-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QXgjpOqJE/JKKy0/qj8HpJScTxtIHlMMjBtPFvxoQIrcWvzOZTfIeW36YT75FbJw Vdc4TCuNS9faa4uotsf4Tw== 0000100885-97-000004.txt : 19970630 0000100885-97-000004.hdr.sgml : 19970630 ACCESSION NUMBER: 0000100885-97-000004 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970627 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNION PACIFIC CORP CENTRAL INDEX KEY: 0000100885 STANDARD INDUSTRIAL CLASSIFICATION: RAILROADS, LINE-HAUL OPERATING [4011] IRS NUMBER: 132626465 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-06075 FILM NUMBER: 97631329 BUSINESS ADDRESS: STREET 1: MARTIN TOWER STREET 2: EIGHTH AND EATON AVES CITY: BETHLEHEM STATE: PA ZIP: 18018 BUSINESS PHONE: 6108613200 10-K/A 1 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A-1 (Mark One) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE [X] SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED) For the fiscal year ended December 31, 1996 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE [ ] SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the transition period from _________ to _________ Commission file number 1-6075 UNION PACIFIC CORPORATION (Exact name of registrant as specified in its charter) Utah 13-2626465 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) Martin Tower, Eighth and Eaton Avenues 18018 Bethlehem, Pennsylvania (Zip Code) (Address of principal executive offices) Registrant's telephone number, including area code (610) 861-3200 ___________________________________ Securities registered pursuant to Section 12(b) of the Act: Name of each exchange Title of each class on which registered Common Stock (Par Value $2.50 per share) New York Stock Exchange, Inc. ___________________________________ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ------ ------ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ X ]. ------ ___________________________________ As of February 28, 1997 the aggregate market value of the registrant's Common Stock held by non-affiliates (using the New York Stock Exchange closing price) was approximately $14,872,259,119. The number of shares outstanding of the registrant's Common Stock as of February 28, 1997 was 246,842,475. Portions of the following documents are incorporated by reference into this Report: (1) registrant's Annual Report to Stockholders for the year ended December 31, 1996 (Parts I, II and IV); and (2) registrant's definitive Proxy Statement for the annual meeting of stockholders to be held on April 18, 1997 (Part III). 2 The undersigned Registrant hereby amends its Annual Report on Form 10-K for the fiscal year ended December 31, 1996 to include the following exhibits: Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K Exhibit Number Exhibit - -------------- ------- (23) Independent Auditors' Consents (99)(a) Financial Statements for the Fiscal Year ended December 31, 1996 required by Form 11-K for the Union Pacific Corporation Thrift Plan. (99)(b) Financial Statements for the Fiscal Year ended December 31, 1996 required by Form 11-K for the Union Pacific Fruit Express Company Agreement Employee 401(k) Retirement Thrift Plan. (99)(c) Financial Statements for the Fiscal Year ended December 31, 1996 required by Form 11-K for the Skyway Retirement Savings Plan. (99)(d) Financial Statements for the Fiscal Year ended December 31, 1996 required by Form 11-K for the Union Pacific Agreement Employee 401(k) Retirement Thrift Plan. (99)(e) Financial Statements for the Fiscal Year ended December 31, 1996 required by Form 11-K for the Union Pacific Motor Freight Agreement Employee 401(k) Retirement Thrift Plan. (99)(f) Financial Statements for the Fiscal Year ended December 31, 1996 required by Form 11-K for the Chicago and North Western Railway Company Profit Sharing and Retirement Savings Program. (99)(g) Financial Statements for the Fiscal Year ended December 31, 1996 required by Form 11-K for the Southern Pacific Rail Corporation Thrift Plan. 3 UNION PACIFIC CORPORATION SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: June 26, 1997 UNION PACIFIC CORPORATION (Registrant) /s/ Joseph E. O'Connor, Jr. ---------------------------------- Joseph E. O'Connor, Jr., Vice President and Controller (Chief Accounting Officer and Duly Authorized Officer) 4 EXHIBIT INDEX ------------- Exhibit Number Exhibit - -------------- ------- (23) Independent Auditors' Consents (99)(a) Financial Statements for the Fiscal Year ended December 31, 1996 required by Form 11-K for the Union Pacific Corporation Thrift Plan. (99)(b) Financial Statements for the Fiscal Year ended December 31, 1996 required by Form 11-K for the Union Pacific Fruit Express Company Agreement Employee 401(k) Retirement Thrift Plan. (99)(c) Financial Statements for the Fiscal Year ended December 31, 1996 required by Form 11-K for the Skyway Retirement Savings Plan. (99)(d) Financial Statements for the Fiscal Year ended December 31, 1996 required by Form 11-K for the Union Pacific Agreement Employee 401(k) Retirement Thrift Plan. (99)(e) Financial Statements for the Fiscal Year ended December 31, 1996 required by Form 11-K for the Union Pacific Motor Freight Agreement Employee 401(k) Retirement Thrift Plan. (99)(f) Financial Statements for the Fiscal Year ended December 31, 1996 required by Form 11-K for the Chicago and North Western Railway Company Profit Sharing and Retirement Savings Program. (99)(g) Financial Statements for the Fiscal Year ended December 31, 1996 required by Form 11-K for the Southern Pacific Rail Corporation Thrift Plan. EX-23 2 CONSENTS Exhibit 23 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Post-Effective Amendment No. 1 to Registration Statement No. 33-12513 and in Registration Statement No. 33-49849 of Union Pacific Corporation on Forms S-8 of our report dated June 17, 1997 appearing in Exhibit 99(a) of Amendment No. 1 to the Annual Report on Form 10-K of Union Pacific Corporation for the year ended December 31, 1996. /s/ Deloitte & Touche LLP New York, New York June 25, 1997 Exhibit 23 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement No. 33-49785 of Union Pacific Corporation on Form S-8 of our report dated June 4, 1997, appearing in Exhibit 99(b) of Amendment No. 1 to the Annual Report on Form 10-K of Union Pacific Corporation for the fiscal year ended December 31, 1996. /s/ Deloitte & Touche LLP Omaha, Nebraska June 25, 1997 Exhibit 23 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement No. 33-51735 of Union Pacific Corporation on Form S-8 of our report dated May 1, 1997 appearing in Exhibit 99(c) of Amendment No. 1 to the Annual Report on Form 10-K of Union Pacific Corporation for the fiscal year ended December 31, 1996. /s/ Deloitte & Touche LLP San Jose, California June 25, 1997 Exhibit 23 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement No. 33-53968 of Union Pacific Corporation on Form S-8 of our report dated June 4, 1997, appearing in Exhibit 99(d) of Amendment No. 1 to the Annual Report on Form 10-K of Union Pacific Corporation for the fiscal year ended December 31, 1996. /s/ Deloitte & Touche LLP Omaha, Nebraska June 25, 1997 Exhibit 23 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement No. 33-54811 of Union Pacific Corporation on Form S-8 of our report dated June 4, 1997, appearing in Exhibit 99(e) of Amendment No. 1 to the Annual Report on Form 10-K of Union Pacific Corporation for the fiscal year ended December 31, 1996. /s/ Deloitte & Touche LLP Omaha, Nebraska June 25, 1997 Exhibit 23 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement No. 333-10797 of Union Pacific Corporation on Form S-8 of our report dated June 4, 1997, appearing in Exhibit 99(f) of Amendment No. 1 to the Annual Report on Form 10-K of Union Pacific Corporation for the fiscal year ended December 31, 1996. /s/ Deloitte & Touche LLP Omaha, Nebraska June 25, 1997 Exhibit 23 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in the registration statement No. 333-13115 on Form S-8 of Union Pacific Corporation of our report dated June 20, 1997 relating to the statements of net assets available for plan benefits (modified cash basis) of Southern Pacific Rail Corporation Thrift Plan as of December 31, 1996 and 1995, and the related statements of changes in net assets available for plan benefits (modified cash basis), for the years then ended and the related supplemental schedules, which report appears in Exhibit 99(g) of Amendment No. 1 to the Annual Report on Form 10-K of Union Pacific Corporation for the fiscal year ended December 31, 1996. Our report notes these financial statements and supplemental schedules were prepared on a modified cash basis of accounting, which is a comprehensive basis of accounting other that generally accepted accounting principles. /s/ KPMG Peat Marwick LLP San Francisco, California June 25, 1997 EX-99.A 3 EXHIBIT 99(A) COVER Exhibit 99(a) UNION PACIFIC CORPORATION THRIFT PLAN Financial Statements for the Years Ended December 31, 1996 and 1995 and Independent Auditors' Report INDEX UNION PACIFIC CORPORATION THRIFT PLAN TABLE OF CONTENTS - ------------------------------------------------------------------------------ Page INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995: Statements of Net Assets Available for Benefits 2 Statements of Changes in Net Assets Available for Benefits 3 Notes to Financial Statements 4-9 Supplemental schedules required by the Employee Retirement Income Security Act of 1974 are disclosed separately in Master Trust reports filed with the U.S. Department of Labor. 1 INDEPENDENT AUDITORS' REPORT Union Pacific Corporation Thrift Plan: We have audited the accompanying statements of net assets available for benefits of the Union Pacific Corporation Thrift Plan (the "Plan") as of December 31, 1996 and 1995 and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 1996 and 1995, and the changes in net assets available for benefits for the years then ended in conformity with generally accepted accounting principles. /s/ DELOITTE & TOUCHE LLP New York, New York June 17, 1997 2 UNION PACIFIC CORPORATION THRIFT PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1996 AND 1995 - ------------------------------------------------------------------------------ 1996 1995 --------- ---------- ASSETS: Investments at fair value (Notes 2, 3 and 7) $476,177,320 $382,627,929 ------------ ------------ Net assets available for benefits $476,177,320 $382,627,929 ============ ============ The accompanying notes are an integral part of these financial statements. 3 UNION PACIFIC CORPORATION THRIFT PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 - ------------------------------------------------------------------------------ 1996 1995 ------------ ------------ ADDITIONS TO NET ASSETS ATTRIBUTED TO: Investment income (Note 7): Net appreciation in fair value of investments $ 64,672,659 $ 73,425,389 Interest 7,138,329 7,177,207 Dividends 11,286,224 7,847,775 ------------ ------------ 83,097,212 88,450,371 Contributions by (Note 7): Employees 23,593,530 19,113,441 Company 7,699,682 6,615,099 ------------ ------------ 31,293,212 25,728,540 Total Additions 114,390,424 114,178,911 ------------ ------------ DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: Distributions to participants (Note 7) 20,841,033 15,807,420 ------------ ------------ NET INCREASE 93,549,391 98,371,491 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of Year 382,627,929 284,256,438 ------------ ------------ End of Year $476,177,320 $382,627,929 ============ ============ The accompanying notes are an integral part of these financial statements. 4 UNION PACIFIC CORPORATION THRIFT PLAN NOTES TO FINANCIAL STATEMENTS 1. DESCRIPTION OF PLAN The following description of the Union Pacific Corporation Thrift Plan (the "Plan") provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. General - The Plan was adopted in October 1973 by the Board of Directors of Union Pacific Corporation (the "Company") and approved by its stockholders in May 1974. Under the terms of the Plan, non-agreement employees generally become eligible to participate in the Plan after completing twelve months continuous service and working at least 1,000 hours. Contributions - The Company contributes to the Plan on behalf of each participant an amount equal to 50% of the participant's contribution with such Company contribution limited to 3% of the participant's base salary. The Plan meets the requirements of section 401(k) of the Internal Revenue Code, which (i) permits certain employee contributions to be withheld on a "salary deferral" basis, so that amounts deducted will not be included in the employee's income for Federal income tax purposes, (ii) allows employees to contribute up to 16% of their salary to the Plan, (iii) provides for payroll based employee stock ownership plan contributions ("PAYSOP"), and (iv) makes various other changes intended to give participants greater control and flexibility with respect to Plan investments. Spin-Off - In September 1996, the Company's Board of Directors declared a special dividend consisting of the shares of Union Pacific Resources Group ("Resources") common stock owned by the Company (the "Spin-Off"). As a result of the Spin-Off, each of the Company's stockholders received 0.846946 of a share of Resources common stock for each share of Company common stock held by such stockholders at the September 26, 1996 record date for the distribution. Therefore, each Plan participant's account received 0.846946 of a share of Resources common stock for each share of Company common stock held in the account. The shares received have been placed in the Resources Stock Fund ("Resources Stock"). Future contributions to Resources Stock are not permitted. Loans to Participants - In June 1985, the loan provisions of the Plan were approved by the Internal Revenue Service and became effective. The amount of a loan is limited to one-half of the vested value of a participant's account, excluding PAYSOP, and subject to a minimum and maximum loan amount. As the loan is repaid, all principal and interest payments will be credited to the participant's account, excluding PAYSOP, in the same proportions as the contributions then being made on behalf of the participant. If no contributions are then being made, the loan repayments will be invested in accordance with the participant's most recent investment election, unless he or she directs otherwise to the extent permitted by the Plan. Participant loans, which are secured by the participant's individual account balances, bear a fixed rate of interest set by the Plan Administrator based on interest rates then being charged on similar loans, and are repayable over periods not exceeding five years, except loans relating to a principal residence, in which case the term of the loan shall not exceed fifteen years. The loans bear interest ranging from 5.5% to 10.5%. The number of loans outstanding at December 31, 1996 and 1995 was 1,725 and 1,797, respectively. 5 UNION PACIFIC CORPORATION THRIFT PLAN NOTES TO FINANCIAL STATEMENTS--(continued) Participant Accounts - Aggregate monthly employee and Company contributions may be invested entirely in the Union Pacific Company Stock Fund (Company Stock), Union Pacific Equity Index Fund (Equity Index), Union Pacific Fixed Income Fund (Fixed Income), Vanguard/Wellington Fund (Wellington), Vanguard U.S. Growth Portfolio (U.S. Growth), Vanguard Money Market Reserves-Prime Portfolio (VMMR Prime Portfolio), Vanguard International Growth Portfolio (International Growth), Vanguard Bond Index Fund (Bond Index) or any combination thereof, in multiples of 5% in accordance with separate elections by each employee. At December 31, 1996 and 1995, 5,731 and 5,265 members of the Plan held interest in 4,920 and 4,725 Company stock accounts, 2,782 and 2,614 Equity Index accounts, 3,935 and 2,676 Fixed Income accounts, 3,899 and 0 Resources Stock accounts, 1,714 and 1,302 Wellington accounts, 100 and 9 VMMR Prime Portfolio accounts, 1,587 and 925 U.S. Growth accounts, 1,419 and 1,106 International Growth accounts, and 477 and 440 Bond Index accounts, respectively. In addition, 3,213 and 3,337 members held interest in PAYSOP accounts at December 31, 1996 and 1995, respectively. Participants' Plan accounts are maintained on a unit basis. Under this method, an employee's account value is expressed in units of participation, representing an undivided interest in the underlying assets and income of the Fund. The purchase or redemption price of the units is determined daily by the Trustee, based on the current market values, or contract value in the case of Guaranteed Investment Contracts (GICs), of the underlying assets of the Fund. Vesting - Vesting is based exclusively upon years of service. Participants at all times have a 100% vested interest in their voluntary contributions plus actual earnings thereon and their PAYSOP account. A participant's vested interest in the portion of his/her account derived from Company contributions increases 25% every year, after two years of credited service, to 100% vested after five years of credited service. A participant's interest in the Company's contributions will also become 100% vested if, while employed by the Company, the participant reaches age 65, dies, or sustains a total and permanent disability. Payment of Benefits - A participant may elect to receive a final distribution under the Plan as either a cash lump sum distribution, or in monthly or annual installments over a specified period of time not to exceed the lesser of ten calendar years or the life expectancy of the participant or the joint life expectancy of the participant and his/her beneficiary as prescribed in the Treasury Regulations. Final distributions of PAYSOP accounts must be lump sum distributions. For benefit payments equal to or less than $3,500, the Plan Administrator may direct the Trustee to make a lump sum payment to the participant or beneficiary. A participant has the option to receive the value of his/her PAYSOP account and the portion of his/her account invested in the Company Stock Fund in cash or in shares of such Company stock; in-kind distributions will be lump sum and any fractional shares will be distributed in cash. A withdrawal may be made by a participant from his/her account in accordance with the Plan's provisions. Forfeitures - When certain terminations of participation in the Plan occur, the nonvested portion of a participant's account, as defined by the Plan, represents a potential forfeiture. Such potential forfeitures reduce subsequent Company contributions to the Plan. However, if upon reemployment the former participant fulfills certain requirements as defined in the Plan, 6 UNION PACIFIC CORPORATION THRIFT PLAN NOTES TO FINANCIAL STATEMENTS--(continued) the previously forfeited nonvested portion of the participant's account may be restored through Company contributions. Amounts summarized below represent Company contributions forfeited for the years ended December 31, 1996 and 1995: 1996 1995 ------- ------- Company contributions forfeited................... $24,278 $30,851 Applied against current year contributions........ 18,170 18,643 ------- ------- Applied to reduce subsequent year contributions... $ 6,108 $12,208 ======= ======= Administrative Expenses - All costs of Plan administration are borne by the Company. 