This document provides consolidated financial highlights for Burlington Northern Santa Fe Corporation for the years 1991-1995. Some key points: - Revenues grew from $4.559 billion in 1991 to $6.183 billion in 1995. Operating income improved from a loss of $239 million in 1991 to income of $526 million in 1995, excluding unusual merger-related charges. - Net income was $92 million in 1995 but would have been $416 million without accounting changes and debt retirement costs related to the merger. - Capital expenditures were $1.042 billion in 1995 and are planned to be nearly $1.7 billion in 1996 to support revenue growth and cost reduction initiatives.

3. CONSOLIDATED FINANCIAL HIGHLIGHTS
Burlington Northern Santa Fe Corporation and Subsidiaries
(Dollars in millions, except per share data)
The selected financial data shown below include BNI results for each of the five years ended December 31, 1995
and SFP results from September 22, 1995 to December 31, 1995.
1991
1993 1992
1995 1994
Year ended December 31,
FOR THE YEAR
$ 4,559
$ 4,630
$ 4,995 $ 4,699
Revenues $ 6,183
661 597
853
526 (239)
Operating income (loss)(1)
Income (loss) before extraordinary item and
296 299
426
198 (306)
cumulative effect of change in accounting method
- (14)
(10) (21)
(106)
Accounting change/Extraordinary item (2)(3)(4)(5)
278
416 296
92 $ $ (320)
$ $
$
Net income (loss)
394 274 275
71 $ $ (321)
$ $
$
Earnings (loss) available for common stockholders
Primary earnings (loss) per share:
Before extraordinary item and change in
$ 3.35
$ 4.48 $ 3.06
1.66
$ $ (3.96)
accounting method
- (.24)
(.99) (.11)
Accounting change/Extraordinary item (.18)
3.11
4.37 $ 3.06
.67 $
$ $ $ (4.14)
Primary earnings (loss) per share
77,462
90,187 89,672 88,617
106,730
Average shares (in thousands)
Fully diluted earnings (loss) per share:
Before extraordinary item and change in
3.34
4.38 3.04
1.66 $ $
$ $ $ (3.96)
accounting method
- (.18)
(.24)
(.99) (.11)
Accounting change/Extraordinary item
$ 3.10
$ 4.27 3.04 $
$
$ .67 (4.14)
Fully diluted earnings (loss) per share
89,492 77,462
97,528 97,189
106,730
Average shares (in thousands)
$ 1.20 $ 1.20
$ 1.20 $ 1.20
1.20
$
Dividends declared per common share
AT YEAR END
$ 6,324
$ 7,592
Totalassets $ 7,045 $ 6,563
$ 18,269
Long-term debt, including current portion
1,567 1,982
1,819 1,737
4,233
and commercial paper
- - - 9 11
Redeemable preferred stock
1,202
2,237 1,919 1,728
5,037
Stockholders' equity
OTHER
487 509
753 676
$ $ $
$ $
1,042
Totalcapital expenditures
362 352 338 347
520
Depreciation and amortization
86% 90%
83% 87%
80%
Operating ratio (6)
Total debt to total capital, excluding
48% 62%
45% 48%
46%
redeemable preferred stock
(1) 1995 includes $735 million before taxes related to merger, severance and asset charges as discussed in Note 3 of the financial statements.
1991 includes pre-tax charge of $708 million related to: (i) costs for reducing surplus crew positions and a management separation pay program,
(ii) increases in estimated personal injury costs and (iii) increases in estimated environmental clean-up costs.
(2) 1995 includes the cumulative effect of the change in accounting method for locomotive overhauls which decreased net income by $100 million, or
$.94 per common share. Additionally, 1995 includes an extraordinary loss on retirement of debt of $6 million (after tax), or $.05 per common share.
(3) 1994 includes the cumulative effect of the implementation of the accounting standard for postemployment benefits.
(4) 1992 includes the cumulative effect of the change in accounting method for revenue recognition and the cumulative effect of the implementation of
the accounting standard for postretirement benefits.
(5) 1991 includes extraordinary loss on retirement of debt.
(6) 1995 and 1991 operating ratios exclude the pre-tax charges discussed in note (1) above.
P AGE

4. FE
BURLINGTON NORTHERN SANTA
T Significant unusual items include merger, severance
o OUR SHAREHOLDERS,
CUSTOMERSAND COLLEAGUES and asset charges of $453 million after-tax for 1995.
1995 was a historic year for us. It brought together two These charges, along with reserves established at the
- time of the merger, cover the costs associated with the
successful companies Burlington Northern Inc. and
- elimination of some 3,000 positions in 1995 and over
Santa Fe Pacific Corporation and created Burlington
the next few years, the disposition of about 4,000 miles
Northern Santa Fe Corporation in September. The year
of low-density track in 14 states, the closing of offices,
1995 was also one of our better years in terms of our on-
facilities, and other operations that will not be needed
going pursuit of an injury-free workplace, on-time service,
customer satisfaction, and financial performance. as a result of combining the two railroads. There also
BNSF's well-balanced business portfolio derived was a $100 million after-tax charge associated with a
change in accounting for locomotive overhauls and
about 25 percent of its combined 1995 revenues from
another $6 million for the early retirement of debt. With
transporting a record 204 million tons of coal, most
of it from the Powder River Basin these items, BNSF net income was
of Wyoming and Montana. Another $92 million, or $0.67 per common
25 percent came from intermodal share, on an as reported basis for
shipments - more than 2.5 million 1995, compared with $416 million,
trailers and containers, another record, or $4.27 per common share, fully
were moved on flatcars in 1995. About diluted, in 1994.
