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 September 30, 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 1-8159
BURLINGTON NORTHERN INC.
(Exact name of registrant as specified in its charter)
Delaware 41-1400580
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2650 Lou Menk Drive
Fort Worth, Texas 76131
(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 October 31, 1996
Common stock, $1.00 par value* 2,007 shares
*Burlington Northern Inc. 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 INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(DOLLARS IN MILLIONS)
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues $ 1,301 $ 1,389 $ 3,928 $ 4,025
Operating expenses:
Compensation and benefits 419 439 1,309 1,366
Purchased services 87 119 292 363
Depreciation and amortization 113 109 325 321
Equipment rents 119 114 366 346
Fuel 108 103 324 301
Materials and other 147 160 476 494
Merger, severance and asset charge - 106 - 148
------- ------- ------- --------
Total operating expenses 993 1,150 3,092 3,339
------- ------- ------- --------
Operating income 308 239 836 686
Equity in earnings of SFP 15 17 38 17
Interest expense 39 49 119 142
Other income, net 7 2 8 17
------- ------- ------- --------
Income before income taxes 291 209 763 578
Income tax expense 113 82 296 226
------- ------- ------- --------
Income before cumulative effect of
change in accounting method 178 127 467 352
Cumulative effect of change in
accounting method, net of tax - - - (100)
------- ------- ------- --------
Net income $ 178 $ 127 $ 467 $ 252
======= ======= ======= ========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
BURLINGTON NORTHERN INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(DOLLARS IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 100 $ 42
Accounts receivable, net 646 566
Materials and supplies 129 136
Current portion of deferred income taxes 174 174
Other current assets 31 38
--------- ---------
Total current assets 1,080 956
Property and equipment, net 7,225 6,566
Investment in Santa Fe Pacific Corporation 589 556
Other assets 316 323
--------- ---------
Total assets $ 9,210 $ 8,401
========= =========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable and other current liabilities $ 1,465 $ 1,400
Long-term debt and commercial paper due
within one year 107 33
--------- ---------
Total current liabilities 1,572 1,433
Long-term debt and commercial paper 1,505 1,709
Deferred income taxes 1,421 1,245
Advance from parent, net 693 460
Casualty and environmental reserves 371 417
Employee merger and separation costs 224 257
Other liabilities 725 648
--------- ---------
Total liabilities 6,511 6,169
--------- ---------
Commitments and Contingencies
Stockholder's equity:
Common stock and additional paid-in capital 1,797 1,797
Retained earnings 921 454
Other (19) (19)
--------- ---------
Total stockholder's equity 2,699 2,232
--------- ---------
Total liabilities and stockholder's
equity $ 9,210 $ 8,401
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
BURLINGTON NORTHERN INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(DOLLARS IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1996 1995
Operating Activities:
<S> <C> <C>
Net income $ 467 $ 252
Adjustments to reconcile net income to net cash
provided by operating activities:
Cumulative effect of change in accounting method - 100
Depreciation and amortization 325 321
Deferred income taxes 176 35
Merger, severance and asset charge - 148
Employee merger and separation costs paid (87) (58)
Other, net (43) 40
Changes in working capital 100 15
------ --------
Net cash provided by operating activities 938 853
------ --------
Investing Activities:
Cash used for capital expenditures (931) (581)
Investments in and advances to affiliates - (791)
Other, net (52) (22)
------ --------
Net cash used for investing activities (983) (1,394)
------ --------
Financing Activities:
Net increase (decrease) in commercial paper (224) 524
Proceeds from issuance of long-term debt 105 522
Payments on long-term debt (21) (421)
Advances from parent 233 -
Dividends paid - (97)
Proceeds from stock options - 12
Other, net 10 3
------ --------
Net cash provided by financing activities 103 543
------ --------
Increase in cash and cash equivalents 58 2
Cash and cash equivalents:
Beginning of period 42 27
------ --------
End of period $ 100 $ 29
====== ========
Supplemental cash flow information:
Interest paid, net of amounts capitalized $ 57 $ 132
Income taxes paid, net of refunds 3 161
Assets financed through capital lease obligations 13 4
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
BURLINGTON NORTHERN INC. 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 Inc. (BNI) 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. The principal subsidiary of BNI is Burlington
Northern Railroad Company (BNRR). Additionally, BNI maintains a 17 percent
ownership interest in Santa Fe Pacific Corporation (SFP) which is an indirect
wholly-owned subsidiary of BNSF.
