<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): October 20, 1998
Burlington Northern Santa Fe Corporation
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
1-11535 41-1804964
(Commission File Number) (I.R.S. Employer
Identification No.)
2650 Lou Menk Drive, Fort Worth, Texas 76131-2830
(Address of Principal Executive Offices) (Zip Code)
(817) 352-6454
(Registrant's Telephone Number, Including Area Code)
(Not Applicable)
(Former Name or Former Address, If Changed Since Last Report)
<PAGE>
INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events.
The Company announced its third quarter 1998 earnings in an October 20,
1998, press release, which press release is attached as Exhibit 99.1 and is
hereby incorporated by reference.
Attached as Exhibit 99.2 is a table with selected financial data for the
five years ended December 31, 1997, with earnings per share data restated to
reflect the Company's three-for-one common stock split, effected in the form of
a stock dividend of two additional shares of common stock payable September 1,
1998, for each share of common stock outstanding or held in the Company's
treasury as of the close of business on August 17, 1998.
Attached as Exhibit 12.1 is a statement regarding computation of ratio of
earnings to fixed charges (as of September 30, 1998).
Item 7. Financial Statements and Exhibits.
(c) Exhibits
See Exhibit Index included herewith.
<PAGE>
EXHIBIT INDEX
-------------
Exhibit
Number Description of Exhibit
- ------ ----------------------
12.1 Computation of ratio of earnings to fixed charges (as of
September 30, 1998)
99.1 Burlington Northern Santa Fe Corporation press release dated
October 20, 1998
99.2 Burlington Northern Santa Fe Corporation selected financial
data restated to reflect stock split effected in the form of
a stock dividend payable September 1, 1998
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BURLINGTON NORTHERN SANTA FE CORPORATION
(Registrant)
Date: November 9, 1998 By: /s/ Thomas N. Hund
-----------------------------
(Signature)
Thomas N. Hund
Vice President and Controller
<PAGE>
EXHIBIT 12
BURLINGTON NORTHERN SANTA FE CORPORATION and SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In Millions, Except Ratio Amounts)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
---------------------------
1998 1997
--------- ---------
<S> <C> <C>
Earnings:
Pre-tax income............................ $1,380 $1,061
Add:
Interest and fixed charges,
excluding capitalized interest........ 264 255
Portion of rent under long-term
operating leases representative
of an interest factor................. 144 139
Amortization of capitalized interest.... 3 3
Less: Undistributed equity in earnings
of investments accounted for
under the equity method.......... (12) (8)
------ ------
Total earnings available for fixed charges $1,779 $1,450
====== ======
Fixed charges:
Interest and fixed charges................ $ 276 $ 268
Portion of rent under long-term operating
leases representative of an interest
factor.................................. 144 139
------ ------
Total fixed charges....................... $ 420 $ 407
====== ======
Ratio of earnings to fixed charges.......... 4.24x(1) 3.56x
</TABLE>
(1) Earnings for the nine months ended September 30, 1998 include a pre-tax
gain on the pipeline partnerships sale of $67 million. Excluding this
gain, the ratio for the nine months ended September 30, 1998 would have
been 4.08x.
<PAGE>
EXHIBIT 99.2
NEWS
Contact: Richard Russack
FOR IMMEDIATE RELEASE
(817) 352-6425
Burlington Northern Santa Fe Reports Improved Third Quarter Results
. Net income of $317 million or $0.66 per share -- up 12 percent from
net income of $283 million or $0.60 per share in 1997.
. Revenues of $2.3 billion for the third quarter 1998 were $169 million
or 8 percent higher than third quarter 1997.
. Third quarter 1998 operating income of $614 million -- $73 million or
13 percent higher than a year ago.
. Operating ratio for the third quarter improved to 73.4 percent
compared with 74.7 percent in 1997.
FORT WORTH, Texas, October 20, 1998 -- Burlington Northern Santa Fe
Corporation (BNSF)(NYSE: BNI) today reported third quarter 1998 net income of
$317 million, or $0.66 per share on a diluted basis, compared with third quarter
1997 net income of $283 million, or $0.60 per share.