15 percent of combined 1995 revenues During the fourth quarter of 1995,
reflected the movement of a record we learned that we can achieve high
663,000 carloads of agricultural levels of on-time, damage-free
commodities, like corn, wheat and service simultaneously for each of
the largest segments of our franchise
soybeans, while transportation of foods,
- agricultural commodities, coal and
beverages, forest products, chemi-
ROBERT D. KREBS
cals, minerals and metals accounted intermodal. Improving both our
BNSF President and Chief Executive Officer
for the remaining 35 percent. service performance and our safety
We entered 1996 focused on our vision: To realize the record are key to the future success of our company.
tremendous potential of the new Burlington Northern In this period, the first one in which we operated as a
and Santa Fe Railway by providing transportation merged railroad, one incredible achievement exempli-
fied the potential of the new company better than any
services that consistently meet our customers' expecta-
other: BNSF handled 27,040 trailers without one failure
tions. Our new railway, the largest in North America,
for our largest Intermodal customeI; United Parcel Service,
will provide single-line service with broad geographic
from Thanksgiving to Christmas Eve.
scope, as shown on pages 8-9, making it easier for
This streak continued until January 18, 1996, when a
shippers to use the improved services we are now
large portion of our railroad in the Midwest was snow-
capable of providing.
RECORD-SETTING PERFORMANCES bound. For 58 consecutive days, 43,709 trailers arrived
THROUGHOUT 1995 at every UPS hub for sorting on schedule to enable UPS
-
For 1995, BNSF generated $1.576 billion in combined to meet its commitments to its customers a magnifi-
operating income, excluding unusual items. This repre- cent example of thousands of BNSF people working as a
sents a 32 percent improvement over 1994. Combined team to achieve a common goal. I believe this will
revenues grew nearly $500 million year over year, while become the standard for the service we will provide
adjusted operating expenses were only $110 million customers in all segments of our business, and this will
enable us to achieve one of our goals, consistent
higher. As a result, the operating ratio was lowered to
revenue growth. For 1996, our overall on-time perfor-
80.7 percent from 84.5. For 1996, we are targeting a 78
mance target is 92 percent.
percent operating ratio.
P AG(

5. BURLINGTON NORTHERN SANTA FE
Kansas, will be rebuilt from the ground up at a cost of
For several years, employees of both BN and Santa Fe
about $90 million over a two-year period. The Hobart
have aggressively worked to reduce personal injuries
intermodal facility in Los Angeles is scheduled for a $25
and lost work days due to injuries. For 1995, personal
million upgrade and the final phase of the three-year San
injuries were down over 30 percent, as more than 95
Bernardino expansion will be completed this summer.
percent of our 45,000 employees worked injury-free.
Capacity will also be enhanced at our yard in Barstow,
BNSF enters 1996 as the third safest major railroad in
California, and at our Chicago Corwith yard this year.
North America with the goal of another 25 percent
In addition, BNSF is better positioned to participate
improvement in 1996.
INVESTING FOR GROWTH in NAFTA-driven growth in 1996 as a result of gaining
access to the border crossing at Eagle Pass, Texas,
In 1996, we plan a capital program approaching $1.7
through our merger trackage agreement with the
billion which will support our efforts to increase
Southern Pacific. This complements our El Paso, Texas,
revenues and reduce our operating ratio.
gateway and Canadian access into
About $1.1 billion will be spent to
quot;we have a strong British Columbia and Manitoba.
maintain our franchise, as we resur-
Much of the progress made since
face more than 12,000 miles of track,
franchise, resource- last September is a result of the
and replace 700 miles of rail and 3
work and commitment of 45,000
million ties, while keeping our equip-
ful employees, employees all over BNSF and their
ment fleet at the level required to
willingness to pull together as we
and the momentum
respond to demand and customers'
build a new company. The support
expectations. BNSF will add 87 loco-
from our Board of Directors also has
motives in 1996, both alternating
to fulfill our enabled us to make rapid progress
current and direct current units,
merger promise. quot; and to establish a 1996 plan that
acquire three aluminum coal sets
will demonstrate the wisdom of the
and 90 taconite cars, and remanu-
merger that created Burlington Northern Santa Fe.
facture 1,050 other freight cars.
A person who deserves much credit and my personal
More than $500 million is slated for capacity expan-
appreciation for making BNSF happen is Gerald
sion projects at key locations across our network, all of
Grinstein, our former chairman, who decided to leave
which will enable us to grow our business. The BNSF
the company at the end of 1995. All of us will miss his
route from the Midwest to the Pacific Northwest (PNW)
wisdom and his wit, and we wish him well as he pursues
is 11 percent shorter than that of our major competitor,
new challenges.
which means we can provide better service at lower
Another director who will be terribly missed is
operating cost for our grain, intermodal and merchandise
Barbara Jordan, who passed away in mid-January.
customers. To expand PNW capacity, we need a third
Although her tenure on the Board was less than five
route between eastern Washington and the coast. Several
years, her contributions will forever be a part of BNSF.
alternatives are being pursued and we expect to be in a
I'm confident that BNSF will grow successfully in the
position to start running trains over a new route in 1997.
years ahead. We have a strong franchise, resourceful
Another expansion will be the completion of 55 miles
employees, and the momentum to fulfill our merger promise.
of double track on BNSF's premier route from Chicago
to California. By year end, we will have eliminated more
than one-third of the single track that remained on a
660-mile segment of this lane when we began the
program two years ago.
