EXHIBIT 99(a)
FINANCIAL STATEMENTS OF THE
UNION PACIFIC CORPORATION THRIFT PLAN
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
F-1
UNION PACIFIC CORPORATION THRIFT PLAN
INDEX TO FINANCIAL STATEMENTS
Page
---------
Independent Auditors' Report . . . . . . . . . . . . . . . . F-2
Financial Statements:
Statement of Net Assets Available for Benefits,
with Fund Information as of December 31, 1993. F-3 - F-4
Statement of Net Assets Available for Benefits,
with Fund Information as of December 31, 1992. F-5 - F-6
Statement of Changes in Net Assets Available for
Benefits, with Fund Information for the year
ended December 31, 1993 . . . . . . . . . . . F-7 - F-8
Statement of Changes in Net Assets Available for
Benefits, with Fund Information for the year
ended December 31, 1992 . . . . . . . . . . . F-9 - F-10
Notes to Financial Statements . . . . . . . . . . . F-11
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
F-2
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Trustees and Participants of
the 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, 1993 and 1992, 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,
1993 and 1992, 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 Fund Information in the statement
of net assets available for benefits and the statement of changes in net
assets available for benefits is presented for the purpose of additional
analysis and is not a required part of the basic financial statements. The
Fund Information has not been subjected to a separate audit and we express no
separate opinion on such information. This information is the
responsibility of the Plan's management. However, the information by fund
has been subjected to the auditing procedures applied in our audit of the
basic financial statements and, in our opinion, is fairly stated in all
material respects when considered in relation to the basic financial
statements taken as a whole.
/s/DELOITTE & TOUCHE
New York, New York
June 16, 1994
F-3
Page 1 of 2
UNION PACIFIC CORPORATION THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1993
FUND INFORMATION
------------------------------------------------------
Company
Total Company Equity Fixed Stock
Plan Stock Index Income (PAYSOP)
----- ------- ------ ------ --------
ASSETS:
Investments at Fair Value
(Note 3)......................... $299,905,154 $107,421,068 $51,378,881 $89,408,145 $8,016,614
Accounts Receivable:
Accrued Interest and Dividends... 718,119 667,851 -- -- 50,268
Due from (to) Other Funds........ -- -- -- -- --
Contributions Receivable:
Participants..................... -- -- -- -- --
Company.......................... -- -- -- -- --
------------ ------------ ----------- ----------- ----------
Total Assets.................. 300,623,273 108,088,919 51,378,881 89,408,145 8,066,882
------------ ------------ ----------- ----------- ----------
LIABILITIES:
Forfeitures to be Applied
(Note 1)......................... -- -- -- -- --
------------ ------------ ----------- ----------- ----------
Total Liabilities............. -- -- -- -- --
------------ ------------ ----------- ----------- ----------
Net Assets Available
for Benefits..................... $300,623,273 $108,088,919 $51,378,881 $89,408,145 $8,066,882
============ ============ =========== =========== ==========
The accompanying notes to financial statements are an integral part of these statements.
F-4
Page 2 of 2
UNION PACIFIC CORPORATION THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1993
FUND INFORMATION
--------------------------------------------------------------------
Loan U.S. International Bond
Fund Wellington Growth Growth Index
---- ---------- ------ ------------- -----
ASSETS:
Investments at Fair Value
(Note 3)......................... $14,839,589 $11,232,599 $3,339,795 $11,785,693 $2,482,770
Accounts Receivable:
Accrued Interest and Dividends... -- -- -- -- --
Due from (to) Other Funds........ -- -- -- -- --
Contributions Receivable:
Participants..................... -- -- -- -- --
Company.......................... -- -- -- -- --
----------- ----------- ---------- ----------- ----------
Total Assets.................. 14,839,589 11,232,599 3,339,795 11,785,693 2,482,770
----------- ----------- ---------- ----------- ----------
LIABILITIES:
Forfeitures to be Applied
(Note 1)......................... -- -- -- -- --
----------- ----------- ---------- ----------- ----------
Total Liabilities............. -- -- -- -- --
----------- ----------- ---------- ----------- ----------
Net Assets Available
for Benefits..................... $14,839,589 $11,232,599 $3,339,795 $11,785,693 $2,482,770
=========== =========== ========== =========== ==========
The accompanying notes to financial statements are an integral part of these statements.
