1. Burlington Northern Santa Fe Corporation
2000 Annual Report to Shareholders

2. Contents The BNSF Vision
Message from the Our vision is to realize the tremendous potential of The Burlington
2
Chairman, and Northern and Santa Fe Railway by providing transportation services
President and CEO that consistently meet our customers’ expectations.
Safety
8
Service We will know we have succeeded when:
10
Efficiency
12
Innovation Our customers find it easy Our owners earn financial
14 • •
Growth to do business with us, returns that exceed other
16
BNSF’s Values receive 100-percent on-time, railroads and the general
18
Achievement Awards damage-free service, accurate market as a result of BNSF’s
19
Financial Review and timely information superior revenue growth, an
21
Executive Officers regarding their shipment, operating ratio in the low
47
and Directors and the best value for their 70s, and a return on invested
Corporate Information transportation dollar. capital which is greater than
48
our cost of capital.
Our employees work in a safe
About the Cover •
This BNSF grain shuttle environment free of accidents The communities we serve
•
train approaches Little Falls, and injuries, are focused benefit from our sensitivity
Minnesota, en route to on continuous improvement, to their interests and to the
load at a grain elevator near share the opportunity for environment in general,
Sioux City, Iowa. personal and professional our adherence to the highest
growth that is available to all legal and ethical standards,
members of our diverse work and the participation of our
force, and take pride in their company and our employees
association with BNSF. in community activities.

3. Consolidated Financial Highlights
Burlington Northern Santa Fe Corporation and Subsidiaries
(Dollars in millions, except per share data)
December 31, 2000 1999 1998 1997 1996
For The Year Ended:
Revenues $ 9,205 $ 9,189 $ 9,054 $ 8,489 $ 8,192
Operating income $ 2,108 $ 2,205 $ 2,158 $ 1,767 $ 1,748
Net income $ 980 $ 1,137 $ 1,155 $ 885 $ 889
Basic earnings per share $ 2.38 $ 2.46 $ 2.45 $ 1.91 $ 1.95
Average shares (in millions) 412.1 463.2 470.5 464.4 456.3
Diluted earnings per share $ 2.36 $ 2.44 $ 2.43 $ 1.88 $ 1.91
Average shares (in millions) 415.2 466.8 476.2 471.1 464.4
Dividends declared per common share $ 0.48 $ 0.48 $ 0.44 $ 0.40 $ 0.40
At Year End:
Total assets $24,375 $23,700 $22,646 $21,266 $19,693
Long-term debt and commercial paper,
Including current portion $ 6,846 $ 5,813 $ 5,456 $ 5,289 $ 4,711
Stockholders’ equity $ 7,480 $ 8,172 $ 7,784 $ 6,822 $ 5,994
Total debt to capital 47.8% 41.6% 41.2% 43.7% 44.0%
For The Year Ended:
Capital expenditures $ 1,399 $ 1,788 $ 2,147 $ 2,182 $ 2,234
Depreciation and amortization $ 895 $ 897 $ 832 $ 773 $ 760
1

4. On December 7, 2000, the Board of Directors elected Matthew K. Rose
Chief Executive Officer of BNSF. Matt, who joined the BNSF Board in
July, continues as BNSF President, a position he has held since June 1999.
Rob Krebs continues as Chairman.
In commenting on the announcement, Rob said, “Matt began his transportation
career in 1981, and has management experience in both the trucking
and railroad industries. At BNSF, he has held a series of senior leadership
positions in both marketing and operations. I’ve been a railroad president
or CEO for 20 years and I know one of my most important jobs is to identify
a successor. I’m grateful that Matt has the confidence of all of our important
constituencies—our owners, customers and employees, and that the transition
has been flawless. I know Matt has a great career ahead of him.”
To Our Shareholders, In addition, BNSF repur- Limited exports of U.S.
•
Customers and Colleagues: chased 65 million shares in agricultural commodities,
BNSF had a number of bright 2000 at an average price of especially corn, lowered
spots in 2000. In particular, $23 per share. our revenues $80 million,
the growth of our intermodal or 6 percent, in 2000 com-
revenue and volume and our pared with 1999.
However, four factors impacted
success in controlling oper- And the slowdown in
the performance of BNSF •
ating expenses clearly made America’s economy pro-
in 2000.
the difference. Both areas are duced sluggish traffic
Soaring fuel prices through-
•
expected to contribute similarly throughout the second
out the year added more
to BNSF’s 2001 performance. half of 2000 in our car-
than $230 million to our
Intermodal revenues grew load sector, including
fuel expenses compared
•
$147 million, or 6 percent, forest products, metals and
with 1999.
and intermodal volumes chemicals. This restrained
Weak demand for coal,
•
exceeded a record 3.44 the sector’s revenue growth
due to milder-than-
million containers and to only 1 percent, or $16
expected weather most
trailers, a 7 percent increase million, for the full year,
of the year coupled with
over 1999. after a first-half revenue
large stockpiles during
Adjusted operating expenses growth rate of 3 percent,
the first half of 2000 at
•
on a year-over-year basis compared with 1999.
the utilities we serve, con-
grew only 1 percent, despite tributed to a reduction
a $230 million increase in our coal revenues of A Five-Year Review
in fuel costs for 2000 com- Although the past year has
$95 million, or 4 percent,
pared with 1999. had its ups and downs, when
from 1999.
2

5. we look at what we have Regrettably, in July 2000, performance are worthy to
together with CN, we gave up
achieved since the merger note because they demonstrate
our efforts to combine our
of Burlington Northern and our people’s commitment to
two companies. We believed
Santa Fe in late 1995, we have the BNSF vision: “To realize
the risks and uncertainty
made enormous progress in the tremendous potential
involved in waiting up to
every area: safety; customer of BNSF by providing trans-
two-and-one-half years for
service; efficiency, and finan- portation services that con-
a decision from the Surface
cial performance. Based on sistently meet our customers’
Transportation Board (STB)
our progress, we were prepared expectations.” This commit-
were not in the best inter-
to take the next step. We ment is reflected throughout
ests of our shareholders,
felt our plan, announced in our organization. The BNSF
employees and customers.
December 1999, to offer ship- Achievement Award is designed
The STB’s moratorium on
pers substantially expanded to recognize employee con-
rail mergers is scheduled to
single-line service through a tributions to this Vision and
end on June 15, four days
competitive end-to-end com- to the Values that shape our
after the STB’s new merger
bination with the Canadian community. Beginning on
rules become effective.
National Railway Company page 19 is a list of these
(CN) would have provided BNSF employees and the
BNSF successes since 1995
significant growth potential activities for which they
in safety, customer service,
and shareholder value, building won an Achievement Award
on our successes since 1995. efficiency and financial in 2000.
BNSF System Map
BNSF’s employees handled 8.167
million loads of customer freight,
including record levels of traffic
along the transcontinental main
line, which runs between Chicago BNSF Lines and Trackage Rights
and Los Angeles. Regional Connections
3