Robert D. Krebs
We have scheduled several yard expansions in 1996
President and Chief Executive Officer
to accommodate intermodal growth and improve operat-
February 20, 1996
ing efficiencies. The Argentine yard in Kansas City,
P AGE

6. LEVERAGING FRANCHISE STRENGTHS
MODAL:THE GROWTH LEADER
INTER
There is tremendous growth potential for BNSF's
Intermodal business. BNSF has some of the fastest and
most direct intermodal routes in many of the nation's
BLENDING THE major transportation lanes. That includes the shortest
... one
route between Chicago and Seattle (2,218 miles)
of the shortest routes between Chicago and Los Angeles
(2,214 miles) ... and the best single-
BEST OF TWO line route between California and the
Southeast. Service improvements maq.e
during the fourth quarter alone in this
GREATRAILROADS largely untapped intermodallane
reduced transit times between Memphis, BNSF EMPLOYEES AVE
H
Tennessee, and Southern California by BEENSO SUCCESSFUL
. .. ATREDUCING
INJURIES
In the long history of American railroading no merger 24 hours III both dIrectIons. Overall,
THAT
THECOMPANY
NOW
has been larger, approved so quickly or demonstrated Intermodal on-time performance reached HAS THETHIRD LOWEST
greater potential. Combining Burlington Northern Inc. record highs in the third and fourth INJURY RATE AMONG
and Santa Fe Pacific Corp. created much more than the quarters on both BN and Santa Fe. MAJOR RAILROADS.
largest rail network in North America. It created a new This combination of superior routes and on-time
competitor with the market reach needed to deliver new service gives Intermodal the greatest growth opportuni-
single-line services to customers throughout two-thirds ties for the new company. To take advantage of those
of the United States as well as to Canada and Mexico. strengths, BNSF introduced Guaranteed and Premium
BN didn't reach the Southwest. Santa Fe didn't reach intermodal service in addition to regular service in the
the Pacific Northwest or the Southeast. Now BNSF fourth quarter of 1995 for customers shipping between
the Pacific Northwest and Midwest. BNSF also offers
delivers to all of those areas with 31,000 route miles in
27 states and two Canadian provinces stretching from better intermodal service through midwestern gateways
all major ports along the West Coast, to the Great Lakes like Chicago, Kansas City and St. Louis to both the
PNW and California.
and the Gulf, and from Canada to Mexico.
BN was primarily a coal, grain and merchandise railroad. To accommodate future growth, BNSF is expanding
Santa Fe was primarily an intermodal and automotive capacity at key terminals, improving on-time
carrier. Together, BNSF creates a stronger portfolio with performance and equipment utilization, offering new
a more diversified and balanced product mix. services, and modifying train schedules to meet cus-
More importantly, customers have access to shorter tomers' needs. Multi-year capacity expansion projects
routes and faster transit times using at intermodal facilities in Los Angeles (Hobart) and
BNSF, and many of the interline traffic Chicago (Corwith) will boost capacity at each to more
exchanges that delay shipments will than one million units-per-year when completed in
be eliminated, giving customers more 1997. At San Bernardino, California, the intermodal
single-line service options to more facility is being expanded to handle more than 400,000
markets than the predecessor railroads units annually after completion in mid-year 1996. The
BNSFTOOK
DEliVERY
total investment to expand capacity at these facilities
mc- could deliver independently. The great
OF 130 MOREAC
TlON LOCOMOTIVES
IN
alone is $155 million.
challenge now facing BNSF is to realize
1995 WHICH
ARENOW
. BNSF moved more intermodal traffic on a combined
its tremendous potential by continu-
PARTOF THE INOUSTRY S
ing to build on the momentum of the basis in 1995 than any other rail system in the world,
LARGEST
LOCOMOTIVE
record-settingperformancesof 1995. more than 2.5 million containers and trailers. Despite
FLEET
OF4,400 UNITS.
P AGE

8. the PRB. PRB coal is cheaper to mine than most other
sluggish economic conditions, BNSF
domestic sources. It also burns much cleaner, with an
posted a 4 percent increase in com-
~~~~~~~~;
average sulfur content one-sixth to one-half that of most
bined volume, mostly attributable to
7' r':quot;quot;-;'''':;,'~:''~'::'';;X
~.-, -~.: quot; '. -~~~~
other coal. As a result, PRB coal is helping to bring many
growth of international and less-than
-- nil, ~
truck-load (LTL) traffic. utilities into compliance with the 1990 Clean Air Act
,e 1',,
TO AUTOMOTIVE: GROWTH Amendments without having to install expensive scrubber
BNSF HASACCESS
TH R 0 UGH INN 0 VAT ION
ALLMUORWESTCOAST systems or purchase emissions credits. The PRB contains
.
PORTS, WHICHEXPECT.
Combmed BNSF automotIve carloads 73 percent of the nation's low-sulfur coal reserves. Those
COITAINER VOLUMES TO
factors, low-fuel cost, low-delivered cost, and low-sulfur
DOUBLE THE EXTdeclined
OVER N less than one-half percent
content, have driven unprecedented demand for PRB coal.