"Coal, Intermodal and Merchandise volume and revenue growth, coupled with
effective expense controls, contributed to the 12 percent increase in third
quarter 1998 net income over the prior year," said Robert D. Krebs, BNSF
chairman, president and chief executive officer.
Revenues of $2.3 billion for the third quarter 1998 were $169 million or 8
percent higher than third quarter 1997. Coal revenues improved $65 million or
13 percent to $565 million on a 11 percent increase in carloadings. Intermodal
growth in the direct marketing, international and truckload sectors produced
revenues of $659 million, $69 million or 12 percent greater than
1
<PAGE>
last year. Merchandise revenues grew to $724 million, an increase of $49 million
or 7 percent, driven by volume increases in all sectors. Agricultural commodity
revenues decreased $2 million or 1 percent to $267 million. Automotive revenues
decreased $15 million or 15 percent to $86 million, primarily due to the loss of
a contract with Ford Motor Company as previously announced.
Operating expenses of $1.7 billion increased $96 million or 6 percent over
the prior-year period despite an 8 percent increase in units handled. All
expense categories were higher primarily as a result of increased business
levels. Operating ratio improved to 73.4 percent for the third quarter 1998
compared with 74.7 percent a year earlier.
Common Stock Repurchases and Stock Split
During the 1998 third quarter, BNSF repurchased 3.4 million shares at an
average price of $30.86 per share, bringing total 1998 repurchases under BNSF's
share-repurchase program to 3.6 million shares at an average price of $30.72 per
share. Additionally, a three-for-one common stock split in the form of a stock
dividend and a 20 percent increase in the common stock dividend on the post-
split stock became effective in the third quarter of 1998. All per-share
information has been restated to reflect the three-for-one stock split.
Nine-months 1998 Results
BNSF adjusted net income for the nine months ended September 30, 1998, was
$827 million, or $1.73 per share on a diluted basis, a 24 percent increase from
1997 net income of $668 million, or $1.42 per share. Including a one-time gain
on the March 1998 sale of substantially all of BNSF's interest in Santa Fe
Pacific Pipeline Partners, L.P., BNSF reported net income for the first
2
<PAGE>
nine months of 1998 of $859 million or $1.80 per common share. Revenues for the
period were $6.7 billion, up 7 percent. Operating expenses were $5.1 billion for
the first nine months of 1998, a 4 percent increase over the same 1997 period.
Operating income was $1.6 billion for the 1998 period compared with $1.3 billion
a year ago. Operating ratio improved to 76.2 percent for the first nine months
of 1998 compared with 78.7 percent a year earlier.
Through its subsidiary, The Burlington Northern and Santa Fe Railway
Company, BNSF operates one of the largest railroad networks in the United
States, with 34,000 route miles covering 28 states and two Canadian provinces.
Consolidated financial statements follow.
[BNSF LOGO]
3
<PAGE>
Burlington Northern Santa Fe Corporation
Adjusted Consolidated Statement of Income
(Unaudited, In millions, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1998 1997 1998 1997
------------------ -----------------
Revenues $2,307 $2,138 $6,688 $6,226
------ ------ ------ ------
<S> <C> <C> <C> <C>
Operating Expenses
Compensation and benefits 695 661 2,087 2,006
Purchased services 243 217 707 644
Depreciation and amortization 211 195 618 574
Equipment rents 203 200 597 601
Fuel 178 173 541 555
Materials and other 163 151 548 517
------ ------ ------ ------
Total Operating Expenses 1,693 1,597 5,098 4,897
------ ------ ------ ------
Operating Income 614 541 1,590 1,329
Interest Expense 91 86 264 255
Other Income (Expense)--Net (19) (10) (13) (13)
------ ------ ------ ------
Income Before Income Taxes 504 445 1,313 1,061
Income Tax Expense 187 162 486 393
------ ------ ------ ------
Adjusted Net Income $ 317 $ 283 $ 827 $ 668
====== ====== ====== ======
Adjusted Diluted Earnings Per Share $ 0.66 $ 0.60 $ 1.73 $ 1.42
====== ====== ====== ======
Reported Earnings
Net Income $ 317 $ 283 $ 859 $ 668
====== ====== ====== ======
Basic Earnings Per Share $ 0.67 $ 0.61 $ 1.82 $ 1.44
====== ====== ====== ======
Diluted Earnings Per Share $ 0.66 $ 0.60 $ 1.80 $ 1.42
====== ====== ====== ======
Average Shares Outstanding
Basic $471.4 465.8 470.9 463.4
====== ====== ====== ======
Diluted 477.0 472.2 476.8 470.3
====== ====== ====== ======
</TABLE>
Statement Explanation:
1998 adjusted net income and diluted earnings per share exclude other income
attributable to a first quarter gain on pipeline partnership sale of $32 million
($67 million pre-tax) or $0.07 per share after tax. All per share information
has been restated to reflect the third quarter 1998 three-for-one stock split.
