<PAGE>
Filed Pursuant To Rule No. 424(b)(5)
Under the Securities Act of 1933 in
connection with Registration
No. 333-2501
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED MAY 15, 1996
[LOGO BNSF] $200,000,000
BURLINGTON NORTHERN SANTA FE CORPORATION
7.25% DEBENTURES DUE AUGUST 1, 2097
----------------
Interest on the Debentures is payable on February 1 and August 1 of each
year, commencing February 1, 1998. The Debentures are redeemable in whole or
in part at any time at the option of the Company at the redemption price equal
to the greater of (i) 100% of the principal amount of such Debentures and (ii)
the sum of the present values of the remaining scheduled payments of principal
and interest thereon discounted to the date of redemption on a semiannual
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Treasury Rate (as defined herein), plus in each case accrued interest thereon
to the date of redemption. The Debentures will not be subject to any sinking
fund. Upon the occurrence of a Tax Event (as defined herein), the Company will
have the right to shorten the maturity of the Debentures to the extent
required so that the interest paid on the Debentures will be deductible for
United States federal income tax purposes.
The Debentures will be represented by one or more global securities
registered in the name of the nominee of The Depository Trust Company.
Beneficial interests in the global securities will be shown on, and transfers
thereof will be effected only through, records maintained by DTC and its
participants. Except as described herein, Debentures in definitive form will
not be issued. The Debentures will be issued only in denominations of $1,000
and integral multiples thereof. See "Description of Debentures".
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE(1) DISCOUNT(2) COMPANY(1)(3)
----------------- ------------ -------------
<S> <C> <C> <C>
Per Debenture...................... 99.043% 1.125% 97.918%
Total.............................. $198,086,000 $2,250,000 $195,836,000
</TABLE>
- --------
(1) Plus accrued interest, if any, from July 29, 1997.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
(3) Before deducting estimated expenses of $150,000 payable by the Company.
----------------
The Debentures offered hereby are offered severally by the Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to
their right to reject any order in whole or in part. It is expected that the
Debentures will be ready for delivery in book-entry form only through the
facilities of DTC in New York, New York on or about July 29, 1997, against
payment therefor in immediately available funds.
GOLDMAN, SACHS & CO.
MORGAN STANLEY DEAN WITTER
CHASE SECURITIES INC.
J.P. MORGAN & CO.
SALOMON BROTHERS INC
----------------
The date of this Prospectus Supplement is July 24, 1997.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE DEBENTURES,
INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN SUCH
SECURITIES, AND THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE
OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING".
----------------
DOCUMENTS INCORPORATED BY REFERENCE
The following documents previously filed by the Company under the Securities
Exchange Act of 1934 (the "Exchange Act") with the Securities and Exchange
Commission are incorporated herein by reference:
(a) Annual Report on Form 10-K for the year ended December 31, 1996; and
(b) Quarterly Report on Form 10-Q for the quarter ended March 31, 1997;
(c) Current Report on Form 8-K (Date of earliest event reported: January
21, 1997); and
(d) Current Report on Form 8-K (Date of earliest event reported: July 22,
1997).
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act prior to the termination of the
offering shall be deemed to be incorporated herein by reference and shall be
deemed a part hereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein will be deemed to be modified or superseded for purposes of this
Prospectus Supplement to the extent that a statement contained herein or in
any other subsequently filed document which also is, or is deemed to be,
incorporated by reference herein modifies or supersedes any such statement.
Any such statement so modified or superseded will not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus Supplement.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus Supplement is delivered, on the
request of such person, a copy of any of the foregoing documents incorporated
herein by reference (other than the exhibits to such documents unless such
exhibits are specifically incorporated by reference into such documents).
Written or telephone requests should be directed to Burlington Northern Santa
Fe Corporation, 2650 Lou Menk Drive, Fort Worth, Texas 76131-2830, Attention:
Corporate Secretary (telephone (817) 333-2000).
Unless otherwise indicated, currency amounts in the Prospectus and this
Prospectus Supplement are stated in United States dollars ("$" or "dollars").
THE COMPANY
On September 22, 1995, Burlington Northern Inc. ("BNI") and Santa Fe Pacific
Corporation ("SFP") effected a business combination (the "Merger") pursuant to
which each became a direct or indirect wholly owned subsidiary of the Company.
As a result of the Merger, Burlington Northern Railroad Company ("BN") and The
Atchison, Topeka and Santa Fe Railway Company ("ATSF") also became indirect
wholly owned subsidiaries of the Company.
On December 30, 1996, BNI merged with and into SFP. On December 31, 1996,
ATSF merged with and into BN and BN changed its name to The Burlington
Northern and Santa Fe Railway Company ("BNSF Railway").
Through its principal operating subsidiary, BNSF Railway, the Company is
engaged primarily in railroad transportation. BNSF Railway operates one of the
largest railroad networks in the United
S-2
<PAGE>
States, with approximately 35,000 route miles reaching across 29 states and
two Canadian provinces as of December 31, 1996. Approximately 7,900 route
miles of BNSF Railway's system consist of trackage rights which permit BNSF
Railway to operate its trains with its crews over another railroad's tracks.
BNSF Railway serves all major ports in the western United States, certain
Mexican and Canadian gateways and Gulf ports, important gateways to the
eastern United States and most major cities in the Pacific Northwest and west
and in the midwestern and southwestern United States. The principal cities
served by BNSF Railway include Albuquerque, Billings, Birmingham, Cheyenne,
Chicago, Corpus Christi, Dallas, Denver, Des Moines, Duluth/Superior,
Fargo/Moorhead, Fort Worth, Galveston, Houston, Kansas City, Little Rock,
Lincoln, Los Angeles, Memphis, Mobile, Oklahoma City, Omaha, Pensacola,
Phoenix, Portland, Reno, Salt Lake City, San Antonio, St. Louis, St.
Paul/Minneapolis, the San Francisco Bay area, Seattle, Spokane, Springfield
(Missouri), Tacoma, Tulsa, Wichita, Vancouver (British Columbia), Winnipeg
(Manitoba) and the United States/Mexico crossings of Brownsville, El Paso and
Eagle Pass, Texas and San Diego.
BNSF Railway derives a substantial portion of its revenues from intermodal
transportation and the transportation of coal and agricultural commodities.
Other significant aspects of BNSF Railway's business include the
transportation of commodities in the following areas: chemicals, forest
products, consumer goods, automotive, metals, and minerals.
The Company's principal executive offices are located at 2650 Lou Menk
Drive, Forth Worth, Texas 76131-2830, telephone number (817) 333-2000.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges of the
Company for each of the five years ended December 31, 1996, and for the three
month periods ended March 31, 1997 and 1996. The ratios reflect the historical
results only for BNI in all periods reported prior to 1996, except for the
year ended December 31, 1995, which period includes SFP results from September
22, 1995.
<TABLE>
<CAPTION>
THREE
MONTHS
ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
---------- ------------------------------
1997 1996 1996 1995(2) 1994 1993 1992
---- ---- ---- ------- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings to Fixed Charges(1)........ 2.75x 3.45x 3.89x 1.85x 3.70x 3.19x 2.58x
</TABLE>
- --------
(1) For purposes of this ratio, earnings are calculated by adding fixed
charges (excluding capitalized interest) to income (loss) from continuing
operations. Fixed charges consist of interest on indebtedness (including
amortization of debt discount and premium) and the portion of rental
expense under long term operating leases representative of an interest
factor.
(2) Earnings for the year ended December 31, 1995, include merger, severance
and asset charges of $735 million. Excluding these costs, the ratio would
have been 3.91x.
USE OF PROCEEDS
The net proceeds from the sale of the Debentures offered hereby will be used
for general corporate purposes, including but not limited to the repayment of
commercial paper currently having an average interest rate of approximately
5.8%.