20 YEARS. despite depressed automobile sales
In 1995, Burlington Northern Santa Fe hauled a
and reduced production. While BNSF only serves a
combined total of 204 million tons of coal which takes
couple of auto-assembly plants directly, it is leveraging
into account the coal traffic interchanged between the
innovation as a means of increasing market share.
former BN and Santa Fe. Independently, BN moved
BNSF is a technological leader in the development of
183 million tons of coal, most of it from the PRB, a 7
equipment designed to improve protection for automo-
percent increase from 1994. The Santa Fe Railway.
biles in transit. The company has acquired intermodal
hauled 36 millions tons of coal, down 10 percent from
trailer and container equipment designed to ship
1994 as a result of abundant western hydroelectric
automobiles in a fully enclosed environment and has
supply and lower-than-normal natural gas prices.
helped develop a lightweight, fully enclosed, articulated
EXPANDING COAL CAPACITY
multilevel rail car to provide the same protection in
standard rail service. The record 1995 tonnage represents the kind of growth
COAL: A BRIGHT FUTURE BNSF has prepared for with its multi-year investment
Since the first unit train left the Powder River Basin strategy designed to capture the anticipated increase in
demand for Powder River Basin coal. In 1995, BNSF
(PRB) in 1969, BNSF has helped transform this remote
invested $385 million in track and equipment to boost
ranching area straddling northeastern Wyoming and
southeastern Montana into one of the nation's most impor- transportation capacity by:
. Constructing 21 miles of double and triple track on
tant fuel sources for generating electricity. Today, nearly
10 percent of the electricity produced in the United States the joint BNSF/UP Orin Line (120 miles of the 127-mile
is generated from coal hauled by BNSF, most of it from line are now double or triple tracked);
.Const ructing 25 miles of additional track between
:;:i~'quot;
~~~'-
~
?--ci:~;~-., <~ i.I.IM Alliance, Neb., and Gillette, Wyo.;
:
~
.
I~~~~quot;~ Expanding Alliance yard with four
'.
new receiving and departure tracks and
eight storage tracks; and
.Acqui ring 130 AC locomotives, eight
new aluminum train sets, and the Trough
Train (an extended car with 13 articu- ABOUT PERCENT
25 OF
. . BNSF's 1995 REVENUE
coa I
lated sectIOns that Increases
FROMCOAL
WASDERIVED
carrying capacity by 30 to 40 percent). TRAFFIC,25 PERCENT
Phase n of the Clean Air Act, which FROM
INTERMODAL, 15
PERCENT
FROMAGRICUL-
requires even lower sulfur emissions in
TURALCOMMODITIES
AND
the year 2000, and impending electric
35 PERCENT
FROMCON,
utility deregulation, will stimulate addi- SUMERPRODUCTS,
tional demand for PRB coal over the CHEMICALS,MINERALS
AND METALS.
next several years. To respond to these
P AGE
I

9. -.- ~ quot;
'
-quot;'''''''iIiJ.~-41 'quot; JUt! ~ .
quot; '~ :-'
.
t:quot;'':'>~I''...!

10. . ~ BNSF offers businesses new international shipping
opportunities because it links all major ports on the
west Coast and the Gulf with the Midwest, Pacific
fr
Northwest, Southwest and the Southeast.
NAFTA
North American
I
shippers can
J
take better
SAFETY
advantage of
wearing proper safety equipment is an
NAFTA with
important part of BNSF's success in
BNSF's north-
making the railroad a safer place to
south direct
work. BN reduced reportable injuries by
routes between
30% in 1995. Santa Fe reduced them
Canada and
by 38%. Together, BNSF has set a
Mexico.
unified target for reducing reportable
injuries by another 25% in 1996.
FORESTRODUCTS
P
Companies in the
Northwest, Northern
Midwest and Southeast
have access to new mar-
kets in the Southwest
and west Coast.
In 1996, BNSF will invest
BURLINCTON
NORTHERN
nearly $1.7 billion to maintain
CHEMICal COMPANIES and improve its infrastructure BN's strengths in coal,
in the PNW and by adding more double grain and merchandise
combined with Santa Fe's
Canada gain access and triple track, expanding
to a new single-line yards and terminals, acquiring strengths in intermodal
route to the west more new locomotives and and automotive give BNSF
Coast via BNSF. freight car equipment. a stronger and more diver-
sified traffic base.
I
o
rrrrrrCiT , 9712 '
P AGE

11. OPERATING
SUERGIES
BNSF will benefit from the
consolidation of operations and
administrative functions,
disposition of about 4,000 miles of
low-density track, and the disposal
of excess office space and other
facilities, and operations.
between Chicago and the Pacific
Northwest, (2,218 miles), and one
of the shortest between Chicago and
Southern California (2,214 miles).
COAl/ELECTRICITY
Nearly 10% of the electricity produced in the
United States is generated from coal hauled by
BNSF. The new railroad's extended routes will
enable cleaner- ;:::;,
1
,
:iquot;
.
1
burning, low-sulfur
~
coal to be delivered
-iW
to more markets.
~
QUIPMENT
BNSF will improve
equipment utilization of
..
.. its combined 90,000-car
,- fleet and of its combined
4,400-10comotive fleet.