6. Safety Severity Ratio 1995-2000 railroad has operated better than
(lost work days/200,000 hours worked)
ever. We also made on-time serv-
ice data available to customers,
and introduced in 2000 a new
web-based tracking and tracing
application. And each week,
our web site offers discounted
rates on intermodal shipments
between specific locations on
The severity ratio measures lost workdays due to injury per 200,000 hours worked. Figures reflect Federal Railroad
our network through a program
Administration data. 2000 ratio is preliminary, as of January 31, 2001.
called ValueTrax.
Safety our 33,500 route-mile network.
Revenues grew 14 percent to
At BNSF, we want to achieve In addition, highway/rail-
our potential, but we want to $9.2 billion during the period
crossing accidents per million
do it safely. That’s the mark of train miles were 39 percent from 1995 to 2000. At the same
true leadership and our com- lower for 2000 than for 1995, time, system-wide on-time
mitment to our employees, benefiting members of the performance improved to the 90
customers and the public. We hundreds of communities that percent range throughout 1999
believe safety and efficiency go BNSF serves in 28 states and and 2000, up from 79 percent
hand-in-hand. Our goal is to two Canadian provinces. and 82 percent, respectively,
have an injury-free, accident- in 1997 and 1998. As a result
free workplace. Customer Service
of this improvement, we intro-
Providing consistent on-time duced guaranteed intermodal
Our progress toward this goal service to our customers is the
service, including a 100 percent
since 1995 has been outstanding. key to revenue growth and
money-back option, on six key
Employee injury frequency and realizing our potential. We
long-haul corridors in 2000.
severity (lost work days) ratios, have changed our business
We are also providing a similar
as measured per 200,000 hours processes to make it easier for
service assurance option to car-
worked, have dropped 12 per- customers to do business with
load customers shipping along
cent and 52 percent, respectively, BNSF. We invested more than
our high-growth I-5 corridor
in this five-year period. This $500 million since 1995 to
running from Vancouver,
develop, expand and enhance
reduction in severity reflects
British Columbia to Southern
our real-time integrated infor-
approximately 22,000 fewer lost
California and into Phoenix.
mation system as well as to
workdays in 2000 compared
constantly expand our suite
with 1995, or the equivalent
Each of these offerings is bring-
of web-based applications.
of 110 full-time employees.
ing new freight business to
BNSF, taking advantage of our
We cut over in mid-1997 to
BNSF has also experienced a
efficient rail network that has
our new system that provides
14 percent reduction in train
schedule information by car the U.S. rail industry’s lowest
accidents per one million train
and by train. Since then, our
miles during this period across operating cost.
4

7. Efficiency horsepower by 46 percent. execute flawlessly the transporta-
Service and efficiency work BNSF’s road fleet of nearly tion service plan (TSP) for every
together. As we add business 4,000 locomotives set a fuel car on our system based on our
and improve the utilization of efficiency record in 2000, customers’ needs.
our railcars and locomotives, generating an average of 746
GTMs per gallon of diesel fuel,
our customers benefit, our Our Strategic Sourcing group
about a 7 percent improvement
system’s efficiency improves and had an equally impressive
over the 1996 level. If we had
our operating costs decrease. success story in 2000. They
operated our locomotive fleet
As a result, BNSF can provide identified approximately $125
in 2000 at the 1996 fuel effici-
rail rates to customers that are million in annual cash savings,
ency level of 700 GTMs per
among the most competitive in $65 million of which was
gallon, we would have used an
the transportation marketplace. realized in 2000. We worked
additional 77 million gallons
with our suppliers to tighten
of fuel in 2000.
Since 1995, BNSF has increased
specifications and ordering
the annual number of gross ton
processes and began imple-
But BNSF’s most significant
miles (GTMs) it handles at a
menting standard purchasing
efficiency initiatives took place
faster rate than other Class I
procedures for all expenditures
in our mechanical and engi-
railroads. Gross ton miles, a
throughout BNSF, from office
neering departments in 2000.
standard industry measure,
supplies to locomotive parts
Together, the departments
reflect the total tons of freight
to travel and lodging. In 2001,
saved approximately $130
hauled and the distance the
we’re focusing on further
million by identifying and
freight was moved. Over the
savings from fuel, freight cars,
removing “waste” from numer-
past five years, GTMs increased
wheel sets and a variety of
ous processes associated with
17 percent to 875 billion. For
equipment purchases. We are
maintaining our locomotives,
the same period, adjusted
working with other railroads
freight cars, track, signals and
operating expense per 1,000
to establish industry standards
bridges. Our goal is to increase
GTMs declined 14 percent
for purchasing and maintaining
the reliability and predictabil-
to $7.20 adjusted for inflation.
commonly used equipment
ity of our fleets and all of
our physical assets in order to and materials.
Looked at another way, at year-
end 2000, GTMs per employee
Efficiency 1995-2000
reached 22.0 million, or a 34 (gross ton miles/employee, in millions)
percent increase since 1995. Since
the merger, overall employment
has been reduced 13 percent.
On the equipment side, about
$2.5 billion has been invested
in the acquisition of 1,624
fuel-efficient road locomotives
A key efficiency measure is the number of gross ton miles (GTMs) of freight handled per employee. In 2000,
since 1995, boosting our total BNSF handled 22.0 million GTMs/employee, a 34 percent increase compared with 1995.
5