S-3
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company as of March 31, 1997, and as adjusted to give effect to the issuance
of the Debentures offered hereby. The Company presently intends to file a
shelf registration statement in the near future that would permit it to issue
up to $550 million of Debt Securities.
<TABLE>
<CAPTION>
ACTUAL AS ADJUSTED
------- -----------
(UNAUDITED)
(IN MILLIONS)
<S> <C> <C>
Total Debt:
Equipment obligations (1)................................ $ 1,027 $ 1,027
Notes and Debentures (2)................................. 2,221 2,221
Commercial Paper and Bank Loans.......................... 1,235 1,035(3)
Mortgages................................................ 468 468
Debentures offered hereby................................ -- 200
Other obligations........................................ 42 42
------- -------
Total Debt (4)......................................... 4,993 4,993
------- -------
Shareholders' Equity:
Total Shareholders' Equity............................. 6,112 6,112
------- -------
Total Capitalization....................................... $11,105 $11,105
======= =======
</TABLE>
- --------
(1) Includes capital lease obligations. Since March 31, 1997, the Company has
issued $92.4 million of debt under Japanese leveraged leases to acquire
locomotives.
(2) In addition, the Company issued $175 million of Medium-Term Notes in July
1997.
(3) Reduced by proceeds raised from the issuance of the Debentures offered
hereby.
(4) An additional financing by the Company was the sale of $300 million of
accounts receivable in June 1997.
S-4
<PAGE>
DESCRIPTION OF DEBENTURES
The following description of the particular terms of the Debentures
supplements, and to the extent inconsistent therewith replaces, the
description of the general terms and provisions of the Debt Securities set
forth in the accompanying Prospectus, to which description reference is hereby
made. Whenever a defined term is referred to and not herein defined, the
definition thereof is contained in the accompanying Prospectus or in the
Indenture referred to therein.
GENERAL
The Debentures are each to be issued under an Indenture, dated as of
December 1, 1995 (the "Indenture"), between the Company and The First National
Bank of Chicago, as Trustee, which Indenture is more fully described under the
heading "Description of Debt Securities" in the accompanying Prospectus. The
Debentures will rank pari passu with each other and with all other unsecured
and unsubordinated indebtedness of the Company.
The Debentures will bear interest at 7.25% per annum and will mature on
August 1, 2097.
The Debentures will bear interest from July 29, 1997 or from the most recent
interest payment date to which interest has been paid or provided for, payable
semiannually in arrears on February 1 and August 1 of each year, commencing
February 1, 1998 to the persons in whose names the Debentures are registered
at the close of business on the immediately preceding January 15 and July 15,
respectively, whether or not such day is a Business Day.
SINKING FUND
The Debentures will not be entitled to the benefit of a sinking fund.
CONDITIONAL RIGHT TO SHORTEN MATURITY
The Company intends to deduct interest paid on the Debentures for United
States federal income tax purposes. However, there have been proposed tax law
changes over the past year that, among other things, would have prohibited an
Issuer from deducting interest payments on debt instruments with a maturity of
more than 40 years. While none of these proposals has become law, there can be
no assurance that similar legislation affecting the Company's ability to
deduct interest paid on the Debentures will not be enacted in the future or
that any such legislation would not have a retroactive effective date. As a
result, there can be no assurance that a Tax Event (as defined below) will not
occur.
Upon the occurrence of a Tax Event, the Company will have the right to
shorten the maturity of the Debentures to the minimum extent required, in the
opinion of nationally recognized independent tax counsel, such that, after the
shortening of the maturity, interest paid on the Debentures will be deductible
for United States federal income tax purposes or, if such counsel is unable to
opine definitively as to such a minimum period, the minimum extent so required
as determined in good faith by the Board of Directors of the Company after
receipt of an opinion of such counsel regarding the applicable legal
standards. There can be no assurance that the Company would not exercise its
right to shorten the maturity of the Debentures upon the occurrence of such a
Tax Event or as to the period by which such maturity would be shortened. In
the event that the Company elects to exercise its right to shorten the
maturity of the Debentures on the occurrence of a Tax Event, the Company will
mail a notice of shortened maturity to each Holder of the Debentures by first-
class mail not more than 60 days after the occurrence of such Tax Event,
stating the new maturity date of the Debentures. Such notice shall be
effective immediately upon mailing.
S-5
<PAGE>
The Company believes that the Debentures should constitute indebtedness for
United States federal income tax purposes under current law and, in that case,
an exercise of its right to shorten the maturity of the Debentures would not
be a taxable event to Holders for such purposes. Prospective investors should
be aware, however, that the Company's exercise of its right to shorten the
maturity of the Debentures will be a taxable event to Holders for United
States federal income tax purposes if the Debentures are treated as equity for
United States federal income tax purposes before the maturity is shortened,
assuming that the Debentures of shortened maturity are treated as debt for
such purposes. Prospective investors should also be aware that if the
Debentures are characterized as equity, amounts paid with respect to the
Debentures prior to shortening the maturity of the Debentures to a holder who
is not (i) a U.S. citizen or resident, (ii) a corporation organized under the
laws of the United States or (iii) otherwise subject to United States federal
income tax on a net income basis in respect of the Debentures (a "Non-U.S.
Holder"), would be subject to withholding of United States federal income tax
at a 30% rate (or such lower rate as may be specified by an applicable income
tax treaty), unless the payment is effectively connected with the conduct of a
trade or business in the United States or, if a tax treaty applies, is
attributable to a permanent establishment of the Non-U.S. Holder within the
United States.
"Tax Event" means that the Company shall have received an opinion of
nationally recognized independent tax counsel to the effect that, as a result
of (a) any amendment to, clarification of, or change (including any announced
prospective amendment, clarification or change) in any law, or any regulation
thereunder, of the United States, (b) any judicial decision, official
administrative pronouncement, ruling, regulatory procedure, notice or
announcement, including any notice or announcement of intent to adopt or
promulgate any ruling, regulatory procedure or regulation (any of the
foregoing, an "Administrative or Judicial Action"), or (c) any amendment to,
clarification of, or change in any official position with respect to, or any
interpretation of, an Administrative or Judicial Action or a law or regulation
of the United States that differs from the theretofore generally accepted
position or interpretation, in each case, occurring on or after July 29, 1997,
there is more than an insubstantial increase in the risk that interest paid by
the Company on the Debentures is not, or will not be, deductible, in whole or
in part, by the Company for United States federal income tax purposes.
OPTIONAL REDEMPTION
The Debentures will be redeemable as a whole or in part, at the option of
the Company at any time, at a redemption price equal to the greater of (i)
100% of the principal amount of such Debentures and (ii) the sum of the
present values of the remaining scheduled payments of principal and interest
thereon discounted to the redemption date on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury Rate (as
defined below), plus in each case, accrued interest thereon to the date of
redemption.
"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed
as a percentage of its principal amount) equal to the Comparable Treasury
Price for such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable
to the remaining term of the Debentures to be redeemed that would be utilized,
at the time of selection and in accordance with customary financial practice,
in pricing new issues of corporate debt securities of comparable maturity to
the remaining term of such Debentures. "Independent Investment Banker" means
one of the Reference Treasury Dealers appointed by the Trustee after
consultation with the Company.
S-6
<PAGE>
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is
not published or does not contain such prices on such business day, (A) the
average of the Reference Treasury Dealer Quotations for such redemption date,
after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (B) if the Trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such Quotations. "Reference
Treasury Dealer Quotations" means, with respect to each Reference Treasury
Dealer and any redemption date, the average, as determined by the Trustee, of
the bid and asked prices for the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing to the Trustee
by such Treasury Reference Dealer at 5:00 p.m. on the third business day
preceding such redemption date.