INTERMOOAl NIPPERS
S
have access to new
direct routes on
BNSF between
Southern California
and the Southeast, and
combined with BN's routes in large fleet will enable
to new single-line
the Pacific Northwest, Midwest BNSF to move grain cars
north with the harvest as service options
and Southeast give BNSF
throughout most of the
extended market reach through it moves from Texas to
western United States.
the Canadian border.
most of the Western two-thirds
of the United States.
P AGE

12. ports. High barge rates on the Mississippi River and
BNSF's ROUTESTRUCTURENABlESIT TO ORICINATE
E MORECRAINFROMMORE
ocean freight spreads that favored exporting grain from
CRAINPRODUCINC
RECIONSTNANANY OTHERRAILROAD THE INDUSTRY.
IN
ports in the Pacific Northwest over those on the Gulf
~, ~._quot; quot;quot;7quot;quot;..quot;:... , .:l'( .,.. -quot;'~<;'.,
~ . ;;rquot;rf{,~l
; f. quot;(:.,.. quot;
~ -:,. ~-
~.lS~~'- l~ i,
combined with a good crop supply on BNSF's system to
'#.; ,
'~ .,~l'r ~':'~i !7~''-it~1
.. ,.
'.
~~
~
~t'
<tl quot; ~'i~fli,~~.-,
jJ!;.
i.
~
create an opportunity BNSF anticipated, planned for
t:~~ ...'J./ -quot;.~
~ ~ ,, . . quot;~~I';quot; ~~-'~..
'quot; quot;quot; ~ ' . ,~ :--~~,quot;,.,z.' ,
'I' t.~, ~.Ji., f ' ~:.. ~-.~ ,., ,quot;,-'
-
and capitalized on very successfully.
:.'1~ ~~~~~~C,,{/
I: 'quot; ~)''u'{':'t.;,
~
,.'
. ., AT' ~..~~~1f.'~'t(' ...,., .-
,...''' 1.'r<'1,'/.quot; .,,~/ quot;-
.. ;;:;#1..
,
It( ~':'. r.-quot;quot;quot;':.i~~ ')::'tquot;. - ~ (' ~quot;
.. ,~,~
~ BNSF is the largest rail transporter
~..,~,.:
'~ quot;quot;)!~quot; 1.quot;J, . .f','~ t ~!ii.),,:.,>J~Iquot;':quot;:s.
.quot; fquot;quot;:~~'~r ,. f ,f j:>..
,,/,?J'('J..:
S
I,~'~.{::.I~, I. .., ~ 'lquot;,,,,,
.
,t ~ CI lquot; .~ ;~;.:
~1t-.. ft;'. .,-~~.~ -t-~fi quot;(:(.'~~'quot;
of grain in North America, in part,
'i'~.r ::'(tt:'t{'.:f< '1[: ~I. .'t
~~ fI '::'~
~;;'
~
'~J';'t:' :';'I'
'{:-~~ftquot;';('{~.~
.
~
..
~ because it connects most of the nation's
/r~~~ ,'
{quot;quot;,::;' . ~quot;quot; ~ ~~~
.~I i'£'-dquot;.l//J,i...,~f':'
.:.~f
; '<!ff*
.
1:~~:~.-
~
~~~ '.tt/ iO:<i~1~ ...
.
1quot;;1i:1f{l,<~.~ . .
'11', . . .,
key grain-producing areas to most of its
1':,.(t~£,~,.. I'Z-~~I~,~l,<If 1 ~~b.l~-::'quot; '
I
~A: .
.quot; .
~I
.
j' ,~ ~ ,~,J', to£..- ',,,, .
.
.f
~
;''' ' ;,~~.~ ~~~~,~:~ (.~t ,;'t~;~,,: quot;
~'~:ii':quot; I'quot; major domestic consumption markets
.
'f/. I~''.!,: ~. quot;~.,~ (~~~::'~~ ..~-'~~~-'<;r~ ~.'~~quot; .
.
.
.
,,-,-11:,~~fL:1: '
'~~~ ~~ ' <'''.,'1/:.'' '~''''' .
r!i-r<. .t. :. :~,'<,'
(
:'1.,.-quot;(/ . !'It and grain export ports. BNSF serves BNSF SERVES
. .
quot;~s.}quot; AlSO
.tf~~~ :;'('C,' ~ ;
v.
~~ < ''f'''''. .
~.!t'quot; ,~,i'J l:tJ . &:,. ,
.
.
~
'
key grain-producing regions stretching
~,!~'.~.,.~j'/~1'-quot; MOSTOF THE NATION'S
quot;,quot; 'i.. ~';;'~I quot;, - ~'. j
LARGEST
DOMESTIC
:',~:):!~;,:~. :~
t:-~~
.,J.1quot;~~i;~fl~~~;:'~«('~~{~'l~;~'{' , ,,': <'iJ from the Northern to the Southern Great
~ ~ quot;quot;.,;~.,'
t:::1:t/{{ 11b!~(>'I' '~i~: 'V! ,l'.quot;>-' [ '0' t.quot;quot;
quot;.:,' GRAINMARKETSAND
,i[,~,~.~,.