F-5
Page 1 of 2
UNION PACIFIC CORPORATION THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1992
FUND INFORMATION
-----------------------------------------------------
Company
Total Company Equity Fixed Stock
Plan Stock Index Income (PAYSOP)
----- ------- ------ ------ --------
ASSETS:
Investments at Fair Value
(Note 3)......................... $261,005,736 $ 99,624,182 $48,726,129 $83,552,988 $7,589,192
Accounts Receivable:
Accrued Interest and Dividends... 750,888 627,206 -- -- 47,674
Due from (to) Other Funds........ -- 194,627 107,358 147,505 --
Contributions Receivable:
Participants..................... 60,230 19,004 13,924 17,177 --
Company.......................... 32,351 8,564 10,639 8,111 --
------------ ------------ ----------- ----------- ----------
Total Assets.................. 261,849,205 100,473,583 48,858,050 83,725,781 7,636,866
------------ ------------ ----------- ----------- ----------
LIABILITIES:
Forfeitures to be Applied
(Note 1)......................... 14,271 -- -- 14,271 --
------------ ------------ ----------- ----------- ----------
Total Liabilities............. 14,271 -- -- 14,271 --
------------ ------------ ----------- ----------- ----------
Net Assets Available
for Benefits..................... $261,834,934 $100,473,583 $48,858,050 $83,711,510 $7,636,866
============ ============ =========== =========== ==========
The accompanying notes to financial statements are an integral part of these statements.
F-6
Page 2 of 2
UNION PACIFIC CORPORATION THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1992
FUND INFORMATION
-------------------------------------------------------------------
Loan U.S. International Bond
Fund Wellington Growth Growth Index
---- ---------- ------ ------------- -----
ASSETS:
Investments at Fair Value
(Note 3)......................... $14,191,099 $ 3,172,943 $1,931,427 $ 738,649 $1,479,127
Accounts Receivable:
Accrued Interest and Dividends... 76,008 -- -- -- --
Due from (to) Other Funds........ (467,200) 8,824 4,934 1,288 2,664
Contributions Receivable:
Participants..................... -- 3,743 3,848 445 2,089
Company.......................... -- 1,208 1,767 206 1,856
----------- ----------- ---------- ----------- ----------
Total Assets.................. 13,799,907 3,186,718 1,941,976 740,588 1,485,736
----------- ----------- ---------- ----------- ----------
LIABILITIES:
Forfeitures to be Applied
(Note 1)......................... -- -- -- -- --
----------- ----------- ---------- ----------- ----------
Total Liabilities............. -- -- -- -- --
----------- ----------- ---------- ----------- ----------
Net Assets Available
for Benefits..................... $13,799,907 $3,186,718 $1,941,976 $ 740,588 $1,485,736
=========== =========== ========== =========== ==========
The accompanying notes to financial statements are an integral part of these statements.
F-7
Page 1 of 2
UNION PACIFIC CORPORATION THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1993
FUND INFORMATION
-----------------------------------------------------
Company
Total Company Equity Fixed Stock
Plan Stock Index Income (PAYSOP)
----- ------- ------ ------ --------
Investment Income:
Dividend Income:
Union Pacific Corporation
Common Stock.................. $ 2,750,403 $ 2,557,875 $ -- $ -- $ 192,528
Other.......................... 2,175,536 -- 1,464,712 -- --
Interest Income.................. 7,712,604 29,356 -- 6,530,304 2,964
------------ ------------ ----------- ----------- ----------
12,638,543 2,587,231 1,464,712 6,530,304 195,492
Net Appreciation (Depreciation)
in Fair Value of Investments
(Note 3)......................... 14,136,960 7,944,187 3,436,532 173,577 528,567
Net Transfers Among Funds.......... -- (6,530,041) (6,196,004) (3,875,336) --
Contributions by:
Participants..................... 16,652,997 5,557,937 4,212,638 5,001,785 --
Company (Net of Forfeitures-
Note 1)........................ 6,164,034 2,210,589 1,518,354 1,815,602 --
Distributions to Participants...... (11,032,945) (4,153,904) (1,999,230) (4,091,505) (298,720)
Net Transfer of Assets from (to)
the Union Pacific Resources
Thrift Plan...................... 228,750 (663) 83,829 142,208 4,677
------------ ------------ ----------- ----------- ----------
Net Increase....................... 38,788,339 7,615,336 2,520,831 5,696,635 430,016
Net Assets Available for Benefits
at Beginning of Year............. 261,834,934 100,473,583 48,858,050 83,711,510 7,636,866
------------ ------------ ----------- ----------- ----------
Net Assets Available for Benefits
at End of Year................... $300,623,273 $108,088,919 $51,378,881 $89,408,145 $8,066,882
============ ============ =========== =========== ==========
The accompanying notes to financial statements are an integral part of these statements.