As a result of a business combination, SFP became an indirect wholly-owned
subsidiary of BNSF on September 22, 1995. Subsequent to that time, as
permitted by the Interstate Commerce Commission decision authorizing the
business combination, BNSF has begun to consolidate 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. It is management's current plan to merge BNRR and ATSF in the near
future. Additionally, management is currently considering a plan to merge BNI
and SFP, which could take place as early as the end of 1996. The consolidation
of operations includes a single management team, as well as the combination of
certain information systems and certain operations. The third quarter and
nine month results presented in these financial statements include the effect
of allocations of expenses between BNI and SFP as they are no longer
distinguishable by each separate company. Management believes that these
allocations are reasonable.
The results of operations for any interim period are not necessarily
indicative of the results of operations to be expected for the entire year.
In the opinion of management, all adjustments (consisting of only normal
recurring adjustments, except as disclosed) necessary to present fairly BNI's
financial position as of September 30, 1996 and December 31, 1995 and the
results of operations for the three and nine month periods ended September 30,
1996 and 1995 and cash flows for the nine month period ended September 30,
1996 and 1995 have been included.
Certain prior year and prior period data has been reclassified to conform to
the current period presentation.
2. Employee, merger and separation costs
Current and long-term employee merger and separation liabilities totaling $295
million are included in the consolidated balance sheet at September 30, 1996.
During the first nine months of 1996, the Company paid $87 million of
employee, merger and separation costs.
At September 30, 1996, approximately $71 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, primarily including relocation costs
associated with clerical employees, have been recorded as operating expenses
in 1996 and will continue to be recorded as operating expenses during the
remainder of 1996 and future periods. The ultimate timing and magnitude of
any such future expense is presently unknown.
Results for the first nine months of 1995 include $148 million of
merger-related expenses principally related to employee separations and
relocations and to restricted stock which vested upon approval of the merger
by BNI shareholders.
3. Accounting change
Effective January 1, 1995, BNI 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. BNI 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
BNI's operations, as well as those of its competitors, are subject to
extensive federal, state and local environmental regulation. BNI'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 BNI'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, BNI is subject to environmental clean-up 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. BNI 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, BNI may be considered a PRP
under certain other laws. Accordingly, under CERCLA and other federal and
state statutes, BNI may be held jointly and severally liable for all
environmental costs associated with a particular site. If there are other
PRPs, BNI 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 BNI'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. BNI 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.
BNI is involved in a number of administrative and judicial proceedings
and other mandatory clean-up efforts at approximately 185 sites, including the
Superfund sites, at which it is being asked to participate in the study or
clean-up of the alleged environmental contamination. BNI paid approximately
$22 million during the first nine months of 1996 relating to mandatory
clean-up efforts, including amounts expended under federal and state voluntary
clean-up programs. BNI has accruals of approximately $110 million for
remediation and restoration of all known sites, including $105 million
pertaining to mandated sites, of which approximately $40 million relates to
the Superfund sites. BNI anticipates that the majority of the accrued costs
at September 30, 1996, will be paid over the next five years. No individual
site is considered to be material.
Liabilities for environmental costs represent BNI'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 BNI's best
estimates of all costs, without reduction for anticipated recoveries from
third parties, BNI'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 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; and are therefore not expected to have a material
adverse effect on BNI's consolidated financial position or liquidity.
BNI expects it will become subject to future requirements regulating air
emissions from diesel locomotives that may increase its operating costs.
Proposed regulations applicable to new locomotive engines are expected to be
issued by the U.S. Environmental Protection Agency by January 31, 1997, with
final regulations to be promulgated by December 17, 1997. 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 locomotive emission standards that may differ from
federal standards.
BNI and its subsidiaries are 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 BNI, 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
BNI 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. Any gains or losses associated with changes in market
value of these hedges are deferred and recognized as a component of fuel
expense in the period in which the hedged fuel is purchased and used. To the
extent BNI hedges portions of its fuel purchases, it may not fully benefit
from decreases in fuel prices.
As of October 31, 1996, BNI had entered into forward purchases for
approximately 11 million gallons at an average price of approximately 49 cents
per gallon. These contracts have expiration dates of November and December
1996.
The above price does not include taxes, fuel handling costs and certain
transportation costs.
The current and future fuel delivery prices are monitored continuously and
hedge positions are adjusted from time to time. Hedge positions are also
closely monitored to ensure that they will not exceed actual fuel requirements
in any period. Unrealized gains from BNI's fuel hedging transactions were
insignificant at September 30, 1996. BNI monitors its hedging positions and
credit ratings of its counterparties and does not anticipate losses due to
counterparty nonperformance.