<PAGE>
Burlington Northern Santa Fe Corporation
(Unaudited, In millions)
<TABLE>
<CAPTION>
Condensed Consolidated Balance Sheet
September 30, December 31,
1998 1997
------------- ------------
<S> <C> <C>
Assets
Cash and cash equivalents $ 17 $ 31
Other current assets 1,199 1,203
------- -------
Total current assets 1,216 1,234
Properties and other assets 21,044 20,102
------- -------
Total Assets $22,260 $21,336
======= =======
Liabilities and Stockholders' Equity
Current liabilities $ 2,116 $ 2,060
Long-term debt and commercial paper 5,154 5,181
Deferred income taxes 5,479 5,175
Other liabilities 1,970 2,108
Stockholders' equity 7,541 6,812
------- -------
Total Liabilities and Stockholders' Equity $22,260 $21,336
======= =======
</TABLE>
<TABLE>
<CAPTION>
Condensed Consolidated Statement of Cash Flows
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1998 1997 1998 1997
------------------ -----------------
<S> <C> <C> <C> <C>
Cash Provided by Operating Activities $ 551 $ 477 $ 1,552 $ 1,110
Cash Used for Capital Expenditures (606) (631) (1,558) (1,476)
Net Proceeds of Borrowings 192 220 398 542
Dividends Paid (47) (46) (141) (138)
Purchase of BNSF Common Stock (104) - (110) -
Cash Used for Other Activities - (17) (155) (40)
----- ----- ------- -------
Increase (Decrease) in Cash and Cash Equivalents $ (14) $ 3 $ (14) $ (2)
===== ===== ======= =======
</TABLE>
<PAGE>
Burlington Northern Santa Fe Corporation
Supplemental Data
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1998 1997 1998 1997
------- -------- ------- -------
<S> <C> <C> <C> <C>
Revenues (In millions)
Intermodal $ 659 $ 590 $ 1,825 $ 1,660
Coal 565 500 1,678 1,471
Agricultural Commodities 267 269 771 800
Automotive 86 101 278 315
Merchandise
Chemicals 213 200 632 614
Metals and Minerals 208 199 606 559
Forest Products 159 145 464 428
Consumer Goods 144 131 420 377
------ ------ ------ ------
Total Freight Revenues 2,301 2,135 6,674 6,224
Other Revenues 6 3 14 2
------ ------ ------ ------
Total Revenues $2,307 $2,138 $6,688 $6,226
====== ====== ====== ======
Operating ratio 73.4% 74.7% 76.2% 78.7%
Revenue ton miles (billions) 118.4 106.1 347.3 309.6
Freight revenue per thousand revenue ton miles $19.44 $20.12 $19.22 $20.11
Cars/Units (thousands) 2,038 1,884 5,851 5,393
Average revenue per car/unit $1,129 $1,133 $1,141 $1,154
Employees (average) 45,055 44,060 44,612 43,135
</TABLE>
<PAGE>
EXHIBIT 99.2
Consolidated Financial Highlights
Burlington Northern Santa Fe Corporation and Subsidiaries
(Dollars in millions, except per share data)
The selected financial data shown below include BNSF results for the years ended
December 31, 1997 and 1996, Burlington Northern Inc. results for each of the
three years ended December 31, 1995 and Santa Fe Pacific results from September
22, 1995 to December 31, 1995.