"Reference Treasury Dealer" means each of Goldman, Sachs & Co., Chase
Securities Inc., J.P. Morgan Securities Inc., Morgan Stanley & Co. Incorporated
and Salomon Brothers Inc and their respective successors; provided, however,
that if any of the foregoing shall cease to be a primary U.S. Government
securities dealer in New York City (a "Primary Treasury Dealer"), the Company
shall substitute therefor another Primary Treasury Dealer.
Notice of any redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each holder of the Debentures to be
redeemed.
Unless the Company defaults in payment of the redemption price, on and after
the redemption date interest will cease to accrue on the Debentures or portions
thereof called for redemption.
BOOK-ENTRY SYSTEM
Upon issuance, the Debentures will each be represented by one or more global
securities (the "Global Securities") deposited with, or on behalf of, The
Depository Trust Company ("DTC"), New York, New York, which will act as
Depositary with respect to the Debentures. The Global Securities representing
the Debentures will be registered in the name of a nominee of the Depositary.
Except under the circumstances described in the accompanying Prospectus under
"Description of Debt Securities--Global Securities," the Debentures will not be
issuable in definitive form.
A further description of the Depositary's procedures with respect to Global
Securities is set forth in the accompanying Prospectus under "Description of
Debt Securities--Global Securities." The Depositary has confirmed to the
Company, the Underwriters and the Trustee that it intends to follow such
procedures with respect to the Debentures.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
and the Pricing Agreement, the Company has agreed to sell to each of the
Underwriters named below, and each of such Underwriters has severally agreed to
purchase, the principal amount of the Debentures set forth opposite its name
below:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
UNDERWRITERS DEBENTURES
------------ ------------
<S> <C>
Goldman, Sachs & Co. ....................................... $ 50,000,000
Morgan Stanley & Co. Incorporated .......................... 50,000,000
Chase Securities Inc ....................................... 40,000,000
J.P. Morgan Securities Inc. ................................ 40,000,000
Salomon Brothers Inc ....................................... 20,000,000
------------
Total................................................... $200,000,000
============
</TABLE>
S-7
<PAGE>
Under the terms and conditions of the Underwriting Agreement and the Pricing
Agreement, the Underwriters are committed to take and pay for all of the
Debentures, if any are taken.
The Underwriters propose to offer the Debentures in part directly to the
public at the initial public offering price set forth on the cover page of this
Prospectus Supplement and in part to certain securities dealers at such price
less a concession of 0.675% of the principal amount of the Debentures. The
Underwriters may allow, and such dealers may reallow, a concession not to
exceed 0.375% of the principal amount of the Debentures to certain brokers and
dealers. After the Debentures are released for sale to the public, the offering
price and such other selling terms may from time to time be varied by the
Underwriters.
In connection with the offering, the Underwriters may purchase and sell the
Debentures in the open market. These transactions may include over-allotment
and stabilizing transactions, and purchases to cover short positions created by
the Underwriters in connection with the offering. Stabilizing transactions
consist of certain bids or purchases for the purpose of preventing or retarding
a decline in the market price of the Debentures; and short positions created by
the Underwriters involve the sale by the Underwriters of a greater number of
Debentures than they are required to purchase from the Company in the offering.
The Underwriters may impose a penalty bid, whereby selling concessions allowed
to broker-dealers in respect of the Debentures sold in the offering may be
reclaimed by the Underwriters if such Debentures are repurchased by the
Underwriters in stabilizing or covering transactions. These activities may
stabilize, maintain or otherwise affect the market price of the Debentures,
which may be higher than the price that might otherwise prevail in the open
market; and these activities, if commenced, may be discontinued at any time.
These transactions may be effected in the over-the-counter market or otherwise.
The Debentures are a new series of securities with no established trading
market. The Company has been advised by the Underwriters that the Underwriters
intend to make a market in the Debentures but are not obligated to do so and
may discontinue market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for the Debentures.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
In the ordinary course of their respective businesses, certain of the
Underwriters and their affiliates engage and may in the future engage in
investment banking and commercial banking transactions with the Company and its
subsidiaries. In addition, certain directors of the Company hold positions with
or serve in an advisory capacity to an affiliate of Chase Securities Inc., and
Denis E. Springer, Senior Vice President and Chief Financial Officer of the
Company, is a member of the National Advisory Board of The Chase Manhattan
Corporation, an affiliate of Chase Securities Inc.
EXPERTS
The consolidated financial statements and the financial statement schedule as
of December 31, 1996 and for the year ended December 31, 1996 incorporated in
this Prospectus Supplement by reference to the Company's Annual Report on Form
10-K for the year ended December 31, 1996 have been so incorporated in reliance
on the reports of Price Waterhouse LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
The consolidated financial statements and the financial statement schedule as
of December 31, 1995 and for each of the two years in the period ended December
31, 1995 incorporated in this Prospectus Supplement by reference to the
Company's Annual Report on Form 10-K for the year ended December 31, 1996 have
been so incorporated in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
S-8
<PAGE>
PROSPECTUS
LOGO
$675,000,000
BURLINGTON NORTHERN SANTA FE CORPORATION
DEBT SECURITIES
----------------
Burlington Northern Santa Fe Corporation ("BNSF" or the "Company") may from
time to time offer debt securities consisting of bonds, debentures, notes, or
other evidences of indebtedness in one or more series at an aggregate initial
offering price not to exceed $675,000,000 or its equivalent in any other
currency or composite currency ("Debt Securities"). The Debt Securities may be
offered as separate series in amounts, at prices, and on terms to be
determined at the time of sale. The accompanying Prospectus Supplement sets
forth with regard to the series of Debt Securities in respect of which this
Prospectus is being delivered the title, aggregate principal amount,
denominations (which may be in United States dollars, in any other currency or
in a composite currency), maturity, rate, if any (which may be fixed or
variable), and time of payment of any interest, any terms for redemption at
the option of the Company or the holder, any terms for sinking fund payments,
any listing on a securities exchange, and the initial public offering price
and any other terms in connection with the offering and sale of such Debt
Securities.
The Company may sell Debt Securities to or through one or more underwriters
or dealers, and also may sell Debt Securities directly to other purchasers or
through agents. The accompanying Prospectus Supplement sets forth the names of
any underwriters or agents involved in the sale of the Debt Securities in
respect of which this Prospectus is being delivered, the principal amounts, if
any, to be purchased by underwriters and the compensation, if any, of such
underwriters or agents. See "Plan of Distribution" for possible
indemnification arrangements for underwriters, agents, and their controlling
persons.
This Prospectus may not be used to consummate sales of securities unless
accompanied by a Prospectus Supplement.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
The date of this Prospectus is May 15, 1996.
<PAGE>
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. NEITHER THIS PROSPECTUS NOR ANY
PROSPECTUS SUPPLEMENT CONSTITUTES AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT
RELATES OR AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES TO ANY PERSON IN ANY JURISDICTION TO WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR
THEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF
OR THAT THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN OR
THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THEREOF.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"); Santa Fe Pacific
Corporation ("SFP") was subject to the informational requirements of the
Exchange Act prior to November 13, 1995. Reports, proxy and information
statements and other information filed with the Commission can be inspected
and copied during normal business hours at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and should be available at its regional offices at 7 World Trade
Center, Thirteenth Floor, New York, New York 10048; and 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can be
obtained at prescribed rates from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. Such reports,
proxy and information statements, and other information concerning the Company
can also be inspected at the offices of the New York Stock Exchange (the
"NYSE"), 20 Broad Street, New York, New York 10005, the Chicago Stock Exchange
Incorporated, One Financial Place, 440 South LaSalle Street, Chicago, Illinois
60605, and the Pacific Stock Exchange, 301 Pine Street, San Francisco,
California 94104.
