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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act
Date of Report (Date of earliest event reported): January 20, 2000
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) 352-6856
(Registrant's Telephone Number, Including Area Code)
(Not Applicable)
(Former Name or Former Address, If Changed Since Last Report)
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events
The Company amended its By-laws effective January 20, 2000, which amendment
is attached as Exhibit 3.1 and is incorporated by reference. The Company
announced its fourth quarter 1999 earnings in a press release dated January 25,
2000, which press release is attached as Exhibit 99.1 and is incorporated by
reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
See Exhibit Index included herewith.
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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: February 4, 2000 By: /s/ Dennis R. Johnson
-----------------------------
(Signature)
Dennis R. Johnson
Vice President and Controller
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BURLINGTON NORTHERN SANTA FE CORPORATION
INDEX OF EXHIBITS
Exhibit
Number Description
- ------ -----------
3.1 Amendment to By-laws of Burlington Northern Santa Fe Corporation
(effective as of January 20, 2000).
99.1 Press release dated January 25, 2000.
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EXHIBIT 3.1
AMENDMENT OF BY-LAWS
- --------------------
Article II, Section 10 of the Company's By-Laws was amended in its entirety
effective January 20, 2000, as follows:
SECTION 10. Business at Meetings of Stockholders.
(a) General. The business to be conducted at any meeting of stockholders of
the corporation shall be limited to such business and nominations as shall
comply with the procedures set forth in this Article and Article VII of
these By-laws.
(b) Notification of Stockholder Business. At any special meeting of
stockholders only such business shall be conducted as shall have been
brought before the meeting pursuant to the corporation's notice of special
meeting. At an annual meeting of stockholders, only such business shall be
conducted as shall have been properly brought before the meeting. To be
properly brought before an annual meeting, business must be either (i)
specified in the notice of meeting (or any supplement thereto) given by or
at the direction of the Board of Directors, including matters included
pursuant to Rule 14a-8 of the Securities and Exchange Commission, (ii)
otherwise (a) properly requested to be brought before the meeting by a
stockholder of record entitled to vote in the elections of directors
generally, and (b) constitute a proper subject to be brought before the
meeting. In addition to any other applicable requirements, for business
(other than the election of directors) to be otherwise properly brought
before an annual meeting by a stockholder, the business must be a proper
matter for stockholder action and the stockholder must have given timely
notice thereof in writing to the Secretary of the corporation. To be
timely, a stockholder's notice must be addressed to and received at the
principal executive offices of the Corporation, not more than 150 days and
not less than 120 days prior to the first anniversary of the preceding
year's annual meeting; provided, however, that in the event that the date
of the meeting is more than 30 days before or after such anniversary date,
notice by the stockholder to be timely must be so received not later than
the close of business on the 15th day following the day on which notice of
the date of the annual meeting was mailed or public disclosure was made,
whichever first occurs. A stockholder's notice to the Secretary shall set
forth as to each matter (other than the election of directors) the
stockholder proposes to bring before the annual meeting (i) a brief
description of the business desired to be brought before the annual meeting
and the reasons for conducting such business at the annual meeting, (ii)
the name and record address of the stockholder proposing such business and
of each beneficial owner on behalf of which the stockholder is acting,
(iii) the class and number of shares of the corporation which are
beneficially owned by the stockholder and by any such beneficial owner,
(iv) a representation that the stockholder is a holder of record of capital
stock of the corporation entitled to vote at such meeting and intends to
appear in person or by proxy at the meeting to present such business, (v)
any material interest of the stockholder and of any such beneficial owner
in such business; and (vi) whether the proponent
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intends or is part of a group which intends to solicit proxies from other
stockholders in support of such proposal.
Notwithstanding anything in these By-Laws to the contrary, no
business shall be conducted at an annual meeting except in accordance with
the procedures set forth in this Section 10 of Article II, provided,
however, that nothing in this Section 10 of Article II shall be deemed to
preclude discussion by any stockholder of any business properly brought
before the annual meeting.
The Chairman of an annual or special meeting shall have the
power and duty to determine and shall, if the facts warrant, determine and
declare to the meeting that business was not properly brought before the
meeting in accordance with the provisions of this Section 10 of Article II,
and if he should so determine, he shall so declare to the meeting and any
such business not properly brought before the meeting shall not be
transacted.
