SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-6324
BURLINGTON NORTHERN RAILROAD COMPANY
(Exact name of registrant as specified in its charter)
Delaware 41-6034000
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3800 Continental Plaza, 777 Main St.
Fort Worth, Texas 76102-5384
(Address of principal executive offices) (Zip Code)
(817) 333-2000
(Registrant's telephone number, including area code)
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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Shares Outstanding
Class as of April 30, 1996
Common stock, without par value* 1,000 shares
*Burlington Northern Railroad Company is a wholly-owned subsidiary of
Burlington Northern Inc. which is a wholly-owned subsidiary of Burlington
Northern Santa Fe Corporation and there is no market data with respect to such
shares.
Registrant meets the conditions set forth in General Instruction H(1)(a) and
(b) of Form 10-Q and is therefore filing this Form 10-Q with the reduced
disclosure format permitted by General Instruction H(2).
<PAGE>
<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BURLINGTON NORTHERN RAILROAD COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN MILLIONS)
(UNAUDITED)
Three Months Ended
March 31,
1996 1995
------ -------
<S> <C> <C>
Revenues $1,319 $1,347
Operating expenses:
Compensation and benefits 455 482
Equipment rents 137 129
Purchased services 99 115
Fuel 106 98
Depreciation and amortization 98 99
Materials and other 182 199
Merger, severance and asset charge - -
------ -------
Total operating expenses 1,077 1,122
------ -------
Operating income 242 225
Interest expense 15 18
Other income (expense), net 10 4
------ -------
Income before income taxes 237 211
Income tax expense 88 83
------ -------
Income before cumulative effect of
change in accounting method 149 128
Cumulative effect of change in
accounting method, net of tax - (100)
------ -------
Net income $ 149 $ 28
====== =======
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
BURLINGTON NORTHERN RAILROAD COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, December 31,
ASSETS 1996 1995
-------- --------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 23 $ 41
Accounts receivable, net 589 567
Materials and supplies 157 136
Current portion of deferred income taxes 174 174
Other current assets 26 25
-------- --------
Total current assets 969 943
Property and equipment, net 6,218 6,148
Advances to parent 122 290
Investments in and advances to affiliates 135 134
Other assets 131 137
-------- --------
Total assets $ 7,575 $ 7,652
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable and other current liabilities $ 1,329 $ 1,398
Long-term debt and commercial paper due
within one year 97 26
-------- --------
Total current liabilities 1,426 1,424
Long-term debt and commercial paper 588 880
Deferred income taxes 1,278 1,226
Casualty and environmental reserves 425 416
Employee merger and separation costs 254 257
Other liabilities 415 409
-------- --------
Total liabilities 4,386 4,612
-------- --------
Commitments and contingencies
Stockholder's equity:
Common stock, without par value, 1,000 shares
authorized, issued and outstanding 1,191 1,191
Retained earnings 1,998 1,849
-------- --------
Total stockholder's equity 3,189 3,040
-------- --------
Total liabilities and stockholder's
equity $ 7,575 $ 7,652
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
BURLINGTON NORTHERN RAILROAD COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
------ ------
<S> <C> <C>
Operating Activities:
Net income $ 149 $ 28
Adjustments to reconcile net income to net cash
provided by operating activities:
Cumulative effect of change in accounting method - 100
Depreciation and amortization 98 99
Deferred income taxes 52 19
Other, net 28 (1)
Employee, merger and separation costs paid (32) -
Changes in working captial (91) (57)
------ ------
Net cash provided by operating activities 204 188
------ ------
Investing Activities:
Cash used for capital expenditures (153) (137)
Investments in and advances to affiliates 168 (165)
Other, net (2) 4
------ ------
Net cash provided by (used for) investing activities 13 (298)
------ ------
Financing Activities:
Net increase (decrease) in commercial paper (224) 119
Payments on long-term debt (11) (12)
------ ------
Net cash provided by (used for) financing activities (235) 107
------ ------
Increase (decrease) in cash and cash equivalents (18) (3)
Cash and cash equivalents:
Beginning of period 41 27
------ ------
End of period $ 23 $ 24
====== ======
Supplemental cash flow information:
Interest paid, net of amounts capitalized $ 12 $ 12
Income taxes paid, net of refunds 1 63
Assets financed through capital lease obligations 13 -
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
BURLINGTON NORTHERN RAILROAD COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Accounting policies and interim results
The consolidated financial statements should be read in conjunction with the
Burlington Northern Railroad Company (BNRR) Annual Report on Form 10-K and the
Burlington Northern Santa Fe Corporation (BNSF) Annual Report on Form 10-K for
the year ended December 31, 1995. BNRR is a wholly-owned subsidiary of
Burlington Northern Inc. (BNI).