2. Significant Accounting Policies - The accounts of the Plan have been prepared in accordance with generally accepted accounting principles. The financial statements were prepared in accordance with the financial reporting requirements of the Employee Retirement Income Security Act of 1974 as permitted by the Securities and Exchange Commission's amendments to Form 11-K adopted during 1990. Investments are valued utilizing closing prices except for the investment in the GICs, which is valued at cost plus reinvested interest. Dividend income is recorded as of the ex-dividend date. Security transactions are recorded as of the trade date. Certain 1995 amounts have been reclassified to conform to the 1996 financial statement presentation. 3. Investments - At December 31, 1996 and 1995, Plan investments were maintained in commingled funds of the Plan Trustees along with investments of another Company-administered Thrift Plan, within a Master Trust. The Union Pacific Resources Company Employee Thrift Plan ("Resources Plan") was the other participant in the Master Trust at December 31, 1995. Investments for the Chicago and North Western Railway Company Profit Sharing and Retirement Savings Program ("C&NW PS/RS") were added to the Master Trust effective July 31, 1996. The Resources Plan investments were removed from the Master Trust as a result of the Spin-Off. Assets, liabilities, investment income, and security gains and losses are allocated monthly to the Plan based on its equity in the investments of the Master Trust. At December 31, 1996 and 1995, the Plan held percentage interests in the Master Trust of 99.5 and 82.9 in Company Stock (including PAYSOP), 77.1 and 66.2 in Equity Index, 98.4 and 65.8 in Fixed Income, 91.9 and 77.7 in the Loan Fund, 97.5 and 74.0 in Wellington, 94.9 and 71.9 in U.S. Growth, 86.7 and 33.3 in the VMMR Prime Portfolio, 98.5 and 75.6 in International Growth, and 100.0 and 70.2 in Bond Index, and 99.6 and 0.0 in Resources Stock. At December 31, 1996 and 1995, the total investments at fair value of the Master Trust were $577,591,251 and $526,488,315, respectively. In addition, total net appreciation in fair value of investments and total interest and dividends were $86,837,354 and $95,247,372 and $28,728,709 and $21,156,851, respectively, for the years ended December 31, 1996 and 1995. The Plan provides for separate funds for the investment of contributions. 7 UNION PACIFIC CORPORATION THRIFT PLAN NOTES TO FINANCIAL STATEMENTS--(continued) Participants may designate into which fund or funds their contributions and the Company matching contributions are to be directed within specific limits. At December 31, 1996 and 1995, Company Stock and PAYSOP are invested primarily in Union Pacific common stock. Equity Index is invested in the Vanguard Index Trust 500 Portfolio Fund at December 31, 1996 and 1995, which is designed to closely track the investment performance of the Standard and Poor's 500 Composite Stock Index. At December 31, 1996 and 1995, Fixed Income is comprised of investments in GICs bearing interest at 6.05% to 7.85% and 5.94% to 7.85%, respectively. Interest rates are fixed for the life of each contract. GICs are held with insurance companies rated at least A-1 by Standard & Poors. The maturities of these GICs are generally not longer than five years and their principal and interest are unconditionally guaranteed by the respective insurance companies. The fair value of GIC's approximates their contract value. At December 31, 1996 and 1995, Fixed Income is also comprised of the Vanguard Investment Contract Trust, which is comprised of contracts issued by financial institutions and backed by high quality bonds and bond mutual funds. As the GICs expire, the proceeds will be reinvested in the Vanguard Investment Contract Trust. Wellington is invested in the Vanguard/Wellington Fund at December 31, 1996, which is comprised of common stocks and fixed-income securities. At December 31, 1996, U.S. Growth is invested in Vanguard U.S. Growth Portfolio which is comprised of established U.S. growth stocks. International Growth is invested in the Vanguard International Growth Portfolio at December 31, 1996, which is comprised of foreign common stocks with high growth potential. At December 31, 1996, Bond Index is invested in the Vanguard Bond Index Fund which is designed to closely track the investment performance of the Lehman Brothers Aggregate Bond Index. VMMR Prime Portfolio is a diversified money market investment fund invested and reinvested in high quality certificates of deposit, bankers' acceptances, commercial paper, U.S. government securities, and other short-term obligations with the objective of preserving principal while providing income. At December 31, 1996, Resources Stock is invested primarily in Resources common stock. 4. Plan Amendments - Effective July 1, 1996, the Plan was amended to provide that final distributions may be made in annual installments over a period of time not to exceed ten years. The loan provisions of the Plan were amended effective July 1, 1996, to allow a loan term of 12 months, to remove the limitations based on salary level, to allow loans on rollover contributions during the first year of employment, and to provide that one partial payment of at least $500 will be allowed each year. Effective October 15, 1996, the Plan was amended to reflect the Spin-Off and the related creation of Resources Stock. Effective September 1, 1996, the Plan was amended to provide that a participant would be suspended effective when a loan from the C&NW PS/RS enters a grace period or becomes due and payable. Effective September 11, 1996, Southern Pacific Rail Corporation and any wholly-owned subsidiary thereof (SP Companies) became Employers under the Plan. Effective September 11, 1996, the Plan was amended to provide that a Covered Employee transferred to an SP Company would remain a Covered Employee until December 31, 1997, and any individual eligible to participate in the Southern Pacific Rail Corporation Thrift Plan between September 11, 1996 and December 31, 1997, and becoming a Covered Employee during that period would not become an Eligible Employee prior to January 1, 1998. 5. Federal Income Taxes - The Company has received a letter of determination from the Internal Revenue Service dated April 18, 1995, and the Plan Administrator and the Plan's tax counsel believe that the Plan, as subsequently amended, is currently designed and being operated in compliance 8 UNION PACIFIC CORPORATION THRIFT PLAN NOTES TO FINANCIAL STATEMENTS--(continued) with section 401(a) of the Internal Revenue Code of 1986, as amended. With respect to the operation of the Plan, Plan management is aware of certain operational defects which could adversely affect the tax-exempt status of the Plan. These operational defects will be corrected through the use of the Voluntary Compliance Resolution (VCR) program. Submission to the VCR program was made on August 5, 1996. Inasmuch as it is the opinion of Management that the Plan is qualified, employees participating in the Plan are not taxed on Company contributions made on their behalf, on employee contributions made on a pre-tax basis, on earnings on such Company contributions or pre-tax employee contributions, or on earnings on after-tax employee contributions, until any such amounts are distributed. In addition, no provision for Federal income taxes has been made in the financial statements. 6. Plan Termination - Although the Plan is intended to be continued by the Company, the Company reserves the right to amend or terminate the Plan. In the event of a Plan termination or partial termination, or the Company permanently ceases to make contributions, all invested amounts shall immediately vest and be nonforfeitable. All funds shall continue to be held for distribution as provided in the Plan. 7. Fund Information - Investments at par value, investment income, contributions, and distributions to participants by fund are as follows for the years ended December 31, 1996 and 1995: Year Ended Year Ended December 31, December 31, 1996 1995 ------------ ------------ Investments at Fair Value: Union Pacific Company Stock Fund $127,266,375 $132,265,668 Union Pacific Equity Index 91,508,657 75,624,191 Union Pacific Fixed Income 92,215,165 87,346,365 Common Stock/PAYSOP 10,378,499 8,279,048 Resources Stock Fund 51,360,520 -- Vanguard Wellington Fund 30,566,181 25,833,050 VMMR Prime Portfolio 1,984,161 131,259 Vanguard US Growth Fund 26,813,999 15,468,564 Vanguard International Growth Portfolio Fund 24,514,297 17,915,064 Vanguard Total Bond Market Fund 3,417,789 3,985,401 Loan Fund 16,151,677 15,779,319 ------------ ------------ $476,177,320 $382,627,929 ============ ============ 9 UNION PACIFIC CORPORATION THRIFT PLAN NOTES TO FINANCIAL STATEMENTS--(continued) Year Ended Year Ended December 31, December 31, 1996 1995 ------------ ------------ Investment Income: Union Pacific Company Stock Fund $ 25,406,609 $ 47,902,716 Union Pacific Equity Index 17,420,616 19,666,695 Union Pacific Fixed Income 5,494,978 6,353,369 Company Stock/PAYSOP 2,507,552 2,788,556 Resources Stock Fund 18,858,691 -- Vanguard Wellington Fund 4,233,058 5,141,861 VMMR Prime Portfolio 54,700 693 Vanguard U.S. Growth Fund 4,800,095 2,920,833 Vanguard International Growth Portfolio Fund 2,971,594 2,136,376 Vanguard Total Bond Market Fund 93,817 479,957 Loan Fund 1,255,502 1,059,315 ------------ ------------ $ 83,097,212 $ 88,450,371 ============ ============ Contributions: Union Pacific Company Stock Fund $ 8,736,619 $ 8,582,467 Union Pacific Equity Index 6,599,982 5,305,357 Union Pacific Fixed Income 5,699,884 5,843,040 Company Stock/PAYSOP 5,741 2,924 Resources Stock Fund 3,160 -- Vanguard Wellington Fund 4,023,577 2,461,104 VMMR Prime Portfolio 163,231 1,053 Vanguard U.S. Growth Fund 2,834,554 1,122,216 Vanguard International Growth Portfolio Fund 2,663,227 1,984,564 Vanguard Total Bond Market Fund 563,237 425,815 Loan Fund -- -- ------------ ------------ $ 31,293,212 $ 25,728,540 ============ ============ Distributions to participants: Union Pacific Company Stock Fund $ 5,148,631 $ 5,284,198 Union Pacific Equity Index 4,485,174 3,123,367 Union Pacific Fixed Income 5,926,598 5,860,719 Company Stock/PAYSOP 413,842 324,497 Resources Stock Fund 324,621 -- Vanguard Wellington Fund 1,575,834 392,133 VMMR Prime Portfolio 713,289 -- Vanguard U.S. Growth Fund 810,357 207,725 Vanguard International Growth Portfolio Fund 934,304 341,643 Vanguard Total Bond Market Fund 100,045 62,020 Loan Fund 408,338 211,117 ------------ ------------ $ 20,841,033 $ 15,807,420 ============ ============ EX-99.B 4 EXHIBIT 99(B) COVER Exhibit 99(b) UNION PACIFIC FRUIT EXPRESS COMPANY AGREEMENT EMPLOYEE 401(k) RETIREMENT THRIFT PLAN Financial Statements and Supplemental Schedules for the Years Ended December 31, 1996 and 1995 and Independent Auditors' Report INDEX UNION PACIFIC FRUIT EXPRESS COMPANY AGREEMENT EMPLOYEE 401(k) RETIREMENT THRIFT PLAN TABLE OF CONTENTS - ------------------------------------------------------------------------------ Page INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS AS OF DECEMBER 31, 1996 AND 1995 AND FOR THE YEARS THEN ENDED: Statements of Net Assets Available for Benefits 2 Statements of Changes in Net Assets Available for Benefits 3 Notes to Financial Statements 4-8 SUPPLEMENTAL SCHEDULES AS OF DECEMBER 31, 1996 AND FOR THE YEAR THEN ENDED: Item 27a - Schedule of Assets Held for Investment Purposes 9 Item 27d - Schedule of Reportable Transactions 10 Schedules not filed herewith are omitted because of the absence of the conditions under which they are required. 1 INDEPENDENT AUDITORS' REPORT Union Pacific Fruit Express Company Agreement Employee 401(k) Retirement Thrift Plan: We have audited the accompanying statements of net assets available for benefits of the Union Pacific Fruit Express Company Agreement Employee 401(k) Retirement Thrift Plan (the Plan) as of December 31, 1996 and 1995 and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 1996 and 1995, and the changes in net assets available for benefits for the years then ended in conformity with generally accepted accounting principles. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules listed in the Table of Contents are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These schedules are the responsibility of the Plan's management. Such schedules have been subjected to the auditing procedures applied in the audit of the basic 1996 financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole. /s/ DELOITTE & TOUCHE LLP Omaha, Nebraska June 4, 1997 2 UNION PACIFIC FRUIT EXPRESS COMPANY AGREEMENT EMPLOYEE 401(k) RETIREMENT THRIFT PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1996 AND 1995 - ------------------------------------------------------------------------------ 1996 1995 -------- -------- ASSETS: Investments at fair value (Note 3) $301,787 $175,643 -------- -------- Net assets available for benefits $301,787 $175,643 ======== ======== The accompanying notes are an integral part of these financial statements. 3 UNION PACIFIC FRUIT EXPRESS COMPANY AGREEMENT EMPLOYEE 401(k) RETIREMENT THRIFT PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 - ------------------------------------------------------------------------------ 1996 1995 -------- -------- ADDITIONS TO NET ASSETS ATTRIBUTED TO: Investment income (Note 7): Net appreciation in fair value of investments (Note 3) $ 35,133 $ 29,447 Interest 171 125 Dividends 12,049 5,159 -------- -------- 47,353 34,731 Employee contributions (Note 7) 83,291 68,321 -------- -------- Total Additions 130,644 103,052 -------- -------- DEDUCTIONS FORM NET ASSETS ATTRIBUTED TO: Distributions to participants (Note 7) 4,500 695 -------- -------- NET INCREASE 126,144 102,357 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of Year 175,643 73,286 -------- -------- End of Year $301,787 $175,643 ======== ======== The accompanying notes are an integral part of these financial statements. 4 UNION PACIFIC FRUIT EXPRESS COMPANY AGREEMENT EMPLOYEE 401(k) RETIREMENT THRIFT PLAN NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1996 AND 1995 - ------------------------------------------------------------------------------ 1. DESCRIPTION OF PLAN The following description of the Union Pacific Fruit Express Company Agreement Employee 401(k) Retirement Thrift Plan (the Plan) provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. General - The Plan is a defined contribution plan covering employees of the Union Pacific Fruit Express Company (the Company) who are governed by a collective bargaining agreement entered into between the Company and a union to which eligibility to participate in the plan has been extended, and have completed one year of service or were employees as of the effective date of the Plan, August 1, 1993. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended. Contributions - Participants may contribute 2% to 8% of their compensation on a salary deferral basis subject to limitations specified in the Internal Revenue Code. The Company does not contribute to the Plan. Participant Accounts - Each participant account is credited with the participant's contributions and an allocation of the Plan's earnings. Allocations are based on participant account balances. Vesting - Participants are at all times 100% vested in the value of their account. Payment of Benefits - Distribution of benefits shall be in a lump sum no later than 60 days following the close of the plan year in which the participant's termination of employment occurs, subject to certain mandatory pay-outs to participants who have attained age 70-1/2, but have not yet terminated employment. 2. SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting - The accounts of the Plan have been prepared in accordance with generally accepted accounting principles. The financial statements were prepared in accordance with the financial reporting requirements of ERISA as permitted by the Securities and Exchange Commission's amendments to Form 11-K adopted during 1990. Investment Valuation and Income Recognition - Investments in the Union Pacific Company Stock Fund, Resources Stock Fund, Vanguard/Wellington Fund, Vanguard Index Trust-500 Portfolio Fund, Vanguard U.S. Growth Fund, Vanguard International Growth Portfolio Fund and the Vanguard Total Bond Market Fund are valued at fair value as determined by quoted market prices. The investments in the Vanguard Investment Contract Trust Fund are valued at fair value as determined by Vanguard Fiduciary Trust 5 Company. Dividend income is recorded as of the ex-dividend date. Security transactions are recorded as of the trade date. 3. INVESTMENTS Plan participants may direct their contributions in various proportions to any of the seven available investment funds identified below: Fund A - Union Pacific Company Stock Fund - This fund is administered as a separate account by Vanguard Fiduciary Trust Company and invests primarily in the stock of Union Pacific Corporation. It also maintains a small cash position invested in Vanguard Money Market Reserves, to facilitate transactions. The Company stock fund is divided into fund shares, rather than shares of company stock. Fund B - Vanguard Wellington Fund - This fund consists of investment in the Vanguard Wellington Mutual Fund. Fund C - Vanguard Index Trust-500 Portfolio Fund - This fund consists of investment in the Vanguard Index Trust-500 Portfolio Mutual Fund. Fund D - Vanguard Investment Contract Trust Fund - This fund consists of investment in the Vanguard Fiduciary Trust Company Investment Contract Trust, a collective investment fund for tax- qualified pension and profit sharing plan assets. Fund E - Vanguard U.S. Growth Fund - This fund consists of investment in the Vanguard U.S. Growth Mutual Fund. Fund F - Vanguard International Growth Portfolio Fund - This fund consists of investment in the Vanguard International Growth Portfolio Mutual Fund. Fund G - Vanguard Total Bond Market Fund - This fund consists of investment in the Vanguard Total Bond Market Mutual Fund. In September 1996, The Company's Board of Directors declared a special dividend consisting of the shares of Union Pacific Resources Group ("Resources") common stock owned by the Company ("the Spin-Off"). As a result of the Spin-Off, each of the Company's stockholders received 0.846946 of a share of Resources common stock for each share of Company common stock held by such shareholders at the September 26, 1996 record date for the distribution. Therefore, each Plan participant's account received 0.846946 of a share of Resources common stock for each share of Company common stock held in the account. The shares received have been placed in the Resources Stock Fund ("Resources Stock"). Future contributions to Resources Stock Fund are not permitted. 6
The following table presents the fair value of investments. Investments that represent 5% or more of the Plan's net assets are separately identified. December 31, 1996 December 31, 1995 -------------------------- -------------------------- Number Fair Number Fair of Units Value of Units Value -------------------------- -------------------------- Investments at Fair Value as Determined by Quoted Market Price: Union Pacific Company Stock Fund 4,682.749 $ 46,172 3,158.845 $ 34,242 Resources Stock Fund 1,630.503 17,104 -- -- Vanguard Wellington Fund 3,644.406 95,301 2,552.599 62,360 Vanguard Index Trust - 500 Portfolio Fund 1,696.993 117,364 1,227.725 70,717 Vanguard U.S. Growth Fund 701.654 16,657 260.343 5,298 Other -- 5,805 -- 1,191 --------- -------- --------- ------- 298,403 173,808 Other Investments at Estimated Fair Value 3,383.690 3,384 1,834.850 1,835 -------- -------- Total Investments at Fair Value $301,787 $175,643 ======== ========