F-8
Page 2 of 2
UNION PACIFIC CORPORATION THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1993
FUND INFORMATION
-------------------------------------------------------------------
Loan U.S. International Bond
Fund Wellington Growth Growth Index
---- ---------- ------ ------------- -----
Investment Income:
Dividend Income:
Union Pacific Corporation
Common Stock.................. $ -- $ -- $ -- $ -- $ --
Other.......................... -- 571,221 45,906 93,697 --
Interest Income.................. 984,452 -- -- -- 165,528
----------- ----------- ---------- ----------- ----------
984,452 571,221 45,906 93,697 165,528
Net Appreciation (Depreciation)
in Fair Value of Investments
(Note 3)......................... -- 289,564 (53,324) 1,799,615 18,242
Net Transfers Among Funds.......... 326,717 6,297,673 857,138 8,574,277 545,576
Contributions by:
Participants..................... -- 781,232 459,582 441,433 198,390
Company (Net of Forfeitures-
Note 1)........................ -- 255,561 148,806 145,158 69,964
Distributions to Participants...... (271,487) (149,370) (59,654) (9,075) --
Net Transfer of Assets from (to)
the Union Pacific Resources
Thrift Plan...................... -- -- (635) -- (666)
----------- ----------- ---------- ----------- ----------
Net Increase....................... 1,039,682 8,045,881 1,397,819 11,045,105 997,034
Net Assets Available for Benefits
at Beginning of Year............. 13,799,907 3,186,718 1,941,976 740,588 1,485,736
----------- ----------- ---------- ----------- ----------
Net Assets Available for Benefits
at End of Year................... $14,839,589 $11,232,599 $3,339,795 $11,785,693 $2,482,770
=========== =========== ========== =========== ==========
The accompanying notes to financial statements are an integral part of these statements.
F-9
Page 1 of 2
UNION PACIFIC CORPORATION THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1992
FUND INFORMATION
-----------------------------------------------------
Company
Total Company Equity Fixed Stock
Plan Stock Index Income (PAYSOP)
----- ------- ------ ------ --------
Investment Income:
Dividend Income:
Union Pacific Corporation
Common Stock.................. $ 2,609,112 $ 2,426,839 $ -- $ -- $ 182,273
Other.......................... 1,377,990 -- 1,244,794 -- --
Interest Income.................. 6,155,725 28,924 -- 5,189,561 2,172
------------ ------------ ----------- ----------- ----------
10,142,827 2,455,763 1,244,794 5,189,561 184,445
Net Appreciation (Depreciation)
in Fair Value of Investments
(Note 3)......................... 16,360,163 11,695,795 2,255,489 1,440,708 968,746
Net Transfers Among Funds.......... -- (7,719,334) (2,479,719) (636,368) --
Contributions by:
Participants..................... 15,754,335 5,380,606 4,490,259 5,462,084 --
Company (Net of Forfeitures-
Note 1)........................ 5,949,479 2,179,330 1,626,502 2,031,054 --
Distributions to Participants...... (8,947,191) (2,707,564) (1,558,168) (4,153,323) (191,877)
Net Transfer of Assets from (to)
the Union Pacific Resources
Thrift Plan...................... 160,077 52,772 48,547 47,532 3,831
------------ ------------ ----------- ----------- ----------
Net Increase....................... 39,419,690 11,337,368 5,627,704 9,381,248 965,145
Net Assets Available for Benefits
at Beginning of Year............. 222,415,244 89,136,215 43,230,346 74,330,262 6,671,721
------------ ------------ ----------- ----------- ----------
Net Assets Available for Benefits
at End of Year................... $261,834,934 $100,473,583 $48,858,050 $83,711,510 $7,636,866
============ ============ =========== =========== ==========
The accompanying notes to financial statements are an integral part of these statements.