As a result of a business combination, Santa Fe Pacific Corporation (SFP)
became an indirect wholly-owned subsidiary of BNSF on September 22, 1995.
Subsequent to that time, BNSF has begun to cosolidate operations of BNI's and
SFP's railroad subsidiaries, BNRR and The Atchison, Topeka and Santa Fe
Railway Company (ATSF), although to date, the railroad subsidiaries have not
merged. The consolidation of operations includes a single management team, as
well as the combination of certain information systems and certain
operations. The first quarter results presented in these financial
statements include the effect of allocations of certain expenses between BNI
and SFP which are no longer distinguishable by each separate company.
Management believes that these allocations represent the best estimates of
costs to each company. If the railroad subsidiaries are not merged, estimates
related to the allocation of costs will become more significant as the
combination of systems and operations progresses during 1996.
In the opinion of management, all adjustments (consisting of only normal
recurring adjustments, except as disclosed) necessary to present fairly BNRR's
financial position as of March 31, 1996 and December 31, 1995 and the results
of operations for the three month periods ended March 31, 1996 and 1995 and
cash flows for the three month periods ended March 31, 1996 and 1995 have been
included. The results of operations for any interim period are not
necessarily indicative of the results of operations to be expected for the
entire year.
Certain prior year data has been reclassified to conform to the current year
presentation.
2. Employee, merger and separation costs
Current and long-term employee merger and separation liabilities totaling $344
million are included in the balance sheet at March 31, 1996. During the first
quarter of 1996, the Company paid $32 million of employee, merger and
separation costs.
At March 31, 1996, approximately $90 million of the total liability is
included within current liabilities for anticipated costs to be paid over the
next twelve months. The remaining costs are anticipated to be paid over the
next five years.
Certain merger and separation costs, including relocation costs associated
with clerical employees, will be recorded as operating expenses in 1996 and
future periods. The ultimate timing and magnitude of any such future expense
is presently unknown.
3. Accounting change
Effective January 1, 1995, BNRR changed its method of accounting for periodic
major locomotive overhauls. Under the new method, costs of owned locomotives
relating to components requiring major overhaul are depreciated, on a
straight-line basis, to the first major overhaul date. The remaining cost of
the owned locomotive is depreciated, on a straight-line basis, over the
estimated economic life of the locomotive. The cost of overhauls on owned
units are then capitalized when incurred and depreciated, on a straight-line
basis, until the next anticipated overhaul. In addition, estimated costs for
major overhauls on leased units are accrued on a straight-line basis over the
life of the leases. BNRR previously expensed locomotive overhauls when the
costs were incurred. The cumulative effect of this change on years prior to
1995 was a reduction in net income of $100 million, net of a $63 million tax
benefit.
4. Environmental and other contingencies
BNRR's operations, as well as those of its competitors, are subject to
extensive federal, state and local environmental regulation. BNRR's operating
procedures include practices to protect the environment from the environmental
risks inherent in railroad operations, which frequently involve transporting
chemicals and other hazardous materials.
Additionally, many of BNRR's land holdings are and have been used for
industrial or transportation related purposes or leased to commercial or
industrial companies whose activities may have resulted in discharges onto the
property. As a result, BNRR is subject to environmental cleanup and
enforcement actions. In particular, the Federal Comprehensive Environmental
Response Compensation and Liability Act of 1980 (CERCLA), also known as the
"Superfund" law, as well as similar state laws generally impose joint and
several liability for clean-up and enforcement costs without regard to fault
or the legality of the original conduct on current and former owners and
operators of a site. BNRR has been notified that it is a potentially
responsible party (PRP) for study and clean-up costs at approximately 22
Superfund sites for which investigation and remediation payments are or will
be made or are yet to be determined (the Superfund sites) and, in many
instances, is one of several PRPs. In addition, BNRR may be considered a PRP
under certain other laws. Accordingly, under CERCLA and other federal and
state statutes, BNRR may be held jointly and severally liable for all
environmental costs associated with a particular site. If there are other
PRPs, BNRR generally participates in the clean-up of these sites through
cost-sharing agreements with terms that vary from site to site. Costs are
typically allocated based on relative volumetric contribution of material, the
amount of time the site was owned or operated, and/or the portion of the total
site owned or operated by each PRP.
