SCHEDULE 14A
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
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Filed by the Registrant [x]
Filed by a Party other than the Registrant [x]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[X ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
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BURLINGTON NORTHERN INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
BURLINGTON NORTHERN INC.
(NAME OF PERSON(S) FILING PROXY STATEMENT)
----------------------
Payment of Filing Fee (Check the appropriate box): (/1/)
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[x] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
Santa Fe Pacific Corporation common stock, par value $1.00 per
share.
(2) Aggregate number of securities to which transactions applies:
187,049,738 shares of Santa Fe Pacific Corporation common stock.
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: $49 1/2 (/2/)
(4) Proposed maximum aggregate value of transaction: $3,148,047,091
(/2/)
(/1/) The filing fee previously was paid with the initial filing of the
preliminary proxy materials on August 8, 1994 and with the filing
of two Registration Statements on Form S-4 on October 12, 1994
(Reg. No. 33-56007) and October 27, 1994 (Reg. No. 33-56183),
respectively.
(/2/) For purposes of calculating the filing fee only. Upon consummation
of the Merger, each outstanding share of Santa Fe Pacific
Corporation common stock, par value $1.00 per share, will be
converted into the right to receive 0.34 shares of Burlington
Northern Inc. common stock, no par value. The proposed maximum
aggregate value of the transaction described in the preliminary
proxy materials is $3,148,047,091 (calculated based on the number
of shares of Santa Fe Pacific Corporation common stock
outstanding as of October 19, 1994, the average of the high and
low reported prices of Burlington Northern Inc. common stock on
October 21, 1994 and the exchange ratio of 0.34). The filing fee
is one-fiftieth of that amount.
[x] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:...................$1,145,590
(2) Form, Schedule or Registration
Statement No.:............................Preliminary Proxy
Statement
Registration Statement
on Form S-4
(Reg. No. 33-56007)
Registration Statement
on Form S-4, as amended
(Reg. No. 33-56183)
(3) Filing Party: ...................Burlington Northern
Inc./Santa Fe
Pacific Corporation
(4) Date filed: ...................August 8, 1994
...................October 12, 1994
...................October 27,1994
[BURLINGTON NORTHERN INC. LOGO NEWS]
Burlington Northern Inc. Announces Record
Quarterly, Annual Earnings
FORT WORTH, Texas, January 19, 1995--Burlington Northern Inc. (BNI)
today announced the highest quarterly and annual earnings ever achieved by the
company. Fourth quarter 1994 net income of $142 million, $1.51 per common
share (primary) or $1.46 per common share (fully diluted), was 20 percent
greater than the $118 million, $1.25 per common share (primary) or $1.21 per
common share (fully diluted), earned in the same 1993 quarter. Operating
income of $264 million represented an 18-percent increase over the prior
year's fourth quarter. Revenues for the fourth quarter reached $1.34 billion,
also an all-time quarterly record, and were eight percent higher than reported
for the same period of 1993.
Full-year 1994 net income for BNI was $416 million, $4.37 per common
share (primary) or $4.27 per common share (fully diluted), a 41-percent
increase over 1993. Annual operating income rose 29 percent to $853 million,
while revenues climbed six percent to nearly five billion dollars.
Included in 1994 earnings was the cumulative effect of an accounting
adjustment which reduced net income by $10 million and earnings per common
share by $.11 (primary). Reported 1993 net income included a third quarter
charge of $26 million, or $.29 per common share (primary), to reflect the
effect of a one-percent increase in the corporate income tax rate on the
year-end 1992 deferred tax balance. BNI had also announced that operating
income in the second and third quarter of 1993 was reduced by a total of $88
million, or $.61 per common share (primary), due to the summer's flooding.
Agricultural commodities experienced all-time record volume and
revenues in the quarter. Abundant harvests in BNI's service territory, strong
domestic demand, and a resurgence in foreign demand combined to increase unit
volume 18 percent. Revenues grew to $274 million, 24 percent over the fourth
quarter of last year.
