<PAGE>
Filing under Rule 425
- ---------------------
Filer: Burlington Northern Santa Fe Corporation
Comapnies that are subject to the filing:
Canadian National Railway Company
North American Railways, Inc.
Registration Statement No. 333-94397
[BNSF logo and letterhead appears here]
May 8, 2000
Dear Fellow Shareholder:
I'm pleased to share with you our record first quarter 2000 results, which
are reported in the attached news release. The first quarter of 2000 was a good
one for BNSF as we remained focused on our day-to-day business of serving
shippers, operating an efficient and on-time railroad, and growing our revenues.
Operating income was $510 million, or 6 percent higher than the same 1999
quarter; earnings per share was $0.55 on a diluted basis, a 10-percent increase
from a year ago; and our operating ratio -- the key measure of efficiency --
improved to 77.2 percent, 80 basis points lower than the 78 percent in first
quarter 1999. Revenues were $2.24 billion, or 3 percent higher, than the same
1999 period.
We continued to improve service levels - achieving a record 93.7 percent
system-wide on-time performance in the first quarter of 2000, the best in the
industry, and a solid improvement from 88.7 percent in the first quarter of
1999. During the first quarter, we also repurchased 26.7 million shares of BNSF
common stock. On April 20, our Board of Directors authorized an extension of the
current program, adding 30 million shares to the total of 60 million shares
previously authorized and substantially repurchased since July 1997. The amount
of shares repurchased in the first quarter reflects our belief that BNSF stock
represents an extremely good value at recent prices.
Throughout the quarter, I kept you aware of developments following our
December 20, 1999 announcement to combine BNSF and Canadian National Railway
Company (CN). We remain convinced this is the right strategic move for both
companies. It will create an efficient, integrated network with new single-line
traffic routes offering shippers expanded market access and better service.
On March 7, Paul Tellier, CN's CEO, and I testified before the U.S. Surface
Transportation Board (STB). After the public hearings, the STB issued a 15-month
merger moratorium during which time they would consider revising current merger
rules. This policy decision prohibits us from filing our merger application. On
April 25, the U.S. Court of Appeals in Washington, D.C. decided to hear oral
arguments for an expedited judicial review of the STB's moratorium, responding
to petitions we made in March. We filed our written testimony on May 5 and the
Court will hear oral arguments on June 13. I will keep you informed of our
progress.
Meanwhile, our shareholder hotline remains open at 1-800-223-2064 from 8:30
a.m. to 8:00 p.m. Eastern Time, Monday through Friday to help answer any
questions you may have regarding the proposed combination.
<PAGE>
Clearly, BNSF and CN are the most efficient and financially strong railroads
in the industry today. Thank you for your continuing support.
Sincerely,
/s/ Robert D. Krebs
- ------------------------------------
Robert D. Krebs
Chairman and Chief Executive Officer
- --------------------------------------------------------------------------------
North American Railways, Inc. and CN have filed a registration statement on Form
F-4/S-4 with the Securities and Exchange Commission (SEC) in connection with the
securities to be issued in the combination. This filing also includes the
preliminary proxy statement for the shareholders' meetings to be held for
approval of the combination. Investors should read this document and other
documents filed with the SEC by CN, BNSF, and North American Railways, Inc.
about the combination because they contain important information. These
documents may be obtained for free at the SEC's Web site, www.sec.gov. Other
filings made by BNSF on Forms 10-K, 10-Q and 8-K may be obtained for free from
the BNSF Corporate Secretary's office, 817-352-6856. For information concerning
participants in BNSF's solicitation of proxies for approval of the combination,
see "Certain Information Concerning Participants" filed by BNSF on Schedule 14A
under Rule 14a-12.
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT A
[BNSF logo here] NEWS
Contact: Richard Russack FOR IMMEDIATE RELEASE
(817) 352-6425
Burlington Northern Santa Fe Reports
Record First Quarter Results
. Earnings of $0.55 per diluted share -- up 10 percent from first quarter
1999 earnings of $0.50 per diluted share.
. First quarter operating income of $510 million -- $30 million or 6
percent higher than first quarter 1999 operating income of $480 million.
