UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2003
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 1-11535
BURLINGTON NORTHERN SANTA FE CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware |
41-1804964 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
2650 Lou Menk Drive
Fort Worth, Texas
(Address of principal executive offices)
76131
(Zip Code)
(800) 795-2673
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ü No
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ü No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| Class |
Shares Outstanding at April 21, 2003 | |
| Common stock, $.01 par value |
372,650,439 shares |
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
BURLINGTON NORTHERN SANTA FE CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in millions, except per share data)
(Unaudited)
| Three Months Ended March 31, |
|||||||
| 2003 |
2002 |
||||||
| Revenues |
$ |
2,232 |
$ |
2,163 |
| ||
| Operating expenses: |
|||||||
| Compensation and benefits |
|
715 |
|
714 |
| ||
| Purchased services |
|
299 |
|
275 |
| ||
| Depreciation and amortization |
|
226 |
|
230 |
| ||
| Equipment rents |
|
169 |
|
175 |
| ||
| Fuel |
|
274 |
|
184 |
| ||
| Materials and other |
|
203 |
|
205 |
| ||
| Total operating expenses |
|
1,886 |
|
1,783 |
| ||
| Operating income |
|
346 |
|
380 |
| ||
| Interest expense |
|
106 |
|
109 |
| ||
| Other expense (income), net |
|
2 |
|
(4 |
) | ||
| Income before income taxes and cumulative effect of accounting change |
|
238 |
|
275 |
| ||
| Income tax expense |
|
90 |
|
103 |
| ||
| Income before cumulative effect of accounting change |
|
148 |
|
172 |
| ||
| Cumulative effect of accounting change, net of tax |
|
39 |
|
— |
| ||
| Net income |
$ |
187 |
$ |
172 |
| ||
| Earnings per share: |
|||||||
| Basic earnings per share (before cumulative effect of accounting change) |
$ |
0.40 |
$ |
0.45 |
| ||
| Basic earnings per share (after cumulative effect of accounting change) |
$ |
0.50 |
$ |
0.45 |
| ||
| Diluted earnings per share (before cumulative effect of accounting change) |
$ |
0.40 |
$ |
0.45 |
| ||
| Diluted earnings per share (after cumulative effect of accounting change) |
$ |
0.50 |
$ |
0.45 |
| ||
| Average shares (in millions): |
|||||||
| Basic |
|
371.1 |
|
382.5 |
| ||
| Dilutive effect of stock awards |
|
2.3 |
|
3.0 |
| ||
| Diluted |
|
373.4 |
|
385.5 |
| ||
| Dividends declared per share |
$ |
0.12 |
$ |
0.12 |
| ||
See accompanying Notes to Consolidated Financial Statements.
2
BURLINGTON NORTHERN SANTA FE CORPORATION and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in millions, shares in thousands)
(Unaudited)
| March 31, 2003 |
December 31, 2002 |
|||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
65 |
|
$ |
28 |
| ||
| Accounts receivable, net |
|
138 |
|
|
141 |
| ||
| Materials and supplies |
|
246 |
|
|
226 |
| ||
| Current portion of deferred income taxes |
|
287 |
|
|
314 |
| ||
| Other current assets |
|
100 |
|
|
82 |
| ||
| Total current assets |
|
836 |
|
|
791 |
| ||
| Property and equipment, net |
|
24,235 |
|
|
24,022 |
| ||
| Other assets |
|
966 |
|
|
954 |
| ||
| Total assets |
$ |
26,037 |
|
$ |
25,767 |
| ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable and other current liabilities |
$ |
1,822 |
|
$ |
1,918 |
| ||
| Long-term debt due within one year |
|
145 |
|
|
173 |
| ||
| Total current liabilities |
|
1,967 |
|
|
2,091 |
| ||
| Long-term debt and commercial paper |
|
6,857 |
|
|
6,641 |
| ||
| Deferred income taxes |
|
7,044 |
|
|
6,975 |
| ||
| Casualty and environmental liabilities |
|
451 |
|
|
444 |
| ||
| Minimum pension liability |
|
368 |
|
|
368 |
| ||
| Employee merger and separation costs |
|
162 |
|
|
170 |
| ||
| Other liabilities |
|
1,179 |
|
|
1,146 |
| ||
| Total liabilities |
|
18,028 |
|
|
17,835 |
| ||
| Commitments and contingencies (see Notes 2, 5, and 6) |
||||||||
| Stockholders’ equity: |
||||||||
| Common stock, $.01 par value, 600,000 shares authorized; |
|
5 |
|
|
5 |
| ||
| Additional paid-in capital |
|
5,672 |
|
|
5,664 |
| ||
| Retained earnings |
|
5,767 |
|
|
5,625 |
| ||
| Treasury stock, at cost, 123,999 shares and 120,905 shares, respectively |
|
(3,193 |
) |
|
(3,114 |
) | ||
| Unearned compensation |
|
(37 |
) |
|
(39 |
) | ||
| Accumulated other comprehensive loss |
|
(205 |
) |
|
(209 |
) | ||
| Total stockholders’ equity |
|
8,009 |
|
|
7,932 |
| ||
| Total liabilities and stockholders’ equity |
$ |
26,037 |
|
$ |
25,767 |
| ||
See accompanying Notes to Consolidated Financial Statements.
3
BURLINGTON NORTHERN SANTA FE CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in millions)
(Unaudited)
| Three Months Ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| OPERATING ACTIVITIES |
||||||||
| Net income |
$ |
187 |
|
$ |
172 |
| ||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
|
226 |
|
|
230 |
| ||
| Deferred income taxes |
|
69 |
|
|
68 |
| ||
| Employee merger and separation costs paid |
|
(10 |
) |
|
(20 |
) | ||
| Cumulative effect of accounting change, net of tax |
|
(39 |
) |
|
— |
| ||
| Other, net |
|
7 |
|
|
(3 |
) | ||
| Changes in current assets and liabilities: |
||||||||
| Accounts receivable, net |
|
3 |
|
|
17 |
| ||
| Materials and supplies |
|
(20 |
) |
|
(8 |
) | ||
| Other current assets |
|
(15 |
) |
|
(28 |
) | ||
| Accounts payable and other current liabilities |
|
(81 |
) |
|
(72 |
) | ||
| Net cash provided by operating activities |
|
327 |
|
|
356 |
| ||
| INVESTING ACTIVITIES |
||||||||
| Capital expenditures |
|
(340 |
) |
|
(260 |
) | ||
| Other, net |
|
(10 |
) |
|
(108 |
) | ||
| Net cash used for investing activities |
|
(350 |
) |
|
(368 |
) | ||
| FINANCING ACTIVITIES |
||||||||
| Net increase in commercial paper and bank borrowings |
|
242 |
|
|
128 |
| ||
| Payments on long-term debt |
|
(63 |
) |
|
(32 |
) | ||
| Dividends paid |
|
(45 |
) |
|
(46 |
) | ||
| Proceeds from stock options exercised |
|
2 |
|
|
27 |
| ||
| Purchase of BNSF common stock |
|
(77 |
) |
|
(80 |
) | ||
| Other, net |
|
1 |
|
|
— |
| ||