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SOURCE: Burlington Northern Santa Fe
Burlington Northern Santa Fe Reports First Quarter 2009 Results
FORT WORTH, TX--(Marketwire - April 23, 2009) - Burlington Northern Santa Fe Corporation
(BNSF) (
-- Quarterly earnings were $0.86 per diluted share, which included a
$0.19 per share charge related to an unfavorable coal rate case decision
and an $0.08 per share loss on unwinding interest rate hedges on debt no
longer expected to be issued. This compares to first-quarter 2008 earnings
of $1.30 per diluted share.
-- Freight revenues decreased $831 million, or 20 percent, to $3.31
billion compared with the first quarter of 2008 as loads handled decreased
14 percent. The 20-percent decrease in freight revenues included a
reduction in fuel surcharges of approximately $325 million and a $96
million charge related to the unfavorable coal rate case decision.
-- Operating expenses decreased $631 million, or 19 percent, to $2.76
billion compared with the first quarter of 2008. The reduction in operating
expenses was driven by strong cost controls, decreased unit volumes and
lower fuel expenses resulting from decreased fuel prices.
Burlington Northern Santa Fe Corporation (BNSF) (
"During the first quarter of 2009, BNSF's focus on cost control and a variable cost structure enabled us to weather a difficult economic environment," said Matthew K. Rose, BNSF Chairman, President and Chief Executive Officer. "BNSF continues to manage through the recession and is well positioned to take advantage of the eventual economic recovery."
First-quarter 2009 freight revenues decreased $831 million, or 20 percent, to $3.31 billion compared with $4.14 billion in the prior year. The 20-percent decrease in revenues included a decrease in fuel surcharges of approximately $325 million and a $96 million charge in excess of amounts previously accrued related to the unfavorable coal rate decision. The remaining variance was due to lower unit volumes as a result of the economic downturn, partially offset by improved yields.
Coal revenues were $863 million. Excluding the $96 million charge related to the unfavorable coal rate decision, coal revenues increased $5 million, or 1 percent, reflecting improved yields on slightly lower unit volumes. Agricultural Products revenues were $187 million, or 22 percent lower than the first quarter of 2008. Lower unit volumes caused mainly by reduced domestic loadings and international grain shipments were partially offset by improved yields. Industrial Products revenues declined $220 million, or 23 percent, to $719 million, which included a decline in unit volumes that was driven by lower demand for construction products and building products and was partially offset by improved yields. Consumer Products revenues fell $333 million, or 24 percent, to $1.05 billion, on lower international intermodal, domestic intermodal and automotive volumes due to economic conditions. Decreased fuel surcharges driven by lower fuel prices also negatively impacted revenues of each of the business units.
Operating expenses for the first quarter of 2009 were $2.76 billion compared with first-quarter 2008 operating expenses of $3.39 billion. The $631 million decrease in operating expenses was driven by strong cost controls, decreased unit volumes and lower fuel prices, which decreased fuel expenses by about $300 million.
First-quarter 2009 interest expense increased $64 million, or 48 percent, to $198 million compared with $134 million in the first quarter of 2008. This increase was primarily attributable to a $43 million loss on unwinding interest rate hedges on debt no longer expected to be issued, and the unfavorable coal rate case decision further increased interest expense by $9 million.
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,
----------------
2009 2008
------- -------
Operating revenues
Freight revenues (a) $ 3,312 $ 4,143
Other revenues 112 118
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Total operating revenues 3,424 4,261
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Operating expenses
Compensation and benefits 868 983
Fuel 614 1,045
Purchased services 478 525
Depreciation and amortization 370 341
Equipment rents 201 230
Materials and other 224 262
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Total operating expenses 2,755 3,386
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Operating income 669 875
Interest expense (b) 198 134
Other expense, net 3 -
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Income before income taxes 468 741
Income tax expense 175 286
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Net income $ 293 $ 455
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Diluted earnings per share $ 0.86 $ 1.30
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Diluted average shares outstanding (in millions) 341.9 351.3
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Operating ratio (c) 79.8% 78.9%
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(a) 2009 includes a $96 million charge related to an unfavorable coal rate
case decision.