8. Financial Performance track in the Powder River Basin through 2005: revenue growth;
A review of the results of the past service; ease of doing business;
in Wyoming, and reopening the
five years demonstrates signif- efficiency, and BNSF people.
Stampede Pass route in Washington.
icant progress on all measures: More than 100 initiatives have
• Adjusted operating income already been built around
With our record capital-spending
grew 41 percent to $2.15 these priorities.
program behind us, we are now
billion; able to generate free cash flow. Free
• Our adjusted operating ratio One of the results we are aiming
cash flow increased 66 percent to
at 76.4 percent is about 5 to achieve through these initia-
$431 million in 2000 compared
percentage points lower than tives is to generate at least $500
with $260 million in 1999.
in 1995; million in free cash flow in 2001
• Adjusted net income grew and exceed $1 billion in free
(All 1995 figures are “pro forma”
$286 million to $1.02 billion; cash flow by 2005.
and include results for both
• Adjusted diluted earnings Burlington Northern Inc. and
per share rose 52 percent to Here are some of the initiatives
Santa Fe Pacific Corporation.)
$2.45; and we’ve identified for these five areas:
• Dividends per share rose 20 • Revenue Growth – Increase rev-
Beginning on Page 8 and contin-
percent to 48 cents annually. enues annually at more than
uing through Page 17, we describe
the rate of America’s economic
some of our year 2000 successes
Further, we spent more than $11 growth by developing new
in safety, efficiency, service, inno-
billion in capital to maintain and products and programs, tap-
vation and growth. These suc-
improve our network and fleets ping and penetrating new
cesses are building blocks to help
since the beginning of 1995, markets, and expanding
BNSF grow and deliver trans-
including $1.7 billion on track our franchise with strategic
portation solutions that safely
and facility expansion projects. and efficiently meet our customers’ alliances and joint ventures.
Among these projects were expectations in the years ahead. • Service – Improve service to
rebuilding the Argentine yard in the 95 percent on-time level
Kansas; double-tracking several for all premium intermodal
The Next Five Years
hundred miles of the Los Angeles Late in 2000, we announced a set customers and to the 90
to Chicago transcontinental of five strategic, customer-focused percent level for all carload
route; adding double and triple priorities that will guide BNSF customers by the end of 2002
Operating Income 1995-2000 Capital Investment 1995-2000
($ in billions) ($ in billions)
BNSF’s adjusted operating income in 2000 of $2.15 billion grew 41 percent compared BNSF spent more than $11 billion in capital investments since the beginning of
with 1995. 2000 earnings have been adjusted to exclude second-quarter special 1995. After an aggressive expenditure program following the merger, BNSF has
items related to the reduction and redeployment of employees and third-quarter write- scaled back its capital investment. BNSF’s 2000 capital investments of $1.763 billion
off of deferred BNSF/CN merger costs. Including the special items, operating income represented a 30 percent decrease compared with the 1998 figure of $2.520 billion.
for the year was $2,108 million. Other years have also been adjusted for special items. Chart includes operating leases for freight equipment obtained to expand business.
6

9. through better design and
execution of each car’s service
plan. We will continue to
reset our service goals as we
approach 2005. For our coal
customers, our goal is to
improve train cycle times from
the mine to the utility and
return to the mine. For our
grain customers, our goal is
to meet their request dates for
Matt Rose and Rob Krebs
hopper cars at the elevators
and train delivery requirements
This is a large undertaking that mandatory retirement age. Ronald
to the ports and other receivers. Woodard joined the BNSF board
requires marshalling the ideas
Ease of Doing Business –
•
at the time of the merger in
and commitment of all 40,000
Play a larger role in our cus- 1995. All three directors have con-
BNSF employees. We believe
tomers’ supply chains by tributed significantly to shaping
it is the right course of action
reducing the number of cus- BNSF, and we extend our appre-
for our Company at this time,
tomer touch points within ciation and thanks to them.
and we are confident that we
BNSF and by expanding web- can achieve these goals.
based transactions to cover Finally, we wouldn’t have achieved
all needs of our customers. any of the successes described in
Our management team recog-
this letter and on the subsequent
Efficiency – Keep BNSF’s cost
•
nizes the importance of creating
pages of this report without the
per GTM at the lowest level a positive and enthusiastic work-
commitment, innovation and
in the industry without degra- place environment, as expressed
enthusiasm of our employees; the
dation to our infrastructure in one of our core shared values:
confidence and trust of the thou-
or service quality. This will be “Empowering employees and
sands of customers who do busi-
accomplished by optimizing showing concern for their well-
ness with us, and the even larger
our fleet size, velocity and being, and respect for their talent
number of shareholders who have
facility capacity, as well as and achievements.”
invested in our future. To all
through disciplined execution
of you, thank you very much.
of each car’s service plan. We have made progress since
BNSF People – Retain and 1995 thanks, in part, to the
•
hire a well-qualified and quality of our management team
diverse workforce for BNSF. and the support and trust of our
We will continue to improve Board of Directors. Three of our Robert D. Krebs
safety performance and work- directors will not be standing for Chairman
force development through reelection at our annual sharehold-
training, an enhanced per- ers meeting. Joseph F. Alibrandi
formance management and George Deukmejian served
system and adherence to on the boards of predecessor Matthew K. Rose
companies since 1982 and 1991,
BNSF’s Vision and Values President and
respectively, and have reached
(see page 18). Chief Executive Officer
7

10. BNSF’s grade crossing safety team, working with landowners
Y
T
and communities along BNSF lines, closed or contracted
E
to close 635 redundant or rarely used highway-rail grade
F
A
crossings in 2000. This figure was more than three times the
S
previous year’s figure and was unmatched in the industry.
In addition, BNSF employees and volunteers offered 6,800
Operation Lifesaver grade crossing safety programs in
communities along its line, including more than 600 truck
driver safety classes and 450 school bus driver safety classes.
Highway-Rail Grade
Crossing Incidents
(per million train miles)
As the industry leader with the lowest
rate of grade crossing collisions,
BNSF has reduced its highway-rail
grade crossing collision rate by 39
percent since 1995.
“What made sense 50 years seven crossings, put active
ago, when a road was warning devices at eight,
first built, may not make install stop signs at the
sense anymore. BNSF remaining crossings, and
worked with the Minnesota do roadway work at
Department of Trans- nine locations, using a
portation and Morrison combination of state
County’s Area Council and BNSF funds. Local
of Governments to look residents are pleased, and
at every BNSF crossing they see the changes have
in the county. We asked benefited the community
communities to think and improved safety.”
realistically about which
crossings no longer served – Gene Young
the public need. Of these, Township Officer
BNSF and the state and Hog Farmer
DOT were able to close Little Falls, Minnesota
8

