Exhibit 13.1

Notes to Consolidated Financial Statements
Burlington Northern Santa Fe Corporation and
Subsidiaries


1 The Company

Burlington Northern Santa Fe Corporation including its majority-owned
subsidiaries (collectively, BNSF or Company) is engaged primarily in railroad
transportation through its principal subsidiary, The Burlington Northern and
Santa Fe Railway Company (BNSF Railway), which operates one of the largest
railroad networks in North America with 33,500 route miles covering 28 states
and two Canadian provinces. Through one operating transportation services
segment, BNSF Railway transports a wide range of products and commodities
including the transportation of containers and trailers (intermodal), coal and
agricultural commodities which constituted 28 percent, 24 percent and 15
percent, respectively, of total revenues for the year ended December 31, 1999.
Other significant aspects of BNSF's business include the transportation of
chemicals, forest products, consumer goods, metals, minerals, automobiles and
automobile parts. Revenues derived from other sources are not significant.

Proposed Combination With
Canadian National Railway Company

On December 18, 1999, BNSF and Canadian National Railway Company (CN) entered
into a Combination Agreement, as amended, providing for the combination of the
two companies (the Combination). To comply with Canadian legal requirements
that, among other things, prohibit any person and that person's associates from
holding more than 15 percent of the voting rights in CN, while ensuring that the
combination will be tax-efficient for each company's shareholders, the combined
enterprise will consist of two public companies: North American Railways, Inc.
(North American Railways) and CN. Upon completion of the combination, North
American Railways will be the parent company of BNSF and will own all of the
limited voting equity shares of CN. All shareholders will have voting interests
in both North American Railways and CN and economic interests in the combined
companies.

     In the Combination, BNSF shareholders will receive one share of North
American Railways common stock and one CN voting share for each BNSF share.
Additionally, CN shareholders will receive, for each CN common share, 1.05 CN
voting shares and either 1.05 shares of North American Railways common stock or
1.05 CN exchangeable shares. The CN exchangeable shares will be exchangeable at
any time on a one-for-one basis for shares of North American Railways common
stock. CN shareholders who elect to receive the CN exchangeable shares will also
receive the right to vote on matters submitted to North American Railways
shareholders in proportion to their economic interest in the combined companies.
Dividends paid on the North American Railways common stock and the CN
exchangeable shares will be equivalent. Any shares of BNSF common stock owned by
BNSF or any of its subsidiaries as treasury stock will be automatically canceled
and cease to exist.

     Each share of North American Railways common stock will be "stapled" to a
CN voting share and will trade as a single security. Similarly, each CN
exchangeable share will be "stapled" to a CN voting share and will trade as a
single security. In addition, CN will issue to North American Railways limited
voting equity shares carrying 10.1 percent of the voting rights in CN and 100
percent of CN's equity. The result of these arrangements will be that, at all
times, each company will have the same public shareholder base with each public
shareholder effectively having the same economic benefits and voting rights on a
per security basis.

     The Combination is subject to, among other things, approval by the
shareholders of both companies, as well as approvals by the Quebec Superior
Court and the United States Surface Transportation Board (STB). North American
Railways, by its charter, will conform to the provisions of the CN
Commercialization Act and Canadian corporate law on the composition of boards of
directors. Like


CN, North American Railways shareholders will be subject to an ownership limit
whereby no single shareholder can own more than 15 percent of North American
Railways' voting shares. The companies currently expect that all required
regulatory approvals can be obtained and the transaction consummated by mid-
2001. Shareholders of both CN and BNSF are expected to vote on the proposed
Combination during the second quarter of 2000.

     Upon consummation, the Combination will be accounted for by North American
Railways pursuant to the purchase method of accounting in accordance with
Accounting Principles Board Opinion No. 16, "Business Combinations." Under this
method, North American Railways will prepare its financial statements reflecting
the assets and liabilities of BNSF at their historical cost basis and the fair
value of North American Railways common stock issued or issuable to the CN
shareholders will be allocated to the assets and liabilities of CN based on fair
value. CN's results of operations will be included with North American Railways
from the date the transaction is consummated. Based on the current agreement,
the fair value of North American Railways common stock will be based on a $25.63
per share fair value of BNSF common stock which was determined using the average
of the closing daily BNSF common stock prices as reported by The Wall Street
Journal for the two days preceding, the day of, and the two days following the
December 20, 1999 announcement of the Combination.

     Under the terms of the Combination Agreement, as amended, BNSF is required
to pay a cash termination fee of $450 million to CN if the Combination is
terminated as a result of any of the following: i) another party has made a
proposal for an alternative transaction and the Company's shareholders do not
approve the Combination; ii) CN elects to terminate the Combination because
BNSF's Board of Directors changed its previously favorable recommendation of the
Combination to its shareholders or iii) BNSF breaches certain obligations not to
solicit or respond to alternative transaction proposals. CN is obligated to pay
a cash termination fee of $200 million to BNSF if the Combination is terminated
as a

Burlington Northern Santa Fe Corporation
34


result of actions similar to those above that are caused by CN.

     Pursuant to the Combination Agreement, as amended, CN and BNSF entered into
reciprocal stock option agreements. Each company's option is exercisable by the
other company under the same circumstances in which that party is entitled to
receive the $450 million or $200 million termination fee, as applicable,
referred to above. The option agreement allows BNSF and CN to purchase, in the
case of BNSF, approximately 29 million CN common shares and, in the case of CN,
approximately 65 million shares of BNSF common stock. The number of shares
subject to the stock options will be adjusted in each case so that the number of
shares issued will always be equal to, but not exceed, 12.5 percent of the
outstanding common shares of the option issuer after giving effect to the
issuance of shares under the option. The exercise price of the option is, in
each case, the average of the closing price of the option issuer's common stock
on the New York Stock Exchange on the five trading days preceding the date of
notice of exercise multiplied by the number of shares to be issued.

     Additionally, BNSF is required to pay a cash termination fee of $300
million to CN if BNSF terminates the Combina-tion because of conditions imposed
by the STB that the Company believes would significantly and adversely affect
the benefits of the Combination, and CN is willing to complete the Combination
despite these conditions. CN is obligated to pay a cash termination fee of $150
million to BNSF if it terminates the Combination as a result of STB conditions
and BNSF is willing to complete the Combination

                                        Burlington Northern Santa Fe Corporation
                                                                         35