This Prospectus constitutes a part of a registration statement on Form S-3
(together with all amendments and exhibits, the "Registration Statement")
filed by the Company with the Commission under the Securities Act of 1933, as
amended (the "Securities Act"). This Prospectus omits certain of the
information contained in the Registration Statement, and reference is hereby
made to the Registration Statement and to the exhibits relating thereto for
further information with respect to the Company and the Debt Securities
offered hereby. Any statements contained herein concerning the provisions of
any document are not necessarily complete, and, in each instance, reference is
made to the copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such statement is
qualified in its entirety by such reference.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents previously filed by the Company under the Exchange
Act with the Commission are incorporated herein by reference: (1) Annual
Report on Form 10-K for the year ended December 31, 1995; (2) Quarterly Report
on Form 10-Q for the quarter ended March 31, 1996; and (3) Current Reports on
Form 8-K dated February 13, 1996 and April 12, 1996.
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<PAGE>
The following documents previously filed by SFP under the Exchange Act with
the Commission are incorporated herein by reference: (1) Annual Report on Form
10-K for the year ended December 31, 1994 (and Form 10-K/A with respect
thereto); and (2) Quarterly Reports on Form 10-Q for the quarters ended March
31, 1995 and June 30, 1995.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14, or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the Offering shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus has been delivered a copy of any or all of the documents referred
to above which have been or may be incorporated by reference herein other than
exhibits to such documents (unless such exhibits are specifically incorporated
by reference therein). Requests for such copies should be directed to
Burlington Northern Santa Fe Corporation, 1700 East Golf Road, Schaumburg,
Illinois 60173-5860, Attention: Corporate Secretary, telephone number (847)
995-6000.
Unless otherwise indicated, currency amounts in the Prospectus and any
Prospectus Supplement are stated in United States dollars ("$" or "dollars").
3
<PAGE>
THE COMPANY
The Company is engaged primarily in railroad transportation through its two
principal indirect subsidiaries, Burlington Northern Railroad Company ("BNRR")
and The Atchison, Topeka and Santa Fe Railway Company ("ATSF"). Both railroads
are major Class I carriers. Through those subsidiaries, the Company operates
the largest railroad network in the United States, with approximately 31,000
route miles reaching across 27 states and two Canadian provinces as of
December 31, 1995.
The Company serves all major ports in the western United States, certain
Mexican and Canadian gateways and Gulf ports, important gateways to the
eastern United States and most major cities in the Pacific Northwest and in
the midwestern and southwestern United States. The principal cities served by
the Company's rail subsidiaries include Albuquerque, Billings, Birmingham,
Cheyenne, Chicago, Denver, Des Moines, Duluth/Superior, Fargo/Moorhead, Fort
Worth/Dallas, Galveston, Houston, Kansas City, Los Angeles, Lincoln, Memphis,
Mobile, Omaha, Pensacola, Phoenix, Portland, St. Louis, St. Paul/Minneapolis,
the San Francisco Bay area, Seattle, Spokane, Springfield (Missouri), Tacoma,
Tulsa, Wichita, Vancouver (British Columbia), Winnipeg (Manitoba) and the
United States/Mexico crossings of El Paso and San Diego.
The Company derives a substantial portion of its revenues from intermodal
transportation and the transportation of coal and agricultural commodities.
Other significant aspects of the Company's rail business include the
transportation of chemicals and plastics, forest products, consumer and food
products, metals, minerals and ores and automotive products.
On September 22, 1995, Burlington Northern Inc. ("BNI") and SFP consummated
a business combination (the "Merger") pursuant to which each became a direct
or indirect wholly owned subsidiary of the Company. The Company was
incorporated in the State of Delaware on December 16, 1994 for the purpose of
effecting the Merger. The Current Report on Form 8-K (Date of earliest event
reported: April 12, 1996) incorporated herein by reference, contains pro forma
financial information about the Company.
The Company's principal executive offices are located at 3800 Continental
Plaza, 777 Main Street, Fort Worth, Texas 76102, telephone number (817) 333-
2000.
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<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges of the
Company for each of the five years ended December 31, 1995, for the quarter
ended March 31, 1996, and for the year ended December 31, 1995 on a pro forma
basis. The ratios reflect the historical results only for BNI in all periods
reported, except for the year ended December 31, 1995, which period includes
SFP results from September 22, 1995, and for the quarter ended March 31, 1996,
and except for the pro forma year ended December 31, 1995 as described in note
(2) below.
<TABLE>
<CAPTION>
PRO FORMA YEAR ENDED DECEMBER 31,
QUARTER ENDED YEAR ENDED -------------------------------
MARCH 31, 1996 DECEMBER 31, 1995 1995 1994 1993 1992 1991
-------------- ----------------- ----- ----- ----- ----- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings to Fixed
Charges(1)............. 3.45x 2.87x(2) 1.85x(3) 3.70x 3.19x 2.58x (4)
</TABLE>
- --------
(1) For purposes of this ratio, earnings are calculated by adding fixed
charges (excluding capitalized interest) to income (loss) from continuing
operations. Fixed charges consist of interest on indebtedness (including
amortization of debt discount and premium) and the portion of rental
expense under long term operating leases representative of an interest
factor.
(2) The pro forma computation of ratio of earnings to fixed charges displays
the effect of the Merger, including the effects of purchase accounting and
debt issued by BNI and SFP to repurchase, pursuant to the Merger
agreement, 25 million and 38 million shares of SFP common stock,
respectively, as if the Merger had occurred on January 1, 1995, and
includes $230 million of the $735 million of Merger, Severance and Asset
charges which are not directly attributable to the Merger. Excluding the
$230 million of such charges, the pro forma ratio would have been 3.33x.
The pro forma information should be considered in conjunction with the
Company's Current Reports on Form 8-K (Dates of earliest event reported:
February 13, 1996 and April 12, 1996).
(3) Earnings for the year ended December 31, 1995, include Merger, Severance
and Asset charges of $735 million. Excluding these costs, the ratio would
have been 3.91x.
(4) The ratio of earnings to fixed charges, before the 1991 special charge of
$708 million, was 1.65x. Additional earnings of $490 million for the year
ended December 31, 1991 would have been necessary to cover fixed charges.
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement, net
proceeds from the sale of the Debt Securities will be used for general
corporate purposes, including working capital, capital expenditures and debt
repayment.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued under an Indenture (the "Indenture"),
between the Company and The First National Bank of Chicago, as Trustee (the
"Trustee"), a copy of which is filed as an exhibit to the Registration
Statement of which this Prospectus is a part. The Debt Securities may be
issued from time to time in one or more series. The particular terms of each
series, or of Debt Securities forming a part of a series, which are offered by
a Prospectus Supplement will be described in such Prospectus Supplement.
The following summaries of certain provisions of the Indenture do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all the provisions of the Indenture, including the
definitions therein of certain terms, and, with respect to any particular Debt
Securities, to the description of the terms thereof included in the Prospectus
Supplement relating thereto. Wherever particular Sections or defined terms of
the Indenture are referred to herein or in a Prospectus Supplement, such
Sections or defined terms are incorporated by reference herein or therein, as
the case may be.
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<PAGE>
The Company is a holding company, conducting its operations through its
operating subsidiaries. Accordingly, the Company's ability to service the Debt
Securities is dependent, in part, on its ability to obtain dividends or loans
from such operating subsidiaries which may be subject to contractual
restrictions. In addition, the rights of the Company and the rights of its
creditors, including holders of the Debt Securities, to participate in any
distribution of the assets of a subsidiary upon the liquidation or
recapitalization of such subsidiary will be subject to the prior claims of the
subsidiary's creditors except to the extent the Company itself may be a
creditor with recognized claims against the subsidiary.
The covenants in the Indenture would not necessarily afford the holders of
the Debt Securities protection in the event of a decline in the Company's
credit quality resulting from highly leveraged or other transactions involving
the Company.