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
--------- --------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
FOR THE YEAR ENDED:
Revenues............................................... $ 8,413 $ 8,141 $ 6,117 $4,914 $4,615
Operating income (1)................................... 1,767 1,748 526 853 661
Income before extraordinary item and
cumulative effect of change in accounting
method............................................... 885 889 198 426 296
Accounting change/Extraordinary item (2)(3)............ - - (106) (10) -
Net income............................................. $ 885 $ 889 $ 92 $ 416 $ 296
Earnings available for common stockholders............. $ 885 $ 889 $ 71 $ 394 $ 274
Basic earnings per share: (4)
Before extraordinary item and change in
accounting method.................................. $ 1.91 $ 1.95 $ .57 $ 1.51 $ 1.03
Accounting change/Extraordinary item................. - - (.34) (.04) -
Basic earnings per share............................. $ 1.91 $ 1.95 $ .23 $ 1.47 $ 1.03
Average shares (in millions)......................... 464.4 456.3 313.2 267.3 265.5
Diluted earnings per share: (4)
Before extraordinary item and change in
accounting method.................................. $ 1.88 $ 1.91 $ .55 $ 1.46 $ 1.02
Accounting change/Extraordinary item................. - - (.33) (.03) -
Diluted earnings per share........................... $ 1.88 $ 1.91 $ .22 $ 1.43 $ 1.02
Average shares (in millions)......................... 471.1 464.4 317.7 291.3 290.4
Dividends declared per common share (5)................ $ .40 $ .40 $ .40 $ .40 $ .40
AT YEAR END:
Total assets........................................... $21,336 $19,763 $18,269 $7,592 $7,045
Long-term debt and commercial paper,
including current portion............................ 5,289 4,711 4,233 1,819 1,737
Stockholders' equity................................... 6,812 5,981 5,037 2,237 1,919
Total debt to capital.................................. 44% 44% 46% 45% 48%
FOR THE YEAR ENDED:
Capital expenditures................................... $ 2,182 $ 2,234 $ 890 $ 698 $ 676
Depreciation and amortization.......................... 773 760 520 362 352
Operating ratio (6).................................... 77.9% 78.5% 79.4% 82.6% 85.7%
</TABLE>
(1) 1997 and 1995 include $90 million and $735 million before taxes,
respectively, related to special charges as discussed in Note 3 of the financial
statements incorporated by reference in the Company's Annual Report on Form 10-K
for the year ended December 31, 1997.
(2) 1995 includes the cumulative effect of the change in accounting method for
locomotive overhauls which decreased net income by $100 million. Additionally,
1995 includes an extraordinary loss on retirement of debt of $6 million (after
tax).
(3) 1994 includes the cumulative effect of the implementation of the accounting
standard for postemployment benefits.
(4) Earnings per share information for all periods has been restated to reflect
the three-for-one common stock split which was effected in the form of a stock
dividend of two additional shares of BNSF common stock for each share
outstanding or held in treasury on September 1, 1998 to stockholders of record
on August 17, 1998, and the Company's adoption in 1997 of the accounting
standard for earnings per share.
(5) Amounts for all years have been restated to reflect the three-for-one
common stock split discussed in note (4) above.
(6) 1997 and 1995 operating ratios exclude the pre-tax charges discussed in
note (1) above.