11. 9

12. BNSF Guaranteed Service—money back if delivery is not on
E
C
time—was introduced on three intermodal service corridors
I
in May 2000, and is operating at a 98 percent success rate.
V
R
An industry first, this service has attracted shippers who never
E
before used rail transportation. The service was expanded to
S
additional intermodal service corridors in late 2000. A compar-
able program for carload shipments, known as Service Assurance,
was implemented in November 2000 on the I-5 Corridor,
which links the Pacific Northwest with the Pacific Southwest.
truck-competitive service,
and this is important
as we ship product from
British Columbia to
customers across the U.S.
The more we continue
to improve our service
to customers, the more
business opportunities
there will be for Pacifica
and BNSF.”
“At Pacifica Papers, we in how we manage trans-
manufacture value added portation of our product, – Rob Broekhuizen
paper products that meet and BNSF has been Distribution Manager
our customers’ unique able to keep pace. BNSF Pacifica Paper
needs. Many of our cus- provides very good, Vancouver, B.C.
tomers demand ‘just
in time’ delivery. This On-time Performance 2000
(percent on time)
requires more coordination In 2000, BNSF moved more than 8.167 million shipments, with an overall on-time
and support from our average of about 91 percent across all commodities. BNSF’s Guaranteed Service, a
premium service product geared toward customers with stringent delivery requirements,
transportation providers. handled more than 700 shipments in 2000 with 98 percent on-time performance.
BNSF’s Service Assurance
program has allowed
us to increase our volume
with BNSF in 2000.
We have become more
sophisticated at Pacifica
10

13. 11

14. Each BNSF locomotive spends an average of 31 hours
Y
C
less “in the shop” for scheduled maintenance every
N
three to four months, thanks to BNSF’s Lean Process
E
improvements in 2000. BNSF production crews used
I
C
the Lean Process to improve rail and crosstie installation
I
efficiency by about 19 percent in 2000. BNSF realized
F
F
similar improvements from 400 additional Lean Workshops
E
in 2000, on issues ranging from railcar inspections to
signal installation to shop material inventories.
Locomotive Maintenance
Process 1999-2000
Since October 1999, average locomotive
dwell time for scheduled maintenance
has been reduced system-wide by 31
hours, meaning each locomotive is
available to pull freight more than one
day sooner. Each of BNSF’s 5,000
active locomotives receives scheduled
maintenance three to four times a year.
“Lean Workshops are about the locomotives instead, 78 Hours
working smarter, not harder. we reduced dwell time
Locomotive Maintenance
We identify waste in our (the time a locomotive is October 1999
work area, gather data, and unavailable to pull freight)
reduce waste, or ‘non-value- here at Barstow from
added’ (NVA) time. Super- 68 hours to 32 hours! 47 Hours
visors and craftspeople set The Lean Process is work-
aside job titles and the ‘way ing at locations across
things have always been BNSF, and excitement Locomotive Maintenance
done’ to search for efficient grows as we rethink our November 2000
solutions. A Lean Workshop work processes to improve
at our Barstow locomotive quality and efficiency.”
facility found the largest
NVA item was moving loco- – Jodie Lee 31 Hours
motives 2.5 miles to seven BNSF
locations for maintenance. General Foreman Reduction in Maintenance Time
By moving the employees to Barstow, California
12

15. 13

16. Introduced in April 2000, BNSF ValueTrax, an on-line
N
O
program aimed to increase intermodal volume during off-peak
I
days and sell excess capacity on certain service corridors, has
VAT
resulted in an additional 90-100 loads a week. Other BNSF
on-line innovations in 2000 include the Customer Logistics
O
System, which allows customers to create customized shipment
N
status reports; ePay, which allows customers to view freight
N
I
bills and schedule payments electronically; and CarsOnTrack,
which offers consumers rail transit for personal vehicles.
out of Southern California.
BNSF is the first U.S.
freight railroad to offer
transportation specials via
the Internet. Designed for
customers with flexible
production and shipping
schedules, ValueTrax is
truly revolutionary.”
– Randy Richardson
“With ValueTrax, we put Los Angeles, for instance, BNSF
certain intermodal routes helps us attract more Manager, Intermodal
‘on sale’ for the upcoming revenue loads as we repo- Marketing Company
Sunday, Monday, and sition equipment for (IMC) Marketing
Tuesday, and post those heavy mid-week volumes Fort Worth, Texas
discount fares on our web
site. It’s like the airlines’ Electronic Transactions 1999-2000
‘super saver’ program. We (percent of total)
Some BNSF e-Business tools, including ValueTrax, attract new business. Other
fill more trains, as we e-Business tools improve “ease of doing business” by enabling customers to transact
reposition equipment on business electronically. In 2000, BNSF substantially increased the percentage of
major transactions completed electronically.
low-volume days, and
the shipper saves 15 to
20 percent on traffic that
would otherwise move
another way. An incentive
rate on certain westbound
departures from Chicago to
14

17. 15

18. With a 20 percent surge in international intermodal business
H
T
in 2000, BNSF’s Southern California terminals handled
W
record volume. This growth was driven by strong import
O
demand and by larger-capacity vessels used by BNSF
R
steamship partners, including Maersk, Hyundai, NYK,
G
OOCL and Evergreen. BNSF responded to this demand by
adding service to match steamship schedules, expanding
container storage at origin and destination points, and
increasing intermodal facility capacity in the Los Angeles area.
customers’ success now
and well into this new
century. Our Los Angeles
hub is the busiest rail
intermodal facility in the
nation. Everybody I know
is proud to play a part
in handling the fastest
growing business segment
in the rail industry.”
to meet the expectations
“These are exciting times,
to say the least. It takes – Chuck Potempa
of our international
a real team effort to BNSF
steamship partners, and
handle growth rates that Senior Hub Manager
we’ve positioned ourselves
seemed unimaginable Los Angeles, California
to be a key player in our
a couple years ago. The
surge in international International Intermodal Growth
(in number of containers)
intermodal business rep- BNSF’s international
resents BNSF’s largest intermodal traffic has
grown more than
growth area in 2000. 60 percent since 1996.
And, there is no reason
to believe it’s going to
slow down. If you think
about it, the health of the
U.S. and world economy
depends on BNSF’s ability
16

