Burlington Northern Santa Fe Corporation (NYSE: BNI) is soon to become a member of Berkshire Hathaway. Buffett's Berkshire Hathaway already owned 23 percent of the railroad, and paid a 31 percent premium over the stock price to secure the rest. Berkshire Hathaway chairman and chief executive officer, Warren E. Buffett's $44 billion (including $10 billion of outstanding BNSF debt) bet on Burlington is not out of generosity or patriotism. Buffett's investment in Burlington makes a perfect business sense and it is one of the reminders to those who have written off railroads.

Quick look at Buffett's 2008 shareholder letter

In good years and bad, Charlie and I simply focus on four goals:

(1) maintaining Berkshire's Gibraltar-like financial position, which features huge amounts of excess liquidity, near-term obligations that are modest, and dozens of sources of earnings and cash;

(2) widening the "moats" around our operating businesses that give them durable competitive advantages;

(3) acquiring and developing new and varied streams of earnings;

(4) expanding and nurturing the cadre of outstanding operating managers who, over the years, have delivered Berkshire exceptional results.

Though Burlington is Berkshire Hathaway's largest to date acquisition, it doesn't hurt Berkshire's Gibraltar-like financial position. Purchase terms are 60% cash and 40% stock consideration, with shareholders able to elect the form of consideration they receive in order to maximize tax efficiency. Warren Buffett told Fox Business Network Tuesday that he's offering Berkshire Hathaway Inc. stock in his purchase of Burlington Northern Santa Fe Corp. (BNI) to make sure he retains a "comfortable level" of cash. Buffett also said he considers BNSF's management "the best there is."

The acquisition does widen the moats around Berkshire's operating businesses that give them durable competitive advantages. Berkshire is buying Burlington for its irreplaceable rights of way, a predictable business model, economic efficiency, and strong free cash flow despite heavy demand for capital investment.

Looking at other financial metrics

Burlington recorded revenues of $18,018 million during the financial year ended December 2008 (FY2008), an increase of 14% over FY2007. The increase in revenues was due to strong performance of the company's operating divisions. The operating profit of the company was $3,912 million during FY2008, an increase of 12.2% over FY2007. The net profit was $2,115 million in FY2008, an increase of 15.6% over FY2007.