GENERAL
The Indenture provides that Debt Securities in separate series may be issued
thereunder from time to time without limitation as to aggregate principal
amount. The Company may specify a maximum aggregate principal amount for the
Debt Securities of any series. (Section 301) The Debt Securities are to have
such terms and provisions which are not inconsistent with the Indenture,
including as to maturity, principal and interest, as the Company may
determine. Except as provided in Section 1008, the Debt Securities will be
unsecured obligations of the Company and will rank on a parity with all other
unsecured and unsubordinated indebtedness of the Company.
The applicable Prospectus Supplement will set forth the price or prices at
which the Debt Securities to be offered will be issued and will describe the
following terms of such Debt Securities: (1) the title of such Debt
Securities; (2) any limit upon the aggregate principal amount of the
particular series of Debt Securities; (3) the date or dates on which the
principal of any of such Debt Securities will be payable or the method by
which such date or dates will be determined or extended; (4) the rate or rates
at which any of such Debt Securities will bear interest, if any, or the method
by which such rate or rates shall be determined, the date or dates from which
any such interest will accrue, the Interest Payment Dates on which any such
interest will be payable and the Regular Record Date for any such interest
payable on any Interest Payment Date, or the method by which such date or
dates shall be determined, and the basis upon which interest shall be
calculated if other than that of a 360-day year of twelve 30-day months; (5)
the place or places where the principal of and any premium and interest on any
of such Debt Securities will be payable; (6) the period or periods within
which, the price or prices at which and the terms and conditions upon which
any of such Debt Securities may be redeemed, in whole or in part, at the
option of the Company and the manner in which any election by the Company to
redeem such Debt Securities shall be evidenced (if other than by a Board
Resolution); (7) the obligation, if any, of the Company to redeem or purchase
any of such Debt Securities pursuant to any sinking fund or analogous
provision or at the option of the Holder thereof, and the period or periods
within which, the price or prices at which and the terms and conditions upon
which any of such Debt Securities will be redeemed or purchased, in whole or
in part, pursuant to any such obligation; (8) the denominations in which any
of such Debt Securities will be issuable, if other than denominations of
$1,000 and any integral multiple thereof; (9) if the amount of principal of or
any premium or interest on any of such Debt Securities may be determined with
reference to an index or pursuant to a formula, the manner in which such
amounts will be determined; (10) if other than the currency of the United
States of America, the currency, currencies or currency units in which the
principal of or any premium or interest on any of such Debt Securities will be
payable (and the manner in which the equivalent of the principal amount
thereof in the currency of the United States of America is to be determined
for any purpose, including for the purpose of determining the principal amount
deemed to be Outstanding at any time); (11) if the principal of or any premium
or interest on any of such Debt Securities is to be payable, at the election
of the Company or the Holder thereof, in one or more currencies or currency
units other than those in which such Debt Securities are stated to be payable,
the currency, currencies or currency units in which payment of any such amount
as to which such election is made will be payable, the periods within which
and the terms and conditions upon which such election is to be made and the
amount so payable (or the manner in which such amount is to be determined);
(12) the
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<PAGE>
percentage of the principal amount at which such Debt Securities will be
issued and, if other than the entire principal amount thereof, the portion of
the principal amount of any of such Debt Securities which will be payable upon
declaration of acceleration of the Maturity thereof or the method by which
such portion shall be determined; (13) if the principal amount payable at the
Stated Maturity of any of such Debt Securities will not be determinable as of
any one or more dates prior to the Stated Maturity, the amount which will be
deemed to be such principal amount as of any such date for any purpose,
including the principal amount thereof which will be due and payable upon any
Maturity other than the Stated Maturity or which will be deemed to be
Outstanding as of any such date (or, in any such case, the manner in which
such deemed principal amount is to be determined); (14) any variation from the
application of the provisions of the Indenture described under "Defeasance and
Covenant Defeasance--Defeasance and Discharge" or "Defeasance and Covenant
Defeasance--Defeasance of Certain Covenants," or under both such captions and
the manner in which any election of the Company to defease such Debt
Securities shall be evidenced (if other than by a Board Resolution); (15)
whether any of such Debt Securities will be issuable in whole or in part in
the form of one or more Global Securities and, if so, the respective
Depositaries for such Global Securities, the form of any legend or legends to
be borne by any such Global Security in addition to or in lieu of the legend
referred to under "Form, Exchange and Transfer--Global Securities" and, if
different from those described under such caption, any circumstances under
which any such Global Security may be exchanged in whole or in part for Debt
Securities registered, and any transfer of such Global Security in whole or in
part may be registered, in the names of Persons other than the Depositary for
such Global Security or its nominee; (16) whether any of such Debt Securities
will be subject to certain optional interest rate reset provisions; (17)
whether any of such Debt Securities will be subject to certain optional
extension of maturity provisions; (18) any addition to or change in the Events
of Default applicable to any of such Debt Securities and any change in the
right of the Trustee or the requisite Holders of any of such Debt Securities
to declare the principal amount thereof due and payable; (19) any addition to
or change in the covenants in the Indenture applicable to any of such Debt
Securities; and (20) any other terms of such Debt Securities not inconsistent
with the provisions of the Indenture. (Section 301)
Debt Securities, including Original Issue Discount Securities, may be sold
at a substantial discount below their principal amount. Certain special United
States income tax considerations (if any) applicable to Debt Securities sold
at an original issue discount may be described in the applicable Prospectus
Supplement. In addition, certain special United States income tax or other
considerations (if any) applicable to any Debt Securities which are
denominated in a currency or currency unit other than United States dollars
may be described in the applicable Prospectus Supplement.
FORM, EXCHANGE AND TRANSFER
The Debt Securities of each series will be issuable only in fully registered
form, without coupons, and, unless otherwise specified in the applicable
Prospectus Supplement, only in denominations of $1,000 and integral multiples
thereof. (Section 302)
At the option of the Holder, subject to the terms of the Indenture and the
limitations applicable to Global Securities, Debt Securities of each series
will be exchangeable for other Debt Securities of the same series of any
authorized denomination and of a like tenor and aggregate principal amount.
(Section 305)
Subject to the terms of the Indenture and the limitations applicable to
Global Securities, Debt Securities may be presented for exchange as provided
above or for registration of transfer (duly endorsed or with the form of
transfer duly executed) at the office of the Security Registrar or at the
office of any transfer agent designated by the Company for such purpose. No
service charge will be made for any registration of transfer or exchange of
Debt Securities, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Such transfer or exchange will be effected upon the Security Registrar or such
transfer agent, as the case may be, being satisfied with the documents of
title and identity of the person making the request. The Company has appointed
the Trustee as Security Registrar. Any transfer agent (in addition to the
Security Registrar) initially designated by the Company for any Debt
Securities will be named in the applicable Prospectus Supplement. (Section
305) The Company may at any time designate
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<PAGE>
additional transfer agents or rescind the designation of any transfer agent or
approve a change in the office through which any transfer agent acts, except
that the Company will be required to maintain an office or agency in each
Place of Payment for the Debt Securities of each series. (Section 1002)
If the Debt Securities of any series (or of any series and specified tenor)
are to be redeemed in part, the Company will not be required to (i) issue,
register the transfer of or exchange any Debt Security of that series (or of
that series and specified tenor, as the case may be) during a period beginning
at the opening of business 15 days before the day of mailing of a notice of
redemption of any such Debt Security that may be selected for redemption and
ending at the close of business on the day of such mailing or (ii) register
the transfer of or exchange any Debt Security so selected for redemption, in
whole or in part, except the unredeemed portion of any such Debt Security
being redeemed in part. (Section 305)
GLOBAL SECURITIES
Unless otherwise provided in the Prospectus Supplement, some or all of the
Debt Securities of any series may be represented, in whole or in part, by one
or more Global Securities which will have an aggregate principal amount equal
to that of the Debt Securities represented thereby. Unless otherwise provided
in the Prospectus Supplement, the Global Security representing Securities will
be deposited with, or on behalf of, The Depository Trust Company ("DTC"), or
other successor depository appointed by the Company (DTC or such other
depository is herein referred to as the "Depositary") and registered in the
name of the Depositary or its nominee and such Global Security will bear a
legend regarding the restrictions on exchanges and registration of transfer
thereof referred to below and any such other matters as may be provided for
pursuant to the Indenture. Unless otherwise provided in the Prospectus
Supplement, Debt Securities will not be issued in definitive form.