(b) 2009 includes a $43 million loss on interest rate hedges and $9
million related to an unfavorable coal rate case decision.
(c) 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,
2009 2008
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 610 $ 633
Accounts receivable, net 825 847
Materials and supplies 538 525
Current portion of deferred income taxes 472 442
Other current assets 277 218
------------ ------------
Total current assets 2,722 2,665
Property and equipment, net 31,391 30,847
Other assets 2,850 2,891
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Total assets $ 36,963 $ 36,403
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Liabilities and stockholders' equity
Current liabilities:
Accounts payable and other current
liabilities $ 3,133 $ 3,190
Long-term debt due within one year 275 456
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Total current liabilities 3,408 3,646
Long-term debt and commercial paper 9,416 9,099
Deferred income taxes 8,787 8,590
Pension and retiree health and welfare
liability 1,049 1,047
Casualty and environmental liabilities 968 959
Employee separation costs 56 57
Other liabilities 1,865 1,874
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Total liabilities 25,549 25,272
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Stockholders' equity:
Common stock and additional paid-in capital 7,662 7,636
Retained earnings 12,921 12,764
Treasury stock and other (9,169) (9,269)
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Total stockholders' equity 11,414 11,131
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Total liabilities and stockholders' equity $ 36,963 $ 36,403
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Book value per share $ 33.62 $ 32.82
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Common shares outstanding (in millions) 339.5 339.2
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Net debt to total capitalization (a) 44.3% 44.5%
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(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
(in millions)
Three Months
Ended March 31,
------------------------
2009 2008
----------- -----------
Operating activities
Net income $ 293 $ 455
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 370 341
Deferred income taxes 90 83
Long-term casualty and environmental
liabilities, net (1) 7
Other, net 49 1
Change in accounts receivable sales program (50) -
Other changes in working capital (17) 28
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Net cash provided by operating activities 734 915
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Investing activities
Capital expenditures (462) (468)
Construction costs for facility financing
obligation (13) (4)
Acquisition of equipment pending financing (286) (173)
Proceeds from sale of assets financed 368 -
Other, net 2 (98)
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Net cash used for investing activities (391) (743)
----------- -----------
Financing activities
Net (payments) borrowings (251) 430
Dividends paid (136) (112)
Purchase of BNSF common stock (4) (373)
Proceeds from stock options exercised 8 35
Proceeds from facility financing obligation 15 18
Other, net 2 25
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Net cash (used for) provided by financing
activities (366) 23
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(Decrease) increase in cash and cash equivalents (23) 195
Cash and cash equivalents:
Beginning of period 633 330
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End of period $ 610 $ 525
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Burlington Northern Santa Fe Corporation
Operating Statistics *
Three Months Ended
March 31,
-----------------
2009 2008
-------- --------
Revenue Statistics
Cars / units (in thousands) 2,128 2,486
Average revenue per car / unit (a) $ 1,602 $ 1,667
Average length of haul (miles) 1,099 1,087
Revenue ton miles (in millions) 149,148 167,936
Freight revenue / thousand GTM (a) $ 13.80 $ 14.65
Freight revenue / thousand RTM (a) $ 22.85 $ 24.67
Operating / Productivity Statistics
Operating Expense
Gross ton miles (in millions) 247,008 282,818
Operating expense / thousand GTM $ 11.15 $ 11.97
Thousand GTM / average employee 6,421 6,991
Compensation
Average employees 38,468 40,453
Compensation and benefits / average employee $ 22,561 $ 24,297
Compensation and benefits / thousand GTM $ 3.51 $ 3.48
Fuel (b)
GTM / gallon of fuel 777 777
Gallons of fuel used (in millions) 318 364
Average price per gallon of fuel (c) $ 1.85 $ 2.77
Velocity
Locomotive miles per day 298.6 303.7
Car miles per day 224.0 202.0
* Certain prior period amounts have been reclassified to conform with the
current period presentation.
(a) 2009 coal revenues on a GAAP basis were $863 million. However, for
comparative purposes the table above excludes (from coal revenues and
from the computation of amounts derived therefrom) a $96 million charge
related to an unfavorable coal rate case decision.
