Volume 2, Issue 6
June 1, 2001

Inside this issue:
New beginnings bring changes and mixed feelings
Regular safety practices result in many rewards
Legislatures move to assist short line railroads
Employee News
Living a healthy lifestyle when your life is "on the road"
Timber Rock Railroad poised for future growth

It’s always a pleasure to visit with you about our excellent Watco employees. However, I do so today with very mixed feelings. The Webb/Lundy family, as well as the Watco family, is about to say goodbye to two very special young ladies — Shannon and Sharron Wilson. Over the years we have had several outstanding employees resign for various reasons, and each time, it takes a little out of me. When these two talented young ladies leave, they will take even more.

Since both will be married this year (Sharron on August 18 and Shannon on October 27), they are resigning to follow their husband’s career opportunities. Sharron, who has done an outstanding job as Editor of this publication, as well as her many other duties, graduated from Pittsburg State University just last week. She and her husband-to-be will be going on active duty as newly commissioned officers with the United States Army in San Antonio, Texas.

Shannon, who has done such an outstanding job as Administrative Assistant to the President (and many others in the Pittsburg office) will join her fiancé, a recent law school graduate, as he pursues employment with the Judge Advocate General (JAG) division of the Army. Shannon will also continue her duty with the Kansas National Guard for the present time.

As I said before, we have had many quality employees resign, and in each instance someone has stepped up to fill the void left by their departure. This is precisely the kind of spirit that has allowed our company to continue to grow into the great organization it is today.

In the case of Shannon and Sharron, it will be especially hard for me to see them go, because I know the many hardships they have overcome to reach this point. But they are both true success stories, and I’m very proud to call them my great-nieces (in every sense of the word!)

I’m sure I speak for all Watco employees when I wish Shannon and Sharron the very best that life has to offer, and we hope that they and their soon-to-be spouses will visit us every chance they get. Godspeed!!!!

When you think of safety what comes to your mind? According to Webster’s New World Thesaurus, the following are a few things listed:

• Out of danger
• Protected
• Carefully
• Free from harm
• Invulnerable
• Security

All of these descriptions or definitions are sought after for ourselves and for our families. Safety at work should and is every bit as important as it is at our homes, in our cars, or with our families.

Do you practice the aforementioned descriptions while working?

Many people ask, "Why so many rules?" Rules are usually created due to an incident or accident occurring. Loss of property or life is too late for the creation of rules thus we need to strive to be proactive with our safety instead of reactive. Each and every one of us are responsible for a safe work environment, so don’t wait for an incident before you react to potential dangers. I believe that the 2 most important tools available are the use of Common Sense and allowing yourself enough time to think. If we will use thought before action we will be safer, more productive, and better employees.

You will read in this newsletter articles about business growth, financial benefits, health benefits, years of service, people, and company goals. All of these are very interesting and important but without practicing safety they are only words to read. The foundation of a service oriented company is not just a good solid business plan but is the safe work environment and safe practices which we promote and execute daily. Be a part of the future growth of this company by contributing your attention and service to safety.

Make Safety Your Focus Not Your Afterthought!

Efforts to strengthen and preserve rail service proved popular to legislators in four of Watco’s states during the 2001 Legislative sessions. Kansas and Idaho passed major provisions that will assist shortline railroads with operations, while Oklahoma and Washington still have proposals under consideration. The federal Congress is also considering a proposal to provide funding to help shortlines improve track so that they can move 286,000-pound cars.

Rep. Kent Kunz, Pocatello, and Senator Evan Frasure, Pocatello, took the lead in their individual chambers to win passage for the Idaho Rail Preservation Act. This bill was modeled after legislation in Washington and Kansas that can provide money for loans and grants for rail infrastructure and equipment. Idaho has lost one-third of its rail since 1975 and the very mountainess terrain that has agriculture, timber and natural resources as it primary industries is in desperate need to keep railroads operating.

Key shippers of the Eastern Idaho Railroad and the Palouse River and Coulee City Railroad, in addition to the other Idaho shortlines, supported the bill. The bill outlines how a program would operate and directs the Idaho Transportation Department make recommendations for funding to the 2002 Legislature

In Kansas, the acquisition of the K&O Railroad proved to be a front-burner issue for the close of the Kansas Legislative session. Watco requested a property tax abatement and a long-term income tax credit for both Kansas railroads to be used to make significant improvements in the track.

