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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 [ ]
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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SANTA FE PACIFIC CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
SANTA FE PACIFIC CORPORATION
(NAME OF PERSON(S) FILING PROXY STATEMENT)
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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(j)(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 transaction applies: 186,523,992
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: $52 3/8(/2/)
4) Proposed maximum aggregate value of transaction: $2,637,682,402(/2/)
(/1/) The filing fee previously was paid with the initial filing of the
preliminary proxy materials on August 8, 1994.
(/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, would have been converted into the right
to receive 0.27 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 equal to one-fiftieth of one percent
of $2,637,682,402 (calculated based on the number of shares of Santa Fe
Pacific Corporation common stock outstanding as of June 30, 1994, the
average of the high and low reported prices of Burlington Northern Inc.
common stock on August 5, 1994 and the exchange ratio of 0.27).
[ ] 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: ..........
2) Form, Schedule or Registration
Statement No.: ...................
3) Filing Party: ....................
3) Date Filed: ......................
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SANTA FE PACIFIC CORPORATION
BURLINGTON NORTHERN/SANTA FE MERGER
Investment Summary
. STRUCTURE
. ONE-THIRD OF SHARES PURCHASED UP FRONT FOR $20 CASH
. REMAINDER IN BNI STOCK, ALLOWING PARTICIPATION IN SIZABLE UPSIDE
. NON-TAXABLE STOCK EXCHANGE
. EQUITY PARTICIPATION
. BNI/SANTA FE MERGER CREATES SIGNIFICANT STRATEGIC ENHANCEMENTS
. PROVEN MANAGEMENT TEAM TO IMPLEMENT OPERATING PLAN
. REVENUE GROWTH AND COST REDUCTIONS RAISE EARNING POWER
. SUPERIOR LONG-TERM RETURN ON INVESTMENT
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SANTA FE PACIFIC CORPORATION
BURLINGTON NORTHERN/SANTA FE MERGER
Joint Tender Offer and Merger
. BNI AND SFP JOINTLY TENDER FOR 63 MILLION SFP SHARES FOR $20 PER SHARE
. TAX FREE STOCK EXCHANGE AT .40 BNI SHARES FOR REMAINING SFP SHARES AFTER
REGULATORY APPROVAL
. RECORD DATE - DECEMBER 27
. SHAREHOLDER'S MEETING - FEBRUARY 7
. TENDER CLOSES - FEBRUARY 8
. CONDITIONS TO SHARE REPURCHASE
. SHAREHOLDER APPROVAL OF BNI/SFP MERGER
. MINIMUM OF 63 MILLION SHARES VALIDLY TENDERED
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SANTA FE PACIFIC CORPORATION
BURLINGTON NORTHERN/SANTA FE MERGER
Joint Tender Offer and Merger
. SFP FINANCING PROVIDED BY BANK LOAN FACILITY
($ MILLIONS)
INITIAL SHARE REPURCHASE $ 760
REFINANCING 400
OTHER CASH REQUIREMENTS 150
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SUBTOTAL $1,310
WORKING CAPITAL REVOLVER 250
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TOTAL $1,560
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SANTA FE PACIFIC CORPORATION
BURLINGTON NORTHERN/SANTA FE MERGER
Possible Incremental Share Repurchase
.Santa Fe Can Repurchase Up to 10 Million Shares
Between Tender and Merger As Long as Certain
Conditions Are Met
.Exchange Ratio at Closing Will Be Adjusted for Shares
Actually Repurchased Up to .4347
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SANTA FE PACIFIC CORPORATION
NOMINAL VALUE OF BN PROPOSAL
Current Offer With No
Incremental Share Repurchase Value
- -------------------------------- ---------