7 During 1996 and 1995, the Plan's investments (including investments bought, sold, and held during the year), appreciated in value by $35,133 and $29,447, respectively, as follows: Years Ended December 31, 1996 1995 --------- --------- Net Change in Fair Value Investments at Fair Value as Determined by Quoted Market Prices: Union Pacific Company Stock Fund $ 9,327 $ 5,897 Resources Stock Fund 3,081 -- Mutual Funds 22,725 23,550 ------- ------- Net change in fair value $35,133 $29,447 ======= ======= 4. PLAN ADMINISTRATION The Plan is administered by the Senior Vice President, Human Resources of the Corporation. All expenses incurred in the administration of the Plan are paid by the Company. 5. TAX STATUS The Plan obtained a tax determination letter dated July 27, 1995, in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code (the Code). The Plan has been amended since receiving the determination letter. However, Plan management believes that the Plan currently is being operated in compliance with the applicable requirement of the Internal Revenue Code. Therefore, it is believed that the Plan was qualified and the related trust was tax-exempt under provisions of Section 501(a) of the Internal Revenue Code as of the financial statement date. Therefore, no provision for income taxes has been included in the Plan's financial statements. 6. PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan at any time, to terminate the Plan subject to the provisions of ERISA. Regardless of such actions, the principal and income of the Plan remains for the exclusive benefit of the Plan's participants and beneficiaries. The Company may direct the Trustee either to distribute the Plan's assets to the participants, or to continue the Trust and distribute benefits as though the Plan had not been terminated. 8 7. FUND INFORMATION Investment income, contributions and distributions to participants by fund are as follows for the years ended December 31, 1996 and 1995: Year Ended Year Ended December 31, December 31, 1996 1995 ------------- -------------- Investment Income: Union Pacific Company Stock Fund $10,446 $ 6,553 Resources Stock Fund 3,081 -- Vanguard Wellington Fund 12,061 13,064 Vanguard Index Trust - 500 Portfolio Fund 19,350 14,642 Vanguard Investment Contract Trust Fund 171 125 Vanguard U.S. Growth Fund 1,686 257 Vanguard International Growth Portfolio Fund 490 89 Vanguard Total Bond Market Fund 68 1 ------- ------- $47,353 $34,731 ======= ======= Contributions: Union Pacific Company Stock Fund $21,351 $16,939 Resources Stock Fund -- -- Vanguard Wellington Fund 24,300 24,807 Vanguard Index Trust - 500 Portfolio Fund 28,665 23,468 Vanguard Investment Contract Trust Fund 732 1,455 Vanguard U.S. Growth Fund 5,308 773 Vanguard International Growth Portfolio Fund 2,562 836 Vanguard Total Bond Market Fund 373 43 ------- ------- $83,291 $68,321 ======= ======= Distributions to participants: Union Pacific Company Stock Fund $ 4,500 $ -- Resources Stock Fund -- -- Vanguard Wellington Fund -- 189 Vanguard Index Trust - 500 Portfolio Fund -- -- Vanguard Investment Contract Trust Fund -- 506 Vanguard U.S. Growth Fund -- -- Vanguard International Growth Portfolio Fund -- -- Vanguard Total Bond Market Fund -- -- ------- ------- $ 4,500 $ 695 ======= ======= 8. RELATED PARTY TRANSACTIONS Plan investments include the Union Pacific Company Stock Fund which is invested primarily in the Stock of Union Pacific Corporation. Union Pacific Corporation is the holding Company of the Plan sponsor and, therefore, these transactions qualify as party-in-interest. The Plan also invests in various funds managed by Vanguard Fiduciary Trust Company. Vanguard Fiduciary Trust Company is the trustee as defined by the Plan and, therefore, the related transactions qualify as party-in-interest. 9
UNION PACIFIC FRUIT EXPRESS COMPANY AGREEMENT EMPLOYEE 401(k) RETIREMENT THRIFT PLAN Item 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 1996 - ---------------------------------------------------------------------------------------- Column B Column C Column D Column E Description of Investment, Identity of Issue, Including Collateral, Rate Borrower, Lessor of interest, Maturity Date, Current or Similar Party Par or Maturity Value Cost Value Union Pacific Company Stock Fund * 4,682.749 units $33,209 $46,172 Resources Stock Fund 1,630.503 units 14,023 17,104 Vanguard Wellington Fund * 3,644.406 units 82,540 95,301 Vanguard Index Trust - 500 Portfolio Fund * 1,696.993 units 87,948 117,364 Vanguard U.S. Growth Fund* 701.654 units 16,072 16,657 Vanguard International Growth Portfolio Fund * 304.975 units 4,784 5,020 Vanguard Investment Contract Trust Fund * 3,383.690 units 3,384 3,384 Vanguard Total Bond Market Fund * 79.745 units 776 785 -------- -------- $242,736 $301,787 ======== ======== * Represents a party-in-interest
10
UNION PACIFIC FRUIT EXPRESS COMPANY AGREEMENT EMPLOYEE 401(k) RETIREMENT THRIFT PLAN Item 27d - SCHEDULE OF REPORTABLE TRANSACTIONS YEAR ENDED DECEMBER 31, 1996 - ----------------------------------------------------------------------------------------------------------------- Series of Transactions, When Aggregated, Involving an Amount in Excess of 5% of the Current Value of Plan Assets: Column A Column B Column C Column D Column E Column F Column G Total Total Dollar Dollar Identity of Number of Number of Value of Value of Net Gain Party Involved Description of Asset Purchases Sales Purchases Sales or (Loss) Vanguard Fiduciary Union Pacific Company Trust Company * Stock Fund 28 3 $22,709 $6,083 $ 352 Vanguard Fiduciary Vanguard Wellington Trust Company * Fund 27 3 $31,388 $3,420 $ 620 Vanguard Fiduciary Vanguard Index Trust Trust Company * 500 Portfolio Fund 30 2 $31,965 $ 2,274 $ 408 Vanguard Fiduciary Vanguard Investment Trust Company * Contract Trust Fund 30 2 $ 8,743 $7,194 $ -- Vanguard Fiduciary Vanguard U.S. Growth Fund Trust Company * 29 1 $15,590 $4,718 $ (52) Vanguard Fiduciary Vanguard International Trust Company * Growth Fund 28 1 $ 6,352 $2,758 $ 103 * Represents a party-in-interest
EX-99.C 5 EXHIBIT 99(C) COVER Exhibit 99(c) SKYWAY RETIREMENT SAVINGS PLAN Financial Statements for the Years Ended December 31, 1996 and 1995, Supplemental Schedules for the Year Ended December 31, 1996 and Independent Auditors' Report INDEX SKYWAY RETIREMENT SAVINGS PLAN TABLE OF CONTENTS - ----------------------------------------------------------------------------- Page Independent Auditors' Report 1 Financial Statements for the Years Ended December 31, 1996 and 1995: Statements of Net Assets Available for Benefits 2 Statements of Changes in Net Assets Available for Benefits 3 Notes to Financial Statements 4-7 Supplemental Schedules for the Year Ended December 31, 1996: Item 27a - Assets Held for Investment Purposes 8 Item 27d - Reportable Plan Transactions 9 1 INDEPENDENT AUDITORS' REPORT The Administrative Committee of the Skyway Retirement Savings Plan: We have audited the accompanying statements of net assets available for benefits of the Skyway Retirement Savings Plan (the Plan) as of December 31, 1996 and 1995, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 1996 and 1995, and the changes in net assets available for benefits for the years then ended in conformity with generally accepted accounting principles. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment as of December 31, 1996 and reportable Plan transactions for the year ended December 31, 1996 are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These schedules are the responsibility of the Plan's management. Such supplemental schedules have been subjected to the auditing procedures applied in our audit of the basic 1996 financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole. /s/ DELOITTE & TOUCHE LLP San Jose, California May 1, 1997 2 SKYWAY RETIREMENT SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1996 AND 1995 - ------------------------------------------------------------------------------ ASSETS 1996 1995 ---------- ---------- INVESTMENTS Vanguard Windsor II - at fair value $2,103,245 $1,339,429 Vanguard Investment Contract Trust - at contract value 1,136,733 1,228,841 Vanguard Index Trust 500 Portfolio - at fair value 1,447,980 985,987 Vanguard International Growth Portfolio - at fair value 1,144,940 864,414 Union Pacific Company Stock Fund - at fair value 848,248 848,031 Union Pacific Resource Group Stock fund - at fair value 320,474 - Vanguard Total Bond Market Fund - at fair value 644,483 570,476 Participant loans - at face value 410,528 570,476 ---------- ---------- Total investments 8,056,631 6,085,825 CONTRIBUTIONS RECEIVABLE 71,519 67,451 ---------- ---------- NET ASSETS AVAILABLE FOR BENEFITS $8,128,150 $6,153,276 ========== ========== See notes to financial statements. 3 SKYWAY RETIREMENT SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS YEARS ENDED DECEMBER 31, 1996 AND 1995 - ------------------------------------------------------------------------------ 1996 1995 ---------- ---------- CONTRIBUTIONS: Employee $1,509,826 $1,335,213 Employer Matching 326,023 333,572 Less forfeited employer matching funds (65,194) (28,193) ---------- ---------- Total contributions 1,770,655 1,640,592 ---------- ---------- INVESTMENT INCOME: Interest and dividends 383,480 255,458 Net appreciation in fair value of investments 765,142 846,716 Total investment income 1,148,622 1,102,174 ---------- ---------- BENEFIT PAYMENTS (944,403) (1,028,786) ---------- ---------- NET INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS 1,974,874 1,713,980 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 6,153,276 4,439,296 ---------- ---------- End of year $8,128,150 $6,153,276 ========== ========== See notes to financial statements. 4 SKYWAY RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1996 AND 1995 - --------------------------------------------------------------------------- 1. DESCRIPTION OF THE PLAN The following description of the Skyway Retirement Savings Plan (the Plan) provides only general information. Participants should refer to the Plan agreement and amendments for a more complete description of the Plan's provisions. General - The Plan, established January 1983 by Skyway Freight Systems, Inc. (the Company), is a defined contribution plan covering all full-time employees who have completed one year and 1,000 hours of service. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Vanguard Fiduciary Trust Company (Vanguard) serves as trustee of the Plan. Contributions - Participants may elect to make tax deferred contributions of up to 10% of their compensation (subject to certain Internal Revenue Code limitations). Rollover contributions from a participant's former qualified plan or individual retirement account are also allowed. Employer contributions are determined at the discretion of the Company's Board of Directors. For the years ended December 31, 1996 and 1995, the Company contributed an amount equal to 25% of each participant's contributions, limited to 10% of the individual participant's annual compensation. Forfeited matching contributions revert to the Company and may be used in the following year to reduce the amount the Company must contribute for the matching contribution. Participant Accounts - Each participant's account is credited with the participant's contributions and an allocation of (a) the Company's contributions and (b) Plan earnings. Vesting - Participants are immediately vested as to participant contributions and earnings thereon. Vesting in the remainder of their accounts is based on years of continuous employment. Participants are fully vested after seven years of employment, attainment of age 65, or if employment is terminated by disability or death, regardless of years of service. Upon employee termination, all nonvested amounts will be forfeited. Spin-Off - During 1996, the Union Pacific Corporation spun off Union Pacific Resource Group. Each Plan participant's account received 0.846946 shares of Union Pacific Resource Group common stock for each share of Union Pacific common stock held in the account. Participants are not allowed to make additional purchases of Union Pacific Resource Group common stock. Investment Options - Participants may direct the investment of their accounts in any of the following seven investment options: Vanguard Windsor II - Funds are invested with a growth and income objective in common stocks. Vanguard Investment Contract Trust - Funds are invested in contracts issued by insurance companies and banks, and in similar types of fixed income investments. Vanguard Index Trust 500 Portfolio - Funds are invested in all of the stocks included in the Standard & Poor's 500 Index. 5 Vanguard International Growth Portfolio - Funds are invested in potential growth companies based outside of the United States. Union Pacific Company Stock Fund - Funds are invested in common stock of Union Pacific Corporation. Union Pacific Resource Group Stock Fund- Funds are invested in common stock of Union Pacific Resource Group, Inc. Vanguard Total Bond Market Fund - Funds are invested in corporate bonds. Investment decisions may be changed on a daily basis. Payment of Benefits - On termination of employment or attainment of age 65, whichever is later, a participant may elect to receive the benefit in one of the following forms: (1) a lump-sum amount equal to the value of the vested portion of the participant's account; (2) installments, payable at least annually over a period of years determined by the Plan's Administrative Committee; (3) a nontransferable annuity contract providing for a monthly guaranteed income for a specified number of years; or (4) a combination of the above. 2. SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting - The financial statements of the Plan are prepared under the accrual method of accounting. Payment of Benefits - Benefits are recorded when paid. Investments are stated at fair value as determined by quoted market prices except for the Vanguard Investment Contract Trust, which is stated at contract value, and participant loans, which are stated at face value. Administrative expenses of the Plan are paid by the Company. 3. PARTICIPANT LOANS The Plan permits participants to borrow against the lesser of 50% of the vested portion of their account balance, or 100% of their before-tax contribution amount, to a maximum of $50,000. The loans bear interest at prime rate plus 1% and are payable over a maximum five-year period. Loan repayment generally is made through payroll deductions. 4. PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants immediately become fully vested. 5. ASSETS OF TERMINATED EMPLOYEES At December 31, 1996 and 1995, approximately $24,000 and $265,000, respectively, of vested Plan assets were payable to terminated employees who have withdrawn from participation in the Plan. 6 6. INCOME TAX STATUS A favorable determination letter has been received from the Internal Revenue Service as to the qualified status of the Plan as amended through December 15, 1994. Therefore, management believes the Plan was qualified and tax-exempt as of and for the years ended December 31, 1996 and 1995. Accordingly, no provision for federal or state income taxes has been made. 7. INVESTMENT CONTRACT ACCOUNTS The Plan maintains contract accounts with Vanguard Group, Incorporated in its Investment Contract Account. The Plan's investment contract accounts are fully benefit responsive and therefore have been presented in the financial statements at contract value. The fair value of the Plan's investment contract accounts approximate the contract value at December 31, 1996. The average yield on investment contract accounts for the year ended December 31, 1996 and 1995 was 6.07% and 6.23%, respectively. The average crediting interest rates for the respective years were 6.00% and 6.12%. 8. FUND INFORMATION Contributions, benefit payments and investment income by fund for the years ended December 31, 1996 and 1995 are as follows: 1996 1995 ---------- ---------- Contributions: Employee Contributions: Vanguard Windsor II $ 351,478 $ 277,426 Vanguard Investment Contract Trust 212,402 209,279 Vanguard Index Trust 500 Portfolio 318,753 249,402 Vanguard International Growth Portfolio 251,915 258,342 Union Pacific Company Stock Fund 233,849 212,921 Union Pacific Resource Group Stock Fund -- -- Vanguard Total Bond Market Fund 141,429 127,843 ---------- ---------- $1,509,826 $1,335,213 ========== ========== Employer matching contributions: Vanguard Windsor II $ 82,560 $ 67,346 Vanguard Investment Contract Trust (43,293) 35,073 Vanguard Index Trust 500 Portfolio 71,051 60,600 Vanguard International Growth Portfolio 61,064 61,075 Union Pacific Company Stock Fund 54,851 50,568 Union Pacific Resource Group Stock Fund -- -- Vanguard Total Bond Market Fund 34,596 30,717 ---------- ---------- $ 260,829 $ 305,379 ========== ========== 7 1996 1995 ---------- ---------- Benefit payments: Vanguard Windsor II $ 171,898 $ 250,171 Vanguard Investment Contract Trust 204,618 160,078 Vanguard Index Trust 500 Portfolio 166,416 98,296 Vanguard International Growth Portfolio 146,338 304,165 Union Pacific Company Stock Fund 132,546 159,252 Union Pacific Resource Group Stock Fund 10,528 -- Vanguard Total Bond Market Fund 62,011 25,536 Participant loans 50,048 31,288 ---------- ---------- $ 944,403 $1,028,786 ========== ========== Investment income: Vanguard Windsor II $ 371,776 $ 346,362 Vanguard Investment Contract Trust 71,316 70,647 Vanguard Index Trust 500 Portfolio 243,011 226,727 Vanguard International Growth Portfolio 136,962 109,739 Union Pacific Company Stock Fund 194,511 256,554 Union Pacific Resource Group Stock Fund 82,864 -- Vanguard Total Bond Market Fund 23,098 76,986 Participant loans 25,084 15,159 ---------- ---------- $1,148,622 $1,102,174 ========== ========== * * * * * 8 SKYWAY RETIREMENT SAVINGS PLAN ITEM 27a - SUPPLEMENTAL SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 1996 - ------------------------------------------------------------------------------ Number Market of Units Cost Value Vanguard Windsor II 88,260 $ 371,776 $ 346,362 Vanguard Investment Contract Trust 1,136,733 71,316 70,647 Vanguard Index Trust 500 Portfolio 20,937 243,011 226,727 Vanguard International Growth Portfolio 69,559 136,962 109,739 Union Pacific Company Stock Fund 1 86,029 194,511 256,554 Union Pacific Resource Group Stock Fund 1 30,550 82,864 - Vanguard Total Bond Market Fund 65,496 23,098 76,986 Participant loans 2 - 25,084 15,159 1 Represents a party-in-interest. 2 Consists of 120 individual loans with interest at prime plus 1% and terms ranging from one to five years. 9
SKYWAY RETIREMENT SAVINGS PLAN ITEM 27d - SUPPLEMENTAL SCHEDULE OF REPORTABLE PLAN TRANSACTIONS* YEAR ENDED DECEMBER 31, 1996 - ------------------------------------------------------------------------------------------- Cost Proceeds Gain Vanguard Windsor II (67 Transactions) $919,197 Vanguard Investment Contract Trust (107 Transactions) 620,237 Vanguard Index Trust 500 Portfolio (67 Transactions) 581,083 Vanguard International Growth Portfolio (50 transactions) 433,830 Union Pacific Company Stock Fund (51 transactions) 340,186 Vanguard Investment Contract Trust (83 Transactions) $712,346 $ 712,346 $ -- Vanguard Windsor II (87 Transactions) 326,902 381,197 $ 54,295 Vanguard Index Trust 500 Portfolio (86 Transactions) 271,489 331,855 60,366 * Reportable Plan transactions are defined as transactions that exceed 5% of the fair market value of Plan assets at the beginning of the year.