The commitment by the South Kansas & Oklahoma Railroad and the Kansas & Oklahoma Railroad was to avoid abandonment in return for the financial commitment from the state. Both proposals passed the Kansas House of Representatives, whose effort was led by Rep. Gary Hayzlett, Chairman of the Transportation Committee, Rep. Dennis McKinney, Assistant Minority Leader, and Rep. R.J. Wilson, Pittsburg.

In the Senate, with the end of the session placing additional pressure on all items under consideration, the property tax measure passed with unanimous approval while the income tax was placed in a summer interim study. Senator Ruth Teichman, Stafford, was a key advocate in the Senate.

In Oklahoma and Washington the Legislatures are still in session and have under consideration proposals to assist shortline railroads. In Washington, Gov. Gary Locke has been a tremendous advocate on behalf of improving transportation both in the rural and urban areas. The Oklahoma Department of Transportation has been advocating a redistribution of fees that would provide shortlines and other public transportation with infrastructure money.

On top of all that, the federal Congress, under the direction of Rep. Don Young, Alaska, and Chair of the House Transportation Committee, is considering a proposal to grant money to shortlines to improve track conditions to handle 286,000-pound rail cars. The bill passed the Railroad sub-committee on a unanimous vote and is now under consideration by the full Transportation Committee. Reps. Jerry Moran, Kansas, Brad Carson, Oklahoma, Jim Ryun, Kansas, Wes Watkins, Oklahoma, and Todd Tiahrt, Kansas, are all co-sponsors of the bill. We will be working with our Congressmen from our other states in the weeks ahead to garner additional support.

Congress is also again considering recommendations to improve benefits to the Railroad Retirement Act, this despite a warning from the White House about the privatization of retirement accounts. Similar legislation passed the House last year, but was held up in the Senate. Watco supports the efforts to improve the RRR Act.

David Scott is the new Superintendent of Maintenance Management and Planning, effective May 7th. David will oversee the track personnel and all maintenance activities on the SKO, SLWC and TIBR. David will work out of the Neodesha office and can be reached at 620-325-8988.

Brian O’Keith McCoy Jr. joined the Timber Rock Railroad in DeRidder, LA, April 16th. Brian was employed at Wal-Mart, where he worked as a forklift operator. Brian’s new position at the TIBR is a track laborer.

Kevin Schoenhofer joined the South Kansas and Oklahoma Railroad in Cherryvale, Kansas, February 26th. Kevin spent 6 years as a grocer before becoming a switchman/conductor for SKOL. Kevin and his wife, Mitzi, have a 9-year-old daughter named Haley.

Melinda Booth joined Customer Service in the Cherryvale office January 29th. Melinda brings 10 years of customer service experience with farmers from lending institutions. Melinda and her husband Brent have 3 children, Colt 13, Dakota and Chaneya, both 9.

Sara Buccolo, daughter of David Buccolo, Vice President of Railroad Operations, has been elected captain of the 2001-02 Pittsburg High School POM Pon dance team. Sara will be a Junior. Sara’s sister, Gina, completed Graduate school at the University of California at Irvine with a Degree in Planetary Geology and will be working as a satellite systems engineer with Boeing Planetary Satellite Systems El Segundo, CA. Gina will be married to Jeff Mendez July 5 in Pasadena, CA.

Gina's fiancée’ Jeff is a Doctoral student working on ocean and climate research at the California Institute of Technology in Pasadena.

Tasha Lewis-Hanson, daughter of Tamera Hanson, Corporate Office Controller, graduated from Fort Scott High School May 19th. Tasha will attend the University of Kansas in Lawrence next fall. Tasha’s major is Interior Design.

Chasity Barrington, daughter of Mike Barrington, Asst. Manager/Systems Clerk for Watco Switching in DeRidder, LA, graduated from Northwestern State University in Natchitoches, LA, May 4th. Chasity received her Bachelor of Science, majoring in secondary education. Chasity is also Trish and Randy Bennett’s niece. Randy is the EVP of Switching/Warehousing and Trish is his Adm. Assistant.

Sharron Wilson, former Newsletter Coordinator and Office Assistant for the Corporate Office graduated from Pittsburg State University May 11th with a degree in General Studies with an emphasis in Elementary Education and she will receive her commission into the United States Army, entering with a rank of 2LT in August of this year. An August 18th wedding is set for Sharron and Shawn Turnage. Shawn is stationed at Fort Hood where he is a Platoon Leader in a Calvary unit. Sharron will be moving to Fort Hood, TX, following the wedding to pursue her career with the Army.

Wes Thompson, son of Gary Thompson, Roadmaster for the SKO, graduated from Pittsburg State Univ. with a Bachelors of Science in Biology/Pre-Med. Next fall, Wes will attend Kansas University Medical in Kansas City, Missouri.