19. 17

20. In 1997, BNSF’s senior management team developed a set of
VALUES
core values to complement BNSF’s vision. These values (see
below) define and shape BNSF’s culture. A two-day workshop
on Vision and Values was presented in 1998 to salaried
employees. A follow-up class, “Values in Action,” developed
BNSF’S
in 2000 shows how these values shape BNSF’s leadership
and management style. Vision and Values influences many
aspects of BNSF, from transportation and marketing decisions
to town hall meetings to BNSF Achievement Awards.
Style Shared Values Equality
As a Community, we are: As a Community, BNSF values: As a member of the BNSF
• Tough-minded optimists • Listening to customers and Community, I can expect:
• Decisive yet thorough doing what it takes to meet • To be treated with dignity
• Open and supportive, and their expectations and respect
• Confident and proud of • Empowering employees and • To be given equal access
our success showing concern for their to tools, training and
well-being, and respect for development opportunities
their talent and achievements • To have equal opportunity to
Liberty
As a member of the BNSF • Continuously improving by achieve my full potential
Community, each of us has the striving to do the right thing
right to: safely and efficiently Community
• A safe work environment— • Celebrating our rich heritage BNSF is a Community of
for the sake of ourselves, our and building on our success as over 40,000 mutually depend-
co-workers, our shippers and we shape our promising future ent members. Each one of
the communities we serve us depends upon BNSF for
• Feel the satisfaction that our livelihood, and through
Efficiency
comes from a job well Efficiency is the best collective appli- our collective efforts, BNSF
done—by using our talent, cation of our resources to meet our depends upon us to defend,
judgment and initiative, customers’ expectations. Each of us sustain and strengthen our
and by performing to our contributes to efficiency when we: Community. We are an
fullest potential • Understand our customers’ effective Community when
• Express our individualism, expectations and priorities each of us:
• Help develop business • Believes in our Vision and
ideas and concerns—con-
processes that best match embraces our Shared Values
sistent with the Community’s
BNSF resources with our • Knows our own role and
Vision and Shared Values,
customers’ requirements strives to fulfill it
to anyone in the Community
• Constantly monitor and • Respects, trusts and openly
without fear of retribution
measure our results in order communicates with other
• Participate fully in life
to continuously improve Community members
outside of work—by
• Manage our Community’s • Is proud of our heritage and
enjoying the fruits of
resources as if they were our own
our own labor confident in our future
18

21. Financial Contents
Management’s Discussion and Analysis
21
Report of Management
31
Report of Independent Accountants
31
Consolidated Statement of Income
32
Consolidated Balance Sheet
33
Consolidated Statement of Cash Flows
34
Consolidated Statement of Changes in
35
Stockholders’ Equity
Notes To Consolidated Financial Statements
36
Revenue Table
The following table presents BNSF’s revenue information by commodity for the years ended December 31, 2000, 1999 and
1998 and includes certain reclassifications of prior year information to conform to current year presentation.
Average Revenue
Revenues Cars/Units Per Car/Unit
2000 1999 1998 2000 1999 1998 2000 1999 1998
(IN MILLIONS) (IN THOUSANDS)
Intermodal $2,654 $2,507 $ 2,451 3,441 3,203 3,086 $ 771 $ 783 $ 794
Carload 2,577 2,561 2,593 1,774 1,773 1,801 1,453 1,444 1,440
Coal 2,131 2,226 2,239 2,023 2,123 2,078 1,053 1,049 1,077
Agricultural Commodities 1,257 1,337 1,280 680 715 689 1,849 1,870 1,858
Automotive 493 443 388 249 250 230 1,980 1,772 1,687
Total Freight Revenues 9,112 9,074 8,951 8,167 8,064 7,884 $1,116 $1,125 $1,135
Other Revenues 93 115 103
Total Revenues $9,205 $9,189 $ 9,054
Management’s Discussion And Analysis in the intermodal, carload and automotive sectors, par-
Of Financial Condition tially offset by lower coal and agricultural revenues.
And Results Of Operations Average revenue per car/unit decreased in 2000 to $1,116
from $1,125 in 1999. Volumes increased for the year
but experienced a general slowing late in 2000 based on
Management’s discussion and analysis relates to the
economic conditions which have continued in January
financial condition and results of operations of Burlington
2001. During 2000, based on reporting to the Association
Northern Santa Fe Corporation and its majority-owned
of American Railroads (AAR), BNSF’s share of the
subsidiaries (collectively, BNSF or Company). The prin-
western United States rail traffic market decreased 0.4
cipal subsidiary of BNSF is The Burlington Northern and
points to 43.1 percent.
Santa Fe Railway Company (BNSF Railway). All earnings
per share information is stated on a diluted basis.
Intermodal revenues of $2,654 million improved $147
Results Of Operations million, or 6 percent, compared with 1999 reflecting
increases in the international and truckload sectors,
Year Ended December 31, 2000
partially offset by decreases in the intermodal market-
Compared With Year Ended December 31, 1999
ing companies (IMC) and direct marketing sectors.
Net income in 2000 was $980 million ($2.36 per share)
International revenues were up due to high levels of
compared with $1,137 million ($2.44 per share) for 1999.
Trans-Pacific trade as well as market share gains with
The decrease in earnings per share is primarily due to the
Mitsui, Yang Ming and Hapag Lloyd. Truckload revenues
effect on net income of a $232 million increase in fuel
benefited from strong Schneider National loadings.
expenses and recognition in 1999 of a gain of $50 million
These revenue increases were partially offset by decreases
(pre-tax) in connection with prior period line sales, less
in the direct marketing sector due to decreased loadings
costs of $13 million (pre-tax) related to those sales, partially
within the less than truckload segment and in the
offset by the favorable effect of the common stock repur-
IMC sector due to pricing pressures, and strong over
chase program (see Liquidity and Capital Resources:
the road competition.
Common Stock Repurchase Program).
Carload revenues, which include revenues from the chem-
Revenues
icals, forest products, metals, minerals and machinery,
Total revenues for 2000 were $9,205 million or $16
perishable and dry boxcar sectors, of $2,577 million for
million higher than 1999 revenues of $9,189 million.
2000 were $16 million, or 1 percent, higher than 1999
The $16 million increase primarily reflects increases
21