EX-99.D 6 EXHIBIT 99(D) COVER Exhibit 99(d) UNION PACIFIC AGREEMENT EMPLOYEE 401(k) RETIREMENT THRIFT PLAN Financial Statements and Supplemental Schedules for the Years Ended December 31, 1996 and 1995 and Independent Auditors' Report INDEX UNION PACIFIC AGREEMENT EMPLOYEE 401(k) RETIREMENT THRIFT PLAN TABLE OF CONTENTS - --------------------------------------------------------------------- Page INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS AS OF DECEMBER 31, 1996 AND 1995 AND FOR THE YEARS THEN ENDED: Statements of Net Assets Available for Benefits 2 Statements of Changes in Net Assets Available for Benefits 3 Notes to Financial Statements 4-8 SUPPLEMENTAL SCHEDULES AS OF DECEMBER 31, 1996 AND FOR THE YEAR THEN ENDED: Item 27a - Schedule of Assets Held for Investment Purposes 9 Item 27d - Schedule of Reportable Transactions 10 Schedules not filed herewith are omitted because of the absence of the conditions under which they are required. 1 INDEPENDENT AUDITORS' REPORT Union Pacific Agreement Employee 401(k) Retirement Thrift Plan: We have audited the accompanying statements of net assets available for benefits of the Union Pacific Agreement Employee 401(k) Retirement Thrift Plan (the Plan) as of December 31, 1996 and 1995 and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 1996 and 1995 and the changes in net assets available for benefits for the years then ended in conformity with generally accepted accounting principles. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules listed in the Table of Contents are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These schedules are the responsibility of the Plan's management. Such schedules have been subjected to the auditing procedures applied in the audit of the basic 1996 financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole. /s/ DELOITTE & TOUCHE LLP Omaha, Nebraska June 4, 1997 2 UNION PACIFIC AGREEMENT EMPLOYEE 401(k) RETIREMENT THRIFT PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1996 AND 1995 - --------------------------------------------------------------------- 1996 1995 ----------- ----------- ASSETS: Investments at fair value (Note 3) $92,719,672 $55,139,991 ----------- ----------- Net assets available for benefits $92,719,672 $55,139,991 =========== =========== The accompanying notes are an integral part of these financial statements. 3 UNION PACIFIC AGREEMENT EMPLOYEE 401(k) RETIREMENT THRIFT PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 - --------------------------------------------------------------------- 1996 1995 ----------- ----------- ADDITIONS TO NET ASSETS ATTRIBUTED TO: Investment income (Note 7): Net appreciation in fair value of investments (Note 3) $10,564,969 $ 9,657,059 Interest 330,166 234,540 Dividends 3,212,755 1,451,500 ----------- ----------- 14,107,890 11,343,099 Employee contributions (Note 7) 24,829,233 16,805,417 ----------- ----------- Total Additions 38,937,123 28,148,516 ----------- ----------- DEDUCTION FROM NET ASSETS ATTRIBUTED TO: Distribution to participants (Note 7) 1,357,442 943,344 ----------- ----------- NET INCREASE 37,579,681 27,205,172 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of Year 55,139,991 27,934,819 ----------- ----------- End of Year $92,719,672 $55,139,991 =========== =========== The accompanying notes are an integral part of these financial statements. 4 UNION PACIFIC AGREEMENT EMPLOYEE 401(k) RETIREMENT THRIFT PLAN NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1996 AND 1995 - --------------------------------------------------------------------- 1. DESCRIPTION OF PLAN The following description of the Union Pacific Agreement Employee 401(k) Retirement Thrift Plan (the Plan) provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. General - The Plan is a defined contribution plan covering employees of the Union Pacific Railroad Company and its Railroad affiliates (the Company) who are represented for the purposes of collective bargaining by a rail union, to which eligibility to participate in the plan has been extended. The Plan covers employees who have completed one year of service or were employees as of the effective date of the Plan, July 1, 1990. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended. Contributions - Participants may contribute 2% to 8% of their compensation on a salary deferral basis subject to limitations specified in the Internal Revenue Code. The Company does not contribute to the Plan. Participant Accounts - Each participant account is credited with the participant's contributions and an allocation of the Plan's earnings. Allocations are based on participant account balances. Vesting - Participants are at all times 100% vested in the value of their account. Payment of Benefits - Distribution of benefits shall be in a lump sum no later than 60 days following the close of the plan year in which the participant's termination of employment occurs, subject to certain mandatory pay-outs to participants who have attained age 70-1/2, but have not yet terminated employment. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting - The accounts of the Plan have been prepared in accordance with generally accepted accounting principles. The financial statements were prepared in accordance with the financial reporting requirements of ERISA as permitted by the Securities and Exchange Commission's amendments to Form 11-K adopted during 1990. Investment Valuation and Income Recognition - Investments in the Union Pacific Company Stock Fund, Resources Stock Fund, Vanguard Wellington Fund, Vanguard Index Trust-500 Portfolio Fund, Vanguard U.S. Growth Fund, Vanguard International Growth Portfolio Fund and the Vanguard Total Bond Market Fund are valued at fair value as determined by quoted market prices. The investments in the Vanguard Investment Contract Trust Fund are valued at fair value as determined by Vanguard Fiduciary Trust Company. 5 Dividend income is recorded as of the ex-dividend date. Security transactions are recorded as of the trade date. 3. INVESTMENTS Plan participants may direct their contributions in various proportions to any of the seven available investment funds identified below: Fund A - Union Pacific Company Stock Fund - This fund is administered as a separate account by Vanguard Fiduciary Trust Company and invests primarily in the stock of Union Pacific Corporation. It also maintains a small cash position invested in Vanguard Money Market Reserves, to facilitate transactions. The Company stock fund is divided into fund shares, rather than shares of company stock. Fund B - Vanguard Wellington Fund - This fund consists of investment in the Vanguard Wellington Mutual Fund. Fund C - Vanguard Index Trust-500 Portfolio Fund - This fund consists of investment in the Vanguard Index Trust-500 Portfolio Mutual Fund. Fund D - Vanguard Investment Contract Trust Fund - This fund consists of investment in the Vanguard Fiduciary Trust Company Investment Contract Trust, a collective investment fund for tax- qualified pension and profit sharing plan assets. Fund E - Vanguard U.S. Growth Fund - This fund consists of investment in the Vanguard U.S. Growth Mutual Fund. Fund F - Vanguard International Growth Portfolio Fund - This fund consists of investment in the Vanguard International Growth Portfolio Mutual Fund. Fund G - Vanguard Total Bond Market Fund - This fund consists of investment in the Vanguard Total Bond Market Mutual Fund. In September 1996, The Company's Board of Directors declared a special dividend consisting of the shares of Union Pacific Resources Group ("Resources") common stock owned by the Company ("the Spin-Off"). As a result of the Spin-Off, each of the Company's stockholders received 0.846946 of a share of Resources common stock for each share of Company common stock held by such shareholders at the September 26, 1996 record date for the distribution. Therefore, each Plan participant's account received 0.846946 of a share of Resources common stock for each share of Company common stock held in the account. The shares received have been placed in the Resources Stock Fund ("Resources Stock"). Future contributions to Resources Stock Fund are not permitted. 6
The following table presents the fair value of investments. Investments that represent 5% or more of the Plan's net assets are separately identified. December 31, 1996 December 31, 1995 ---------------------------- ---------------------------- Number Fair Number Fair of Units Value of Units Value ------------- ------------- ------------- ------------- Investments at Fair Value Determined by Quoted Market Price: Union Pacific Company Stock Fund $1,455,658.553 $14,352,794 1,016,452.978 $11,018,350 Resources Stock Fund 493,540.126 5,177,236 -- -- Vanguard Wellington Fund 845,091.198 22,099,135 611,225.539 14,932,240 Vanguard Index Trust - 500 Portfolio Fund 499,790.113 34,565,484 368,706.110 21,237,472 Vanguard U.S. Growth Fund 202,362.143 4,804,077 48,688.571 990,812 Other -- 4,706,223 -- 2,181,244 ----------- ----------- 85,704,949 50,360,118 ----------- ----------- Investments at Estimated Fair Value: Vanguard Investment Contract Trust Fund 7,014,723.420 7,014,723 4,779,873.470 4,779,873 ----------- ----------- $92,719,672 $55,139,991 =========== ===========
7 During 1996 and 1995 the Plan's investment (including investments bought, sold, and held during the year), appreciated in value by $10,564,969 and $9,657,059 respectively as follows: Year Ended December 31, ---------------------------- Net Change in Fair Value 1996 1995 Investments at Fair Value as Determined by Quoted Market Price: Union Pacific Company Stock Fund $ 2,927,426 $ 2,656,355 Resources Stock Fund 979,849 -- Mutual Funds 6,657,694 7,000,704 ----------- ----------- Net change in fair value $10,564,969 $ 9,657,059 =========== =========== 4. PLAN ADMINISTRATION The Plan is administered by the Senior Vice President, Human Resources of the Corporation. All expenses incurred in the administration of the Plan are paid by the Company. 5. TAX STATUS The Plan obtained a tax determination letter dated July 27, 1995, in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code (the Code). The Plan has been amended since receiving the determination letter. However, Plan management believes that the Plan currently is being operated in compliance with the applicable requirement of the Internal Revenue Code. Therefore, it is believed that the Plan was qualified and the related trust was tax-exempt under provisions of Section 501(a) of the Internal Revenue Code as of the financial statement date. Therefore, no provision for income taxes has been included in the Plan's financial statements. 6. PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan at any time, to terminate the Plan subject to the provisions of ERISA. Regardless of such actions, the principal and income of the Plan remains for the exclusive benefit of the Plan's participants and beneficiaries. The Company may direct the Trustee either to distribute the Plan's assets to the participants, or to continue the Trust and distribute benefits as though the Plan had not been terminated. 8 7. FUND INFORMATION Investment income, contributions, and distributions to participants by fund are as follows for the years ended December 31, 1996 and 1995: Year Ended Year Ended December 31, December 31, 1996 1995 ------------- -------------- Investment Income: Union Pacific Company Stock Fund $ 3,271,547 $ 2,906,421 Resources Stock Fund 979,849 -- Vanguard Wellington Fund 2,821,356 3,049,684 Vanguard Index Trust - 500 Portfolio Fund 5,730,512 4,783,462 Vanguard Investment Contract Trust Fund 330,166 234,540 Vanguard U.S. Growth Fund 553,670 155,034 Vanguard International Growth Portfolio Fund 400,405 193,334 Vanguard Total Bond Market Fund 20,385 20,624 ----------- ----------- $14,107,890 $11,343,099 =========== =========== Contributions: Union Pacific Company Stock Fund $ 4,741,092 $ 3,538,563 Resources Stock Fund -- -- Vanguard Wellington Fund 5,981,467 4,410,060 Vanguard Index Trust - 500 Portfolio Fund 8,406,639 5,850,039 Vanguard Investment Contract Trust Fund 1,847,997 1,539,332 Vanguard U.S. Growth Fund 1,752,820 424,127 Vanguard International Growth Portfolio Fund 1,736,846 932,616 Vanguard Total Bond Market Fund 362,372 110,680 ----------- ----------- $24,829,233 $16,805,417 =========== =========== Distributions to participants: Union Pacific Company Stock Fund $ 274,615 $ 177,571 Resources Stock Fund 15,538 -- Vanguard Wellington Fund 396,073 213,372 Vanguard Index Trust - 500 Portfolio Fund 461,026 387,928 Vanguard Investment Contract Trust Fund 152,800 128,888 Vanguard U.S. Growth Fund 12,101 7,040 Vanguard International Growth Portfolio Fund 42,826 24,705 Vanguard Total Bond Market Fund 2,463 3,840 ----------- ----------- $ 1,357,442 $ 943,344 =========== =========== 8. RELATED PARTY TRANSACTIONS Plan investments include the Union Pacific Company Stock Fund which is invested primarily in the Stock of Union Pacific Corporation. Union Pacific Corporation is the holding Company of the Plan sponsor and, therefore, these transactions qualify as party-in-interest. The Plan also invests in various funds managed by Vanguard Fiduciary Trust Company. Vanguard Fiduciary Trust Company is the trustee as defined by the Plan and, therefore, the related transactions qualify as party-in-interest. 9
UNION PACIFIC AGREEMENT EMPLOYEE 401(k) RETIREMENT THRIFT PLAN Item 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 1996 - ---------------------------------------------------------------------------------------- Column B Column C Column D Column E Description of Investment, Identity of Issue, Including Collateral, Rate Borrower, Lessor of interest, Maturity Date, Current or Similar Party Par or Maturity Value Cost Value Union Pacific Company Stock Fund * 1,455,658.533 units $10,370,637 $14,352,794 Resources Stock Fund 493,540.126 units 4,218,899 5,177,236 Vanguard Wellington Fund * 845,091.198 units 19,108,500 22,099,135 Vanguard Index Trust - 500 Portfolio Fund * 499,790.113 units 25,707,974 34,565,484 Vanguard Investment Contract Trust Fund * 7,014,723.420 units 7,014,723 7,014,723 Vanguard U.S. Growth Fund * 202,362.143 units 4,526,779 4,804,077 Vanguard International Growth Portfolio Fund * 248,062.367 units 3,810,567 4,083,107 Vanguard Total Bond Market Fund * 63,324.862 units 619,445 623,116 ----------- ----------- $75,377,524 $92,719,672 =========== =========== * Represents a party-in-interest
10
UNION PACIFIC AGREEMENT EMPLOYEE 401(k) RETIREMENT THRIFT PLAN Item 27d - SCHEDULE OF REPORTABLE TRANSACTIONS YEAR ENDED DECEMBER 31, 1996 - ------------------------------------------------------------------------------------------------------------------ Series of Transactions, When Aggregated, Involving an Amount in Excess of 5% of the Current Value of Plan Assets: Column A Column B Column C Column D Column E Column F Column G Total Total Dollar Dollar Identity of Number of Number of Value of Value of Net Gain Party Involved Description of Asset Purchases Sales Purchases Sales or(Loss) Vanguard Fiduciary Trust Company * Union Pacific Company Stock Fund 161 210 $ 7,820,804 $3,037,434 $365,779 Vanguard Fiduciary Trust Company * Vanguard Wellington Fund 117 216 $ 7,990,143 $2,009,057 $297,241 Vanguard Fiduciary Vanguard Index Trust - 500 Portfolio Trust Company * Fund 196 207 $10,786,620 $2,489,185 $465,381 Vanguard Fiduciary Vanguard Investment Contract Trust 232 207 $ 4,793,851 $2,558,965 $ - Trust Company * Fund Vanguard Fiduciary Trust Company * Vanguard U.S. Growth Fund 209 119 $ 4,287,796 $ 691,292 $ 44,405 Vanguard Fiduciary Vanguard International Growth 169 142 $ 2,810,290 $ 897,357 $ 66,170 Trust Company * Portfolio Fund * Represents a party-in-interest