Environmental costs include initial site surveys and environmental
studies of potentially contaminated sites as well as costs for remediation and
restoration of sites determined to be contaminated. Liabilities for
environmental clean-up costs are initially recorded when BNRR's liability for
environmental clean-up is both probable and a reasonable estimate of
associated costs can be made. Adjustments to initial estimates are recorded
as necessary based upon additional information developed in subsequent
periods. BNRR conducts an ongoing environmental contingency analysis, which
considers a combination of factors including independent consulting reports,
site visits, legal reviews, analysis of the likelihood of participation in and
the ability of other PRPs to pay for clean-up, and historical trend analyses.
BNRR is involved in a number of administrative and judicial proceedings
and other mandatory clean-up efforts at approximately 170 sites, including the
Superfund sites, at which it is being asked to participate in the study or
clean-up of the alleged environmental contamination. BNRR paid approximately
$6 million during the three months ended March 31, 1996 relating to mandatory
clean-up efforts, including amounts expended under federal and state voluntary
clean-up programs. BNRR has accruals of approximately $115 million for
remediation and restoration of all known sites, including $110 million
pertaining to mandated sites, of which approximately $45 million relates to
the Superfund sites. BNRR anticipates that the majority of the accrued costs
at March 31, 1996 will be paid over the next five years. No individual site
is considered to be material.
Liabilities for environmental costs represent BNRR's best estimates for
remediation and restoration of these sites and include both asserted and
unasserted claims. Unasserted claims are not considered to be a material
component of the liability. Although recorded liabilities include BNRR's
best estimates of all costs, without reduction for anticipated recoveries from
third parties, BNRR's total clean-up costs at these sites cannot be predicted
with certainty due to various factors such as the extent of corrective actions
that may be required, evolving environmental laws and regulations, advances in
environmental technology, the extent of other PRPs' participation in clean-up
efforts, developments in ongoing environmental analyses related to sites
determined to be contaminated, and developments in environmental surveys and
studies of potentially contaminated sites. As a result, future charges to
income for environmental liabilities could possibly have a significant effect
on results of operations in a particular quarter or fiscal year as individual
site studies and remediation and restoration efforts proceed or as new sites
arise. However, expenditures associated with such liabilities are typically
paid out over a long period; therefore, management believes that it is
unlikely that any identified matters, either individually or in the aggregate,
will have a material adverse effect on BNRR's consolidated financial position
or liquidity.
BNRR expects it will become subject to future requirements regulating air
emissions from diesel locomotives that may increase its operating costs.
Regulations applicable to new locomotive engines are expected to be issued by
the Environmental Protection Agency soon. It is anticipated that these
regulations will be effective for locomotive engines installed after 1999.
Under some interpretations of federal law, older locomotive engines may be
regulated by states based on standards and procedures which the State of
California ultimately adopts. At this time it is unknown whether California
will adopt any locomotive emission standards.
BNRR is a party to a number of legal actions and claims, various governmental
proceedings and private civil suits arising in the ordinary course of
business, including those related to environmental matters and personal injury
claims. While the final outcome of these items cannot be predicted with
certainty, considering among other things the meritorious legal defenses
available, it is the opinion of management that none of these items, when
finally resolved, will have a material adverse effect on the annual results of
operations, financial position or liquidity of BNRR, although an adverse
resolution of a number of these items in a single period could have a material
adverse effect on the results of operations in a particular quarter or fiscal
year.