Does this sound familiar? " I had to be at the airport at 7 a.m., arrived in Kansas City, Houston and then Twin Falls mid afternoon; drove an hour and a half for a three hour meeting; ate dinner around 8 p.m. and got to my room at 10:30 p.m."

Do you have days like this? I know many of you do because I constantly hear this: "How do you expect me to exercise and eat right when half of my working time involves travel?" Well, I am here to tell you it can be done. First let’s look at what you did in preparation for your business trip.

If your trip is for more than one day don’t you have to stay somewhere? Did you reserve a room in a hotel that either has an exercise facility or access to one? Most of your popular motel chains have this feature. Just get up the next morning 45 minutes early and get your work out in. If you can’t find lodging with gym access, go for a 30 to 45 minute walk. You will feel better the rest of the day.

Okay, now let’s look at what you did on your day of travel. You decide to grab breakfast at the airport. Did you pound down two sausage and egg biscuits at 620 calories and 41 grams of fat each, or did you walk past the airport Burger King to the snack bar and get an apple or an orange and low fat yogurt with a combined 250 calories and less than three grams of fat? While you were there did you buy a couple of low fat fruit bars for the plane?

Noon rolls around and Oh-Boy...a lunch flight. Do you know why you eat that food on the airplane? Because you are bored stiff! That stuff has enough salt and fat to wipe out your daily requirements, so politely refuse and eat your fruit bars.

You are now safely on the ground and en route to your meeting, but you feel like you could go for something. Did you go through the drive through for a "Big Extra" 710 calories and 46 grams of fat? Or did you choose a grilled chicken sandwich or a regular hamburger, both having about 280 calories and 7 grams of fat. Do you see what I am trying to tell you? I understand that your associates are going to want you to eat the 26 oz. "Mr. Special" T-Bone after your meeting. So to make this a successful trip, knowing it was next to impossible to exercise today, exercising the day before your travel and the day after you get there will work.

Simple lifestyle habits like "This week I will make time to exercise four days for at least 30 to 45 minutes a day no matter where I am; today I will limit my fat intake to no more than 50 fat grams no matter where I eat." (Based on a 1,500 calorie diet)

All the healthy choices are out there wherever your business travel takes you. It’s up to you to make the right choice.

Timber Rock Railroad was established in 1998 with the purchase of 40 plus miles of the former Burlington Northern Santa Fe railroad between DeRidder, Louisiana, and Kirbyville, Texas. We are committed to provide safe, efficient, quality rail transportation services for our customers.

Our working relationship goes beyond what is required with the customers, the Burlington Northern Santa Fe and the Kansas City Southern railways, as we go the extra mile to provide rail transportation services.

The Timber Rock Railroad complemented Watco Companies first operation begun by Charles R. "Dick" Webb, that being the contract switching services for Boise Cascade at Boise Southern, Louisiana.

Kirk Hawley, Vice President of Railroad Marketing, said, "The Timber Rock has a solid customer base that continues to utilize rail service. Our goal is to continue to make the Timber Rock a competitive transportation choice for our customers. To do that we will continue to develop relationships with our Class I partners and work to grow the business in this line."

The on-line customer base of Boise Cascade, Entergy, Geo Chemical, Harralson Tie & Timber, Highland Growers, Louisiana Pacific, Malone Lumber, McDonald Lumber, Premier Stone, and Westvaco generates approximately 15,000 carloads of revenue freight each year. The two interchanges are with the BNSF at Kirbyville, Texas, and the KCS at DeRidder, Louisiana. Chemicals, coal, paper and forest products, and rock are the major commodities moved by the Timber Rock line.

General Manager, Pat LaCaze, believes providing the customer with consistent quality rail transportation services will allow Timber Rock to continue to grow and prosper. Pat has established a great team to provide the rail service and with the support of the customer service center, they are able to meet the customers needs.

"The staff and the management of the Timber Rock Railroad have done a great job in improving their operating efficiencies", said Rick Webb, Watco Companies, Inc., President and C.E.O.

"This is a great example of how we have grown the business and developed a property location over a period of time."

Those involved with the Timber Rock Railroad are excited about providing a working atmosphere that will ensure a long-term vision of success for both employees and customers. It is fully understood that without these two components working together, the TIBR could not be successful.

(This is an on-going series on Watco Companies profit centers.)

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                               Watco Companies, Inc. * 315 W. 3rd Street * Pittsburg, KS 66762 * Phone: 620-231-2230 * Fax: 620-231-0812