EX-99.E 7 EXHIBIT 99(E) COVER Exhibit 99(e) UNION PACIFIC MOTOR FREIGHT COMPANY AGREEMENT EMPLOYEE 401(k) RETIREMENT THRIFT PLAN Financial Statements and Supplemental Schedules for the Years Ended December 31, 1996 and 1995 and Independent Auditors' Report INDEX UNION PACIFIC MOTOR FREIGHT COMPANY AGREEMENT EMPLOYEE 401(k) RETIREMENT THRIFT PLAN TABLE OF CONTENTS - ------------------------------------------------------------------------ Page INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS AS OF DECEMBER 31, 1996 AND 1995 AND FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995: Statements of Net Assets Available for Benefits 2 Statements of Changes in Net Assets Available for Benefits 3 Notes to Financial Statements 4-9 SUPPLEMENTAL SCHEDULES AS OF DECEMBER 31, 1996 AND FOR THE YEAR THEN ENDED: Item 27a - Schedule of Assets Held for Investment Purposes 10 Item 27d - Schedule of Reportable Transactions 11 Schedules not filed herewith are omitted because of the absence of the conditions under which they are required. 1 INDEPENDENT AUDITORS' REPORT Union Pacific Motor Freight Company Agreement Employee 401(k) Retirement Thrift Plan: We have audited the accompanying statements of net assets available for benefits of the Union Pacific Motor Freight Company Agreement Employee 401(k) Retirement Thrift Plan (the Plan) as of December 31, 1996 and 1995 and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 1996 and 1995 and the changes in net assets available for benefits for the years ended December 31, 1996 and 1995 in conformity with generally accepted accounting principles. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules listed in the Table of Contents are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These schedules are the responsibility of the Plan's management. Such schedules have been subjected to the auditing procedures applied in the audit of the basic 1996 financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole. /s/ DELOITTE & TOUCHE LLP Omaha, Nebraska June 4, 1997 2 UNION PACIFIC MOTOR FREIGHT COMPANY AGREEMENT EMPLOYEE 401(k) RETIREMENT THRIFT PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1996 AND 1995 - --------------------------------------------------------------------- 1996 1995 ----------- ----------- ASSETS: Investments at fair value (Note 3) $305,267 $182,336 -------- -------- Net assets available for benefits $305,267 $182,336 ======== ======== The accompanying notes are an integral part of these financial statements. 3 UNION PACIFIC MOTOR FREIGHT COMPANY AGREEMENT EMPLOYEE 401(k) RETIREMENT THRIFT PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 - --------------------------------------------------------------------- 1996 1995 ----------- ----------- ADDITIONS TO NET ASSETS ATTRIBUTED TO: Investment income (Note 7): Net appreciation in fair value of investments (Note 3) $ 41,561 $ 32,848 Interest 1,324 779 Dividends 8,866 4,367 -------- -------- 51,751 37,994 Employee contributions (Note 7) 90,667 82,198 -------- -------- Total Additions 142,418 120,192 -------- -------- DEDUCTION FROM NET ASSETS ATTRIBUTED TO: Distribution to participants (Note 7) 19,487 21,739 -------- -------- NET INCREASE 122,931 98,453 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of Year 182,336 83,883 -------- -------- End of Year $305,267 $182,336 ======== ======== The accompanying notes are an integral part of these financial statements. 4 UNION PACIFIC MOTOR FREIGHT COMPANY AGREEMENT EMPLOYEE 401(k) RETIREMENT THRIFT PLAN NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 - --------------------------------------------------------------------- 1. DESCRIPTION OF PLAN The following description of the Union Pacific Motor Freight Company Agreement Employee 401(k) Retirement Thrift Plan (the Plan) provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. General - The Plan is a defined contribution plan covering employees of the Union Pacific Motor Freight Company (the Company) who are governed by a collective bargaining agreement entered into between the Company and a Union to which eligibility to participate in the plan has been extended, and have completed one year of service or were employees as of the effective date of the Plan, January 1, 1994. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended. Contributions - Participants may contribute 2% to 8% of their compensation on a salary deferral basis subject to limitations specified in the Internal Revenue Code. The Company does not contribute to the Plan. Participant Accounts - Each participant account is credited with the participant's contributions and an allocation of the Plan's earnings. Allocations are based on participant account balances. Vesting - Participants are at all times 100% vested in the value of their account. Payment of Benefits - Distribution of benefits shall be in a lump sum no later than 60 days following the close of the plan year in which the participant's termination of employment occurs, subject to certain mandatory pay-outs to participants who have attained age 70-1/2, but have not yet terminated employment. 2. SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting - The accounts of the Plan have been prepared in accordance with generally accepted accounting principles. The financial statements were prepared in accordance with the financial reporting requirements of ERISA as permitted by the Securities and Exchange Commission's amendments to Form 11-K adopted during 1990. Investment Valuation and Income Recognition - Investments in the Union Pacific Company Stock Fund, Resources Stock Fund, Vanguard Wellington Fund, Vanguard Index Trust-500 Portfolio Fund, Vanguard U.S. Growth Fund, Vanguard International Growth Portfolio Fund and the Vanguard Total Bond Market Fund are valued at fair value as determined by quoted market prices. The investments in the Vanguard Investment Contract Trust Fund are valued at fair value as determined by Vanguard Fiduciary Trust Company. 5 Dividend income is recorded as of the ex-dividend date. Security transactions are recorded as of the trade date. 3. INVESTMENTS Plan participants may direct their contributions in various proportions to any of the seven available investment funds identified below: Fund A - Union Pacific Company Stock Fund - This fund is administered as a separate account by Vanguard Fiduciary Trust Company and invests primarily in the stock of Union Pacific Corporation. It also maintains a small cash position invested in Vanguard Money Market Reserves, to facilitate transactions. The Resources stock fund is divided into fund shares, rather than shares of company stock. Fund B - Vanguard Wellington Fund - This fund consists of investment in the Vanguard Wellington Mutual Fund. Fund C - Vanguard Index Trust-500 Portfolio Fund - This fund consists of investment in the Vanguard Index Trust-500 Portfolio Mutual Fund. Fund D - Vanguard Investment Contract Trust Fund - This fund consists of investment in the Vanguard Fiduciary Trust Company Investment Contract Trust, a collective investment fund for tax- qualified pension and profit sharing plan assets. Fund E - Vanguard U.S. Growth Fund - This fund consists of investment in the Vanguard U.S. Growth Mutual Fund. Fund F - Vanguard International Growth Portfolio Fund - This fund consists of investment in the Vanguard International Growth Portfolio Mutual Fund. Fund G - Vanguard Total Bond Market Fund - This fund consists of investment in the Vanguard Total Bond Market Mutual Fund. In September 1996, The Company's Board of Directors declared a special dividend consisting of the shares of Union Pacific Resources Group ("Resources") common stock owned by the Company ("the Spin-Off"). As a result of the Spin-Off, each of the Company's stockholders received 0.846946 of a share of Resources common stock for each share of Company common stock held by such shareholders at the September 26, 1996 record date for the distribution. Therefore, each Plan participant's account received 0.846946 of a share of Resources common stock for each share of Company common stock held in the account. The shares received have been placed in the Resources Stock Fund ("Resources Stock"). Future contributions to Resources Stock Fund are not permitted. 6
The following table presents the fair value of investments. Investments that represent 5% or more of the Plan's net assets are separately identified. December 31, 1996 December 31, 1995 ---------------------------- ---------------------------- Number Fair Number Fair of Units Value of Units Value ------------- ------------- ------------- ------------- Investments at Fair Value Determined by Quoted Market Price: Union Pacific Company Stock Fund 9,832.248 $ 96,946 6,341.668 $ 68,743 Resources Stock Fund 3,303.817 $ 34,657 -- -- Vanguard Wellington Fund 1,946.050 50,889 1,413.295 34,527 Vanguard Index Trust - 500 Portfolio Fund 1,143.817 79,106 912.077 52,536 Other -- 19,381 -- 7,591 -------- -------- 280,979 163,397 Investments at Estimated Fair Value: Vanguard Investment Contract Trust Fund 24,287.800 24,288 18,939.220 18,939 -------- -------- $305,267 $182,336 ======== ========
7 Years Ended December 31, ---------------------------- Net Change in Fair Value 1996 1995 Investments at Fair Value as Determined by Quoted Market Price: Union Pacific Company Stock Fund $ 19,292 $ 16,158 Resources Stock Fund 6,960 -- Mutual Funds 15,309 16,690 -------- -------- Net change in fair value $ 41,561 $ 32,848 ======== ======== 4. PLAN ADMINISTRATION The Plan is administered by the Senior Vice President, Human Resources of the Corporation. All expenses incurred in the administration of the Plan are paid by the Company. 5. TAX STATUS The Plan obtained a tax determination letter dated September 16, 1994, in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code (the Code). The Plan has been amended since receiving the determination letter. However, Plan management believes that the plan currently is being operated in compliance with the applicable requirement of the Internal Revenue Code. Therefore, it is believed that the Plan was qualified and the related trust was tax-exempt under provisions of Section 501(a) of the Internal Revenue Code as of the financial statement date. Therefore, no provision for income taxes has been included in the Plan's financial statements. 6. PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan at any time, to terminate the Plan subject to the provisions of ERISA. Regardless of such actions, the principal and income of the Plan remains for the exclusive benefit of the Plan's participants and beneficiaries. The Company may direct the Trustee either to distribute the Plan's assets to the participants, or to continue the Trust and distribute benefits as though the Plan had not been terminated. 8 7. FUND INFORMATION Investment income, contributions, and distributions to participants by fund are as follows for the years ended December 31, 1996 and 1995: Year Ended Year Ended December 31, December 31, 1996 1995 ------------- -------------- Investment Income: Union Pacific Company Stock Fund $ 21,574 $ 17,714 Resources Stock Fund 6,960 -- Vanguard Wellington Fund 6,260 7,079 Vanguard Index Trust - 500 Portfolio Fund 13,347 11,745 Vanguard Investment Contract Trust Fund 1,324 779 Vanguard U.S. Growth Fund 1,332 107 Vanguard International Growth Portfolio Fund 884 550 Vanguard Total Bond Market Fund 70 20 -------- -------- $ 51,751 $ 37,994 ======== ======== Contributions: Union Pacific Company Stock Fund $ 32,459 $ 32,700 Resources Stock Fund -- -- Vanguard Wellington Fund 18,311 15,752 Vanguard Index Trust - 500 Portfolio Fund 22,102 21,093 Vanguard Investment Contract Trust Fund 8,292 7,364 Vanguard U.S. Growth Fund 4,909 1,088 Vanguard International Growth Portfolio Fund 3,104 3,740 Vanguard Total Bond Market Fund 1,490 461 -------- -------- $ 90,667 $ 82,198 ======== ======== Distributions to participants: Union Pacific Company Stock Fund $ 3,532 $ 8,744 Resources Stock Fund 259 -- Vanguard Wellington Fund 4,717 8,496 Vanguard Index Trust - 500 Portfolio Fund 10,303 4,239 Vanguard Investment Contract Trust Fund 676 -- Vanguard U.S. Growth Fund -- 68 Vanguard International Growth Portfolio Fund -- 192 Vanguard Total Bond Market Fund -- -- -------- -------- $ 19,487 $ 21,739 ======== ======== 9 8. RELATED PARTY TRANSACTIONS Plan investments include the Union Pacific Company Stock Fund which is invested primarily in the Stock of Union Pacific Corporation. Union Pacific Corporation is the holding Company of the Plan sponsor and, therefore, these transactions qualify as party-in-interest. The Plan also invests in various funds managed by Vanguard Fiduciary Trust Company. Vanguard Fiduciary Trust Company is the trustee as defined by the Plan and, therefore, the related transactions qualify as party-in-interest. 9. SUBSEQUENT EVENTS On March 1, 1997, the Company was purchased by Rail Terminal Services. 10
UNION PACIFIC MOTOR FREIGHT COMPANY AGREEMENT EMPLOYEE 401(k) RETIREMENT THRIFT PLAN Item 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 1996 - ------------------------------------------------------------------------------------- Column B Column C Column D Column E Description of Investment, Identity of Issue, Including Collateral, Rate Borrower, Lessor of interest, Maturity Date Current or Similar Party or Maturity Value Cost Value Union Pacific Company Stock Fund * 9,832.248 units $ 68,990 $ 96,946 Resources Stock Fund 3,303.817 units 27,758 34,657 Vanguard Wellington Fund * 1,946.050 units 45,072 50,899 Vanguard Index Trust - 500 Portfolio Fund * 1,143.817 units 60,091 79,106 Vanguard Investment Contract Trust Fund * 24,287.800 units 24,288 24,288 Vanguard U.S. Growth Fund * 449.003 units 10,043 10,659 Vanguard International Growth Portfolio Fund * 405.792 units 6,128 6,679 Vanguard Total Bond Market Fund * 207.535 units 2,038 2,043 -------- -------- $244,408 $305,267 ======== ======== * Represents a party-in-interest
11
UNION PACIFIC MOTOR FREIGHT COMPANY AGREEMENT EMPLOYEE 401(k) RETIREMENT THRIFT PLAN Item 27d - SCHEDULE OF REPORTABLE TRANSACTIONS YEAR ENDED DECEMBER 31, 1996 - ----------------------------------------------------------------------------------------------------------------- Series of Transactions, When Aggregated, Involving an Amount in Excess of 5% of the Current Value of Plan Assets: Column A Column B Column C Column D Column E Column F Column G Total Total Dollar Dollar Identity of Number of Number of Value of Value of Net Gain Party Involved Description of Asset Purchases Sales Purchases Sales or (Loss) Vanguard Fiduciary Union Pacific Company Trust Company * Stock Fund 30 6 $46,841 $9,793 $ 834 Vanguard Fiduciary Vanguard Wellington Trust Company * Fund 29 5 $22,915 $9,015 $ 934 Vanguard Fiduciary Vanguard Index Trust Trust Company * 500 Portfolio Fund 29 5 $26,891 $12,008 $1,572 Vanguard Investment Vanguard Investment Trust Company * Contract Trust Fund 41 5 $15,251 $9,902 $ -- * Represents a party-in-interest
