SOURCE: Burlington Northern Santa Fe

April 29, 2008 07:55 ET

Burlington Northern Santa Fe Reports Record First-Quarter 2008 EPS

FORT WORTH, TX--(Marketwire - April 29, 2008) - Burlington Northern Santa Fe Corporation (BNSF) (NYSE: BNI)

--  Quarterly earnings were $1.30 per diluted share.  This compares to
    first-quarter 2007 earnings of $0.96 per diluted share, which included a
    $0.14 charge for additional environmental expenses and a technology system
    write-off.
    
--  Freight revenues increased $599 million, or 17 percent, with an
    increase in fuel surcharges of approximately $280 million compared with the
    same 2007 period.
    
--  Operating income was $875 million, compared to first-quarter 2007
    operating income of $694 million.
    

Burlington Northern Santa Fe Corporation (BNSF) (NYSE: BNI) today reported record first-quarter earnings of $1.30 per diluted share, compared with first-quarter 2007 earnings of $0.96 per diluted share, which included a $0.14 charge for additional environmental expenses and a technology system write-off.

"BNSF achieved record first-quarter results, while demonstrating continued improvement in our velocity and service metrics," said Matthew K. Rose, BNSF Chairman, President and Chief Executive Officer. "Although we continue to see economic softness within the Consumer Products business group and commodities related to housing, we are benefiting from our diverse franchise. Looking forward, we continue to be optimistic about the long-term prospects for BNSF and are poised to meet increased demand as the economy strengthens," Rose added.

First-quarter 2008 freight revenues increased $599 million, or 17 percent, to $4.14 billion compared with $3.54 billion in the prior year. The 17-percent increase in revenue is primarily attributable to volume growth in the Agricultural Products business group, improved yields and increased fuel surcharges of approximately $280 million driven by higher fuel prices.

Agricultural Products revenues were up $240 million, or 38 percent, to $866 million, predominately due to strong unit volumes provided by growth in wheat, soybeans, corn and ethanol, coupled with improved yields. Coal revenues rose by $194 million, or 26 percent, to $954 million, as a result of strong unit volumes, and improved yields. Industrial Products revenues increased $93 million, or 11 percent, to $939 million due to strong demand for construction products and petroleum products, partially offset by weakness in the housing market. Consumer Products revenues reached $1.38 billion, an increase of $72 million, or 5 percent, compared with first quarter 2007. This increase was primarily related to improved yields. Each of the business units also benefited from increased fuel surcharges driven by higher fuel prices.

Operating expenses for the first quarter of 2008 were $3.39 billion compared with first-quarter 2007 operating expenses of $2.95 billion, which included an $81 million charge. The increase in operating expenses was primarily due to an increase in fuel expense of $357 million as a result of higher fuel prices on relatively flat fuel consumption.

Burlington Northern Santa Fe Corporation's subsidiary BNSF Railway Company operates one of the largest North American rail networks, with about 32,000 route miles in 28 states and two Canadian provinces. BNSF Railway Company is among the world's top transporters of intermodal traffic, moves more grain than any other American railroad, carries the components of many of the products we depend on daily, and hauls enough low-sulfur coal to generate about ten percent of the electricity produced in the United States. BNSF Railway Company is an industry leader in Web-enabling a variety of customer transactions at www.bnsf.com.

Financial information follows:

Burlington Northern Santa Fe Corporation
Consolidated Income Information
(Dollars in millions, except per share data)

                                                        Three Months
                                                       Ended March 31,
                                                  ------------------------
                                                      2008         2007
                                                  -----------  -----------

Operating revenues
   Freight revenues                               $     4,143  $     3,544
   Other revenues                                         118          101
                                                  -----------  -----------
      Total operating revenues                          4,261        3,645
                                                  -----------  -----------

Operating expenses
   Fuel                                                 1,009          652
   Compensation and benefits                              983          932
   Purchased services                                     525          502
   Depreciation and amortization                          341          307
   Equipment rents                                        230          232
   Materials and other (a)                                298          326
                                                  -----------  -----------
      Total operating expenses                          3,386        2,951
                                                  -----------  -----------

Operating income                                          875          694
Interest expense                                          134          121
Other expense, net                                          -            5
                                                  -----------  -----------

Income before income taxes                                741          568
Income tax expense                                        286          219
                                                  -----------  -----------

Net income                                        $       455  $       349
                                                  -----------  -----------

Diluted earnings per share                        $      1.30  $      0.96
                                                  -----------  -----------

Diluted average shares outstanding (in millions)        351.3        363.7
                                                  -----------  -----------

Operating ratio (b)                                      78.9%        80.4%
                                                  -----------  -----------

(a) 2007 includes an $81 million charge for additional environmental
    expenses and a technology system write-off.

(b) Calculated as total operating expenses less other revenues divided by
    freight revenues.