5. Hedging activities
BNRR has a program to hedge against fluctuations in the price of its diesel
fuel purchases. This program includes forward purchases for delivery at
fueling facilities. Additionally, this program includes exchange-traded
petroleum futures contracts and various commodity swap and collar transactions
which are accounted for as hedges. Any gains or losses associated with
changes in market value of these hedges are being deferred and recognized as a
component of fuel expense in the period in which the hedged fuel is purchased
and used. To the extent BNRR hedges portions of its fuel purchases, it may
not fully benefit from decreases in fuel prices.
As of March 31, 1996, BNRR had entered into forward purchases for
approximately 57 million gallons at an average price of approximately 49 cents
per gallon and petroleum futures contracts representing approximately 36
million gallons at an average price of approximately 48 cents per gallon.
These contracts have expiration dates ranging from April 1996 to October 1996.
The above prices do not include taxes, fuel handling costs, certain
transportation costs and, except for forward contracts, any differences which
may occur from time to time between the prices of commodities hedged and the
purchase price of BNRR's diesel fuel.
The current and future fuel delivery prices are monitored continuously and
hedge positions are adjusted accordingly. Hedge positions are also closely
monitored to ensure that they will not exceed actual fuel requirements.
Unrealized gains from BNRR's fuel hedging transactions were approximately $2
million at March 31, 1996. BNRR monitors its hedging positions and credit
ratings of its counterparties and does not anticipate losses due to
counterparty nonperformance.
<PAGE>
BURLINGTON NORTHERN RAILROAD COMPANY AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS
Management's narrative analysis relates to the financial condition and results
of operations of Burlington Northern Railroad Company and its majority-owned
subsidiaries (collectively BNRR). BNRR is a wholly-owned subsidiary of
Burlington Northern Inc. (BNI) which became a wholly-owned subsidiary of
Burlington Northern Santa Fe Corporation (BNSF) on September 22, 1995.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1996 COMPARED WITH THREE MONTHS ENDED MARCH 31,
1995
BNRR recorded net income for the first three months of 1996 of $149 million
compared with net income of $28 million for the first three months in 1995.
Results for the first quarter of 1995 were reduced by a $100 million after-tax
charge for the cumulative effect of a change in accounting for locomotive
overhauls.
REVENUES
The following table presents BNRR's revenue information by commodity for the
three months ended March 31, 1996 and 1995 and includes certain
reclassifications of prior year information to conform to current year
presentation.
<TABLE>
<CAPTION>
Revenue
Revenue Per Thousand
Revenues Ton Miles Ton Miles
-----------------------------------------------
1996 1995 1996 1995 1996 1995
-----------------------------------------------
(In Millions) (In Millions)
<S> <C> <C> <C> <C> <C> <C>
Intermodal $ 162 $ 182 5,603 6,099 $28.91 $29.84
Coal 433 453 38,486 37,793 11.25 11.99
Agricultural Commodities 275 248 14,364 12,359 19.15 20.07
Chemicals 83 77 3,386 3,053 24.51 25.22
Forest Products 102 109 4,630 4,733 22.03 23.03
Consumer and Food Products 69 79 2,482 2,699 27.80 29.27
Metals 74 71 3,537 3,108 20.92 22.84
Minerals and Ores 57 56 2,448 2,489 23.28 22.50
Automotive 39 37 412 528 94.66 70.07
------ ------ ------ ------ ------ ------
Total Freight Revenues 1,294 1,312 75,348 72,861 17.17 18.01
Other Revenues 25 35 - - - -
------ ------ ------ ------ ------ ------
Total Operating Revenues $1,319 $1,347 75,348 72,861 $17.17 $18.01
====== ====== ====== ====== ====== ======
</TABLE>
Total revenues for the first three months of 1996 were $1,319 million compared
with revenues of $1,347 million for the first quarter of 1995. The $28
million decrease was primarily due to severe weather conditions and related
operating constraints which reduced business in the Pacific Northwest.
Intermodal revenues were $162 million for the 1996 first quarter compared with
$182 million for the 1995 first quarter. The decrease of $20 million was due
to a reduction in the number of carloadings in the 1996 first quarter due to
severe weather conditions.
Coal revenues were $433 million during the first three months of 1996 compared
with $453 million during the first three months of 1995. The decrease in Coal
revenues was due to severe weather conditions and related operating
constraints which reduced Powder River Basin traffic during the 1996 first
quarter.