EX-99.F 8 EXHIBIT 99(F) COVER Exhibit 99(f) CHICAGO AND NORTH WESTERN RAILWAY COMPANY PROFIT SHARING AND RETIREMENT SAVINGS PROGRAM Financial Statements and Supplemental Schedules for the Years Ended December 31, 1996 and 1995 and Independent Auditors' Report INDEX CHICAGO AND NORTH WESTERN RAILWAY COMPANY PROFIT SHARING AND RETIREMENT SAVINGS PROGRAM TABLE OF CONTENTS ______________________________________________________________________________ Page INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS AS OF DECEMBER 31, 1996 AND 1995 AND FOR THE YEARS THEN ENDED: Statements of Net Assets Available for Benefits 2 Statements of Changes in Net Assets Available for Benefits 3 Notes to Financial Statements 4-11 SUPPLEMENTAL SCHEDULES AS OF DECEMBER 31, 1996 AND FOR THE YEAR THEN ENDED: Item 27a - Schedule of Assets held for Investment Purposes 12 Item 27d - Schedule of Reportable Transactions 13 Additional supplemental schedules required by the Employee Retirement Income Security Act of 1974 are disclosed separately in Master Trust reports filed with the Department of Labor or are omitted because of the absence of conditions under which they are required. 1 INDEPENDENT AUDITORS' REPORT Chicago and North Western Railway Company Profit Sharing and Retirement Savings Program Committee We have audited the accompanying statements of net assets available for benefits of the Chicago and North Western Railway Company Profit Sharing and Retirement Savings Program (the Program) as of December 31, 1996 and 1995, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Program's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Program as of December 31, 1996 and 1995, and the changes in net assets available for benefits for the years then ended in conformity with generally accepted accounting principles. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules listed in the Table of Contents are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These schedules are the responsibility of the Program's management. Such schedules have been subjected to the auditing procedures applied in the audit of the basic 1996 financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole. /s/ DELOITTE & TOUCHE LLP Omaha, Nebraska June 10, 1997 2 CHICAGO AND NORTH WESTERN RAILWAY COMPANY PROFIT SHARING AND RETIREMENT SAVINGS PROGRAM STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1996 AND 1995 ______________________________________________________________________________ 1996 1995 ------------ ------------ ASSETS CASH AND SHORT TERM INVESTMENTS $ -- $ 2,181,488 ------------ ------------ INVESTMENTS, at fair value (Notes 3, 5, and 9) 101,413,931 78,230,963 INVESTMENTS, at contract value (Notes 3,6, and 9): Investment contract with insurance company 37,737,581 56,645,221 ------------ ------------ Total Investments 139,151,512 134,876,184 ------------ ------------ RECEIVABLES: Employer's contribution -- 5,717,530 Participants' contributions -- 107,898 Interest -- 1,174,864 ------------ ------------ Total Receivables -- 7,000,292 ------------ ------------ Total Assets 139,151,512 144,057,964 ------------ ------------ LIABILITIES ACCRUED EXPENSES -- 77,072 ------------ ------------ NET ASSETS AVAILABLE FOR BENEFITS $139,151,512 $143,980,892 ============ ============ The accompanying notes are an integral part of these financial statements. 3 CHICAGO AND NORTH WESTERN RAILWAY COMPANY PROFIT SHARING AND RETIREMENT SAVINGS PROGRAM STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 ______________________________________________________________________________ 1996 1995 ------------ ------------ ADDITIONS TO NET ASSETS ATTRIBUTABLE TO: Investment income (Note 9): Net appreciation in fair value of investments $ 12,828,800 $ 15,146,687 Interest and dividends 10,287,291 11,656,419 ------------ ------------ 23,116,091 26,803,106 ------------ ------------ Contributions (Note 9): Employer -- 5,937,720 Participants' -- 3,240,538 ------------ ------------ -- 9,178,258 ------------ ------------ Total Additions 23,116,091 35,981,364 ------------ ------------ DEDUCTIONS FROM NET ASSETS ATTRIBUTABLE TO: Distributions to participants (Note 9) 27,923,207 21,223,637 Administrative expenses -- 77,072 ------------ ------------ Total Deductions 27,923,207 21,300,709 ------------ ------------ TRANSFERS TO SUPPLEMENTAL PENSION PLAN 22,264 504,472 ------------ ------------ NET INCREASE (DECREASE) (4,829,380) 14,176,183 ------------- ------------ NET ASSETS AVAILABLE FOR BENEFITS: Beginning of Year 143,980,892 129,804,709 ------------ ------------ End of Year $139,151,512 $143,980,892 ============ ============ The accompanying notes are an integral part of these financial statements. 4 CHICAGO AND NORTH WESTERN RAILWAY COMPANY PROFIT SHARING AND RETIREMENT SAVINGS PROGRAM NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1996 AND 1995 ______________________________________________________________________________ 1. DESCRIPTION OF PROGRAM The following description of the Chicago and North Western Railway Company Profit Sharing and Retirement Savings Program (the Program), prior to the adoption of amendments as described in Note 2, provides only general information. Participants should refer to the Program document for a more complete description of the Program's provisions. General - The Program was initially established to provide retirement benefits to eligible employees of Chicago and North Western Railway Company (the Company) and other common control employers who adopt the Program. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended. Contributions - Participants may contribute up to 15% of their compensation on a salary or non-salary deferral basis subject to limitations specified in the Internal Revenue Code. The Company matches employee contributions at a rate of 20% computed on an amount up to the first 5% of the employee's salary contributed. This minimum employer contribution represents the first step in the method discussed below. The amount of the Company's annual contribution is determined based upon the Company's profit, or, if larger, based upon the amount of the employee contributions. Employer contributions are allocated on a four step basis, subject to Internal Revenue Code limitations: 1) The employer contribution is allocated to those employees making employee contributions by matching up to 20% of the amount of each participant's employee contributions for each Program year up to a maximum base of 5% of the employee's salary contributed; 2) If any employer contribution remains unallocated, such amount is allocated to employees in proportion to the amount by which their compensation (to the salary maximum) exceeds the wage base subject to Railroad Retirement Tax, as defined in Section 3121a of the Internal Revenue Code, with a maximum employer contribution up to 11.4% (or, up to 12% if IRS regulations permit) of such excess amount for each Program year; 3) If any employer contribution remains unallocated, such amount is allocated to employees making employee contributions by matching up to 20% of the amount of each participant's employee contributions for each Program year up to a maximum base of 5% of the employee's salary contributed; 4) If any employer contribution remains unallocated, such amount is allocated in proportion to each employee's total compensation (up to the salary maximum) for each Program year. As indicated above, step (2) in the employer contribution allocation formula can provide up to 11.4% of the pay received by a participant in excess of the Railroad Retirement Tax taxable wage base. This is the only step of the allocation formula which integrates with Railroad Retirement. 5 Participant Accounts - Each participant account is credited with the participant's contributions and an allocation of the Plan's earnings. Allocations are based on participant account balances. Vesting - A participant is fully vested if he/she: 1) Reached his/her 65th birthday; or 2) Is involuntarily terminated without cause as determined by the Program Administrator, in accordance with established Company policies if such termination occurs on or after his/her 60th birthday; or 3) Reached his/her 60th birthday and has at least 5 years of service; or 4) Has a disability or dies; or 5) Has a termination of employment on account of a force reduction; or 6) Has five years of service Payment of Benefits - Under the terms of the Program, benefits are to be paid in the form of a joint and survivor annuity. Assets of a participant's account may, as determined by the participant (with spousal consent when required), be paid to him/her in a lump sum or in installments. In order to provide a joint and survivor annuity (or single life annuity where spousal consent is obtained or there is no spouse) assets of the participant's account are transferred to the Chicago and North Western Railway Company Supplemental Pension Plan for payment of the annuity. The annuity may, at the option of the Program administrator, be purchased from a third party institution or paid from the assets of the Supplemental Pension Plan. 2. PROGRAM AMENDMENTS Effective October 24, 1995, the Program was amended such that, the Program was frozen effective December 31, 1995. No new participants were allowed in the Program after December 31, 1995. Except for contributions made in 1996 with respect to 1995 in the customary manner of the prior Program as in effect during 1995, there will be no contributions made to the Program after December 31, 1995. Effective January 1, 1995 participants were fully vested in amounts credited to their account. Effective July 15, 1996, the Program was amended and restated. Program investment options were increased from four to ten. The ten available options are the Union Pacific Common Stock Fund (Company Stock), the Union Pacific Equity Index Fund (Equity Index), the Union Pacific Fixed Income Fund (Fixed Income), the Vanguard Bond Market Fund (Bond Index), the Vanguard Market Reserves - Prime Portfolio Fund (VMMR Prime Portfolio), the Wellington Fund (Wellington), the Vanguard World Fund - U.S. Growth Portfolio (U.S. Growth), the Vanguard World Fund - International Growth Portfolio (International Growth), the Vanguard Windsor Fund (Windsor) and the NWNL Guaranteed Investment Contract Fund (NWNL GIC). In conjunction with the amendment and restatement, Program assets, except for the investment contract with our insurance company, were transferred to Vanguard Fiduciary Trust Company under a Master Trust Agreement. Loans to Participants - Effective September 1, 1996, participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their account balance. Loan transactions are treated as a transfer to (from) the investment fund from (to) the Loan Fund. Loan terms range from 1-5 years or up to 15 years for the purchase of a principle residence. The loans are secured by the 6 balance in the participant's account and bear interest at a rate commensurate with local prevailing rates as determined quarterly by the Plan administrator. Principal and interest is paid ratably, generally through monthly payroll deductions. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting - The accounts of the Program have been maintained in accordance with generally accepted accounting principles. The financial statements were prepared in accordance with the financial reporting requirements of ERISA as permitted by the Securities and Exchange Commission's amendments to Form 11-K adopted during 1990. Investment Valuation and Income Recognition - The Program's investments are stated at fair value except for its investment contract with an insurance company which is valued at contract value (Note 6). If available, quoted market prices are used to value investments. The amounts shown in Note 5 for securities that have no quoted market price represent estimated fair value as determined by Vanguard Fiduciary Trust Company. Purchases and sales of securities are recorded on the trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend basis. Administrative Expenses - All administrative expenses of the Program with the exception of investment management fees are paid by the Company. Investment management fees are paid by the Program. Reclassifications - Certain 1995 amounts have been reclassified to conform to the 1996 financial statement presentation. 4. RESOURCES STOCK FUND In September 1996, The Company's Board of Directors declared a special dividend consisting of the shares of Union Pacific Resources Group ("Resources") common stock owned by the Company ("the Spin-Off"). As a result of the Spin-Off, each of the Company's stockholders received 0.846946 of a share of Resources common stock for each share of Company common stock held by such shareholders at the September 26, 1996 record date for the distribution. Therefore, each Plan participant's account received 0.846946 of a share of Resources common stock for each share of Company common stock held in the Fund. The shares received have been placed in the Resources Stock Fund ("Resources Stock"). Future contributions to Resources Stock Fund are not permitted. 5. INVESTMENTS At December 31, 1996, Program investments were maintained in commingled funds of the Plan Trustee along with investments of another Company- administered Thrift Plan, within a Master Trust. Assets, liabilities, investment income, and security gains and losses are allocated monthly to the Plan based on its equity in the investments of the Master Trust. At December 31, 1996, the Program held percentage interests in the Master trust of 0.50 in Company Stock, 0.40 in Resources Stock, 100.0 in Windsor, 22.90 in Equity Index, 1.60 in Fixed Income, 8.10 in the Loan Fund, 2.50 in Wellington, 5.10 in U.S. Growth, 13.30 in the VMMR Prime Portfolio, 1.50 in International Growth, and 0.00 in Bond Index. At December 31, 1996, the total investments at fair value of the Master Trust was $577,591,251. In addition, total net appreciation in fair value of investments and total interest and dividends of the Master Trust were $86,837,354 and $28,728,709, respectively, for the year ended December 31, 1996. At December 31, 1996, Company Stock is invested primarily in Union Pacific Common Stock. Equity Index is invested in the Vanguard Index Trust 500 Portfolio Fund at December 31, 1996, which is designed to 7 closely track the investment performance of the Standard and Poors' 500 Composite Stock Index. At December 31, 1996, Fixed Income is comprised of investments in GICs bearing interest at 5.19% to 7.85%. Interest rates are fixed for the life of each contract. GICs are held with insurance companies rated at least A-1 by Standard & Poors. The maturities of these GICs range from 1-3 years and their principal and interest are unconditionally guaranteed by the respective insurance companies. The fair value of the GIC's approximates their contract value. At December 31, 1996, Fixed Income is also comprised of the Vanguard Investment Contract Trust, which is comprised of contracts issued by financial institutions and backed by high quality bonds and bond mutual funds. As the GICs expire, the proceeds will be reinvested in the Vanguard Investment Contract Trust. Wellington is invested in the Vanguard/Wellington Fund at December 31, 1996, which is comprised of common stocks and fixed-income securities. At December 31, 1996, U.S. Growth is invested in Vanguard U.S. Growth Fund which is comprised of established U.S. growth stocks. International Growth is invested in the Vanguard International Growth Portfolio at December 31, 1996, which is comprised of foreign common stocks with high growth potential. At December 31, 1996, Bond Index is invested in the Vanguard Total Bond Market Fund which is designed to closely track the investment performance of the Salomon Brothers Broad Investment-Grade Bond Index. At December 31, 1996, VMMR Prime Portfolio is a diversified money market investment fund invested and reinvested in high quality certificates of deposit, bankers' acceptances, commercial paper, U.S. Government securities, and other short-term obligations with the objective of preserving principal while providing income. At December 31, 1996, Windsor is invested in the Vanguard Windsor Fund, a diversified fund invested and reinvested primarily in shares of stocks of companies. At December 31, 1996, NWNL GIC is primarily invested in an investment contract with Northwestern National Life Insurance Company (See Note 6). At December 31, 1996, Resources Stock is invested primarily in Resources common stock. Prior to amendment effective July 15, 1996, Program participants could direct their contributions in various proportions to either Fund B or Fund C. Participant unmatched contributions prior to 1987 could be invested in either Fund D or Fund E, in accordance with participant directions. Fund B - Based upon Program guidelines, this Fund was invested in common stocks, similar equity securities, or other similar investments including, but not limited to, bank pooled or common funds, mutual funds or insurance company separate accounts. At December 31, 1995, assets in this Fund were invested primarily in Vanguard Windsor Fund Incorporated and Vanguard Index Trust 500 Portfolio mutual funds. Fund C - Based upon Program guidelines, this Fund was invested in contracts issued by an insurance company, and upon determination by the Board of Directors, could also include, but not be limited to, guaranteed income contracts, group annuity contracts, immediate participation guarantee contracts, or deposit administration contracts. At December 31, 1995, assets in this Fund were invested primarily in a guaranteed insurance contract with Northwestern National Life Insurance Company. Fund D - Based upon Program guidelines, this Fund was invested in the Windsor Fund maintained by the Vanguard Group of Investment Companies. Fund E - Based upon the Program guidelines, this Fund was invested primarily in the Vanguard Money Market Reserves Prime Portfolio. 8 Except for its investment contract with an insurance company included in the NWNL GIC fund at December 31, 1996 and included in Fund C at December 31, 1996 (Note 6), the following table presents the fair value of investments. Investments that represent 5% or more of the Program's net assets are separately identified.