~:(.~~;:,~ ~i,,~)q~~1tquot;I:~';:Jt(~,f~'!i~J~Qr: ':.~~
)~'.'~
Plains, and from the Pacific Northwest MOSTOF ITS KEY GRAIN
to the Midwest.Com accountsfor about
growthopportunities, BNSF is continuing to focus on cus- EXPORT
PORTS.
tomer service. Innovative pricing, faster cycle times for 35 percent of BNSF's grain revenue, wheat 34 percent,
coal trains (the time it takes to move a loaded coal train feeds and minor oilseeds 8 percent, soybeans 7 per-
from the mine to the utility and back) and reduced cent, barley 5 percent, and flour, mill products, malt,
costs through new technologies are helping BNSF lay oil and specialty grains 11 percent. It is this diversity
the groundwork for long-tenn growth in the coal business. of grain-producing regions, and of the grains and grain
METALS AND MINERALS: ACCESS TO STRONG products produced in those areas that hedges BNSF's
PRODUCTION CAPACITY exposure to fluctuations in the market for specific
Improved demand for pipe, alumina and structural types of grains.
NEW OPPORTUNITIES IN GRAIN
steel helped increase metals traffic a combined total of
7 percent in 1995. BNSF has on-line access to more The USDA's long-term outlook indicates continued
than 40 percent of the nation's aluminum production strong growth in United States agricultural exports over
capacity, to the nation's largest deposit of taconite (iron the next 10 years. The greatest demand is expected to
ore) in Minnesota's 'Iron Range', and to some of the come from China, which could account for almost
most efficient steel mini-mills in the United States. one-third of the estimated increase in grain exports.
Expanded single-line service opportunities will enable BNSF is well positioned to participate in that opportunity.
BNSF to extend the market reach of many of its metal In addition, the merger has created single-line opportu-
and mineral shippers. nities to Southern California and Mexico, and for direct
AGRICULTURALCOMMODITIES: routing of spring wheat to the Gulf of Mexico. Linkages
A RECORD YEAR from Kansas and Oklahoma to the Pacific Northwest
No BNSF business segment did a and from the upper Midwest to Southern California
better job in 1995 of seizing traffic provide opportunities for opening new markets and cre-
opportunities than Agricultural ating more transportation options in existing markets.
BNSF HASON,LINE
Commodities.A record combined
ACCESS
TOSOME
OFTHE
The expanded grain market coverage and larger grain
NATION'SMOSTEFFI.
car fleet will enable BNSF to move cars in line with the
663,000 carloads of grain were
CIENTSTEEl MINI-
natural seasonal rotation of the harvest as it moves
transported by BNSF.The record
MillS, ITS LARGEST
north from Texas to the Canadian border.
grain performance was led by strong
DEPOSIT IRON ORE
OF
domestic demand and by export To help improve the productivity of that 35,000 grain-
(TACONITE)ANDA LARGE
demand for com and soybean ship- car fleet, BNSF invested in additional track sidings and
PARTOF ITS AlUMINUM
ments through the Pacific Northwest
PRODUCTION APACITY.
C yard expansions along many of its key grain routes in
P AGE 10

14. tI
1995, significantly expanding the rail yards at Hauser, in capital projects, including about
$5.00 million for terminal and track
Idaho, and at Pasco and Vancouver, Washington, which
handle most of BNSF's grain trains bound for the PNW capacity expansion.
CONSUMER AND INDUSTRIAL PRODUCTS: Yet investing in traditional rail
EXTENDED MARKET REACH infrastructure is not enough. BNSF
THE NOC PLACES
cannot expect to reach its service,
Strong demand for petroleum helped increase BNSF's
OPEIATiORSTEAM MEM-
growth, safety and operating cost
combined Chemical carloads by 3 percent, helping to
BERSWITHIN FEETOF
goals without the benefit of the very
offset reduced demand for lumber and canned goods in UCI OTHERTO
best real-time information and control
the Forest Products and Consumer Goods units. INCREASE
THE SPEED
Access to new markets and new direct routes will systems. BNSF is developing and ANDOORDINATION F
C O
benefit most of BNSF's chemical, consumer and forest implementing the industry's best DECISIORS.
examples of those technologies at its new operations
products customers as much as it does, grain, coal,
center in Fort Worth.
intermodal or automobile shippers.
THE NOC: A 21sT CENTURY CONTROL CENTER
In Forest Products, for example, BNSF serves more
NetworkOperations
The
of North America's primary
Center (NOC) is the largest
timber producing areas than
and most technologically
any other railroad and is con-
advanced control center
sequently one of the largest
of its kind in any industry.
carriers of lumber, paper
It has the ability to not only
products, plywood, pulpmill . ~~
view, track and help manage
feedstock and wood pulp in
the industry. BNSF's extend- day-to-day operations, but to
ed market coverage enables provide an electronic
overview of the entire system,
forest products producers in
the Southeast, Minnesota and helping to identify potential
the Pacific Northwest to reach problems in advance and
destinations in the Southwest prevent them from occurring.
The NOC is currently
with single-line service.