BN EARNINGS / ADD TWO
Revenues from intermodal shipments grew 15 percent to $216 million as
strong import and export demand for containerized freight, and market share
gains in the domestic less-than-truckload market, drove unit volumes up 11
percent over fourth quarter 1993.
Fourth quarter 1994 coal volume of 44.8 million tons and revenues of
$416 million set all-time records, surpassing last year's fourth quarter
records established as the company made a concerted effort to replenish coal
stockpiles seriously depleted during the summer's flooding.
"While agricultural commodities, intermodal, and coal accounted for
most of the revenue growth in the quarter, most other commodity groups turned
in solid performances as well," said Gerald Grinstein, chairman and chief
executive officer of BNI. "The pace at which we operated during the second
half of 1994 has established the benchmark for 1995."
Record fourth quarter volumes were a challenge for BNI employees.
There were a number of locations throughout the system that operated in excess
of normal capacity for much of the quarter. Extraordinary measures were taken
to serve customers and satisfy as much of the immediate demand as possible.
In response to growing market opportunities, BNI continued to invest
in its freight-hauling capacity. By the end of the year, the company had
added more than 1,000 engineers and conductors to its work force, increased its
fleet of highly productive AC traction locomotives by 133, and built an
additional 31 miles of second main track to improve service between Powder
River Basin coal producers and utility customers.
While handling record volumes of business, the company was able to
operate safely and efficiently. Personal injuries resulting in lost work days
fell 52 percent during 1994 and derailment incidents were reduced by 21 percent
over the same period.
"We reduced our fourth quarter operating ratio (the ratio of
operating expenses to operating revenues) to 80.4, its lowest point ever, and
brought the full year down to 82.9, a three point improvement over 1993," said
Mr. Grinstein. "We were pleased with our performance in the second half of
1994, particularly in the fourth quarter, and we are encouraged by the market
opportunities we see in the coming year. We are confident that we can take
advantage of these opportunities while at the same time increasing the
productivity of our system."
BN EARNINGS/ADD THREE
Headquartered in Fort Worth, Texas, BNI is the parent of Burlington
Northern Railroad, the longest rail system in terms of miles of road and
second main track, in North America, with operations in 25 states and two
Canadian provinces. Its principal sources of revenue are the transportation
of coal, grain, intermodal containers, and a wide variety of industrial,
consumer, automotive and forest products.
Condensed consolidated financial statements follow.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Dollars in Millions, Except Per Share Data -- UNAUDITED)
<TABLE>
Three Months Ended Twelve Months Ended
December 31, December 31,
<S> <C> <C> <C> <C> <C> <C>
% %
1994 1993 Change 1994 1993 Change
_______ _______ _______ _______ _______ _______
Revenues $ 1,344 $ 1,246 7.9% $ 4,995 $ 4,699 6.3%
Costs and expenses 1,080 1,022 5.7% 4,142 4,038 2.6%
_______ _______ _______ _______ _______ _______
Operating income 264 224 17.9% 853 661 29.0%
Interest expense 37 38 -2.6% 155 145 6.9%
Other income (Expense), net 4 3 33.3% (3) 5 -160.0%
_______ _______ _______ _______ _______ _______
Income before income taxes and
cumulative effect of change in
accounting method 231 189 22.2% 695 521 33.4%
Income tax expense 89 71 25.4% 269 225 19.6%
_______ _______ _______ _______ _______ _______
Income before cumulative effect of
change in accounting method 142 118 20.3% 426 296 43.9%