December 31, 1996 December 31, 1995 ---------------------------- ---------------------------- Number Fair Number Fair of Units Value of Units Value Investments at Fair Value as Determined by Quoted Market Price: Vanguard Windsor Fund Incorporated -- $ -- 3,841,686 $55,819,700 Vanguard Index Trust 500 Portfolio -- -- 376,241 21,795,663 Common stock -- -- 9,250 410,469 ------------ ----------- -- 78,025,832 Investments at Estimated Fair Value: Program interest in Master Trust -- 101,413,931 -- -- Vanguard Money Market Reserves -- -- 205,131 205,131 ------------ ------------ $101,413,931 $78,230,963 ============ ============
9 6. INVESTMENT CONTRACT WITH INSURANCE COMPANY The Program has entered into a benefit responsive investment contract with Northwestern National Life Insurance Company (Northwestern National). This contract is included in the financial statements at contract value, which approximates fair value. Contract value represents contributions made under the contract, plus earnings, less Program withdrawals and administrative expenses. Northwestern National maintains the contributions in a pooled account. The crediting interest rate under this contract at December 31, 1996 and 1995, and for the years then ended was 7% and 8%, respectively. Under this contract a penalty may be incurred for early withdrawal from the contract by the plan sponsor, plan termination and various other employer initiated events. 7. TAX STATUS The Program obtained a tax determination letter dated April 16, 1996, in which the Internal Revenue Service stated that the Program, as amended through October 24, 1995, was in compliance with the applicable requirements of the Internal Revenue Code (the Code). The Program has been amended since receiving the determination letter. However, Program management believes that the program currently is being operated in compliance with the applicable requirement of the Internal Revenue Code. Therefore, it is believed that the Program was qualified and the related trust was tax-exempt under provisions of Section 501(a) of the Internal Revenue Code as of the financial statement date. Therefore, no provision for income taxes has been included in the Program's financial statements. 8. PROGRAM TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Program at any time, to terminate the Program subject to the provisions of ERISA. Regardless of such actions, the principal and income of the Program remains for the exclusive benefit of the Program's participants and beneficiaries. The Company may direct the Trustee either to distribute the Program's assets to the participants, or to continue the Trust and distribute benefits as though the Program had not been terminated. 10 9. FUND INFORMATION Net assets available for benefits, participant contributions, withdrawals and investment income by fund are as follows for the years ended December 31, 1996 and 1995: 1996 1995 ------------ ------------ Net assets available for benefits: Company stock $ 653,871 $ -- Equity index 27,110,164 -- Fixed income 1,482,186 -- Bond index 169 -- VMMR Prime Portfolio 304,040 -- Wellington 777,296 -- U.S. Growth 1,436,948 -- International Growth 371,142 -- Windsor 67,652,196 -- NWNL GIC 37,737,581 -- Resources stock 211,718 -- Loan Fund 1,414,201 -- Fund B -- 82,326,722 Fund C -- 60,388,841 Fund D and E -- 1,265,329 ------------ ------------ Total $139,151,512 $143,980,892 ------------ ------------ Employer contributions: Company stock $ -- $ -- Equity index -- -- Fixed income -- -- Bond index -- -- VMMR Prime Portfolio -- -- Wellington -- -- U.S. Growth -- -- International Growth -- -- Windsor -- -- NWNL GIC -- -- Resources stock -- -- Loan Fund -- -- Fund B -- 3,806,945 Fund C -- 2,130,775 Fund D and E -- -- ------------ ------------ Total $ -- $ 5,937,720 ------------ ------------ Participant's contributions: Company stock $ -- $ -- Equity index -- -- Fixed income -- -- Bond index -- -- VMMR Prime Portfolio -- -- Wellington -- -- U.S. Growth -- -- International Growth -- -- Windsor -- -- NWNL GIC -- -- Resources stock -- -- Loan Fund -- -- Fund B -- 2,175,610 Fund C -- 1,064,928 Fund D and E -- -- ------------ ------------ Total $ -- $ 3,240,538 ------------ ------------ 11 Distribution to participants: Company stock $ -- $ -- Equity index 277,582 -- Fixed income -- -- Bond index -- -- VMMR Prime Portfolio 17,424 -- Wellington -- -- U.S. Growth -- -- International Growth -- -- Windsor 714,074 -- NWNL GIC 1,259,788 -- Resources stock -- -- Loan Fund -- -- Fund B 13,724,297 10,506,455 Fund C 11,844,618 10,649,493 Fund D and E 85,424 67,689 ------------ ------------ Total $27,923,207 $21,223,637 ------------ ------------ Investment income: Company stock $ 116,708 $ -- Equity index 4,083,412 -- Fixed income 13,144 -- Bond index 181 -- VMMR Prime Portfolio 7,941 -- Wellington 38,184 -- U.S. Growth 55,671 -- International Growth 14,216 -- Windsor 10,918,491 -- NWNL GIC 993,921 -- Resources stock 3,873 -- Loan Fund 22,975 -- Fund B 4,885,681 21,814,453 Fund C 1,905,907 4,725,544 Fund D and E 55,786 263,109 ------------ ------------ Total $ 23,116,091 $ 26,803,106 ============ ============ 10.MERGER AGREEMENT On March 16, 1995, the Corporation executed a definitive merger agreement pursuant to which it acquired the remaining 71.6% of the Chicago and North Western Transportation Company's (CNW) stock. Under this agreement the Corporation initiated a tender offer on March 23, 1995 and completed the acquisition of the CNW on April 24, 1995. As a result of the acquisition, and effective April 24, 1995, the Program is being administered by the Senior Vice President, Human Resources of the Corporation. 11.RELATED PARTY TRANSACTIONS Program investments include the Union Pacific Company Stock Fund which is invested primarily in the Stock of Union Pacific Corporation. Union Pacific Corporation is the holding Company of the Program sponsor and, therefore, these transactions qualify as party-in-interest. The Plan also invests in various funds managed by Vanguard Fiduciary Trust Company and LaSalle National Trust. Vanguard Fiduciary Trust Company is the Trustee as defined by the Program and LaSalle National Trust was the Program Trustee prior to the appointment of Vanguard Fiduciary Trust Company; therefore, the related transactions qualify as party-in-interest. 12 CHICAGO AND NORTH WESTERN RAILWAY COMPANY PROFIT SHARING AND RETIREMENT SAVINGS PROGRAM Item 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES YEAR ENDED DECEMBER 31, 1996 ______________________________________________________________________________ Column B Column C Column D Column E Description of Investment Identity of Issue Including Collateral Rate of Borrower, Lessor Interest, Maturity Date Current or Similar Party or Maturity Value Cost Value Northwestern National Life Insurance Company Contract Group annuity contract fund No.GA-135969-1-0101 37,737,581 shares $37,737,581 $37,737,581 13
CHICAGO AND NORTH WESTERN RAILWAY COMPANY PROFIT SHARING AND RETIREMENT SAVINGS PROGRAM Item 27d - SCHEDULE OF REPORTABLE TRANSACTIONS YEAR ENDED DECEMBER 31, 1996 _____________________________________________________________________________________________________________________ Single Transactions Involving an Amount in Excess of 5% of the Current Value of Plan Assets: Column A Column B Column C Column D Column G Column H Column I Current Value of Asset on Identity of Purchase Selling Cost of Transaction Net Gain Party Involved Description of Asset Price Price Asset Date or (Loss) LaSalle National Trust * Short-Term Investment Fund $8,265,483 $ -- $8,265,483 $8,265,483 $ -- LaSalle National Trust * Short-Term Investment Fund $9,102,182 $ -- $9,102,182 $9,102,182 $ -- LaSalle National Trust * Short-Term Investment Fund $ -- $9,105,020 $9,105,020 $9,105,020 $ -- LaSalle National Trust * Short-Term Investment Fund $ -- $8,262,422 $8,262,422 $8,262,422 $ -- Northwestern National Life Insurance Company, Contract Group Annuity Contract #GA-13569-1-001 Fund $ -- $8,265,483 $8,265,483 $8,265,483 $ --
Series of Transactions, When Aggregated, Involving an Amount in Excess of %5 of the current Value of Plan Assets: Column A Column B Column C Column D Column E Column F Column G Dollar Dollar Identity of Number of Number Value of Value of Net Gain Party Involved Description of Asset Purchases of Sales Purchases Sales or(Loss) Vanguard Fiduciary Trust Company * Windsor Fund Incorporated 8 13 $10,979,015 $9,575,418 $1,307,354 Vanguard Fiduciary Trust Company * Index Trust 500 Portfolio 11 10 $ 6,065,435 $4,079,254 $1,001,804 Northwestern National Life Insurance Company Contract #GA-13569-1-001 Group Annuity Contract Fund 44 76 $6,177,865 $25,084,905 $ -- LaSalle National Trust * Short-Term Investment Fund 58 45 $50,890,874 $53,073,362 $ -- *Represents a party-in-interest
EX-99.G 9 EXHIBIT 99(G) COVER Exhibit 99(g) SOUTHERN PACIFIC RAIL CORPORATION THRIFT PLAN Financial Statements and Supplemental Schedules (Modified Cash Basis) December 31, 1996 and 1995 (With Independent Auditors' Report Thereon) INDEX SOUTHERN PACIFIC RAIL CORPORATION THRIFT PLAN Financial Statements and Supplemental Schedules (Modified Cash Basis) December 31, 1996 and 1995 Table of Contents Page Independent Auditors' Report 1 Consent of Independent Auditors 2 Statements of Net Assets Available for Plan Benefits (Modified Cash Basis) - December 31, 1996 and 1995 3 Statements of Changes in Net Assets Available for Plan Benefits (Modified Cash Basis) - Years ended December 31, 1996 and 1995 4 Notes to Financial Statements (Modified Cash Basis) 5-12 Supplemental Schedules - (Modified Cash Basis) Item 27a - Schedule of Assets Held for Investment Purposes (Modified Cash Basis) - December 31, 1996 Schedule 1 Item 27d - Schedule of Reportable Transactions (Modified Cash Basis) - Year ended December 31, 1996 Schedule 2 1 Independent Auditors' Report The Thrift Plan Committee Southern Pacific Rail Corporation Thrift Plan: We have audited the accompanying statements of net assets available for plan benefits (modified cash basis) of Southern Pacific Rail Corporation Thrift Plan (the Plan) as of December 31, 1996 and 1995, and the related statements of changes in net assets available for plan benefits (modified cash basis) for the years then ended, and the supplemental schedules as listed in the accompanying table of contents. These financial statements and supplemental schedules are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements and supplemental schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. As described in note 2(a), these financial statements and supplemental schedules were prepared on a modified cash basis of accounting, which is a comprehensive basis of accounting other than generally accepted accounting principles. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of Southern Pacific Rail Corporation Thrift Plan as of December 31, 1996 and 1995, and changes in net assets available for benefits for the years then ended, on the basis of accounting described in note 2(a). Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of (1) Item 27a - Schedule of Assets Held for Investment Purposes (Modified Cash Basis), and (2) Item 27d - Schedule of Reportable Transactions (Modified Cash Basis) are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ KPMG Peat Marwick LLP San Francisco, California June 20, 1997 2 SOUTHERN PACIFIC RAIL CORPORATION THRIFT PLAN Statements of Net Assets Available for Plan Benefits (Modified Cash Basis) December 31, 1996 and 1995 1996 1995 ------------ ------------ Assets: Investments, at fair value (Note 3): Common stock fund $ 2,707,119 2,148,384 Commingled funds 62,546,639 43,290,298 Short-term investments 4,443,075 3,010,085 ------------ ------------ 69,696,833 48,448,767 Investments, at contract value (note 3): Fixed income annuity contracts 118,576,813 127,786,622 ------------ ------------ Total investments 188,273,646 176,235,389 Receivable from broker 19,417 8,726 Investment income receivable 695,265 730,618 ------------ ------------ Total assets $188,988,328 $176,974,733 ------------ ------------ Liabilities: Unsettled stock sale 1,412 6,815 ------------ ------------ Net assets available for plan benefits $188,986,916 $176,967,918 ============ ============ See accompanying nots to financial statements 3 SOUTHERN PACIFIC RAIL CORPORATION THRIFT PLAN Statements of Changes in Net Assets Available for Plan Benefits (Modified Cash Basis) Years ended December 31, 1996 and 1995 1996 1995 ------------ ------------ Additions to net assets attributed to: Investment income: Interest $ 8,325,983 $ 8,929,902 Dividends 14,673 25 Net appreciation in fair value of investments (Note 3) 9,741,416 11,757,093 ------------ ------------ Total investment income 18,082,072 20,687,020 ------------ ------------ Contributions: Employer 2,816,930 2,908,910 Participants 6,507,155 6,645,656 ------------ ------------ Total contributions 9,324,085 9,554,566 ------------ ------------ Total additions 27,406,157 30,241,586 Deductions from net assets attributed to: Distributions to participants - cash 14,963,502 15,021,561 Distributions to participants - non-cash -- 10,649,546 Investment and administrative expenses 423,657 345,212 ------------ ------------ Total deductions 15,387,159 26,016,319 ------------ ------------ Increase in net assets available for plan benefits 12,018,998 4,225,267 Net assets available for plan benefits: Beginning of year 176,967,918 172,742,651 ------------ ------------ End of year $188,986,916 $176,967,918 ============ ============ See accompanying notes to financial statements. 4 SOUTHERN PACIFIC RAIL CORPORATION THRIFT PLAN Notes to Financial Statements (Modified Cash Basis) (1) Description of Plan (a) General The following description of the Southern Pacific Rail Corporation Thrift Plan (the Plan) is provided for general information purposes only. Participants should refer to the Plan document for a more complete description of the Plan's provisions. The Plan is a defined contribution plan which was established by Rio Grande Holding, Inc. (RGH) on January 1, 1982 as an individual account savings and investment plan for employees of RGH and its subsidiaries (the RGH participants). RGH is a wholly owned subsidiary of Southern Pacific Rail Corporation (SPRC). SPRC adopted the Plan and became its sponsor. SPRC and its subsidiaries that are participating in the Thrift Plan are collectively referred to as the Company. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Southern Pacific Transportation Company's employees not subject to a collective bargaining agreement and not paid on an hourly basis are eligible to participate in the Plan any time after the first anniversary of their employment if they have not incurred a break in service. In addition, certain employees which are currently covered under collective bargaining agreements who were previously not covered have been allowed to continue participation in the Plan. On February 1, 1994, the Plan amended its eligibility requirement, allowing new employees to participate immediately in the Thrift Plan and to accept rollovers. (b) Contributions Plan participants may elect to make employee contributions in an amount not less than 1% nor more than 16% of their salary. These contributions may be made on either an after-tax or a before-tax basis, or a combination of the two, provided the total contribution does not exceed the lesser of 16% of salary or the applicable Internal Revenue Code annual limitation of $9,500. The employer matches the first 3% of employee contributions (whether before-tax or after-tax) on a dollar-for- dollar basis. All contributions are subject to limitations imposed by the Internal Revenue Code such as those under Sections 401(a)(17), 401(k), 401(m), 402(g) and 415. (c) Participant's Accounts Each participant's account is credited with his or her own contributions, employer contributions and an allocation of the Plan's earnings (or losses) based on the type of investments selected and their performance. The allocation of earnings (or losses) is based on each participant's account balance by investment type. (d) Vesting Participant and employer contributions are fully vested when made. 5 SOUTHERN PACIFIC RAIL CORPORATION THRIFT PLAN Notes to Financial Statements (Modified Cash Basis) (e) Investment Options Upon enrollment in the plan, a participant may direct contributions in 1% increments in any of six investment options: Fixed Investment Fund - Funds are invested in high quality investment contracts with a diversified group of insurance companies, banks and other financial institutions. Value Equity Fund - Funds are invested in shares of the Invesco Retirement Trust Equity Fund (a trust company commingled fund). The fund primarily invests in common stocks and securities convertible into common stock. Balanced Fund - Funds are invested in shares of the Invesco Retirement Trust Flex Fund (a trust company commingled fund). The fund contains a mix of stocks and high quality bonds. International Equity Fund - Funds are invested in the Capital Guardian International (Non-U.S.) Equity Fund (a trust company commingled fund). The fund invests in a portfolio comprised primarily of securities of non-U.S. issuers and securities whose principal markets are outside of the United States. Stock Fund - Funds are invested in common stock of Union Pacific Rail Corporation. Growth Equity Fund - Funds are invested in shares of the Invesco Trust Company Common Stock Fund (a trust company commingled fund). The funds consists primarily of small and large capitalization stocks with strong earnings growth. Participants may change their investment options monthly. Effective December 31, 1994 SFP Stock and SFP subsidiary stock (which was held in the SFPAC stock fund) was eliminated from the plan as an investment option. Each participant whose account was invested in that fund was permitted to elect to withdraw, in kind, shares of stock with a fair market value equal to the total value allocated to the participants After-Tax Contributions Account and Company matching contributions account as of the date of withdrawal. All such shares not withdrawn were sold and the proceeds were invested in the Fixed Investment Fund. (f) Resources Stock Fund In September 1996, Union Pacific Corporation's (UPC) Board of Directors declared a special dividend consisting of the shares of Union Pacific Resources Group ("Resources") common stock owned by UPC ("the Spin-Off"). As a result of the Spin-Off, each of UPC's stockholders received 0.846946 of a share of Resources common stock for each share of UPC common stock held by such shareholders at the September 26, 1996 record date for the distribution. The shares were transferred at market value from the UPC Stock Fund to the Resources Stock Fund. Therefore, each Plan participant's account received 0.846946 of a share of Resources common stock for each share of UPC common stock held in the Fund. The shares received have been placed in the Resources Stock Fund ("Resources Stock"). Future contributions to Resources Stock Fund are not permitted. 