Notwithstanding any provision of the Indenture or any Debt Security
described herein, no Global Security may be exchanged in whole or in part for
Debt Securities registered, and no transfer of a Global Security in whole or
in part may be registered in the name of any Person other than the Depositary
for such Global Security or any nominee of such Depositary unless (i) the
Depositary has notified the Company that it is unwilling or unable to continue
as Depositary for such Global Security or has ceased to be qualified to act as
such as required by the Indenture, (ii) there shall have occurred and be
continuing an Event of Default with respect to the Debt Securities represented
by such Global Security or (iii) there shall exist such circumstances, if any,
in addition to or in lieu of those described above as may be described in the
applicable Prospectus Supplement. All Debt Securities issued in exchange for a
Global Security or any portion thereof will be registered in such names as the
Depositary may direct. (Sections 204 and 305)
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. DTC is owned by a number of
Direct Participants and by the New York Stock Exchange, Inc., the American
Stock Exchange, Inc., and the National Association of Securities Dealers, Inc.
Access to DTC's book-entry system is also available to others, such as
securities brokers and dealers, banks and trust companies that clear through
or maintain a custodial relationship with a Direct Participant, either
directly or indirectly ("Indirect Participants"). The Rules applicable to DTC
and its Participants are on file with the Securities and Exchange Commission.
Upon the issuance by the Company of Debt Securities represented by a Global
Security, purchases of Debt Securities under the DTC System must be made by or
through Direct Participants, which will receive a credit for the Debt
Securities on DTC's records. The ownership interest of each actual purchaser
of each Debt Security
8
<PAGE>
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchase, but Beneficial Owners are expected to receive
written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of
ownership interests in the Debt Securities are to be accomplished by entries
made on the books of Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership
interests in Debt Securities, except in the event that use of the book-entry
system for the Debt Securities is discontinued. The laws of some states
require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and such laws may impair the
ability to transfer beneficial interests in the Global Security.
So long as the Depositary for the Global Security, or its nominee, is the
registered owner of the Global Security, the Depositary or its nominee, as the
case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
applicable Indenture. Except as described above, owners of beneficial
interests in Debt Securities represented by the Global Security will not be
entitled to have Debt Securities represented by such Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of Debt Securities in definitive form and will not be considered the
owners or holders thereof under the applicable Indenture.
To facilitate subsequent transfers, all Debt Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Debt Securities with DTC and their registration in
the name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Debt Securities; DTC's
records reflect only the identity of the Direct Participants to whose accounts
such Debt Securities are credited, which may or may not be the Beneficial
Owners. The Participants will remain responsible for keeping account of their
holdings on behalf of their customers. Conveyance of notices and other
communications by DTC to Direct Participants, by Direct Participants to
Indirect Participants, and by Direct Participants and Indirect Participants to
Beneficial Owners will be governed by arrangements among them, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to Debt
Securities. Under its usual procedures, DTC mails an Omnibus Proxy to the
Issuer as soon as possible after the record date. The Omnibus Proxy assigns
Cede & Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Debt Securities are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
Payments of principal of and interest, if any, on the Debt Securities
represented by the Global Security registered in the name of DTC or its
nominee will be made by the Company through the Trustee under the applicable
Indenture or a paying agent (the "Paying Agent"), which may also be the
Trustee under the applicable Indenture to DTC or its nominee, as the case may
be, as the registered owner of the Global Security. Neither the Company, the
Trustee, nor the Paying Agent will have any responsibility or liability for
any aspect of the records relating to or payments made on account of
beneficial ownership interests of the Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Company has been advised that DTC will credit Direct Participants'
accounts on the payable date in accordance with their respective holdings
shown on DTC's records unless DTC has reason to believe that it will not
receive payment on the payable date. Payments by Participants to Beneficial
Owners will be governed by standing instructions and customary practices, as
in the case with securities held for the accounts of customers in bearer form
or registered in "street name," and will be the responsibility of such
Participant and not of DTC, the Paying Agent, or the Company, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payment of principal and interest to DTC is the responsibility of the Company
or the Paying Agent, disbursement of such payments to Direct Participants
shall be the responsibility of DTC, and disbursement of such payments to the
Beneficial Owners shall be the responsibility of Direct and Indirect
Participants.
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The information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from sources that the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of interest on a Debt Security on any Interest Payment Date will be made to
the Person in whose name such Debt Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest. (Section 307)
Unless otherwise indicated in the applicable Prospectus Supplement,
principal of and any premium and interest on the Debt Securities of a
particular series will be payable at the office of such Paying Agent or Paying
Agents as the Company may designate for such purpose from time to time, except
that, at the option of the Company, payment of any interest may be made by
check mailed to the address of the Person entitled thereto as such address
appears in the Security Register. Unless otherwise indicated in the applicable
Prospectus Supplement, the corporate trust office of the Trustee in Chicago,
Illinois will be designated as the Company's sole Paying Agent for payments
with respect to Debt Securities of each series. Any other Paying Agents
initially designated by the Company for the Debt Securities of a particular
series will be named in the applicable Prospectus Supplement. The Company may
at any time designate additional Paying Agents or rescind the designation of
any Paying Agent or approve a change in the office through which any Paying
Agent acts, except that the Company will be required to maintain a Paying
Agent in each Place of Payment for the Debt Securities of a particular series.
(Section 1002)
Any money paid by the Company to a Paying Agent for the payment of the
principal of or any premium or interest on any Security which remains
unclaimed at the end of two years after such principal, premium or interest
has become due and payable may be repaid to the Company at the Company's
request. (Section 1003)
NEGATIVE PLEDGE
In the Indenture, the Company covenants that it will not, and it will not
permit any subsidiary to, create, assume, incur or suffer to exist any Lien
upon any stock of BNI, SFP, BNRR and ATSF (each a "Restricted Subsidiary") to
secure any obligation (other than the Debt Securities) of the Company, any
Subsidiary or other Person, unless all of the Outstanding Securities are
directly secured equally and ratably with such obligation. (Section 1008) The
Indenture defines the term Restricted Subsidiary to include any successor or
assign thereof, whether by merger or otherwise.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may not consolidate with or merge into, or convey, transfer or
lease its properties and assets substantially as an entirety to, any Person (a
"successor Person"), and may not permit any Person to merge into, or convey,
transfer or lease its properties and assets substantially as an entirety to,
the Company, unless (i) the successor Person (if any) is a corporation,
partnership, trust or other entity organized and validly existing under the
laws of any domestic jurisdiction and assumes the Company's obligations on the
Debt Securities and under the Indenture and (ii) immediately after giving
effect to the transaction, no Event of Default, and no event which, after
notice or lapse of time or both, would become an Event of Default, shall have
occurred and be continuing. (Section 801)
EVENTS OF DEFAULT
Each of the following will constitute an Event of Default under the
Indenture with respect to Debt Securities of any series: (a) failure to pay
principal of or any premium on any Debt Security of that series when due; (b)
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failure to pay any interest on any Debt Securities of that series when due,
continued for 30 days; (c) failure to deposit any sinking fund payment, when
due, in respect of any Security of that series; (d) failure to perform or
breach of any other covenant or warranty of the Company in the Indenture with
respect to Debt Securities of that series (other than a covenant included in
the Indenture solely for the benefit of a series other than that series),
continued for 90 days after written notice has been given by the Trustee or
the Holders of at least 25% in principal amount of the Outstanding Securities
of that series, as provided in the Indenture; and (e) certain events in
bankruptcy, insolvency or reorganization. (Section 501)
If an Event of Default (other than an Event of Default described in clause
(d) above that is applicable to all Outstanding Securities) with respect to
the Debt Securities of any series at the time Outstanding shall occur and be
continuing, either the Trustee or the Holders of at least 25% in aggregate
principal amount of the Outstanding Securities of that series by notice as
provided in the Indenture may declare the principal amount of the Debt
Securities of that series (or, in the case of any Debt Security that is an
Original Issue Discount Security or the principal amount of which is not then
determinable, such portion of the principal amount of such Debt Security, or
such other amount in lieu of such principal amount, as may be specified in the
terms of such Debt Security) to be due and payable immediately. If an Event of
Default described in clause (d) above that is applicable to all Outstanding
Securities shall occur and be continuing, either the Trustee or the Holders of
at least 25% in aggregate principal amount of all the Debt Securities then
Outstanding (treated as one class) by notice as provided in the Indenture may
declare the principal amount (or, if any Debt Securities are Original Issue
Discount Securities, such portion of the principal amount as may be specified
in the terms thereof) of all the Debt Securities then Outstanding to be due
and payable immediately. After any acceleration of a series, but before a
judgment or decree based on acceleration, the Holders of a majority in
aggregate principal amount of the Outstanding Securities of that series may,
under certain circumstances, rescind and annul such acceleration if all Events
of Default, other than the non-payment of accelerated principal (or other
specified amount), have been cured or waived as provided in the Indenture.