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EXHIBIT 99.1
[BNSF LOGO APPEARS HERE] NEWS
Contact: Richard Russack FOR IMMEDIATE RELEASE
(817) 352-6425
Burlington Northern Santa Fe Reports
Record Fourth Quarter Results
* Earnings of $0.69 per diluted share -- up 10 percent from fourth
quarter 1998 earnings of $0.63 per diluted share.
* Revenues of $2.37 billion, an increase of $76 million or 3 percent over
fourth quarter 1998 revenues of $2.29 billion.
* Fourth quarter operating income of $603 million -- $35 million or 6
percent higher than fourth quarter 1998 operating income of $568
million.
* Operating ratio for the fourth quarter 1999 improved to 74.6 percent
compared with 75.2 percent in 1998.
* Full-year adjusted earnings of $2.43 per diluted share -- an increase
of 3 percent over full year 1998 adjusted earnings of $2.36 per diluted
share.
* Revenues of $9.1 billion, an increase of $159 million or 2 percent from
full-year 1998 revenues of $8.94 billion.
* Full-year adjusted operating income of $2.24 billion improved 4 percent
over 1998 operating income of $2.16 billion.
* Full-year adjusted operating ratio lowered to 75.4 percent compared
with 75.9 percent in 1998.
FORT WORTH, Texas, January 25, 2000 - - Burlington Northern Santa Fe
Corporation (BNSF) (NYSE: BNI) today reported record fourth quarter 1999
earnings of $0.69 per share on a diluted basis, a 10 percent increase from
fourth quarter 1998 earnings of $0.63 per share. Net income increased $19
million to $315 million from fourth quarter 1998 net income of $296 million.
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BNSF 4Q Earnings / Page Two
"Increases in our intermodal, carload, automotive and agricultural business
units contributed to our record fourth quarter revenues, and the continued
impact of efficiency initiatives implemented earlier in the year kept our
expenses in line and strengthened our performance compared with the fourth
quarter of 1998," said Robert D. Krebs, BNSF Chairman and Chief Executive
Officer.
Revenues of $2.37 billion for the 1999 fourth quarter were $76 million
higher than the 1998 fourth quarter. Intermodal revenues increased $42 million,
or 7 percent, to $679 million. Carload revenues reached $645 million, an
increase of $17 million, or 3 percent, from last year. Automotive revenues
improved $13 million, or 12 percent, to $124 million, primarily due to growth in
vehicle shipments. Agricultural commodity revenues increased $7 million, or 2
percent, to $361 million, primarily due to stronger Mexico and Pacific Northwest
soybean exports. Coal revenues declined $6 million, or 1 percent, to $554
million.
Operating expenses of $1.77 billion were $41 million, or 2 percent, higher
than 1998 despite an increase in volume of 4 percent. Higher purchased
services, depreciation, fuel, and other expenses were partially offset by lower
compensation and benefits and equipment rents expenses.
Operating income was $603 million for the fourth quarter 1999 compared with
$568 million for the same period in 1998. The operating ratio improved to 74.6
percent for the fourth quarter 1999 compared with an operating ratio of 75.2
percent for 1998.
Common Stock Repurchases
During the fourth quarter, BNSF repurchased 4.4 million shares at an
average price of $28.66 per share, bringing total repurchases under BNSF's 30
million share-repurchase program to 27.1 million shares through 1999 at an
average price of $31.02 per share since the program was approved in July 1997.
In 1999, BNSF repurchased a total of 22.1 million shares. In December 1999, the
Board of Directors authorized the Company to repurchase an additional 30 million
shares.
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BNSF 4Q Earnings / Page Three
Full Year 1999 Record Results
"Continued growth in revenue and cost containment led to ongoing
improvements in our 1999 earnings on an adjusted basis. During 1999, we reduced
cash capital expenditures $359 million from 1998 spending levels to $1.79
billion, and for the first time as a combined company, we generated free cash
flow (cash from operations less capital expenditures, other investments and
dividends paid) of approximately $260 million for full year 1999," said Krebs.
"We expect free cash flow to rise considerably in 2000," Krebs pointed out.