Agricultural Commodities revenue of $275 million for the 1996 first quarter
were $27 million greater than revenues of $248 million for the 1995 first
quarter. The increase is primarily due to higher average revenue per car
reflecting stronger export demand.
Forest Products revenues decreased $7 million for the 1996 first quarter.
This decrease was due to lower traffic levels for lumber.
Consumer and Food Products revenues were $69 million for the 1996 first
quarter compared with revenues of $79 million for the first quarter of 1995.
The decrease was due to lower carloadings, partially offset by an increase in
average revenue per car.
EXPENSES
Total operating expenses for the first quarter of 1996 were $1,077 million
compared with operating expenses of $1,122 million for the 1995 first quarter.
The operating ratio for the 1996 first quarter was 81.6 percent compared to
83.3 percent for the 1995 first quarter.
Compensation and benefit expenses for the 1996 first quarter were $455
million, a $27 million decrease from expenses of $482 million for the 1995
first quarter. The decrease was due to lower salaried employee cost due to
reductions in salaried employees, partially offset by increased expenses due
to severe weather.
Equipment rents expenses for the first quarter of 1996 of $137 million was $8
million higher than the first quarter of 1995 primarily due to an increase
in the number of leased freight cars.
Purchased services expenses for the 1996 first quarter of $99 million were $16
million lower than expenses of $115 million for the first quarter of 1995
primarily attributable to lower intermodal-related expenses.
Fuel expenses for the first quarter of 1996 were $8 million higher than fuel
expenses for the 1995 first quarter primarily due to an increase in the
average price paid for diesel fuel.
Materials and other expenses of $182 million for the first quarter of 1996
were $17 million lower than the 1995 first quarter due to operating synergies
gained through the business combination, partially offset by higher costs
associated with severe weather and derailments.
OTHER MATTERS
LABOR
Labor unions represent approximately 90 percent of BNRR's employees under
collective bargaining agreements with 13 different labor organizations. BNRR
is actively involved in industry-wide labor contract negotiations which began
in late 1994. Wages, health and welfare benefits, work rules and other issues
are being negotiated for substantially all rail union employees. An agreement
with the yardmasters union was reached in December 1994 with respect to wages,
work rules and all other matters other than health and welfare benefits;
health and welfare issues are being addressed at the national level and will
apply to BNRR's approximately 250 yardmasters.
In December 1995, BNRR's multi-employer bargaining representative, the
National Carriers' Conference Committee ("NCCC"), reached a tentative
agreement with the United Transportation Union ("UTU"), subject to UTU member
ratification, resolving wage, benefit and work rule issues through 1999. In
April 1996, the UTU members voted to reject the tentative agreement. However,
the UTU and the NCCC agreed to accept binding arbitration of the settlement,
thus averting any job action or service interruption over the issues being
resolved. On May 8, 1996, an arbitration panel imposed the terms of the
previously-reached tentative agreement on the NCCC and the UTU.
An agreement similar to the UTU agreement was reached in February 1996 with
the Brotherhood of Locomotive Engineers ("BLE"). The results of the BLE
membership ratification process should be known in late May 1996. A tentative
agreement was reached between the NCCC and the Brotherhood of Railway
Signalman ("BRS") in May 1996. The results of the BRS ratification process
should be known by the end of June 1996.
On April 5, 1996, the National Mediation Board ("NMB") proffered binding
arbitration to the Transportation Communications Union ("TCU"); following the
TCU's rejection of the NMB's proffer, the TCU was released from mediation on
April 8, 1996 On April 15, 1996, the NMB proffered binding arbitration to the
International Brotherhood of Electrical Workers ("IBEW"), the International
Association of Machinists and Aerospace Workers ("IAM"), and the Sheet Metal
Workers' International Association ("SMW"). All four unions rejected the
NMB's proffer and were released from mediation on April 17, 1996.
On April 29, 1996, the NMB proffered binding arbitration to the Brotherhood of
Maintenance of Way Employees ("BMWE"). The NCCC has agreed to accept binding
arbitration but the BMWE is expected to reject the NMB's proffer. The BMWE
and one other union are challenging the railroads' right to negotiate on a
multi-employer basis and the issue is currently pending in federal district
court in Washington, D.C.