<PAGE>
BURLINGTON NORTHERN INC. 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 Inc. and its majority-owned subsidiaries
(collectively BNI). The principal subsidiary is Burlington Northern Railroad
Company (BNRR). BNI is a wholly-owned subsidiary of Burlington Northern Santa
Fe Corporation (BNSF).
RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH NINE MONTHS ENDED SEPTEMBER
30, 1995
BNI recorded net income for the first nine months of 1996 of $467 million
compared with net income of $252 million for the first nine months in 1995.
Results for the first nine months of 1995 reflect a $148 million pre-tax
merger, severance and asset charge and a $100 million after-tax charge for the
cumulative effect of a change in accounting for locomotive overhauls.
REVENUES
The following table presents BNI's revenue information by commodity for the
nine months ended September 30, 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 $ 493 $ 551 16,878 18,151 $29.21 $30.36
Coal 1,346 1,323 120,809 115,644 11.14 11.44
Agricultural Commodities 674 750 34,513 41,500 19.53 18.07
Chemicals 287 269 11,794 11,201 24.33 24.02
Forest Products 314 321 14,910 14,823 21.06 21.66
Consumer and Food Products 216 231 7,892 8,436 27.24 27.38
Automotive 112 112 1,440 1,593 78.47 70.31
Metals 229 206 10,954 9,772 20.91 21.08
Minerals and Ores 170 166 6,811 6,879 24.96 24.13
------ ------ -------- ------- ------ ------
Total Freight Revenues 3,841 3,929 226,001 227,999 17.00 17.23
Other Revenues 87 96 - - - -
------ ------ -------- ------- ------ ------
Total Operating Revenues $3,928 $4,025 226,001 227,999 $17.00 $17.23
====== ====== ======== ======= ====== ======
</TABLE>
Total revenues for the first nine months of 1996 were $3,928 million, a
decrease of $97 million compared with revenues of $4,025 million for the first
nine months of 1995.
Intermodal revenues were $493 million for the 1996 first nine months compared
with $551 million for the 1995 first nine months. The decrease of $58 million
was principally due to the reduction in the number of carloadings in the 1996
first quarter due to severe weather conditions in the Pacific Northwest.
Agricultural Commodities revenue of $674 million for the 1996 first nine
months were $76 million lower than revenues of $750 million for the 1995 first
nine months. The decrease is primarily due to a significant decline in corn
and wheat exports in the third quarter, compared to record corn and wheat
traffic for export markets a year ago.
Chemicals revenues were $287 million for the first nine months of 1996
compared with $269 million for the first nine months of 1995. The increase is
due to continued strong petroleum products demand.
Consumer and Food Products revenues were $216 million for the 1996 first nine
months compared with revenues of $231 million for the first nine months of
1995. The decrease was principally due to lower carloadings.
Metals revenues increased $23 million for the 1996 first nine months. This
increase was due to higher volumes in 1996 compared to 1995.
EXPENSES
Total operating expenses for the first nine months of 1996 were $3,092 million
compared with operating expenses of $3,339 million for the 1995 first nine
months. Operating expenses for the nine months ended September 30, 1995
include a $148 million merger, severance and asset charge. The operating
ratio was 78.7 percent for the first nine months of 1996 compared to an
operating ratio of 79.3 percent for the 1995 first nine months excluding the
merger, severance and asset charge.
Compensation and benefits expenses for the 1996 first nine months were $1,309
million, a $57 million decrease from expenses of $1,366 million for the 1995
first nine months. The decrease was due to lower costs due to a reduction in
the number of salaried employees, partially offset by increased union employee
expenses.
Purchased services expenses for the 1996 first nine months of $292 million
were $71 million lower than expenses of $363 million for the first nine months
of 1995 primarily reflecting lower intermodal-related expenses and operating
synergies gained through the business combination.
Equipment rents expenses for the first nine months of 1996 of $366 million was
$20 million higher than expenses of $346 million for the first nine months of
1995 primarily due to an increase in lease expense on freight cars.
Fuel expenses of $324 million for the first nine months of 1996 were $23
million higher than the $301 million fuel expenses for the first nine months
of 1995 primarily due to an increase in the average price paid per gallon of
diesel fuel, partially offset by a decrease in volume.
BNI's 17 percent ownership interest in SFP resulted in equity in earnings of
SFP of $38 million for the 1996 first nine months compared to $17 million in
1995.