Burlington Northern Santa Fe Corporation
Consolidated Balance Sheet Information
(Dollars in millions, except per share amounts)


                                                   March 31,   December 31,
                                                  -----------  -----------
                                                      2008         2007
                                                  -----------  -----------
Assets
   Current assets:
   Cash and cash equivalents                      $       525  $       330
   Accounts receivable, net                               861          790
   Materials and supplies                                 639          579
   Current portion of deferred income taxes               336          290
   Other current assets                                   311          192
                                                  -----------  -----------
      Total current assets                              2,672        2,181

Property and equipment, net                            29,783       29,567

Other assets                                            2,097        1,835
                                                  -----------  -----------

Total assets                                      $    34,552  $    33,583
                                                  -----------  -----------

Liabilities and stockholders' equity
   Current liabilities:
   Accounts payable and other current liabilities $     3,108  $     2,824
   Long-term debt due within one year                     619          411
                                                  -----------  -----------
      Total current liabilities                         3,727        3,235

Long-term debt and commercial paper                     8,025        7,735
Deferred income taxes                                   8,618        8,484
Casualty and environmental liabilities                    850          843
Pension and retiree health and welfare liability          452          444
Employee separation costs                                  75           77
Other liabilities                                       1,605        1,621
                                                  -----------  -----------
      Total liabilities                                23,352       22,439
                                                  -----------  -----------

Stockholders' equity:
   Common stock and additional paid-in capital          7,446        7,353
   Retained earnings                                   11,489       11,152
   Treasury stock and other                            (7,735)      (7,361)
                                                  -----------  -----------
      Total stockholders' equity                       11,200       11,144
                                                  -----------  -----------

Total liabilities and stockholders' equity        $    34,552  $    33,583
                                                  -----------  -----------

Book value per share                              $     32.49  $     32.05
                                                  -----------  -----------
Common shares outstanding (in millions)                 344.7        347.7
                                                  -----------  -----------
Net debt to total capitalization (a)                     42.0%        41.2%
                                                  -----------  -----------

(a) Net debt is calculated as total debt less cash and cash equivalents,
    and capitalization is calculated as the sum of net debt and total
    stockholders' equity.





Burlington Northern Santa Fe Corporation
Consolidated Cash Flow Information  *
(Dollars in millions)

                                                        Three Months
                                                       Ended March 31,
                                                  ------------------------
                                                      2008         2007
                                                  -----------  -----------

Operating activities

   Net income                                     $       455  $       349
   Adjustments to reconcile net income to net
    cash provided by operating activities:
      Depreciation and amortization                       341          307
      Deferred income taxes                                83           52
      Long-term casualty and environmental
       liabilities, net                                     7           42
      Other, net                                            1           41
   Change in accounts receivable sales program              -          300
   Other changes in working capital                        44           57
                                                  -----------  -----------

Net cash provided by operating activities                 931        1,148
                                                  -----------  -----------

Investing activities

   Capital expenditures                                  (468)        (537)
   Construction costs for facility financing
    obligation                                             (4)          (1)
   Other, net                                            (287)        (293)
                                                  -----------  -----------

Net cash used for investing activities                   (759)        (831)
                                                  -----------  -----------

Financing activities

   Net borrowings                                         430           47
   Dividends paid                                        (112)         (90)
   Purchase of BNSF common stock                         (373)        (349)
   Proceeds from stock options exercised                   35           55
   Proceeds from facility financing obligation             18            -
   Other, net                                              25           37
                                                  -----------  -----------

Net cash provided by (used for) financing
 activities                                                23         (300)
                                                  -----------  -----------
Increase in cash and cash equivalents                     195           17

Cash and cash equivalents:
   Beginning of period                                    330          375
                                                  -----------  -----------
   End of period                                  $       525  $       392
                                                  -----------  -----------

* Certain comparative prior period amounts have been adjusted to conform to
  the current period presentation.





Burlington Northern Santa Fe Corporation
Operating Statistics

                                                        Three Months
                                                       Ended March 31,
                                                  -------------------------
                                                      2008         2007
                                                  ------------ ------------

Cars / units (in thousands)                              2,486        2,507

Average revenues per car / unit                   $      1,667 $      1,414

Revenue ton miles (in millions)                        167,936      157,263

Gross ton miles (in millions)                          282,818      270,083

RTM / GTM                                                 0.59         0.58

Freight revenue / thousand RTM                    $      24.67 $      22.54

Operating expense / thousand RTM (a)              $      20.16 $      18.76

Freight revenue / thousand GTM                    $      14.65 $      13.12

Operating expense / thousand GTM (a)              $      11.97 $      10.93

Compensation and benefits / thousand GTM          $       3.48 $       3.45

Average employees                                       40,178       40,984

Period end employees                                    40,552       41,541

Thousand RTM / average employee                          4,180        3,837

Thousand GTM / average employee                          7,039        6,590

Gallons of fuel used (in millions)                         364          360

Average price per gallon of fuel (b)              $       2.77 $       1.81

GTM / gallon of fuel                                       777          750

Freight train miles (in millions)                           42           41

GTM / freight train hours (in thousands)                   138          125

Route miles operated                                    32,168       32,023


(a) 2007 includes an $81 million charge for additional environmental
    expenses and a technology system write-off.