The NMB's releases trigger the procedures under the Railway Labor Act,
starting with a 30-day "cooling-off" period. Unless presidential emergency
boards are appointed, which the NMB has recommended, the unions and the
railroads would be free to engage in "self-help" remedies, such as a strike or
lockout after the cooling-off periods expire. The appointment of presidential
emergency boards by President Clinton would defer the possibility of an
interruption of service for an additional 60 days, after which the parties
could engage in self-help absent congressional intervention. The TCU
announced that it intended to strike one or more of the nation's major freight
railroads on May 9, 1996 following the expiration of its cooling-off period.
However, President Clinton appointed Presidential Emergency Board ("PEB") No.
228 on May 8, 1996 to investigate and report on the dispute between the TCU
and the NCCC. The PEB's report is due within 30 days. Another 30-day
cooling-off period will commence after issuance of the report, after which the
parties would be able to exercise their rights to self-help. A cooling-off
period for the BMWE would commence if the BMWE rejects arbitration.
The ultimate outcome of negotiations cannot predicted. While there is the
possibility of presidential or congressional intervention, or both, the
potential exists for one or more work stoppages in the railroad industry in
1996 which may affect BNRR. Existing collective bargaining agreements will
remain in effect until new agreements are reached or until the Railway Labor
Act's procedures are exhausted.
BNRR is party to service interruption agreements under which it would be
required to pay premiums of up to a maximum of approximately $70 million in
the event of work stoppages on other railroads related to ongoing national
bargaining. BNRR is also entitled to receive payments under certain
conditions if a work stoppage occurs on its property.
<PAGE>
BURLINGTON NORTHERN RAILROAD COMPANY AND SUBSIDIARIES
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
COAL TRANSPORTATION CONTRACT LITIGATION
Reference is made to the discussion in the Burlington Northern Railroad
Company ("BNRR") Report on Form 10-K for the fiscal year ended December 31,
1995 of the action filed by Southwestern Electric Power Company ("SWEPCO")
against BNRR in the 102nd Judicial District Court for Bowie County, Texas
seeking a reduction of the transportation rates required to be paid under two
contracts (Southwestern Power Company v. Burlington Northern Railroad Company,
No. D-102-CV-91-0720). BNRR had appealed the trial court's judgment (which
approximated $74 million and contained other relief) to the Court of Appeals
for the Sixth Court of Appeals District of Texas, Texarkana, Texas (Burlington
Northern Railroad Company v. Southwestern Electric Power Company, No.
06-95-00024-CV), and SWEPCO had filed a notice of cross appeal. The matter
was argued on April 23, 1996. By decision dated April 30, 1996, the Court of
Appeals reversed the judgment of the trial court and rendered judgment in
favor of BNRR. SWEPCO was assessed costs of the appeal. SWEPCO may seek
rehearing before the Court of Appeals and may further apply for discretionary
review of the decision by the Texas Supreme Court.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
See Index to Exhibits on page E-1 for a description of the exhibits filed as
part of this report.
B. Reports on Form 8-K
None
<PAGE>
SIGNATURES
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.
BURLINGTON NORTHERN RAILROAD COMPANY
(Registrant)
By: /s/ Thomas N. Hund
Thomas N. Hund
Vice President and Controller
(On behalf the Registrant and as
principal accounting officer)
Schaumburg, Illinois
May 15, 1996
<PAGE>
BURLINGTON NORTHERN RAILROAD COMPANY AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit Nature of Exhibit
27 Financial Data Schedule.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from
Burlington Northern Railroad's Consolidated Financial Statements and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000,000
<CAPTION>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 23
<SECURITIES> 0
<RECEIVABLES> 613
<ALLOWANCES> (24)
<INVENTORY> 157
<CURRENT-ASSETS> 969
<PP&E> 10369
<DEPRECIATION> (4151)
<TOTAL-ASSETS> 7575
<CURRENT-LIABILITIES> 1426
<BONDS> 588
<COMMON> 0
0
0
<OTHER-SE> 3189
<TOTAL-LIABILITY-AND-EQUITY> 7575
<SALES> 0
<TOTAL-REVENUES> 1319
<CGS> 0
<TOTAL-COSTS> 1077
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15
<INCOME-PRETAX> 237
<INCOME-TAX> 88
<INCOME-CONTINUING> 149
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 149
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