Cumulative effect of change in
accounting method, net of tax -- -- -- (10) -- --
_______ _______ _______ _______ _______ _______
Net Income $ 142 $ 118 20.3% $ 416 $ 296 40.5%
======= ======= ======= ======= ======= =======
Primary earnings (loss) per common share:
Income before cumulative effect of
change in accounting method $ 1.51 $ 1.25 20.8% $ 4.48 $ 3.06 46.4%
Cumulative effect of change in
accounting method -- -- -- (0.11) -- --
_______ _______ _______ ________ _ _______ _______
Primary earnings per common share $ 1.51 $ 1.25 20.8% $ 4.37 $ 3.06 42.8%
Shares used in computation
(in thousands) 90,095 89,919 0.2% 90,187 89,672 0.6%
======= ======= ======= ======= ======= =======
Fully diluted earnings (loss) per common share:
Income before cumulative effect of
change in accounting method $ 1.46 $ 1.21 20.7% $ 4.38 $ 3.04 44.1%
Cumulative effect of change in
accounting method -- -- -- (0.11) -- --
_______ _______ _______ _______ _______ _______
Fully diluted earnings per
common share $ 1.46 $ 1.21 20.7% $ 4.27 $ 3.04 40.5%
======= ======= ======= ======= ======= =======
Shares used in computation
(in thousands) 97,436 87,362 0.1% 97,528 97,189 0.3%
======= ======= ======= ======= ======= =======
Dividends declared per common share $ 0.30 $ 0.30 $ 1.20 $ 1.20
======= ======= ======= =======
</TABLE>
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Millions -- UNAUDITED)
<TABLE>
<S> <C> <C>
December 31, 1994 December 31, 1993
ASSETS ----------------- -----------------
Current assets $ 1,012 $ 891
Property and equipment, net 6,311 5,909
------- -------
Other assets 269 245
------- -------
Total assets $ 7,592 $ 7,045
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Commercial paper $ 90 $ 26
Current portion of long-term debt 32 185
Other 1,325 1,319
------- -------
Total current liabilities $ 1,447 $ 1,528
Long-term debt 1,697 1,526
Other liabilities 2,211 2,071
Stockholders' equity 2,237 1,919
------- -------
Total liabilities and Stockholders'
equity $ 7,592 $ 7,045
======= =======
SUPPLEMENTAL FINANCIAL INFORMATION
FINANCIAL RATIOS
Debt to total capital 44.8% 47.5%
Return on assets (ROA) 5.8% 4.4%
Return on equity (ROE) 20.7% 16.2%
Times interest earned 5.5 4.6
======= =======
4th
Quarter Full Year
BNI STOCK PRICES (CLOSING) 1994 1994
-------- --------
High $ 51 5/8 $ 66
Low $ 46 5/8 $ 46 5/8
End of period $ 48 1/8 $ 48 1/8
Beginning of period $ 50 1/4 $ 57 7/8
======== ========
</TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Millions - UNAUDITED)
<TABLE>
Year Ended
December 31,
----------------
Operating activities 1994 1993
----- -----
<S> <C> <C>
Net income $ 416 $ 296
Adjustments to reconcile net income to net cash provided
by operating
activities:
Cumulative effect of change in accounting method 10 --
Depreciation 362 352
Deferred income taxes 126 156
Changes in current assets and liabilities (115) (109)
Changes in long-term casualty and environmental reserv (10) (57)
Other, net -- (60)
Net cash provided by oeprating activities $ 789 $ 578
Investing activities
Additions to property and equipment $ (698) $ (676)
Proceeds from property and equipment dispositions 45 35
Other, net (28) (18)
Net cash provided by (used in) financing activities $ (98) $ 41
Increase (decrease) in cash and cash equivalents $ 10 $ (40)
Cash and Cash equivalents:
Beginning of year 17 57
End of year $ 27 $ 17
Financing activities
Net increase in commercial paper $ 64 $ 26
Proceeds from issuance of long-term debt 310 224
Payments on long-term debt (346) (88)
Dividends paid (129) (125)
Proceeds from exercise of common stock options 6 15
Redemption of redeemable preferred stock -- (9)
Net cash procided by (used in) financing activities $ (3) $ 41
Increase (decrease in cash and cash equivalents $ 10 $ (40)
Cash and cash equivlents:
Beginning of year 17 57
End of Year $ 27 17
</TABLE>