(b) Includes handling, taxes and hedge effect.





Burlington Northern Santa Fe Corporation
Revenue Statistics by Commodity

                                           Three Months
                                          Ended March 31,
                                     -------------------------   Percent
Revenues  (in millions)                  2008         2007       Change
                                     ------------ ------------ ----------
Domestic Intermodal                  $        636 $        586        8.5 %
International Intermodal                      619          610        1.5
Automotive                                    129          116       11.2
                                     ------------ ------------ ----------
Total Consumer Products                     1,384        1,312        5.5

Coal                                          954          760       25.5
Industrial Products                           939          846       11.0
Agricultural Products                         866          626       38.3
                                     ------------ ------------ ----------
Total freight revenue                       4,143        3,544       16.9
Other revenue                                 118          101       16.8
                                     ------------ ------------ ----------
Total revenues                       $      4,261 $      3,645       16.9 %
                                     ------------ ------------ ----------

Cars / units  (in thousands)
Domestic Intermodal                           504          508       (0.8)%
International Intermodal                      622          727      (14.4)
Automotive                                     39           41       (4.9)
                                     ------------ ------------ ----------
Total Consumer Products                     1,165        1,276       (8.7)

Coal                                          634          594        6.7
Industrial Products                           403          390        3.3
Agricultural Products                         284          247       15.0
                                     ------------ ------------ ----------
Total cars / units                          2,486        2,507       (0.8)%
                                     ------------ ------------ ----------

Average revenue per car / unit
Domestic Intermodal                  $      1,262 $      1,154        9.4 %
International Intermodal                      995          839       18.6
Automotive                                  3,308        2,829       16.9
                                     ------------ ------------ ----------
Total Consumer Products                     1,188        1,028       15.6

Coal                                        1,505        1,279       17.7
Industrial Products                         2,330        2,169        7.4
Agricultural Products                       3,049        2,534       20.3
                                     ------------ ------------ ----------
Average revenue per car / unit       $      1,667 $      1,414       17.9 %
                                     ------------ ------------ ----------

Revenue ton miles  (in millions)
Domestic Intermodal                        12,795       12,588        1.6 %
International Intermodal                   18,996       20,321       (6.5)
Automotive                                  1,457        1,464       (0.5)
                                     ------------ ------------ ----------
Total Consumer Products                    33,248       34,373       (3.3)

Coal                                       72,310       66,434        8.8
Industrial Products                        28,355       27,735        2.2
Agricultural Products                      34,023       28,721       18.5
                                     ------------ ------------ ----------
Total revenue ton miles                   167,936      157,263        6.8 %
                                     ------------ ------------ ----------

Freight revenue per thousand ton
 miles
Domestic Intermodal                  $      49.71 $      46.55        6.8 %
International Intermodal                    32.59        30.02        8.6
Automotive                                  88.54        79.23       11.8
                                     ------------ ------------ ----------
Total Consumer Products                     41.63        38.17        9.1

Coal                                        13.19        11.44       15.3
Industrial Products                         33.12        30.50        8.6
Agricultural Products                       25.45        21.80       16.7
                                     ------------ ------------ ----------
Freight revenue per thousand ton
 miles                               $      24.67 $      22.54        9.4 %
                                     ------------ ------------ ----------





Burlington Northern Santa Fe Corporation
Capital Expenditures and Track Maintenance

                                                        Three Months
                                                       Ended March 31,
                                                  -------------------------
                                                       2008         2007
                                                  ------------ ------------

Capital expenditures  (in millions)
   Maintenance of way
      Rail                                        $         87 $         82
      Ties                                                  71           78
      Surfacing                                             40           48
      Other                                                100          103
                                                  ------------ ------------
         Total maintenance of way                          298          311
   Mechanical                                               36           26
   Information services                                     23           16
   Other                                                    29           27
                                                  ------------ ------------
         Total maintenance of business                     386          380
                                                  ------------ ------------

   Terminal and line expansion                              82          157
                                                  ------------ ------------
         Total capital expenditures               $        468 $        537
                                                  ------------ ------------

Track maintenance
   Track miles of rail laid
      Maintenance of business                              153          125
      Expansion projects                                    13           21
                                                  ------------ ------------
         Total                                             166          146
                                                  ------------ ------------

   Cross ties inserted (thousands)
      Maintenance of business                              540          664
      Expansion projects                                    33           54
                                                  ------------ ------------
         Total                                             573          718
                                                  ------------ ------------

   Track resurfaced (miles)                              2,015        2,136
                                                  ------------ ------------

Contact Information

  • Investor Contact:
    Marsha Morgan
    (817) 352-6452

    Media Contact:
    Mary Jo Keating
    (817) 867-6407