OTHER MATTERS
LABOR
Labor unions represent approximately 90 percent of BNRR employees under
collective bargaining agreements with 13 different labor organizations. BNRR
and other major railroads have been actively involved in industry-wide labor
contract negotiations since late 1994. Through this process, wages, health
and welfare benefits, work rules and other issues have now been negotiated for
substantially all BNRR rail union-represented employees. BNRR remains in
negotiations with employees represented by the American Train Dispatchers
Department (ATDD) of the Brotherhood of Locomotive Engineers. The ATDD
represents approximately 425 employees of BNRR.
The new collective bargaining agreements will remain in effect through at
least December 31, 1999 and until new agreements are reached or the Railway
Labor Act's procedures are exhausted. The new collective bargaining
agreements include provisions for retroactive wage increases, signing bonuses
and lump sum payments. Throughout the negotiation process, BNI has been
providing reserves related to potential union agreements; therefore, payments
related to the retroactive portion of these agreements did not have a material
effect on BNI's 1996 results of operations.
UNION PACIFIC/SOUTHERN PACIFIC MERGER
The Surface Transportation Board (STB) approved the proposed common control
and merger of rail carriers controlled by UP and SP in its written decision
dated August 12, 1996. The transaction was consummated on September 12, 1996.
As a condition of the merger, the STB imposed the provisions of the rights
agreement among BNRR, ATSF and UP/SP which grants rights to BNRR and ATSF to
more than 3,500 miles of track and will require the purchase by BNRR or ATSF
from UP and SP of more than 335 miles of track for $150 million. BNRR
acquired 28 miles of track in September 1996 for $20 million; the remaining
$130 million of track is anticipated to be purchased in the fourth quarter of
1996. The STB decision provides BNRR and ATSF with greater access to Gulf
Coast and West Coast markets. BNI is currently evaluating the STB decision
and the impact of the UP/SP merger; presently, the ultimate effect of the
UP/SP merger is not known.
<PAGE>
BURLINGTON NORTHERN INC. AND SUBSIDIARIES
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
COAL TRANSPORTATION CONTRACT LITIGATION
Reference is made to the discussion in Registrant's Report on Form 10-K for
the fiscal year ended December 31, 1995, and in its Reports on Form 10-Q for
the quarters ended March 31 and June 30, 1996, concerning the action filed by
Southwestern Electric Power Company ("SWEPCO") against Burlington Northern
Railroad Company ("BNRR") in the 102nd Judicial District Court for Bowie
County, Texas seeking a reduction of the coal transportation rates required to
be paid under two contracts (Southwestern Electric 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 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.
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 appeal. SWEPCO has been denied two motions for rehearing before the
Court of Appeals. On October 14, 1996, SWEPCO applied for discretionary
review of the decision by the Texas Supreme Court.
CHERRYVILLE, MISSOURI INVESTIGATION
BNRR has been advised that it is a target of a Grand Jury investigation in the
United States District Court for the Eastern District of Missouri with respect
to former railcar cleaning activities conducted by independent contractors at
Cherryville, Missouri. The proceeding relates to alleged violations of
federal environmental protection statutes with respect to lead contamination
at several sites in the Cherryville area. In addition, BNRR has received
personal injury claims from certain individuals formerly residing at or near
some of these sites. The Missouri Department of Natural Resources ("DNR")
also is investigating the matter with respect to possible violations of state
environmental protection laws and has indicated that it may seek a civil
penalty from BNRR. BNRR and another potentially responsible party had
previously prepared investigation and remediation plans in conjunction with
the DNR. BNRR modified the plans and is expediting a response and
implementing remediation with DNR approval. Based upon information currently
available, BNI does not believe that this matter will have a material adverse
effect on the financial condition or results of operations of BNI or BNRR.
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.
<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 INC.
(Registrant)
By: /s/ T. N. Hund
T. N. Hund
Vice President and Controller
(On behalf of the Registrant and as
principal accounting officer)
Schaumburg, Illinois
November 14, 1996
<PAGE>
BURLINGTON NORTHERN INC. 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 Inc. Consolidated Financial Statements
and is qualified in its entirety.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 100
<SECURITIES> 0
<RECEIVABLES> 685
<ALLOWANCES> (39)
<INVENTORY> 129
<CURRENT-ASSETS> 1080
<PP&E> 11625
<DEPRECIATION> (4400)
<TOTAL-ASSETS> 9210
<CURRENT-LIABILITIES> 1572
<BONDS> 1505
<COMMON> 0
0
0
<OTHER-SE> 2699
<TOTAL-LIABILITY-AND-EQUITY> 9210
<SALES> 0
<TOTAL-REVENUES> 3928
<CGS> 0
<TOTAL-COSTS> 3092
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 119
<INCOME-PRETAX> 763
<INCOME-TAX> 296
<INCOME-CONTINUING> 467
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 467
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