. Revenues of $2.24 billion, an increase of $55 million or 3 percent over
first quarter 1999 revenues of $2.18 billion.
. Operating ratio for the first quarter 2000 improved to 77.2 percent
compared with 78.0 percent in first quarter 1999.
FORT WORTH, Texas, April 25, 2000 - - Burlington Northern Santa Fe
Corporation (BNSF) (NYSE: BNI) today reported record first quarter earnings of
$0.55 per share on a diluted basis, a 10 percent increase from first quarter
1999 earnings of $0.50 per share.
"During the first quarter, we continued to focus on customer service, as
our system on-time performance reached a record 93.7 percent compared with 88.7
percent for the first quarter 1999 and 91.0 percent for the full-year 1999,"
said Robert D. Krebs, BNSF Chairman and Chief Executive Officer. "Despite about
a 30 percent increase in our fuel prices, first quarter 2000 operating income
was a record $510 million compared with $480 million for the same 1999 period."
<PAGE>
BNSF 1Q Earnings/Page Two
Revenues of $2.24 billion for the first quarter 2000 were $55 million
higher than the first quarter 1999. Intermodal revenues increased $46 million,
or 8 percent, to $618 million reflecting increases in the international,
truckload and direct marketing sectors. Carload revenues reached $645 million,
an increase of $26 million, or 4 percent, from last year due to increases in
most sectors. Automotive revenues improved $16 million, or 15 percent, to $124
million, primarily due to continued growth in vehicle shipments. Agricultural
commodity revenues increased $12 million, or 4 percent, to $322 million,
primarily due to stronger soybean and wheat exports and increased domestic
demand for soybeans and northern wheat. Coal revenues declined $36 million, or
6 percent, to $529 million due in part to a decrease in demand as a result of
mild winter weather.
Operating expenses of $1.73 billion were $25 million, or 1 percent, higher
than 1999 despite an increase in volume of 3 percent. Fuel expense was $46
million higher than 1999 despite flat consumption, as the average cost of diesel
fuel per gallon, including hedge effects, rose from 56 cents to 72 cents. The
increase in fuel expense was partially offset by lower equipment rents,
materials and other expenses.
Operating income increased 6 percent to $510 million for the first quarter
2000 compared with $480 million for the same period in 1999. The operating
ratio improved slightly to 77.2 percent for the first quarter 2000 compared with
an operating ratio of 78.0 percent for the first quarter 1999.
Common Stock Repurchases
BNSF repurchased 26.7 million shares at an average price of $21.87 during
the first quarter of 2000. On April 20, 2000, the Board of Directors authorized
the extension of the current BNSF share repurchase program, adding 30 million
shares to the total of 60 million shares previously authorized in equal amounts
in July 1997 and December 1999. BNSF has repurchased substantially all of the
shares previously authorized.
<PAGE>
BNSF 1Q Earnings/Page Three
BNSF/CN Combination Update
BNSF is vigorously pursuing avenues of appeal to obtain a prompt hearing on
its application for the proposed combination with Canadian National Railway
Company within the time frames established by statute. BNSF filed with the D.C.
Circuit Court of Appeals a petition for review of the Surface Transportation
Board's March 17, 2000 order imposing a 15-month moratorium on the filing of any
application for approval of a combination involving Class I railroads. BNSF
anticipates action by that Court in the near future on our motions seeking a
stay of the STB's order as well as expedited judicial review of the merits of
the Board's decision. In addition, BNSF plans to actively participate in the
STB's recently announced proceeding to examine if new or revised rules should
apply to rail consolidations.
Through its subsidiary, The Burlington Northern and Santa Fe Railway
Company, headquartered in Fort Worth, Texas, BNSF operates one of the largest
rail networks in North America with 33,500 route miles of track covering 28
states and two Canadian provinces.
Consolidated financial statements follow.