Chemical shippers in the PNW and Canada have providing these services for the Northern and
Burlington Lines on BNSF's system. The Systems
access to a new single-line route to the West Coast and
to Mexico, and consumer products shippers now have Operations Control Center in Schaumburg, performs
these functions for most of the Santa Fe Lines on
a new single-line alternative to virtually all of the
BNSF's network.
major consumer markets in the Western two-thirds of
the United States. SUMMARY
EXPANDING CAPACITY The new company got off to a great start in the
BNSF is continuing to make record fourth quarter of 1995, capping off what had
been a great year for the predecessor companies -
capital investments to provide the
service levels needed to win addition- a remarkable accomplishment of service improvement
al business. In 1996, BNSF will add achieved in spite of severe weather problems on many
THE MAINTENANCEND
A
TRACK,TERMINALAND parts of the system. The challenge for 1996 is to
87 new locomotives, bringing to
EQUIP.En CAPACITY
build on that momentum, to make BNSF a safer place
nearly a thousand the number of new
EXPANSION
PROJECTS
to work by reducing injuries another 25 percent, to
power units that have been added to
CDNmlE AT BNSF
the combined BNSF fleet in the reach an overall on-time performance level of 92
TO STAYIN STEP
percent, and to reduce the ratio of expenses to
1990's. In total, the new company will
WITH RElENUEGRDWTH
income to 78 percent.
invest approximately $1.7 billion
OPPORTUNITIES.
P AGE 12

15. BURLINGTON NORTHERN SANTA FE
FINANCIAL CONTENTS Agreement qualified as a tax-free transaction for federal income
tax purposes, the parties utilized the Holding Company Structure.
13 Management's Discussion and Analysis
Under the Holding Company Structure, BNSF created two
21 Report of Management
subsidiaries. One subsidiary merged with and into BNI, and
21 Report of Independent Accountants
the other subsidiary merged with and into SFP. Each holder of
22 Consolidated Statements of Income
one share of BNI common stock received one share of BNSF
23 Consolidated Balance Sheets
common stock and each holder of one share of SFP common
24 Consolidated Statements of Cash Flows
stock, excluding the SFP common stock acquired by BNI in
25 Consolidated Statements of Changes in the Tender Offer and the SFP common stock held by SFP as
Stockholders' Equity treasury stock, received 0.41143945 shares of BNSF common
26 Notes to Consolidated Financial Statements stock, which reflects the effects of the repurchase program
discussed below. The rights of each stockholder of BNSF are
MANAGEMENT'S DISCUSSION AND ANALYSIS
substantially identical to the rights of a stockholder of BNI,
OF FINANCIAL CONDITION
and the Holding Company Structure has the same economic
AND RESULTS OF OPERATIONS
effect with respect to the stockholders of BNI and SFP as
anagement's discussion and analysis relates to the
M financial condition and results of operations of Burlington would a direct merger of BNI and SFP.
In the Merger Agreement, the exchange ratio of BNSF
Northern Santa Fe Corporation and its majority-owned
common shares for each share of outstanding SFP common
subsidiaries (collectively BNSF or Company). The principal
stock upon consummation of the Merger was set at not less
subsidiaries are Burlington Northern Inc. (BNI), Burlington
than 0.40 shares to not more than 0.4347 shares, with
Northern Railroad Company (BNRR), Santa Fe Pacific
repurchases of SFP common stock by SFP increasing the
Corporation (SFP) and The Atchison, Topeka and Santa Fe
exchange ratio pro rata. SFP repurchased approximately
Railway Company (ATSF).
3.6 million shares which, along with the effect of SFP stock
ACQUISITION OF SFP
options exercised, resulted in the final exchange ratio of
O n June 29, 1994, BNI and SFP entered into an Agreement
0.41143945 shares.
and Plan of Merger (as amended on October 26,1994,
RESULTS OF OPERATIONS
December 18, 1994, January 24, 1995 and September 19,1995,
T he results of operations discussed below include BNI
the Merger Agreement) pursuant to which SFP would merge
results for the years ended December 31, 1995, 1994
with BNI in the manner set forth below (the Merger).
and 1993 and SFP results from September 22,1995 through
Stockholders of BNI and SFP approved the Merger Agreement
December 31, 1995.
at special stockholders' meetings held on February 7, 1995.
YEAR ENDED DECEMBER 31, 1995 COMPAREDWITH
On August 23,1995, the Interstate Commerce Commission
YEAR ENDED DECEMBER 31, 1994
(ICC) issued a written decision approving the Merger and
BNSF recorded net income for 1995 of $92 million ($.67 per
on September 22,1995 the Merger was consummated. As
common share, primary and fully diluted) compared with net
discussed in Note 2, the business combination with SFP was
income of $416 million ($4.37 per common share, primary,
accounted for by the purchase method.
and $4.27 per common share, fully diluted) for 1994. Results
Pursuant to the Merger Agreement, on December 23,1994,
for 1995 were reduced by $735 million of merger, severance
BNI and SFP commenced tender offers (together, the Tender
and asset charges (see Note 3: Merger, severance and asset
Offer) to acquire 25 million and 38 million shares of SFP
charges). The corresponding reduction in net income was
common stock, respectively, at $20 per share in cash. During
approximately $453 million, or $4.24 per common share.
the first quarter of 1995, SFP borrowed $1.0 billion under a
Results for 1995 were further reduced by $100 million (after
credit facility of which $760 million of the proceeds were
tax), or $.94 per common share, for the cumulative effect of
used to purchase the 38 million shares pursuant to the Tender
an accounting change for locomotive overhauls and $6 million
Offer. In addition, BNI borrowed $500 million under a credit
(after tax), or $.05 per common share, for an extraordinary
facility of which the proceeds were used to finance BNI's
loss on early retirement of debt. Results for 1994 were reduced
purchase of SFP common stock in the Tender Offer. The Tender
by $10 million (after tax), or $.11 per common share, for the
Offer was completed on February 21,1995.
cumulative effect of an accounting change for postemployment
Also, pursuant to the Merger Agreement, BNI and SFP were
benefits. Excluding the above items, net income for 1995 would
entitled to elect to consummate the Merger through the use
have been $651 million compared to $426 million in 1994.
of one of two possible structures: (i) a merger of SFP with and
into BNI or (ii) the Holding Company Structure described below.
