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
14
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
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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
16
Schedule 2
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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.