22. due to increases from the metals, perishables, and minerals Fuel expenses of $932 million for 2000 were $232 million,
sectors, partially offset by decreased chemicals, forest or 33 percent, higher than 1999, as a result of a 20 cent,
products, and machinery revenues. The metals increases or 35 percent, increase in the average all-in cost per gallon
were a result of a strong market for steel; the growth in of diesel fuel, partially offset by a 1 percent decrease in
perishables was from the success of new service offerings consumption from 1,187 million gallons to 1,173 million
and a partial recapture of the truck market; and increases gallons. The increase in the average all-in cost per gallon
in minerals were due to higher demand for clay and sand of diesel fuel includes a 34 cent increase in the average
used in domestic oil production. These increases were purchase price, partially offset by the favorable impact in
partially offset by decreased shipments of industrial 2000 from the Company’s fuel hedging program of 13
chemicals, softness in the forest products sector, and cents per gallon compared with additional expense from
lower shipments of heavy machinery. hedging of 1 cent per gallon in 1999.
Coal revenues of $2,131 million for 2000 decreased $95 Materials and other expenses of $777 million for 2000
million, or 4 percent, as a result of volume decreases due were $41 million, or 5 percent, lower than 1999 princi-
to a decrease in demand as a result of milder weather and pally reflecting: (i) reorganization costs of $48 million
high customer inventories that affected shipments for most incurred in the second quarter of 1999 for severance,
of the year, while 1999 benefited from an inventory build pension, medical and other benefit costs for approx-
up in preparation for possible Year 2000 outages. imately 325 involuntarily terminated salaried employees
(see Other Matters: Employee Merger and Separation
Agricultural commodities revenues of $1,257 million for Costs); (ii) lower current year environmental expenses
2000 were $80 million, or 6 percent, lower than 1999 and other materials costs compared with 1999; and
due primarily to weaker corn export shipments to the (iii) higher current year gains from easement sales. Off-
Pacific Northwest and Mexico, and decreased shipments setting these decreases were: (i) $22 million of employee-
of Gulf and Pacific Northwest wheat, both caused by related severance, medical and other benefit costs
worldwide crop competition. Revenues were also lower recorded in the second quarter of 2000 (see Other
as a result of decreased shipments of bulk foods due to Matters: Employee Merger and Separation Costs) for
an oversupply of sugar and supplier price competition approximately 150 involuntarily terminated employees,
in the syrup market which resulted in less traffic. primarily material handlers in mechanical shops and
trainmen reserve boards; (ii) $54 million credit for
Automotive revenues of $493 million for 2000 were the reversal of certain liabilities associated with the
$50 million, or 11 percent, higher than 1999 reflecting consolidation of clerical functions in the second quarter
increased industry-wide automobile production for 1999 (see Other Matters: Employee Merger and
most of the year and more profitable longer haul traffic Separation Costs); (iii) the loss of previously earned
despite essentially flat volumes year-over-year. state tax incentives in the second quarter 2000; and
(iv) higher costs in 2000 related to the maintenance
of leased equipment.
Expenses
Total operating expenses for 2000 were $7,097 million,
an increase of $113 million, or 2 percent, compared with Interest expense for 2000 of $453 million increased $66
operating expenses for 1999 of $6,984 million, despite a million, or 17 percent, principally reflecting higher debt
$232 million increase in fuel expenses. levels resulting from the Company’s share repurchase
program and higher interest rates. Total debt increased
Compensation and benefits expenses of $2,729 million to $6,846 million at December 31, 2000, from $5,813
were $43 million, or 2 percent, lower than 1999 primarily million at December 31, 1999.
due to lower employment levels and reduced incentive
expense, partially offset by increased base wages. Other income (expense), net was unfavorable by
$71 million compared with 1999 primarily due to
Purchased services of $1,022 million for 2000 were $23 a $50 million (pre-tax) deferred gain recognized
million, or 2 percent, lower than 1999 primarily as a during 1999 in connection with the sale of rail lines
result of decreased joint facility and contract switching in Southern California in 1992 and 1993, and the
charges as well as recoveries related to prior periods. recognition in 2000 of $20 million (pre-tax) of
This decrease was partially offset by increased contract expenses related to the termination of the proposed
equipment maintenance costs due to an increase in the combination with Canadian National Railway
number of locomotives under maintenance contracts Company (see Note 3 to the Company’s consolidated
and volume-related increases in ramping expenses. financial statements).
Equipment rents expenses of $742 million were $10 mil- Year Ended December 31, 1999
lion, or 1 percent, lower than 1999 as a result of lower Compared With Year Ended December 31, 1998
lease rates on rail cars as well as a decrease in the number Earnings per share increased to $2.44 per share for 1999
of leased agricultural commodity and coal cars, partially from $2.43 per share for 1998 although net income was
offset by increased locomotive rental expense. slightly lower for 1999 at $1,137 million compared with
22