$20 Cash Tender for 33.2% of Stock $ 6.64
0.4 BN Shares for 66.8% of Stock (a) $ 13.53
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Total $ 20.17
Incremental Repurchase of
10 Million Shares Value
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$20 Cash Tender for 33.2% of Stock $ 6.64
0.4347 BN Shares for 66.8% of Stock (a) $ 14.70
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Total $ 21.34
(a) Using BN Share Price on 1/23/95 of $50.625
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SANTA FE PACIFIC CORPORATION
BURLINGTON NORTHERN/SANTA FE MERGER
Combined Route Structure
[MAP SHOWING COMBINED SYSTEMS]
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SANTA FE PACIFIC CORPORATION
BURLINGTON NORTHERN/SANTA FE MERGER
BENEFITS
. BROAD GEOGRAPHIC COVERAGE
. EXTENSIVE SINGLE LINE SERVICE
. DIVERSIFIED TRAFFIC BASE
. REVENUE GROWTH
. OPERATING SYNERGIES
. OVERHEAD REDUCTION
. FINANCIAL STRENGTH
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SANTA FE PACIFIC CORPORATION
BURLINGTON NORTHERN/SANTA FE MERGER
BENEFITS
. BROAD GEOGRAPHIC COVERAGE
. ALL MAJOR WESTERN PORTS
. MEXICAN AND CANADIAN GATEWAYS
. GULF PORTS
. MAJOR MIDWESTERN AND SOUTHWESTERN GATEWAYS
. EXTENSIVE SINGLE LINE SERVICE
. ELIMINATES COSTS AND DELAYS OF INTERCHANGES
. IMPROVES PRODUCTIVITY
. ENHANCES RESPONSIVENESS TO CUSTOMER NEEDS
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SANTA FE PACIFIC CORPORATION
BURLINGTON NORTHERN/SANTA FE MERGER
Benefits
Diversified Traffic Base
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($ Millions)
Dollars Percentage
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Coal $1,752 25%
Intermodal $1,707 24%
Agricultural Commodities $1,029 14%
Chemicals $ 677 10%
Forest Products $ 591 8%
Automotive $ 379 5%
Other $ 973 14%
- ----------------------------
| Combined Freight |
| Revenues - 1993* $7,108 |
- ----------------------------
* Base Year Used In ICC Case. Combined Freight Revenues for 1994 Were $7,676.
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SANTA FE PACIFIC CORPORATION
BURLINGTON NORTHERN/SANTA FE MERGER
Benefits
REVENUE GROWTH*
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($ MILLIONS)
TRUCK DIVERSIONS $132.1
NEW RAIL BUSINESS 115.2
EXTENDED HAULS 59.2
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TOTAL $306.5
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* FROM ICC CASE BASE YEAR 1993 EXCLUDING REVENUE GROWTH OF INDEPENDENT BNI AND
SFP WHICH TOTALED $568 MILLION IN 1994.
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SANTA FE PACIFIC CORPORATION
BURLINGTON NORTHERN/SANTA FE MERGER
Benefits
OPERATING SYNERGIES
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($ MILLIONS)
REROUTE SAVINGS $ 14.7
. 37 MILLION CAR MILES
. 2.7 BILLION GROSS TON MILES
. 1.8 MILLION LOCOMOTIVE MILES
. 525,000 TRAIN MILES
. 4 MILLION GALLONS OF DIESEL FUEL
COMMON POINT CONSOLIDATIONS 11.9
MECHANICAL 45.7
ENGINEERING/MAINTENANCE OF WAY 12.7
PURCHASING AND MATERIALS 13.3
INTERMODAL OPERATIONS 8.7
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TOTAL $107.0
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SANTA FE PACIFIC CORPORATION
BURLINGTON NORTHERN/SANTA FE MERGER
Benefits
OVERHEAD REDUCTION*
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($ MILLIONS)
EXECUTIVE OFFICE $ 9.4
TRANSPORTATION/MAINTENANCE SUPPORT 37.3
PURCHASING SUPPORT 32.4
OPERATING SUPPORT 24.2
MANAGEMENT INFORMATION SYSTEMS 45.1
BUSINESS UNIT OVERHEADS 86.8
OTHER GENERAL AND ADMINISTRATIVE 110.8
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TOTAL $346.0