BNSF's adjusted earnings for the year ended December 31, 1999, were $2.43
per diluted share, a 3 percent increase from 1998 adjusted earnings of $2.36 per
diluted share. Adjusted net income increased $10 million to $1.13 billion from
1998 adjusted net income of $1.12 billion. Including second and third quarter
special items, BNSF reported earnings of $2.44 per diluted share for the year
ended December 31, 1999.
Revenues for the year were $9.1 billion, up $159 million or 2 percent over
1998 revenues. Adjusted operating expenses of $6.86 billion for 1999 increased
by $81 million or 1 percent. Adjusted operating income was $2.24 billion for
1999 compared with operating income of $2.16 billion for 1998. The adjusted
operating ratio improved to 75.4 percent for 1999 compared with an operating
ratio of 75.9 percent a year earlier.
Proposed Combination with Canadian National Railway Company (CN)
On December 20, 1999, BNSF and CN announced that their boards of directors
had approved a definitive agreement to combine the businesses. On January 11,
2000, a registration statement was filed with the United States Securities and
Exchange Commission related to securities that will be issued in connection with
the proposed business combination.
The BNSF/CN combination will create an end-to-end North American railroad
that will offer shippers substantially expanded single-line service over a
50,000 route-mile network across Canada and the central and western United
States. Combined, BNSF and CN would employ approximately 67,000 people and have
combined annual revenues of approximately $12.5 billion. Benefits of the
combination include new single-line traffic routes, high-quality, efficient and
reliable service, and low integration risk.
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BNSF 4Q Earnings / Page Four
"Canadian National and Burlington Northern Santa Fe are two of the most
efficient and financially-strong railroads in North America today, each with
industry-leading service plans and a proven track record of implementing
previous consolidations. The combination is expected to push the frontier of
efficiency in the industry even further. We anticipate service and transit-time
improvements, asset utilization efficiencies, and cost savings in information
technology, purchasing and other shared services. The prospect of `best
practices' transfer between the two railroads is significant," said Krebs.
The combination is subject to, among other things, approval by the
shareholders of both companies, as well as approvals by the Quebec Superior
Court and the United States Surface Transportation Board. The companies expect
that all required regulatory approvals can be obtained and the transaction
completed by mid-2001.
Through The Burlington Northern and Santa Fe Railway Company, BNSF owns one
of the largest railroad networks in the North America, with approximately 33,500
route miles covering 28 states and two Canadian provinces.
Consolidated financial statements follow.
Any statements in this press release concerning the Company's future
economic performance or business outlook, predictions or expectations of
financial or operational results, and other expressions as to matters which are
not historical facts, are "forward-looking statements" within the meaning of the
federal securities laws. Forward-looking statements involve a number of risks
and uncertainties that could cause actual results to differ materially from
those projected in those statements. Important factors that could cause such
differences include, but are not limited to, general economic downturns, which
may limit demand and pricing; labor matters and stoppages, which may affect the
costs and feasibility of operations; competition and commodity concentrations,
which may affect traffic and pricing levels; severe weather conditions and
natural occurrences such as floods and earthquakes; regulatory and political
developments, including the process of, or conditions imposed in connection
with, obtaining regulatory approvals for the proposed combination; and the
Company's ability to realize the synergies expected as a result of the proposed
combination. The Company assumes no obligation to update forward-looking
information to reflect actual results or changed assumptions or other factors.