F-10
Page 2 of 2
UNION PACIFIC CORPORATION THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1992
FUND INFORMATION
--------------------------------------------------------------------
Loan U.S. International Bond
Fund Wellington Growth Growth Index
---- ---------- ------ ------------- -----
Investment Income:
Dividend Income:
Union Pacific Corporation
Common Stock.................. $ -- $ -- $ -- $ -- $ --
Other.......................... -- 88,333 30,349 14,514 --
Interest Income.................. 893,427 -- -- -- 41,641
----------- ----------- ---------- ----------- ----------
893,427 88,333 30,349 14,514 41,641
Net Appreciation (Depreciation)
in Fair Value of Investments
(Note 3)......................... -- 16,614 49,737 (50,330) (16,596)
Net Transfers Among Funds.......... 4,188,402 2,898,616 1,725,243 734,731 1,288,429
Contributions by:
Participants..................... -- 135,739 102,359 31,242 152,046
Company (Net of Forfeitures-
Note 1)........................ -- 47,416 34,530 10,431 20,216
Distributions to Participants...... (336,017) -- (242) -- --
Net Transfer of Assets from (to)
the Union Pacific Resources
Thrift Plan...................... 7,395 -- -- -- --
----------- ----------- ---------- ----------- ----------
Net Increase....................... 4,753,207 3,186,718 1,941,976 740,588 1,485,736
Net Assets Available for Benefits
at Beginning of Year............. 9,046,700 -- -- -- --
----------- ----------- ---------- ----------- ----------
Net Assets Available for Benefits
at End of Year................... $13,799,907 $ 3,186,718 $1,941,976 $ 740,588 $1,485,736
=========== =========== ========== =========== ==========
The accompanying notes to financial statements are an integral part of these statements.
F-11
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. Effective July 1, 1992,
the Plan added the following four investment options: the Vanguard/Wellington
Fund ("Wellington"), Vanguard U.S. Growth Portfolio ("U.S. Growth"), Vanguard
International Growth Portfolio (International Growth"), and the Total Bond
Market ("Bond Index").
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) make
various other changes intended to give participants greater control and
flexibility with respect to Plan investments.
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 accounts,
excluding PAYSOP and subject to a minimum and maximum loan amount as well as
limitations based on salary level. As the loan is repaid, all principal and
interest payments will be credited to the participant's accounts, 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. Participants' loans, which are secured by the
participants' 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, 1993 and 1992 was
1,824 and 1,746, respectively.
F-12
UNION PACIFIC CORPORATION THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS -- (Continued)
Participant Accounts - Aggregate monthly employee and Company contributions,
may be invested entirely in the Company Stock Fund (Company Stock), Equity
Index Fund (Equity Index), Fixed Income Fund (Fixed Income), Wellington, U.S.
Growth, International Growth, or the Bond Index or any combination thereof,
in multiples of 5% in accordance with separate elections by each employee.
At December 31, 1993 and 1992, 5,319 and 5,298 members of the Plan held
interests in 4,816 and 4,804 Company Stock accounts, 2,727 and 2,798 Equity
Index accounts, 3,107 and 3,226 Fixed Income accounts 732 and 255 Wellington
accounts, 345 and 211 U.S. Growth accounts, 659 and 115 International Growth
accounts, and 321 and 153 Bond Index accounts, respectively. In addition,
3,526 and 3,737 members held interests in PAYSOP accounts at December 31, 1993
and 1992, 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 (GIC), of the underlying assets of the
Fund. The number of units at December 31, 1993 and 1992, and the unit values
at the end of each quarter within the year then ended were as follows:
1993 1992
---- ----
COMPANY STOCK
Number of Units...................... 8,016,498 7,950,853
Unit Value -December 31.............. $ 13.40 $ 12.53
-September 30............. 13.37 11.66
-June 30.................. 13.05 10.75
-March 31................. 12.97 10.10
EQUITY INDEX
Number of Units...................... 4,221,765 4,285,500
Unit Value -December 31.............. $ 12.17 $ 11.37
-September 30............. 12.02 10.97
-June 30.................. 11.78 10.70
-March 31................ 11.79 10.57
FIXED INCOME
Number of Units...................... 8,506,960 7,965,013
Unit Value -December 31.............. $ 10.51 $ 10.49
-September 30............. 10.55 10.58
-June 30.................. 10.54 10.50
-March 31................. 10.55 10.43
PAYSOP
Number of Units...................... 598,255 605,682
Unit Value -December 31.............. $ 13.40 $ 12.53
-September 30............. 13.37 11.66
-June 30.................. 13.05 10.75
-March 31................. 12.97 10.10
F-13
UNION PACIFIC CORPORATION THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS -- (Continued)
1993 1992
---- ----
WELLINGTON
Number of Units...................... 550,618 165,602
Unit Value -December 31.............. $ 20.40 $ 19.16
-September 30............. 20.69 19.16
-June 30.................. 20.31 --
-March 31................. 19.95 --
U.S. GROWTH
Number of Units...................... 223,697 125,744
Unit Value -December 31.............. $ 14.93 $ 15.36
-September 30............. 14.65 14.93
-June 30.................. 14.56 --
-March 31................. 14.90 --
INTERNATIONAL GROWTH
Number of Units...................... 872,368 78,496
Unit Value -December 31.............. $ 13.51 $ 9.41
-September 30............. 12.11 9.93
-June 30.................. 10.88 --
-March 31................. 10.14 --
BOND INDEX
Number of Units...................... 246,796 149,709
Unit Value -December 31.............. $ 10.06 $ 9.88
-September 30............. 10.34 10.11
-June 30.................. 10.22 --
-March 31................. 10.11 --
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
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.