23. 1998 net income of $1,155 million. The slight decrease early in the year at the Powder River Basin mines, and
in net income is primarily due to a 1998 gain of $67 a decrease in the demand for coal due to milder weather
million on the sale of substantially all of the Company’s for most of the year, contributed to the year-over-year
interest in Santa Fe Pacific Pipeline Partners, L.P., along decrease, which was partially offset by an inventory build-
with 1998 gains on real estate portfolio sales and higher up in 1999 to prepare for possible Year 2000 outages. The
interest expense in 1999 incurred on borrowings to fund total number of rail cars shipped increased by 45,000, or
the share repurchase program (see Liquidity and Capital 2 percent, over 1998 volumes.
Resources: Common Stock Repurchase Program), and
increased 1999 environmental expenses. These decreases Agricultural commodities revenues of $1,337 million for
in net income were partially offset by increased operating 1999 were $57 million, or 4 percent, higher than 1998
revenues in 1999 due to volume gains in most sectors. due primarily to increased demand for soybean exports
and Pacific Northwest corn. The increase in soybean rev-
enue was fueled by favorable pricing and an increased
Revenues
Total revenues for 1999 were $9,189 million, or 1 supply of soybeans that was sufficient to meet the higher
percent, higher compared with revenues of $9,054 demand. Increases in revenue were slightly offset by lower
million for 1998. The $135 million increase primarily wheat revenue per car and fewer soybean oil shipments
reflects increases in the intermodal, agricultural in 1999 compared with 1998.
commodities and automotive sectors, partially offset
by lower carload and coal revenues. Average revenue Automotive revenues of $443 million for 1999 were
per car/unit decreased slightly in 1999 to $1,125 from $55 million, or 14 percent, higher than 1998 reflecting
$1,135 in 1998. During 1999, BNSF’s share of the growth in vehicle shipments due to both a record year
western United States rail traffic market, based on of new vehicle production coupled with an increase in
reporting to the AAR, decreased 0.8 points to 43.5 revenue per unit as a result of a favorable change in the
percent. This decrease in market share was primarily mix of vehicles transported.
due to Union Pacific regaining market share as a result
of its recovery from operating difficulties experienced Expenses
in the prior year. Total operating expenses for 1999 were $6,984 million,
an increase of $88 million, or 1 percent, compared with
Carload revenues of $2,561 million for 1999 were $32 operating expenses for 1998 of $6,896 million.
million, or 1 percent, lower than 1998 due to decreases
in the chemicals, minerals and machinery, and metals Compensation and benefits expenses of $2,772 million
sectors, partially offset by increased forest product revenues. were $40 million, or 1 percent, lower than 1998 primarily
The decreases were a result of weaknesses in the chemicals due to lower employment levels resulting from the second
sector due to soft fertilizer markets, weaknesses in the quarter 1999 reorganization discussed in Other Matters:
metals sector due to increased steel imports, and a decrease Employee Merger and Separation Costs, partially offset by
in dedicated train movements of heavy machinery. These increased base wage rates.
decreases were partially offset by increased inland shipments
of forest products. Purchased services of $1,045 million for 1999 were $25
million, or 2 percent, higher than 1998 due primarily to
Intermodal revenues of $2,507 million improved $56 mil- increased contract equipment maintenance costs as well
lion, or 2 percent, compared with 1998 reflecting increases as ramping and other transportation service contracts,
in the direct marketing, international and truckload partially offset by lower haulage expenses.
sectors, partially offset by decreases in the intermodal
marketing companies (IMC) sector. Direct marketing Equipment rents expenses of $752 million were $52 mil-
revenues benefited from year-over-year growth of units lion, or 6 percent, lower than 1998 as a result of lower
shipped for UPS and Roadway Express. International intermodal equipment costs due to a reduction in time
revenues were up due to market share gains and new and mileage, and trailer and container expenses. Lower
business with Sealand, NYK, Maersk and K-Line. Truck- agricultural leased car expense due to improved cycle
load revenues were driven primarily by year-over-year times also contributed to the decrease.
growth in J.B. Hunt, Swift and Triple Crown loadings.
These revenue increases were partially offset by decreases Fuel expenses of $700 million for 1999 were $21 million,
in the IMC sector due to competitive pricing pressures, or 3 percent, lower than 1998, as a result of a 3 cent, or
an overall softening in the IMC market, and increased 6 percent, decrease in the average all-in cost per gallon of
trucking capacity. diesel fuel, partially offset by a 3 percent volume-driven
increase in consumption from 1,155 million gallons to
Coal revenues of $2,226 million for 1999 decreased $13 1,187 million gallons. The average all-in cost per gallon
million, or 1 percent, as a result of a decrease in average of diesel fuel decreased year-over-year due to current
revenue per car due to a decline in coal shipping rates year fuel hedge losses of 1 cent per gallon compared to
on contracts renewed beginning in late 1998 at the lower 7 cents per gallon in the prior year, which were partially
1998 and 1999 market based rates. Operating difficulties offset by a 3 cent increase in the average purchase price.
23

24. Materials and other expenses of $818 million for 1999 a $43 million dividend from the Company’s equity
were $111 million, or 16 percent, higher than 1998 investment in TTX Company in March 2000 as
principally reflecting higher environmental, personal well as lower merger, separation and environmental
injury, property and other tax expenses. As discussed in clean-up payments.
Other Matters: Employee Merger and Separation Costs,
reorganization costs of $45 million were incurred during Investing Activities
the second quarter of 1999 for severance, pension, medical Net cash used for investing activities during 2000 was
and other benefit costs for approximately 325 involun- $1,680 million consisting of $1,399 million in capital
tarily terminated salaried employees that were part of a expenditures as described below, and $281 million of
reorganization program announced in May 1999 to other investing activities which primarily include retired
reduce operating expenses and an additional $3 million track structure removal costs, participation in joint
of costs incurred for relocating approximately 60 non- investment projects and advances for future investment
union employees as a result of the reorganization. In transactions. The increase in other investing activities
addition, the Company also reversed during the second compared to 1999 was principally due to an increase
quarter certain merger severance liabilities of $54 million in joint investment projects and advances for future
associated with the Company’s clerical consolidation investment transactions.
plan. These liabilities related to planned work-force
reductions which were no longer needed due to the A breakdown of cash capital expenditures is set forth in the
Company’s ability to utilize a series of job swaps between following table (in millions):
certain locations to achieve the advantages of functional
work consolidation. Year ended December 31, 2000 1999 1998
Maintenance of way $ 835 $ 810 $ 799
Interest expense for 1999 of $387 million increased Mechanical 221 240 243
$33 million, or 9 percent, principally reflecting higher Information services 66 74 76
debt levels resulting from the Company’s share repur- Other 144 151 185
chase program. Total debt increased to $5,813 mil- Total maintenance of business 1,266 1,275 1,303
lion at December 31, 1999, from $5,456 million at New locomotives and freight cars – 261 340
December 31, 1998. Expansion and other 133 252 504
Total $1,399 $1,788 $2,147
Other income (expense), net was unfavorable by $44 million
compared with 1998 primarily due to the $67 million gain BNSF reduced 2000 cash capital expenditures compared
(pre-tax) on the sale of substantially all of the Company’s with 1999 by approximately $389 million to $1,399
interest in Santa Fe Pacific Pipeline Partners, L.P. in 1998 million. Cash used for new locomotives was lower in
and gains of $26 million (pre-tax) from the sale of a real 2000 reflecting a decrease in the number of locomotives
estate portfolio in 1998. This was partially offset by the purchased. In 2000, 246 new locomotives were delivered
recognition in 1999 of a $50 million (pre-tax) deferred to BNSF under long-term operating leases compared with
gain in connection with the sale of rail lines in Southern 476 locomotives in 1999. Expansion projects, principally
California in 1992 and 1993. main line track and major facility construction, decreased
due to a reduced capital program in 2000.
Liquidity And Capital Resources
Cash generated from operations is BNSF’s principal BNSF has entered into commitments to acquire 100
source of liquidity. BNSF generally funds any additional locomotives in 2001. The locomotives will be financed
liquidity requirements through debt issuance, including from one or a combination of sources including, but not
commercial paper or leasing of assets. limited to, cash from operations, capital or operating
leases, and debt issuances. The decision on the method
During 2000, BNSF generated free cash flow after used will depend upon then current market conditions
dividends paid (calculated as cash flow from operations and other factors.
less capital expenditures, other investing activities
and dividends paid) of $431 million, an improvement Financing Activities
of $171 million from free cash flow of $260 million Net cash used for financing activities during 2000
in 1999. This increase was due primarily to reduced was $648 million, principally consisting of share repur-
capital spending partially offset by reduced cash flow chases of $1,496 million and dividend payments of
from operating activities. $206 million, partially offset by net debt borrowings
of $1,034 million.
Operating Activities
Net cash provided by operating activities was $2,317 In February 2000, a put option on $100 million of
million during 2000 compared with $2,424 million medium-term notes paying a coupon of 6.10 percent
during 1999. The decrease in cash from operations was exercised by the holders and the Company repaid
was primarily due to a decrease in net income and the holders primarily with proceeds from the issuance
lower deferred taxes, partially offset by the receipt of of commercial paper.
24

