Pioneer Railcorp

[RICH DEAN]

The corporate address is:

Pioneer Railcorp
1318 South Johanson Road
Peoria IL 61607

Phone: 309-697-1400

This is from a Sept. 18, 1995 letter to shareholders that I
received announcing a Stock Warrant Distribution to shareholders of
record on June 1, 1995, when a 2 for 1 stock split became effective;
one warrant at a pre-determined price of $2 per share was issued for
each share owned after the split.

Pioneer Railcorp's wholly owned subsidiaries include: West
Jersey Railroad Co. (WJ -- inactive at present as the lease was not
renewed), Wasbash & Western Railway Co. (WGRY), Fort Smith Railroad Co.
(FSR), Alabama Railroad Co. (ALAB), Mississippi Central Railroad Co.
(MSCI), Alabama & Florida Railway Co. (AF), Decatur Junction Railway
Co. (MCTA), Pioneer Railroad Equipment Co. Ltd. (PREL) and Pioneer
Railroad Services Inc. (PRSI).

The unaudited report issued for first six months of 1995
shows total operating revenue of $4,115,530 compared to $3,118,377 a
year earlier. Operating expenses of $3,214,393 compared to $2,350,116
for the same period a year earlier. Operating income was $901,137 for
1995's first six months while $766,261 was realized a year earlier.
Net income before taxes for this six month period in 1995 was
$724,291 and $593,980 in 1994. Earnings per share was $0.17 for that
period this year, compared with $0.15 in 1994.
The unaudited balance sheet showed current assets (cash,
accounts receivable, material & supply inventory, prepaid expenses and
deferred taxes) to be $1,569,185 this year on June 30, while a year
earlier was $1,464,190.
As for property and equipment (land, railroad facilities,
locomotives, transportation equipment, leasehold improvements,
buildings, machinery and equipment, office equipment, railcars, capital
projects in progress, less accumulated depreciation) on June 30, 1995
the amount was $11,248,168 compared to $10,228,373 a year earlier.

As for the common stock, which is listed on the Chicago Stock
Exchange with the symbol PRR (look familiar?) it has been trading at
around 2 1/2 each, at the time of the June split it had been at about 5.
The initial public offering (IPO) sales price was $1 per share which was
offered by ads in railfan publications. Although many other railfans
who had experience in stock market activities laughed at the thought,
some of us speculated (gambled) and so far it has paid off.

For those of you who might watch the stock ticker on CNBC or
other tv source, the bottom reading shows both NASDAQ (4+ letter
symbols) and the minor exchanges (3 letter symbols). The top line is
for the New York Stock Exchange.

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