(Section 502) For information as to waiver of defaults, see "Modification and
Waiver".
Subject to the provisions of the Indenture relating to the duties of the
Trustee, in case an Event of Default shall occur and be continuing, the
Trustee will be under no obligation to exercise any of its rights or powers
under the Indenture at the request or direction of any of the Holders, unless
such Holders shall have offered to the Trustee reasonable indemnity. (Section
603) Subject to such provisions for the indemnification of the Trustee, the
Holders of a majority in aggregate principal amount of the Outstanding
Securities of any series will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee with respect to the
Debt Securities of that series. (Section 512)
No Holder of a Debt Security of any series will have any right to institute
any proceeding with respect to the Indenture, or for the appointment of a
receiver or a trustee, or for any other remedy thereunder, unless (i) such
Holder has previously given to the Trustee written notice of a continuing
Event of Default with respect to the Debt Securities of that series, (ii) the
Holders of at least 25% in aggregate principal amount of the Outstanding
Securities of that series have made written request, and such Holder or
Holders have offered reasonable indemnity, to the Trustee to institute such
proceeding as trustee and (iii) the Trustee has failed to institute such
proceeding, and has not received from the Holders of a majority in aggregate
principal amount of the Outstanding Securities of that series a direction
inconsistent with such request, within 60 days after such notice, request and
offer. (Section 507) However, such limitations do not apply to a suit
instituted by a Holder of a Debt Security for the enforcement of payment of
the principal of or any premium or interest on such Debt Security on or after
the applicable due date specified in such Debt Security. (Section 508)
The Company will be required to furnish to the Trustee annually a statement
by certain of its officers as to whether or not the Company, to their
knowledge, is in default in the performance or observance of any of the terms,
provisions and conditions of the Indenture and, if so, specifying all such
known defaults. (Section 1004)
11
<PAGE>
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of each series affected by such
modification or amendment; provided, however, that no such modification or
amendment may, without the consent of the Holder of each Outstanding Security
affected thereby, (a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Debt Security, (b) reduce the
principal amount of, or any premium or interest on, any Debt Security, (c)
reduce the amount of principal of an Original Issue Discount Security or any
other Debt Security payable upon acceleration of the Maturity thereof, (d)
change the place or currency of payment of principal of, or any premium or
interest on, any Debt Security, (e) impair the right to institute suit for the
enforcement of any payment on or with respect to any Debt Security, (f) reduce
the percentage in principal amount of Outstanding Securities of any series,
the consent of whose Holders is required for modification or amendment of the
Indenture, (g) reduce the percentage in principal amount of Outstanding
Securities of any series necessary for waiver of compliance with certain
provisions of the Indenture or for waiver of certain defaults, or (h) make
certain modifications to such provisions with respect to modification and
waiver. (Section 902)
The Holders of a majority in principal amount of the Outstanding Securities
of any series may waive any past default or compliance with certain
restrictive provisions under the Indenture, except a default in the payment of
principal, premium or interest and certain covenants and provisions of the
Indenture, which cannot be amended without the consent of the Holder of each
Outstanding Security of such series affected. (Sections 513 and 1009)
The Indenture provides that in determining whether the Holders of the
requisite principal amount of the Outstanding Securities have given or taken
any direction, notice, consent, waiver or other action under the Indenture as
of any date, (i) the principal amount of an Original Issue Discount Security
that will be deemed to be Outstanding will be the amount of the principal
thereof that would be due and payable as of such date upon acceleration of the
Maturity thereof to such date, (ii) if, as of such date, the principal amount
payable at the Stated Maturity of a Debt Security is not determinable (for
example, because it is based on an index), the principal amount of such Debt
Security deemed to be Outstanding as of such date will be an amount determined
in the manner prescribed for such Debt Security and (iii) the principal amount
of a Debt Security denominated in one or more foreign currencies or currency
units that will be deemed to be Outstanding will be the U.S. dollar
equivalent, determined as of such date in the manner prescribed for such Debt
Security, of the principal amount of such Debt Security (or, in the case of a
Debt Security described in clause (i) or (ii) above, of the amount described
in such clause). Certain Debt Securities, including those for whose payment or
redemption money has been deposited or set aside in trust for the Holders and
those that have been fully defeased pursuant to Section 1402, will not be
deemed to be Outstanding. (Section 101)
Except in certain limited circumstances, the Company will be entitled to set
any day as a record date for the purpose of determining the Holders of
Outstanding Securities of any series entitled to give or take any direction,
notice, consent, waiver or other action under the Indenture, in the manner and
subject to the limitations provided in the Indenture. In certain limited
circumstances, the Trustee will be entitled to set a record date for action by
Holders. If a record date is set for any action to be taken by Holders of a
particular series, such action may be taken only by persons who are Holders of
Outstanding Securities of that series on the record date. To be effective,
such action must be taken by Holders of the requisite principal amount of such
Debt Securities within a specified period following the record date. For any
particular record date, this period will be 180 days or such shorter period as
may be specified by the Company (or the Trustee, if it set the record date)
and may be shortened or lengthened (but not beyond 180 days) from time to
time. (Section 104)
DEFEASANCE AND COVENANT DEFEASANCE
Unless otherwise provided in the applicable Prospectus Supplement, the
provisions of Section 1402, relating to defeasance and discharge of
indebtedness, or Section 1403, relating to defeasance of certain restrictive
covenants in the Indenture, shall apply to the Debt Securities of any series
or to any specified part of a series. (Section 1401)
12
<PAGE>
Defeasance and Discharge. Section 1402 of the Indenture provides that the
Company will be discharged from all its obligations with respect to such Debt
Securities (except for certain obligations to exchange or register the
transfer of Debt Securities, to replace stolen, lost or mutilated Debt
Securities, to maintain paying agencies and to hold moneys for payment in
trust and in respect of the Trustee) upon the deposit in trust for the benefit
of the Holders of such Debt Securities of money or U.S. Government
Obligations, or both, which, through the payment of principal and interest in
respect thereof in accordance with their terms, will provide money in an
amount sufficient to pay the principal of and any premium and interest on such
Debt Securities on the respective Stated Maturities in accordance with the
terms of the Indenture and such Debt Securities. Such defeasance or discharge
may occur only if, among other things, the Company has delivered to the
Trustee an Opinion of Counsel to the effect that the Company has received
from, or there has been published by, the United States Internal Revenue
Service a ruling, or there has been a change in tax law, in either case to the
effect that Holders of such Debt Securities will not recognize gain or loss
for federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to federal income tax on the same amount, in the
same manner and at the same times as would have been the case if such deposit,
defeasance and discharge were not to occur. (Sections 1402 and 1404)
Defeasance of Certain Covenants. Section 1403 of the Indenture provides that
the Company may omit to comply with certain restrictive covenants, including
those described under "Certain Covenants" and any that may be described in the
applicable Prospectus Supplement, the occurrence of certain Events of Default,
which are described above in clause (d) (with respect to such restrictive
covenants) under "Events of Default" and any that may be described in the
applicable Prospectus Supplement, will be deemed not to be or result in an
Event of Default, in each case with respect to such Debt Securities. The
Company, in order to exercise such option, will be required to deposit, in
trust for the benefit of the Holders of such Debt Securities, money or U.S.