25. In April 2000, BNSF issued $300 million of 7.875 per- February 1999 shelf registration statement. The net
cent notes due April 2007 and $200 million of 8.125 proceeds were used for general corporate purposes
percent debentures due April 2020. The net proceeds including the repayment of commercial paper. At the
of the debt issuance were used for general corporate time of issuing the $200 million of 6.125 percent notes
purposes including the repayment of outstanding com- discussed above, the Company closed out a $100 mil-
mercial paper which increased primarily as a result lion treasury lock transaction at a gain of approximately
of higher share repurchases. At the time of issuing the $8 million which has been deferred and is being amortized
$300 million of 7.875 percent notes and the $200 to interest expense over the 10-year life of the notes.
million of 8.125 percent debentures discussed above,
the Company closed out two treasury lock transactions, In April 1999, the holder of a call option on $200 mil-
each in an amount of $100 million, at gains of approx- lion of the Company’s puttable reset debentures due
imately $9 million and $13 million, respectively, which 2029 exercised the call option. As a result, on May 13,
have been deferred and are being amortized to interest 1999, the holder repurchased the debentures which were
expense over the lives of the notes and the debentures, subsequently resold to investors. The interest rate on
respectively. Subsequent to this debt issuance, the Company the debentures was reset to a fixed interest rate of 7.082
had no remaining capacity under the February 1999 shelf percent. The Company did not receive any proceeds
registration statement. from the resale of these debentures.
In April 2000, BNSF Railway issued $50 million of Aggregate long-term debt scheduled to mature in 2001
privately placed debt collateralized by locomotives that is $232 million. BNSF’s ratio of total debt to total
were acquired in 1999. This debt carries an interest rate capital was 47.8 percent at the end of 2000, 41.6
of 7.77 percent and matures from April 2001 to 2015. percent at the end of 1999, and 41.2 percent at the
end of 1998. The increase in 2000 over the prior
In May 2000, the Company filed a new shelf registration year is attributable to the increase in debt and lower
statement that became effective during May 2000 for equity due primarily to higher share repurchases, as
the issuance of debt securities which may be issued in discussed below.
one or more series at an aggregate offering price not to
exceed $1 billion. Credit Agreements
BNSF issues commercial paper from time to time
In August 2000, BNSF issued $275 million of 7.95 per- which is supported by bank revolving credit agree-
cent debentures due August 2030 under the May 2000 ments. Outstanding commercial paper balances are
shelf registration statement. The net proceeds were used considered as reducing the amount of borrowings
for general corporate purposes including the repayment available under these agreements. The bank revolving
of outstanding commercial paper which increased prima- credit agreements, which were renewed and extended
rily as a result of higher share repurchases. At the time effective June 21, 2000, allow borrowings of up to
of issuing these debentures, the Company closed out a $1.0 billion on a short-term basis (an increase of
treasury lock transaction in the amount of $100 million $250 million over the prior agreement) and $750 mil-
at a gain of approximately $8 million which has been lion on a long-term basis. Annual facility fees are
deferred and is being amortized to interest expense over currently 0.1 percent and 0.125 percent, respectively,
the 30-year life of the debentures. Subsequent to this and are subject to change based upon changes in
issuance, the Company had $725 million available for BNSF’s senior unsecured debt ratings. Borrowing
borrowing under the May 2000 registration statement. rates are based upon i) LIBOR plus a spread deter-
mined by BNSF’s senior unsecured debt ratings, ii)
In December 2000, BNSF issued $300 million of 7.125 money market rates offered at the option of the lenders,
percent notes due December 2010 under the May 2000 or iii) an alternate base rate. The Company generally
shelf registration statement. The net proceeds were used classifies commercial paper as long-term to the extent
for general corporate purposes including the repayment of its commitments available under the revolving
of outstanding commercial paper which increased prima- credit agreements. The commitments of the lenders
rily as a result of higher share repurchases. At the time under the short-term agreement are scheduled to
of issuing these debentures, the Company closed out a expire in June 2001, with the ability for any amounts
treasury lock transaction in the amount of $100 million then outstanding to mature as late as June 2002. The
at a gain of approximately $5 million which has been commitments of the lenders under the long-term
deferred and is being amortized to interest expense over agreement are scheduled to expire in June 2005.
the 10-year life of the notes. Subsequent to this issuance,
the Company had $425 million available for borrowing BNSF also had outstanding bank borrowings at December 31,
under the May 2000 registration statement. 2000, with maturity values of $75 million and interest
rates similar to commercial paper which, upon maturity,
In March 1999, BNSF issued $200 million of 6.125 may be replaced with commercial paper or other bank
percent notes due March 2009 and $200 million of borrowings. There were no bank borrowings outstanding
6.750 percent debentures due March 2029 under the at December 31, 1999.
25