Jr.
The undersigned, a director of Missouri Pacific Railroad Company, a
Delaware corporation (the "Company"), hereby appoints each of Drew Lewis, Judy
L. Swantak and Thomas E. Whitaker his true and lawful attorney-in-fact and
agent, to sign on his behalf the Company's Annual Report on Form 10-K for the
year ended December 31, 1995, and any and all amendments thereto, and to file
the same, with all exhibits thereto, with the Securities and Exchange
Commission.
/s/ JAMES D. ROBINSON, III
-----------------------------
James D. Robinson, III
The undersigned, a director of Missouri Pacific Railroad Company, a
Delaware corporation (the "Company"), hereby appoints each of Drew Lewis, Judy
L. Swantak and Thomas E. Whitaker his true and lawful attorney-in-fact and
agent, to sign on his behalf the Company's Annual Report on Form 10-K for the
year ended December 31, 1995, and any and all amendments thereto, and to file
the same, with all exhibits thereto, with the Securities and Exchange
Commission.
/s/ ROBERT W. ROTH
---------------------------
Robert W. Roth
<PAGE> 4
The undersigned, a director of Missouri Pacific Railroad Company, a
Delaware corporation (the "Company"), hereby appoints each of Drew Lewis, Judy
L. Swantak and Thomas E. Whitaker his true and lawful attorney-in-fact and
agent, to sign on his behalf the Company's Annual Report on Form 10-K for the
year ended December 31, 1995, and any and all amendments thereto, and to file
the same, with all exhibits thereto, with the Securities and Exchange
Commission.
/s/ RICHARD D. SIMMONS
---------------------------
Richard D. Simmons
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
MISSOURI PACIFIC RAILROAD COMPANY AND SUBSIDIARY COMPANIES
FINANCIAL DATA SCHEDULE - EXHIBIT 27
($ in thousands)
Schedule contains summary financial information extracted from the Statements
of Consolidated Income and Consolidated Financial Position and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 7,648
<SECURITIES> 0
<RECEIVABLES> 64,311
<ALLOWANCES> 0
<INVENTORY> 98,920
<CURRENT-ASSETS> 240,185
<PP&E> 6,222,258
<DEPRECIATION> 1,898,640
<TOTAL-ASSETS> 4,696,996
<CURRENT-LIABILITIES> 1,262,075
<BONDS> 363,917
<COMMON> 1
0
0
<OTHER-SE> 1,461,470
<TOTAL-LIABILITY-AND-EQUITY> 4,696,996
<SALES> 0
<TOTAL-REVENUES> 2,350,400
<CGS> 0
<TOTAL-COSTS> 1,871,428
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 88,638
<INCOME-PRETAX> 439,066
<INCOME-TAX> 158,625
<INCOME-CONTINUING> 280,441
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 280,441
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