<PAGE>
Burlington Northern Santa Fe Corporation
Adjusted Consolidated Statement of Income
(Unaudited. In millions, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
------ ------ ------ ------
<S> <C> <C> <C> <C>
Revenues $2,307 $2,138 $6,688 $6,226
------ ------ ------ ------
Operating Expenses
Compensation and benefits 695 661 2,087 2,006
Purchased services 243 217 707 644
Depreciation and amortization 211 195 618 574
Equipment rents 203 200 597 601
Fuel 178 173 541 555
Materials and other 163 151 548 517
------ ------ ------ ------
Total Operating Expenses 1,693 1,597 5,098 4,897
------ ------ ------ ------
Operating Income 614 541 1,590 1,329
Interest Expense 91 86 264 255
Other Income (Expense) - Net (19) (10) (13) (13)
------ ------ ------ ------
Income Before Income Taxes 504 445 1,313 1,061
Income Tax Expense 187 162 486 393
------ ------ ------ ------
Adjusted Net Income $ 317 $ 283 $ 827 $ 668
====== ====== ====== ======
Adjusted Diluted Earnings Per Share $ 0.66 $ 0.60 $ 1.73 $ 1.42
====== ====== ====== ======
Reported Earnings
Net Income $ 317 $ 283 $ 859 $ 668
====== ====== ====== ======
Basic Earnings Per Share $ 0.67 $ 0.61 $ 1.82 $ 1.44
====== ====== ====== ======
Diluted Earnings Per Share $ 0.66 $ 0.60 $ 1.80 $ 1.42
====== ====== ====== ======
Average Shares Outstanding
Basic 471.7 465.8 470.9 463.4
====== ====== ====== ======
Diluted 477.0 472.2 476.8 470.3
====== ====== ====== ======
</TABLE>
Statement Explanation:
- ----------------------
1998 adjusted net income and diluted earnings per share exclude other income
attributable to a first quarter gain on pipeline partnership sale of $32 million
($67 million pre-tax) or $0.07 per share after tax. All per share information
has been restated to reflect the third quarter 1998 three-for-one stock split.
<PAGE>
Burlington Northern Santa Fe Corporation
(Unaudited. In millions)
Condensed Consolidated Balance Sheet
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
------------- ------------
<S> <C> <C>
Assets
Cash and cash equivalents $ 17 $ 31
Other current assets 1,199 1,203
------- -------
Total current assets 1,216 1,234
Properties and other assets 21,044 20,102
------- -------
Total Assets $22,260 $21,336
======= =======
Liabilities and Stockholders' Equity
Current liabilities $ 2,116 $ 2,060
Long-term debt and commercial paper 5,154 5,181
Deferred income taxes 5,479 5,175
Other liabilities 1,970 2,108
Stockholders' equity 7,541 6,812
------- -------
Total Liabilities and Stockholders' Equity $22,260 $21,336
======= =======
</TABLE>
Condensed Consolidated Statement of Cash Flows
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
1998 1997 1998 1997
----- ----- ------- -------
<S> <C> <C> <C> <C>
Cash Provided by Operating Activities $ 551 $ 477 $ 1,552 $ 1,110
Cash Used for Capital Expenditures (606) (631) (1,558) (1,476)
Net Proceeds of Borrowings 192 220 398 542
Dividends Paid (47) (46) (141) (138)
Purchase of BNSF Common Stock (104) - (110) -
Cash Used for Other Activities - (17) (155) (40)
----- ----- ------- -------
Increase (Decrease) in Cash and
Cash Equivalents $ (14) $ 3 $ (14) $ (2)
===== ===== ======= =======
</TABLE>
<PAGE>
Burlington Northern Santa Fe Corporation
Supplemental Data
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1998 1997 1998 1997
------ ------ ------ ------
<S> <C> <C> <C> <C>
Revenues (In millions)
Intermodal $ 659 $ 590 $1,825 $1,660
Coal 565 500 1,678 1,471
Agricultural Commodities 267 269 771 800
Automotive 86 101 278 315
Merchandise
Chemicals 213 200 632 614
Metals and Minerals 208 199 606 559
Forest Products 159 145 464 428
Consumer Goods 144 131 420 377
------ ------- ------ ------
Total Freight Revenues 2,301 2,135 6,674 6,224
Other Revenues 6 3 14 2
------ ------- ------ ------
Total Revenues $2,307 $2,138 $6,688 $6,226
====== ====== ====== ======
Operating ratio 73.4% 74.7% 76.2% 78.7%
Revenue ton miles (billions) 118.4 106.1 347.3 309.6
Freight revenue per thousand
revenue ton miles $19.44 $20.12 $19.22 $20.11
Cars/Units (thousands) 2,038 1,884 5,851 5,393
Average revenue per car/unit $1,129 $1,133 $1,141 $1,154
Employees (average) 45,055 44,060 44,612 43,135
</TABLE>