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*EXCLUDES INDEPENDENT COST INITIATIVES ANTICIPATED BY BNI AND SFP PRIOR TO
MERGER
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SANTA FE PACIFIC CORPORATION
BURLINGTON NORTHERN/SANTA FE MERGER
Summary of Benefits
($ Millions)
BENEFITS YEAR ONE YEAR TWO YEAR THREE NORMAL YEAR
- -------- -------- -------- ---------- -----------
INCREASED REVENUES $ 183.9 $ 260.5 $ 291.2 $ 306.5
LESS COSTS 119.6 169.5 189.4 199.4
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NET REVENUE 64.3 91.0 101.8 107.1
OPERATING BENEFITS 271.8 385.1 430.3 453.0
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TOTAL ANNUAL BENEFITS $ 336.1 $ 476.1 $ 532.1 $ 560.1
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ONE-TIME COSTS
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SEPARATION/RELOCATION/TRAINING $(211.6) $ (42.3) $ (28.2) -
NET CAPITAL EXPENDITURES $ (63.4) - - -
SOURCE: ICC MERGER CASE
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SANTA FE PACIFIC CORPORATION
BURLINGTON NORTHERN/SANTA FE MERGER
ICC Pro Forma Assumptions
. BASE YEAR 1993
. REVENUE GROWTH FROM GENERAL BUSINESS CONDITIONS
NOT INCLUDED
. FUTURE REVENUE GROWTH OF AN INDEPENDENT BN OR SFP
NOT INCLUDED
. INDEPENDENT COST INITIATIVES ANTICIPATED BY BN OR SFP
NOT INCLUDED
. MERGER-RELATED REVENUE GROWTH AND MERGER-RELATED
COST REDUCTIONS INCLUDED
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SANTA FE PACIFIC CORPORATION
BURLINGTON NORTHERN/SANTA FE MERGER
ICC Pro Formas
($Millions)
BASE YEAR PRO FORMA PRO FORMA PRO FORMA PRO FORMA
(1993) YEAR ONE YEAR TWO YEAR THREE NORMAL YEAR
--------- --------- --------- ---------- -----------
OPERATING INCOME $979 $1,102 $1,411 $1,481 $1,538
NET INCOME $438* $ 513 $ 707 $ 763 $ 814
* EXCLUDES GAIN FROM CALIFORNIA LINE SALES AND RETROACTIVE IMPACT OF 1% INCREASE
IN FEDERAL INCOME TAX RATE.
SOURCE: ICC MERGER CASE
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SANTA FE PACIFIC CORPORATION
BURLINGTON NORTHERN/SANTA FE MERGER
Operating Statistics
($ Millions)
Base BNSF BNSF
Year Merger Pro Forma 1994 Actual
1993* Benefits* Normal Year* Combined**
------ --------- ------------ -----------
Revenue $7,108 $307 $7,415 $7,676
Operating Income $ 979 $560 $1,539 $1,282
Operating Ratio 86.2% 79.2% 83.3%
* Source: ICC Merger Case
** 1994 Actual Results of BNI and SFP Combined
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SANTA FE PACIFIC CORPORATION
BURLINGTON NORTHERN/SANTA FE MERGER
Summary of Benefits to Shareholders
. ENHANCED SHAREHOLDER VALUE
. SYNERGIES OF $560 MILLION
. SIGNIFICANT GROWTH PROSPECTS
. LIKELY REGULATORY APPROVAL
. POSSIBILITY OF FASTER SCHEDULE
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SANTA FE PACIFIC CORPORATION
BURLINGTON NORTHERN/SANTA FE MERGER
Comparative Financial Statistics
($ Millions)
Norfolk UP
BNSF Southern Corp
Pro Forma 1993** 1994
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Debt to Capitalization 47.1%* 25.7% 45.9%E
Stockholders' Equity (Millions) $4,802* $4,621 $5,131
* Source: Proxy Filing
** Latest Available
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SANTA FE PACIFIC CORPORATION
BURLINGTON NORTHERN/SANTA FE MERGER
Regulatory Timing
. Expedited 535-Day Schedule Issued by ICC October 5
. Formal Application Filed with ICC October 13
. Initial Expected Decision End of March 1996
. Special Meeting of Shareholders Scheduled February 7
. ICC Schedule Resumes
. ICC Decision Expected Late Second Quarter 1996
. Possibility of Faster Schedule
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GRAPHIC MATERIAL CROSS-REFERENCE PAGE
A MAP SHOWING COMBINED SYSTEMS APPEARS ON PAGE 6.