Government Obligations, or both, which, through the payment of principal and
interest in respect thereof in accordance with their terms, will provide money
in an amount sufficient to pay the principal of and any premium and interest
on such Debt Securities on the respective Stated Maturities in accordance with
the terms of the Indenture and such Debt Securities. The Company will also be
required, among other things, to deliver to the Trustee an Opinion of Counsel
to the effect that Holders of such Debt Securities will not recognize gain or
loss for federal income tax purposes as a result of such deposit and
defeasance of certain obligations and will be subject to federal income tax on
the same amount, in the same manner and at the same times as would have been
the case if such deposit and defeasance were not to occur. In the event the
Company exercised this option with respect to any Debt Securities and such
Debt Securities were declared due and payable because of the occurrence of any
Event of Default, the amount of money and U.S. Government Obligations so
deposited in trust would be sufficient to pay amounts due on such Debt
Securities at the time of their respective Stated Maturities but might not be
sufficient to pay amounts due on such Debt Securities upon any acceleration
resulting from such Event of Default. In such case, the Company would remain
liable for such payments. (Sections 1403 and 1404)
NOTICES
Notices to Holders of Debt Securities will be given by mail to the addresses
of such Holders as they may appear in the Security Register. (Sections 101 and
106)
TITLE
The Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name a Debt Security is registered as the absolute
owner thereof (whether or not such Debt Security may be overdue) for the
purpose of making payment and for all other purposes. (Section 309)
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the law of the State of New York. (Section 112)
13
<PAGE>
REGARDING THE TRUSTEE
The First National Bank of Chicago has lending and other customary banking
relationships with the Company.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities (i) through an underwriter or
underwriters, (ii) through dealers, (iii) through agents, (iv) directly to
purchasers, including affiliates of the Company, or (v) through a combination
of any such methods of sale. The applicable Prospectus Supplement will set
forth the terms of the offerings of any Debt Securities, including the method
of distribution, the name or names of any underwriters, dealers or agents, any
managing underwriter or underwriters, the purchase price of the Debt
Securities and the proceeds to the Company from the sale, any underwriting
discounts, agency fees and other items constituting underwriters' compensation
and any discounts and concessions allowed, reallowed or paid to dealers or
agents. Any initial public offering price and any discount or concessions
allowed or reallowed to dealers may be changed from time to time. The expected
time of delivery of the Debt Securities in respect of which this Prospectus is
delivered will be set forth in the applicable Prospectus Supplement.
If underwriters are used in the sale of the Debt Securities, the
underwriting agreement will provide that the obligations of the underwriters
are subject to certain conditions precedent and that the underwriters with
respect to a sale of Debt Securities will be obligated to purchase all such
Debt Securities if any are purchased. In connection with the sale of Debt
Securities underwriters may receive compensation from the Company or from
purchasers of Debt Securities for whom they may act as agents in the form of
discounts, concessions or commissions. Underwriters may sell Debt Securities
to or through dealers, and such dealers may receive compensation in the form
of discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agent.
Underwriters, agents or dealers participating in the distribution of Debt
Securities may be deemed to be underwriters, and any discounts and commissions
received by them and any profit realized by them on resale of the Debt
Securities may be deemed to be underwriting discounts and commissions under
the Securities Act.
The Debt Securities may be sold in one or more transactions either at a
fixed price or prices which may be changed, at market prices prevailing at the
time of sale, at prices related to such prevailing market prices or at
negotiated prices. The Company may also offer and sell the Debt Securities in
exchange for one or more of its outstanding issues of debt or convertible debt
securities or in the satisfaction of indebtedness.
Underwriters, agents or dealers who participate in the distribution of Debt
Securities may be entitled, under agreements which may be entered into with
the Company, to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act, or to contribution by the
Company to payments that such underwriters, dealers or agents or any of their
controlling persons may be required to make in respect thereof. Underwriters,
agents or dealers may be customers of, engage in transactions with or perform
services for the Company or subsidiaries of the Company in the ordinary course
of business.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters, dealers and agents to solicit offers by certain institutions to
purchase Debt Securities from the Company pursuant to delayed delivery
contracts providing for payment and delivery on the date stated in the
Prospectus Supplement. Such contracts will be subject only to those conditions
set forth in the Prospectus Supplement. The Prospectus Supplement will also
set forth the commission payable for solicitation of such contracts.
Offers to purchase Debt Securities may be solicited directly by the Company
and sales thereof may be made by the Company directly to institutional
investors or others who may be deemed to be underwriters within the meaning of
the Securities Act with respect to any resale thereof. The terms of any such
sales will be described in the Prospectus Supplement relating thereto. Except
as set forth in the applicable Prospectus Supplement, no
14
<PAGE>
director, officer or employee of the Company will solicit or receive a
commission in connection with direct sales by the Company of the Debt
Securities, although such persons may respond to inquiries by potential
purchasers and perform ministerial and clerical work in connection with any
such direct sales.
VALIDITY OF SECURITIES
The validity of the Debt Securities being offered hereby will be passed upon
for the Company by Mayer, Brown & Platt, Chicago, Illinois, and for the
underwriters, dealers, or agents, if any, by Sullivan & Cromwell, New York, New
York.
EXPERTS
The consolidated financial statements of the Company incorporated in this
Prospectus by reference to the Company's Annual Report on Form 10-K for the
year ended December 31, 1995, have been so incorporated in reliance on the
report of Coopers & Lybrand L.L.P., independent accountants, given on the
authority of said firm as experts in auditing and accounting.
The consolidated financial statements of SFP incorporated in this Prospectus
by reference to SFP's Annual Report on Form 10-K for the year ended December
31, 1994, have been so incorporated in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting.
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15
<PAGE>
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT
AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF
AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS
PROSPECTUS SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION
IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Documents Incorporated by Reference........................................ S-2
The Company................................................................ S-2
Ratio of Earnings to Fixed Charges......................................... S-3
Use of Proceeds............................................................ S-3
Capitalization............................................................. S-4
Description of Debentures.................................................. S-5
Underwriting............................................................... S-7
Experts.................................................................... S-8
PROSPECTUS
Available Information...................................................... 2
Documents Incorporated by Reference........................................ 2
The Company................................................................ 4
Ratio of Earnings to Fixed Charges......................................... 5
Use of Proceeds............................................................ 5
Description of Debt Securities............................................. 5
Plan of Distribution....................................................... 14
Validity of Securities..................................................... 15
Experts.................................................................... 15
</TABLE>
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$200,000,000
BURLINGTON NORTHERN
SANTA FE CORPORATION
7.25% DEBENTURES DUE AUGUST 1, 2097
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BNSF
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GOLDMAN, SACHS & CO.
MORGAN STANLEY DEAN WITTER
CHASE SECURITIES INC.
J.P. MORGAN & CO.
SALOMON BROTHERS INC
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