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Burlington Northern Santa Fe Corporation
Consolidated Statement of Income
(Unaudited. In millions, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Year Ended
December 31, December 31,
------------------------- ---------------------------
Adjusted (a) 1999 1998 1999 1998
- ------------ --------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues $ 2,370 $ 2,294 $ 9,100 $ 8,941
--------- --------- ---------- ----------
Operating Expenses
Compensation and benefits 702 725 2,772 2,812
Purchased services 242 228 946 894
Depreciation and amortization 229 214 897 832
Equipment rents 188 207 752 804
Fuel 196 182 700 721
Materials and other 210 170 797 720
--------- --------- ---------- ----------
Total Operating Expenses 1,767 1,726 6,864 6,783
--------- --------- ---------- ----------
Operating Income 603 568 2,236 2,158
Interest Expense 96 90 387 354
Other Income (Expense) - Net (3) (9) (36) (22)
--------- --------- ---------- ----------
Income Before Income Taxes 504 469 1,813 1,782
Income Tax Expense 189 173 680 659
--------- --------- ---------- ----------
Net Income $ 315 $ 296 $ 1,133 $ 1,123
========= ========= ========== ==========
Basic Earnings Per Share $ 0.69 $ 0.63 $ 2.45 $ 2.39
========= ========= ========== ==========
Diluted Earnings Per Share $ 0.69 $ 0.63 $ 2.43 $ 2.36
========= ========= ========== ==========
Unadjusted Reported Earnings
- ----------------------------
Net Income $ 315 $ 296 $ 1,137 $ 1,155
========= ========= ========== ==========
Basic Earnings Per Share $ 0.69 $ 0.63 $ 2.46 $ 2.45
========= ========= ========== ==========
Diluted Earnings Per Share $ 0.69 $ 0.63 $ 2.44 $ 2.43
========= ========= ========== ==========
Average Shares Outstanding
Basic 455.2 469.3 463.2 470.5
========= ========= ========== ==========
Diluted 456.8 474.2 466.8 476.2
========= ========= ========== ==========
</TABLE>
(a) Year ended December 31, 1999 adjusted to exclude second quarter special
items consisting of adjustments for reorganization costs and environmental
expenses, partially offset by a credit for the reversal of liabilities
associated with the consolidation of certain clerical work-forces and
adjusted to exclude a third quarter gain in connection with prior period
line sales that was partially offset by costs related to those line sales.
Year ended December 31, 1998 adjusted to exclude other income attributable
to the gain on pipeline partnership sale.
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Burlington Northern Santa Fe Corporation
(Unaudited. In millions)
Condensed Consolidated Balance Sheet
<TABLE>
<CAPTION>
December 31, December 31,
1999 1998
-------------- --------------
<S> <C> <C>
Assets
Cash and cash equivalents $ 22 $ 25
Other current assets 1,044 1,137
-------------- --------------
Total current assets 1,066 1,162
Properties and other assets 22,634 21,484
-------------- --------------
Total Assets $ 23,700 $ 22,646
============== ==============
Liabilities and Stockholders' Equity
Long-term debt and commercial paper due within one year $ 158 $ 268
Other current liabilities 1,917 1,885
Long-term debt and commercial paper 5,655 5,188
Deferred income taxes 6,097 5,662
Other liabilities 1,701 1,859
Stockholders' equity 8,172 7,784
-------------- --------------
Total Liabilities and Stockholders' Equity $ 23,700 $ 22,646
============== ==============
</TABLE>
Condensed Consolidated Cash Flow Information
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, December 31,
1999 1998
------------ ------------
<S> <C> <C>
Cash provided by operating activities $ 2,424 $ 2,218
Cash used for capital expenditures (1,788) (2,147)
Other investing activities (152) (271)
Dividends paid (224) (197)
----------- -----------
Free Cash Flow after Dividends Paid 260 (397)
Purchase of BNSF common stock (688) (153)
Other financing activities 62 104
------------ -----------
Net Debt Incurred $ (366) $ (446)
============ ===========
</TABLE>
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Burlington Northern Santa Fe Corporation
Supplemental Data
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Year Ended
December 31, December 31,
------------------------------ ------------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues (In millions)
Carload $ 645 $ 628 $ 2,553 $ 2,588
Intermodal 679 637 2,518 2,437
Coal 554 560 2,227 2,239
Agricultural Commodities 361 354 1,329 1,271
Automotive 124 111 443 390
------------ ------------ ------------ ------------
Total Freight Revenues 2,363 2,290 9,070 8,925
Other Revenues 7 4 30 16
------------ ------------ ------------ ------------
Total Revenues $ 2,370 $ 2,294 $ 9,100 $ 8,941
============ ============ ============ ============
Adjusted operating ratio 74.6% 75.2% 75.4% 75.9%
Revenue ton miles (billions) 128.9 121.7 487.8 469.0
Freight revenue per thousand revenue ton miles $ 18.33 $ 18.82 $ 18.59 $ 19.03
Cars/Units (thousands) 2,116 2,033 8,064 7,884
Average freight revenue per car/unit $ 1,117 $ 1,126 $ 1,125 $ 1,132
Employees (average) 41,935 43,555 42,654 44,349
</TABLE>