(b) Fuel statistics are based on locomotive diesel fuel.
(c) Includes handling, taxes and hedge effect.
Burlington Northern Santa Fe Corporation
Revenue Statistics by Commodity
Three Months
Ended March 31,
------------------------ Percent
2009 2008 Change
Revenues (in millions) ----------- ----------- ---------
Domestic Intermodal $ 515 $ 636 (19.0)%
International Intermodal 462 619 (25.4)
Automotive 74 129 (42.6)
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Total Consumer Products 1,051 1,384 (24.1)
Coal (a) 959 954 0.5
Industrial Products 719 939 (23.4)
Agricultural Products 679 866 (21.6)
----------- ----------- ---------
Total freight revenue 3,408 4,143 (17.7)
Other revenue 112 118 (5.1)
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Total revenues $ 3,520 $ 4,261 (17.4)%
=========== =========== =========
Cars / units (in thousands)
Domestic Intermodal 458 504 (9.1)%
International Intermodal 497 622 (20.1)
Automotive 21 39 (46.2)
----------- ----------- ---------
Total Consumer Products 976 1,165 (16.2)
Coal 627 634 (1.1)
Industrial Products 298 403 (26.1)
Agricultural Products 227 284 (20.1)
----------- ----------- ---------
Total cars / units 2,128 2,486 (14.4)%
=========== =========== =========
Average revenue per car / unit
Domestic Intermodal $ 1,124 $ 1,262 (10.9)%
International Intermodal 930 995 (6.5)
Automotive 3,524 3,308 6.5
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Total Consumer Products 1,077 1,188 (9.3)
Coal (a) 1,530 1,505 1.7
Industrial Products 2,413 2,330 3.6
Agricultural Products 2,991 3,049 (1.9)
----------- ----------- ---------
Average revenue per car / unit $ 1,602 $ 1,667 (3.9)%
=========== =========== =========
Revenue ton miles (in millions)
Domestic Intermodal 11,867 12,795 (7.3)%
International Intermodal 14,700 18,996 (22.6)
Automotive 793 1,457 (45.6)
----------- ----------- ---------
Total Consumer Products 27,360 33,248 (17.7)
Coal 73,245 72,310 1.3
Industrial Products 21,301 28,355 (24.9)
Agricultural Products 27,242 34,023 (19.9)
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Total revenue ton miles 149,148 167,936 (11.2)%
=========== =========== =========
Freight revenue per thousand ton miles
Domestic Intermodal $ 43.40 $ 49.71 (12.7)%
International Intermodal 31.43 32.59 (3.6)
Automotive 93.32 88.54 5.4
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Total Consumer Products 38.41 41.63 (7.7)
Coal (a) 13.09 13.19 (0.8)
Industrial Products 33.75 33.12 1.9
Agricultural Products 24.92 25.45 (2.1)
----------- ----------- ---------
Freight revenue per thousand ton
miles $ 22.85 $ 24.67 (7.4)%
=========== =========== =========
(a) 2009 coal revenues on a GAAP basis were $863 million. However, for
comparative purposes the table above excludes (from coal revenues and
from the computation of amounts derived therefrom) a $96 million charge
related to an unfavorable coal rate case decision.
Burlington Northern Santa Fe Corporation
Capital Expenditures
Three Months Ended
March 31,
-------------------------
2009 2008
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Capital expenditures (in millions)
Engineering
Rail $ 110 $ 87
Ties 87 71
Surfacing 42 40
Other 108 100
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Total engineering 347 298
Mechanical 37 36
Other 28 29
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Total replacement capital 412 363
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Information services 19 23
Terminal and line expansion 31 82
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Total capital expenditures $ 462 $ 468
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Track miles of rail laid
Replacement capital 205 153
Expansion projects 12 13
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Total 217 166
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Cross ties inserted (thousands)
Replacement capital 769 540
Expansion projects 10 33
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Total 779 573
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Track resurfaced (miles) 2,351 2,015
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Linda Hurt
(817) 352-6452
Media Contact:
John Ambler
(817) 867-6407