F-14
UNION PACIFIC CORPORATION THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS -- (Continued)
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,
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, 1993 and 1992:
1993 1992
---- ----
Company contributions forfeited................... $20,074 $28,492
Applied against current year contributions........ 20,074 14,221
------- -------
Applied to reduce subsequent year contributions... $ -- $14,271
======= =======
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.
3. Investments - At December 31, 1993 and 1992 Plan investments were
maintained in commingled funds of the Plan Trustees along with investments of
another Company-administered Thrift Plan, within Master Trusts. 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
Trusts. At December 31, 1993 and 1992, the Plan held percentage interests in
the Master Trusts of 83.5 and 83.8 in Company Stock (including PAYSOP), 66.0
and 67.4 in Equity Index, 64.1 and 63.8 in Fixed Income, 77.6 and 77.4 in the
Loan Fund, 80.8 and 76.0 in Wellington, 77.7 and 61.2 in U.S. Growth, 77.6 and
71.3 in International Growth, and 72.4 and 75.1 in Bond Index.
The Plan provides for separate funds for the investment of contributions.
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, 1993 and 1992, 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, 1993 and 1992, which is designed to
closely track the investment performance of the Standard and Poor's 500
Composite Stock Index. At December 31, 1993 and 1992, Fixed Income is
comprised of investments in GICs with Aetna Life Insurance Company, John
Hancock Mutual Life Insurance Company, and Metropolitan Life Insurance
Company, which add interest at rates from 8.90% to 9.65%. These GICs are
generally not longer than five years, the principal and interest of which are
unconditionally guaranteed by the respective insurance companies. At December
31, 1993 and 1992, Fixed Income is also comprised of the Vanguard Fixed Income
Securities Fund Short-Term Corporate Portfolio which is composed of Class
A corporate bonds. As the GICs expire, the proceeds will be reinvested by
Vanguard in new GICs, Bank Investment Contracts, or the Vanguard Fixed Income
F-15
UNION PACIFIC CORPORATION THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS -- (Continued)
Securities Fund Short-Term Corporate Portfolio. Wellington is invested in the
Vanguard/Wellington Fund at December 31, 1993, which is composed of common
stocks and fixed-income securities. At December 31, 1993, U.S. Growth is
invested in Vanguard U.S. Growth Portfolio which is composed of established
U.S. growth stocks. International Growth is invested in the Vanguard
International Growth Portfolio at December 31, 1993, which is composed of
foreign common stocks with high growth potential. At December 31, 1993, Bond
Index is invested in the Vanguard Bond Index Fund which is designed to closely
track the investment performance of the Salomon Brothers Broad Investment-
Grade Bond Index.
4. Plan Amendments - Effective April 1, 1993, the Plan was amended to
provide that the account of a participant who cannot be located is forfeited
and used to reduce Company match contributions to the Plan, pending
reinstatement upon location. The Plan was amended and restated to reflect
changes in the law, including those resulting from the Tax Reform Act of 1986.
These amendments were approved by the Named Fiduciary - Plan Investments
pursuant to a delegation of authority from the Company's Board of Directors.
Effective July 1, 1992, the Plan was amended to allow four additional
investment options. This amendment was approved by the Named Fiduciary - Plan
Investments pursuant to a delegation of authority from the Company's Board of
Directors. Effective July 30, 1992, the Plan was amended to allow the Named -
Plan Administration to add wholly-owned subsidiaries of the Company to the
Plan. This amendment was approved by the Company's Board of Directors.
5. Federal Income Taxes - The Company has received a letter of determination
from the Internal Revenue Service that the Plan as amended, effective August
28, 1985, was qualified under section 401(a) of the Internal Revenue Code.
The Plan Administrator and the Plan's tax counsel believe that the Plan as
further amended is currently designed and being operated in compliance with
section 401(a) of the Internal Revenue Code of 1986, as amended. The Company
intends to submit the Plan to the Internal Revenue Service for a formal
determination on the amended Plan as described above.
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 previous provision for Federal income taxes has
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.