UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 18, 1994
BURLINGTON NORTHERN INC.
(Exact name of registrant as specified in its charter)
Delaware 1-8159 41-1400580
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
3800 Continental Plaza, 777 Main Street, Fort Worth, Texas 76102
(Address of principal executive offices)
Registrant's telephone number, including area code: (817) 333-2000
(Former name or former address, if changed since last report)
Page 1 of 3. There are no exhibits
filed with this Form 8-K.
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Item 5. Other Events
Coal Transportation Contract Litigation Development
On April 26, 1991, an action was filed against Burlington Northern Railroad
Company ("Railroad"), a wholly owned subsidiary of Burlington Northern Inc.
("BNI"), 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 Electric Power Company v. Burlington Northern Railroad
Company, No. D-102-CV-91-0720). The plaintiff, Southwestern Electric Power
Company ("SWEPCO"), was challenging the contract rates for transportation of
coal to its electric generating facilities at Cason, Texas and Flint Creek,
Arkansas. SWEPCO contended that productivity gains achieved by Railroad
constituted unusual economic conditions giving rise to a "gross inequity"
because Railroad's costs of providing service have been reduced over the
contracts' terms. On August 2, 1994, plaintiff filed an amendment to its
complaint to further allege that Railroad had been unjustly enriched by
retaining differences between the rates actually charged and those that should
have been charged. SWEPCO sought both prospective rate relief and recovery of
alleged past overcharges.
Railroad's primary contention was that both parties anticipated productivity
gains in the rail industry when negotiating the contracts and agreed that
Railroad would retain most of its productivity gains. Railroad further
contended that there was no agreement that transportation rates paid by SWEPCO
would be based on Railroad's costs of providing service.
On November 18, 1994, the jury rendered a verdict denying plaintiff's request
for prospective rate relief and that plaintiff take nothing on its principal
claims of "gross inequity." However, Railroad was assessed damages
approximating $56 million relating to plaintiff's alternative claim of unjust
enrichment. Railroad intends to appeal that portion of the jury verdict. In
the opinion of outside counsel, Railroad has a substantial likelihood of
prevailing on appeal, although no assurances can be given due to the
uncertainties inherent in litigation. BNI and Railroad believe that each
Company's financial statements continue to appropriately reflect the expected
outcome of this case.
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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 hereto duly authorized.
BURLINGTON NORTHERN INC.
By: /s/ Edmund W. Burke
Edmund W. Burke
Executive Vice President, Law
and Secretary
Date: November 22, 1994