North American Railways, Inc. and CN have filed a registration statement on Form
F-4/S-4 with the Securities and Exchange Commission (SEC) in connection with the
securities to be issued in the combination. This filing also includes the
preliminary proxy statement for the shareholders' meetings to be held for
approval of the combination. Investors should read this document and other
documents filed with the SEC by CN, BNSF, and North American Railways, Inc.
about the combination because they contain important information. These
documents may be obtained for free at the SEC's Web site, www.sec.gov . Other
-----------
filings made by BNSF on Forms 10-K, 10-Q and 8-K may be obtained for free from
the BNSF Corporate Secretary's office, 817-352-6856. For information concerning
participants in BNSF's solicitation of proxies for approval of the combination,
see "Certain Information Concerning Participants" filed by BNSF on Schedule 14A
under Rule 14a-12.
<PAGE>
Burlington Northern Santa Fe Corporation
Consolidated Statement of Income
(Unaudited. In millions, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------------
<S> <C> <C>
2000 1999
----------- -----------
Revenues $ 2,238 $ 2,183
----------- -----------
Operating Expenses
Compensation and benefits 698 690
Purchased services 231 229
Depreciation and amortization 222 219
Equipment rents 179 193
Fuel 211 165
Materials and other 187 207
----------- -----------
Total Operating Expenses 1,728 1,703
----------- -----------
Operating Income 510 480
Interest Expense 104 94
Other Income (Expense) - Net (15) (9)
----------- -----------
Income Before Income Taxes 391 377
Income Tax Expense 148 141
----------- -----------
Net Income $ 243 $ 236
=========== ===========
Earnings Per Share
Basic Earnings Per Share $ 0.55 $ 0.50
Diluted Earnings Per Share $ 0.55 $ 0.50
=========== ===========
Average Shares Outstanding
Basic 444.2 469.3
Diluted 445.5 474.7
=========== ===========
Operating Ratio 77.2% 78.0%
=========== ===========
</TABLE>
Statement Explanation:
- ----------------------
Certain prior period revenues and expenses have been reclassified to conform to
the current period presentation.
<PAGE>
Burlington Northern Santa Fe Corporation
(Unaudited. In millions)
Condensed Consolidated Balance Sheet
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
--------------- --------------
<S> <C> <C>
Assets
Cash and cash equivalents $ 32 $ 22
Other current assets 956 1,044
--------------- --------------
Total current assets 988 1,066
Properties and other assets 22,906 22,634
--------------- --------------
Total Assets $ 23,894 $ 23,700
=============== ==============
Liabilities and Stockholders' Equity
Long-term debt and commercial paper due within one year $ 127 $ 158
Other current liabilities 1,865 1,917
Long-term debt and commercial paper 6,285 5,655
Deferred income taxes 6,133 6,097
Other liabilities 1,697 1,701
Stockholders' equity 7,787 8,172
--------------- --------------
Total Liabilities and Stockholders' Equity $ 23,894 $ 23,700
=============== ==============
</TABLE>
Condensed Consolidated Cash Flow Information
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------------
<S> <C> <C>
2000 1999
------------- -------------
Cash provided by operating activities $ 540 $ 416
Cash used for capital expenditures (257) (373)
Other investing activities (235) (204)
Dividends Paid (55) (56)
------------- -------------
Free Cash Flow (Deficit) after Dividends Paid (7) (217)
Purchase of BNSF common stock (583) (100)
Other financing activities 1 45
------------- -------------
Net Debt Incurred $ 589 $ 272
============= =============
</TABLE>
<PAGE>
Burlington Northern Santa Fe Corporation
Supplemental Data
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------------
<S> <C> <C>
2000 1999
------------ ------------
Revenues (In millions)
Carload $ 645 $ 619
Intermodal 618 572
Coal 529 565
Agricultural Commodities 322 310
Automotive 124 108
------------ ------------
Total Freight Revenues 2,238 2,174
Other Revenues - 9
------------ ------------
Total Revenues $ 2,238 $ 2,183
============ ============
Operating ratio 77.2% 78.0%
Revenue ton miles (billions) 121.0 113.6
Freight revenue per thousand revenue ton miles $ 18.50 $ 19.14
Cars/Units (thousands) 1,988 1,926
Average freight revenue per car/unit $ 1,126 $ 1,129
Employees (average) 39,254 42,590
</TABLE>
Statement Explanation:
- ----------------------
Certain prior period revenues and expenses have been reclassified to conform to
the current period presentation.