To ensure that the transaction contemplated by the Merger
P AGE I3

16. BURLINGTON NORTHERN SANTA FE
Revenue table
The following table presents BNSF's revenue infonnation by commodity for the years ended December 31,1995,1994 and 1993
and includes certain reclassifications of prior year infonnation to confonn to current year presentation. SFP results are included
only for the period of September 22,1995 to December 31,1995.
Revenue Per
Revenue
Thousand RTM
Revenues Ton Miles (RTM)
1994 1993
1994 1993 1994 1995
1995 1993
1995
(IN MILLIONS)
(IN MILLIONS)
$12.26
$1l.85 $13.02
136,164 117,654
153,169
Coal $1,669 $1,532
$1,815
29.03 30.20 30.86
24,671 22,718
745 701 38,516
Intermodal 1,1l8
20.92
19.89 22.37
33,945
710 55,356 33,922
759
1,101
Agricultural Commodities
22.57 22.86
23.15
19,495 18,329
440 419 19,828
459
Forest Products
26.56
26.57 26.51
315 11,862
402 310 15,127 11,695
Chemicals/Plastics
29.97
28.14 29.40
9,711
291 12,332 10,341
347 304
Food
22.31 21.99 22.08
11,503
308 253 248 11,233
13,804
Metals
22.69 22.69
23.46
10,752 10,136
244 230 12,147
285
Minerals and Ores
80.53
66.50 74.84
1,751
210 152 141 3,158 2,031
Automotive
112
138 119
Other
$18.71
$18.69 $19.33
260,574 237,339
323,437
Total $4,699
$6,183 $4,995
Revenues Current year revenues for Forest Products increased $19
million and Chemicals/Plastics revenues increased $92 million
Total revenues for 1995 were $6,183 million compared with
revenues of $4,995 million for 1994. The $1,188 million when compared to 1994. The increase in Forest Product rev-
enues was due to the addition of $32 million of SFP revenues
increase reflects $802 million of SFP revenues for the period
and was partially offset by lower traffic levels for lumber. The
of September 22,1995 to December 31, 1995. Excluding SFp,
addition of $80 million of SFP revenues along with strong
revenues increased by $386 million or 8 percent primarily
petroleum products demand contributed to the increase in
due to improved Coal and Agricultural Commodities revenues.
Chemicals/Plastics revenues.
Coal revenues improved $146 million during 1995 due to
Revenue increases in all other commodity groups are
higher traffic levels caused primarily by new business,
favorable weather conditions early in the year and increased principally due to the inclusion of SFP revenues from
demand for low-sulfur coal from the Powder River Basin as September 22, 1995.
well as the addition of $58 million of SFP revenues in 1995. Expenses
As discussed in Note 3: Merger, severance and asset charges,
Revenue per thousand revenue ton miles declined as a result
the Company recorded $735 million for merger, severance and
of continuing competitive pricing pressures and a change in
traffic mix. asset charges in 1995. The principal components of the charge
were $287 million related to BNSF's plan to centralize the
Agricultural Commodities revenues during 1995 were
majority of its union clerical functions and $254 million
$342 million greater than 1994. The increase was principally
related to salaried employee costs for severance, pension and
caused by improvements in com and soybean revenues of
other employee benefits and costs for employee relocations
$259 million and $41 million, respectively. Com and soybean
during the period. Additionally, $105 million was recorded for
revenues benefited from increased crop production as well as
planned branch line dispositions, while the remaining $89
higher traffic volumes to the Pacific Northwest due to stronger
million included obligations for vacating leased facilities and
export demand during 1995. Barley and wheat revenues
the write-off of duplicate and excess assets. Additional accruals
declined primarily due to weaker export demand when compared
of $138 million were recorded through purchase accounting
with the strong demand in 1994. Additionally, Agricultural
Commodities revenues included $59 million of SFP revenues related to fonner SFP employees and assets.
When its plans are completed, BNSF expects to have elim-
during 1995. The shift in commodities to lower yielding com
inated approximately 3,000 positions and disposed of approxi-
and soybeans from higher yielding wheat led to the aggregate
decrease in revenue per thousand revenue ton miles. mately 4,000 miles of low density track. Total annual savings
Intennodal revenues increased $373 million when compared related to these plans, when fully implemented, are expected
to exceed $250 million. Insignificant savings were recognized
with 1994, almost exclusively due to the inclusion of SFP
revenues in 1995. Metals revenues increased $55 million due in 1995 due to timing of severances. A significant portion of
to increased taconite, aluminum and steel products revenues the savings will be recognized in 1996 and the full benefit of
as well as the addition of $28 million of SFP revenues in 1995. savings are anticipated to be realized by the end of 1998,
when the plan is fully implemented. Also, as described in
Note 3, costs related to union employee relocation as well as
I4
P AGE