6 SOUTHERN PACIFIC RAIL CORPORATION THRIFT PLAN Notes to Financial Statements (Modified Cash Basis) (g) Payment of Benefits Benefits are payable to a participant upon retirement, disability, death or termination of employment. Subject to certain hardship rules and limits, a participant may also withdraw employer or employee contributions under other circumstances. The benefit to which a participant is entitled is the benefit that can be provided from that participant's account net of any witholding for federal income taxes. (h) Investment Management Fee and Administrative Expenses In 1996 and 1995 respectively, the Plan paid investment management fees of $418,047 and $304,230. Administration expenses paid totaled $5,610 and $40,982 respectively. The majority of administrative expenses in both 1996 and 1995 were paid by the Company. (i) Plan Termination SPRC may terminate the Plan at any time. In the event of termination, Plan net assets will be allocated and distributed to the participants based on their respective account balances. (2) Summary of Significant Accounting Policies (a) Basis of Accounting The accounts of the Plan are maintained, and the accompanying financial statements and information have been prepared, on the cash basis modified to carry investments at fair value, and to reflect the accrual of investment income and brokerage transactions. Consequently, revenues and related assets are recognized when received rather than when earned except for investment carrying value, investment income and brokerage transactions and expenses are recognized when paid rather than when the obligation is incurred. Accordingly, the financial statements are not intended to present net assets available for plan benefits and changes in net assets available for plan benefits in accordance with generally accepted accounting principles. (b) Investment Valuation and Income Recognition The plan's assets are stated at fair value except for its investment contracts which are valued at contract value. Shares of commingled funds are valued at quoted market prices which represent the net asset value of shares held by the plan at year end. The stock is valued at its quoted market price. The investment contracts held in the fixed investment fund are fully benefit responsive and as such are valued at contract value. Contract value represents contributions made under the contract, plus earnings, less participant withdrawals. Purchases and sales of securities are recorded on a trade-date basis. Investment income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. The difference between cost and market value from one period to the next is recognized a net appreciation in fair value of investments in the accompanying state of changes in net assets available for benefits. (c) Use of Estimates The preparation of the financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. 7 SOUTHERN PACIFIC RAIL CORPORATION THRIFT PLAN Notes to Financial Statements (Modified Cash Basis) (3) Investments Chase Manhattan Bank, trustee of the plan, held the Plan's investments and executed transactions therein. The following table presents the fair value of the underlying investments at December 31, 1996 and 1995. Investments that represent 5% or more of the Plan's net assets are separately identified. December 31, -------------------------- 1996 1995 ------------ ------------ Fixed income annuity contracts, at contract value: Allstate Life Insurance Company: Group Annuity Contract No. 5572, 6.45%, April 1, 1999 $ 5,918,697 $ 5,560,072 Group Annuity Contract No. 5607, 7.32%, June 1, 1999 1,036,254 1,036,054 CDC Investment Management Company: Contract No. 114-01, 6.62%, April 15, 1998 5,088,226 5,088,338 Canada Life Assurance Company: Contract No. 45842, 7.17%, July 1, 1999 5,146,283 5,144,331 Commonwealth Life Insurance Co.: ADA-00288-ST, floating interest rate, perpetual with 30 day notice for termination 3,482,213 3,288,032 Continental Life Assurance Co.: Group Annuity Contract No. 12664, 8.51%, May 1, 1997 2,631,544 4,849,691 Group Annuity Contract No. 12750, 7.08%, March 29, 1996 -- 6,472,139 Group Annuity Contract No. 3000-11D, 7.86%, January 12, 1996 -- 93,425 John Hancock Mutual Life Insurance Co. Guaranteed Investment Contract No. 7942, 6.56%, May 1, 2004 5,450,114 5,113,392 Insurance Contract No. 7767, variable rate, February 1, 2000 3,014,309 502,272 *Indicates asset is greater than 5% of net assets available for plan benefits at beginning of the year. 8 SOUTHERN PACIFIC RAIL CORPORATION THRIFT PLAN Notes to Financial Statements (Modified Cash Basis) December 31, -------------------------- 1996 1995 ------------ ------------ Insurance Contract No. 8653, 6.54%, November 22, 1999 $ 5,046,206 $ -- Mass Mutual Insurance Co.: Guaranteed Investment Contract No. 10479, 6.88%, July 5, 2002 4,586,252 5,349,948 Guaranteed Investment Contract No. 10744, 6.11%, July 5, 2002 7,716,349 8,867,525 Metropolitan Life Insurance Co.: Group Annuity Contract No. 12500, 8.18%, September 2, 1996 -- 4,743,721 Group Annuity Contract No. 14018, 7.6%, January 2, 2001 3,313,839 2,140,405 New York Life Insurance Co.: Group Annuity Contract No. 06200, 8.35%, May 13, 1996 -- 5,230,423 Group Annuity Contract No. 06497, 6.98%, February 2, 1997 5,287,973 5,287,805 Group Annuity Contract No. 06497-004, 6.65%, October 31, 1995 6,008,666 -- Peoples Security Life Insurance Co.: Contract No. 00064TR-4, 7.87%, July 20, 1999 4,971,858 4,968,837 Contract No. 00064TR-3, 6.14%, February 25, 1998 3,950,794 4,881,605 Contract No. 00064TR-2, 6.45%, November 15, 2000 4,841,077 4,805,026 Contract No. 00064TR-1, 6.17%, May 17, 1999 4,906,845 4,869,542 Provident Life and Accident Insurance Co. Contract No. 630-05805*, 7.00%, various maturity dates through July 31, 1997 20,831,515 20,835,513 Prudential Insurance Co.: Group Annuity Contract No. 748715, 6.16%, September 30, 1998 1,236,058 2,046,495 Group Annuity Contract No. 7375, 7.31%, April 18, 1996 -- 6,382,539 Group Annuity Contract No. 7395-212, 7.05%, April 18, 1996 $ -- $ 4,425,824 *Indicates asset is greater than 5% of net assets available for plan benefits at beginning of the year. 9 December 31, -------------------------- 1996 1995 ------------ ------------ Prudential Investments - MBIA Group Annuity Contract No. 7375-211, 7.31%, July 25, 1997 $ 3,407,298 $ -- Group Annuity Contract No.7375-212 7.05%, December 1, 1998 4,737,845 -- Sun Life Assurance Co.: Contract No. S-0905-G, 7.28%, June 10, 1999 5,966,598 5,561,706 Traveler's Insurance Co.: Group Annuity Contract No. 13999, 8.20%, March 1, 1996 -- 241,962 ------------ ------------- Total fixed income annuity contracts 118,576,813 127,786,622 ------------ ------------ Common Stock Fund, at market value: Southern Pacific Rail Corporation -- 2,148,384 Union Pacific Corporation 2,078,341 -- Union Pacific Resources Group 628,778 -- ------------ ----------- Total common stock fund 2,707,119 2,148,384 ------------ ----------- Commingled Funds, at market value: Value Equity Fund: Invesco Institutional Series Trust Equity Fund* 34,779,427 26,940,068 Balanced Fund: Invesco Institutional Series Trust Flex Fund* 16,683,492 11,050,017 Growth Equity Fund: Invesco Common Stock Fund 7,495,640 3,156,291 International Equity Fund: CGTC International Non-U.S. Equity Record 3,588,080 2,143,922 ------------ ------------ Total commingled funds 62,546,639 43,290,298 ------------ ------------ Short term investments, at market value: Chase Temporary Investment Fund 4,443,075 3,010,085 ------------ ------------ Total investments $188,273,646 $176,235,389 ============ ============ *Indicates asset is greater than 5% of net assets available for plan benefits at beginning of the year. 10 SOUTHERN PACIFIC RAIL CORPORATION THRIFT PLAN Notes to Financial Statements (Modified Cash Basis) Net appreciation in the fair value of the Plan's investments (including investments bought, sold, as well as held during the year) for the years ended December 31, 1996 and 1995 is summarized as follows: 1996 1995 ----------- ----------- Common stock $ 695,489 $ 496,813 Commingled funds 9,045,927 11,260,278 ----------- ----------- $ 9,741,416 $11,757,091 =========== =========== (4) Tax Status The Plan was amended on April 9, 1995. This revision amended and restated the Plan to reflect changes required by the Tax Reform Act of 1986. The Plan received a favorable determination letter from the Internal Revenue Service on February 8, 1996 which stated that the Plan is qualified under the provisions of Section 401(a) of the Internal Revenue Code, as amended, and exempt from federal income taxes under Section 501(a). (5) Related Party Transaction Certain Plan investments are shares of temporary investment funds managed by Chase Manhattan Bank. Chase Manhattan Bank is the trustee as defined by the Plan, by the Plan and qualifies as a party-in-interest. Investment and administrative expenses paid to the trustee by the Plan amounted to $4,500 and $12,364 for the year ended December 31, 1996 and 1995, respectively. In addition, as of September 11, 1996 (the merger date) the Plan held stock issued by Union Pacific Corporation. Prior to the merger, the Plan held stock issued by the Plan sponsor, Southern Pacific Rail Corporation (Note 6). (6) Merger with Union Pacific On September 11, 1996, a subsidiary of Union Pacific Corporation (UPC) completed its acquisition of SPRC through an exchange of cash and UPC stock for all of the outstanding shares of SPRC not already owned by UPC. As a result, SPRC shares owned by the Plan were exchanged for a combination of cash and UPC stock. The 90,162 shares owned by the Plan were converted into 25,601 shares of UPC stock and $679,525 of cash was transferred to the Fixed Investment Fund. Also, the Plan was amended to permit Plan participants to invest in UPC stock to replace the previous option to invest in SPRC stock. Therefore, the common stock fund represents shares of UPC at December 31, 1996 and shares of SPRC at December 31, 1995. 11 SOUTHERN PACIFIC RAIL CORPORATION THRIFT PLAN Notes to Financial Statements (Modified Cash Basis) (7) Voluntary Compliance Resolution Applications In December of 1996, the Plan administrator filed a Voluntary Compliance Resolution (VCR) application with the Internal Revenue Service relating to operational defects of the Plan. The defects identified are 1) the existence of unallocated amounts in a suspense account resulting from the transfer of assets and liabilities from the Santa Fe Southern Pacific Savings and Investment Plan, 2) contributions made on behalf of one participant exceeded the limit under Section 415 of the Internal Revenue Code of 1986, 3) in two instances, the Plan administrator ceased making installment payments to participants at their request without making an immediate lump sum distribution as required under the Plan, 4) one participant received an overpayment, and 5) the Plan administrator incorrectly calculated the installment payments for one participant and began commencement of the installment payments two months late. The IRS had not yet responded to this VCR application. The Plan administrator is currently in the process of reviewing the Plan activity, determining the necessary corrections and the magnitude of those corrections. The Plan administrator expects that the proposed corrections will be accepted by the IRS with no adverse implications to the Plan's tax status. In October 1994, the Plan Administrator filed a Voluntary Compliance Resolution (VCR) application with the IRS relating to the failure to timely distribute the minimum distribution required under section 401(a)(9) to one employee. The Plan sponsor corrected the situation by distributing to the employee from her account the required amounts due of approximately $66,158. During 1996 the VCR application and proposed correction was accepted by the IRS with no adverse implications to the Plan's tax status. (8) Subsequent Event Effective May 1997, the Plan changed the Trustee and Administrator of the Plan from Chase Manhattan and Howard Johnson, respectively, to Vanguard. The Plan's assets were transferred to Vanguard in May 1997. 12 SOUTHERN PACIFIC RAIL CORPORATION THRIFT PLAN Notes to Financial Statements (Modified Cash Basis) (9) Fund Information Investments, investment income, contributions and distributions to participants by fund are as follows for the years ended December 31, 1996 and 1995: Year Ended Year Ended December 31, December 31, 1996 1995 ------------ ------------ Investments: Fixed Investment Fund $123,019,888 $130,769,265 Value Equity Fund 34,779,427 26,940,068 Balanced Fund 16,683,492 11,050,017 International Equity Fund 3,588,080 2,143,922 Stock Fund 2,078,775 2,175,826 Resources Stock Fund 628,344 -- Growth Equity Fund 7,495,640 3,156,291 ------------ ------------ $188,273,646 $176,235,389 ------------ ------------ Investment Income: Fixed Investment Fund $ 8,325,983 $ 8,854,248 Value Equity Fund 5,705,655 6,453,492 SFPAC Stock Fund -- 2,097,637 Balanced Fund 2,011,292 2,096,786 International Equity Fund 385,150 244,050 Stock Fund 701,234 502,259 Resources Stock Fund 8,928 -- Growth Equity Fund 943,830 438,548 ------------ ------------ $ 18,082,072 $ 20,687,020 ------------ ------------ Contributions: Fixed Investment Fund $ 5,148,402 $ 5,937,853 Value Equity Fund 2,105,276 2,070,458 SFPAC Stock Fund -- -- Balanced Fund 1,083,166 922,664 International Equity Fund 307,963 219,556 Stock Fund 134,221 139,387 Resources Stock Fund -- -- Growth Equity Fund 545,057 264,648 ------------ ------------ $ 9,324,085 $ 9,554,566 ------------ ------------ Distributions to Participants: Fixed Investment Fund $ 12,255,829 $ 12,358,036 Value Equity Fund 1,731,128 1,608,570 SFPAC Stock Fund -- 11,104,648 Balanced Fund 644,223 386,990 International Equity Fund 67,148 60,238 Stock Fund 52,701 71,246 Resources Stock Fund -- -- Growth Equity Fund 212,473 81,379 ------------ ------------ $ 14,963,502 $ 25,671,107 ------------ ------------ 13
Schedule 1 Page 1 of 3 SOUTHERN PACIFIC RAIL CORPORATION THRIFT PLAN Item 27a - Schedule of Assets Held for Investment Purposes (Modified Cash Basis) Year ended December 31, 1996 Cost Current Description of Investment basis value - -------------------------------------------------------------------------------------------- ----- ----- Investment Contracts: Fixed Investment Fund: Allstate Life Insurance Company 6.45% investment contract due April 1, 1999 $ 5,918,697 $ 5,918,697 Allstate Life Insurance Company 7.32% investment contract due June 1, 1999 1,036,254 1,036,254 CDC Investment Management Company 6.62% investment contract due April 15, 1998 5,088,226 5,088,226 Canada Life Assurance Company 7.17% investment contract due July 1, 1999 5,146,283 5,146,283 Commonwealth Life Insurance Company Floating rate contract, 30 day termination notice 3,482,213 3,482,213 Continental Life Assurance Company 8.51% investment contract due May 1, 1997 2,631,544 2,631,544 John Hancock Mutual Life Insurance Company 6.56% investment contract due May 1, 2004 5,450,114 5,450,114 John Hancock Mutual Life Insurance Company Variable rate investment contract due February 1, 2000 3,014,309 3,014,309 John Hancock Mutual Life Insurance Company 6.54% investment contract due November 22, 1999 5,046,206 5,046,206 Mass Mutual Insurance Company Variable investment contract due July 5, 2002 4,586,252 4,586,252 Mass Mutual Insurance Company Variable investment contract due July 5, 2002 7,716,349 7,716,349 Metropolitan Life Insurance Company 6.8% investment contract due January 2, 2001 3,313,839 3,313,839 New York Life Insurance Company 7.33% investment contract due February 3, 1997 5,287,973 5,287,973 New York Life Insurance Company 6.94% investment contract due February 25, 1998 6,008,666 6,008,666 Peoples Security Life Insurance Company 6.45% investment contract due May 1, 1997 3,950,794 3,950,794 Peoples Security Life Insurance Company 6.14% investment contract due May 1, 1997 4,906,845 4,906,845 Peoples Security Life Insurance Company 6.17% investment contract due April 25, 1997 4,841,077 4,841,077 Peoples Security Life Insurance Company 7.87% investment contract due April 25, 1997 4,971,858 4,971,858 Provident Life and Accident Insurance Company Investment contract due 20,831,515 20,831,515
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Schedule 1 ---------- Page 2 OF 3 SOUTHERN PACIFIC RAIL CORPORATION THRIFT PLAN Item 27a - Schedule of Assets Held for Investment Purposes (Modified Cash Basis) Year ended December 31, 1996 Cost Current Description of Investment basis value - -------------------------------------------------------------------------------------------- ----- ----- Prudential Insurance Company 6.16% investment contract due September 30, 1998 $ 1,236,058 $ 1,236,058 Prudential Insurance Company 7.31% investment contract due July 25, 1997 3,407,298 3,407,298 Prudential Insurance Company 7.05% investment contract due December 1, 1997 4,737,845 4,737,845 Sun Life Assurance Company 7.28% investment contract due June 10, 1999 5,966,598 5,966,598 ----------- ----------- Total investment contracts 118,576,813 118,576,813 ----------- ----------- Common stock: Union Pacific Corporation ** 34,567 shares of common stock 1,367,637 2,078,341 Union Pacific Res. Group Inc.**21,682 Shares of Stock 394,336 628,778 ----------- ----------- Total common stock 1,761,973 2,707,119 ----------- ----------- Commingled Funds: Value Equity Fund: Invesco Institutional Series Trust Equity Fund 1,306,024.30 shares of commingled fund 23,454,779 34,779,427 Balanced Fund: Invesco Institutional Series Trust Flex Fund 631,950.44 shares of commingled fund 12,784,799 16,683,492 Growth Equity Fund: Invesco Common Stock Fund 182,021.37 shares of commingled fund 6,190,402 7,495,640 International Equity Fund: CGTC International Non- U.S. Equity Record 269,375.36 shares of commingled fund 3,029,283 3,588,080 ----------- ----------- Total commingled funds 45,459,263 62,546,639 ----------- ----------- **Includes party-in-interest
15
Schedule 1 ----------- Page 3 OF 3 SOUTHERN PACIFIC RAIL CORPORATION THRIFT PLAN Item 27a - Schedule of Assets Held for Investment Purposes (Modified Cash Basis) Year ended December 31, 1996 Cost Current Description of Investment basis value - ------------------------------------------------------------------ ----- ----- Temporary Investment Funds: Chase Temporary Investment Fund: Domestic Liquidity Fund $ 4,443,075 $ 4,443,075 ------------ ------------ Total Temporary Investment Funds 4,443,075 4,443,075 ------------ ------------ Total Investments $170,241,124 $188,273,646 ============ ============ **Includes party-in-interest
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Schedule 2 ---------- Page 1 of 1 SOUTHERN PACIFIC RAIL CORPORATION THRIFT PLAN Item 27d - Schedule of Reportable Transactions (Modified Cash Basis) Year ended December 31, 1996 Purchase/ Number Transaction sales Gain/ of Issuer Name type Cost price (loss) transactions ------ ---- ---- ---- ----- ---- ------------ Chase Bank Domestic Liquidity Fund Purchase $ 36,421,820 -- -- 149 Sale 34,989,193 34,989,193 -- 83 Note: Reportable transactions are included as defined in 29 CFR 2520.103-6 of the Department of Labor's Rules and Regulations for Reporting and Disclosure Under the Employee Retirement Income Security Act of 1974. In general terms, reportable transactions are those transactions, or series of transactions when aggregated within the plan year, which involve an amount in excess of 5% of net assets available for plan benefits as of the beginning of the year.
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