News Release

Burlington Northern Santa Fe Reports Fourth Quarter/Year-End 2002 Results

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• Fourth quarter 2002 earnings of $0.54 per share compared with $0.46 per share including an adjustment for workforce reduction related costs in 2001, or $0.57 per share excluding these costs.
• Freight revenues of $2.27 billion for the fourth quarter 2002 were flat compared with 2001 fourth quarter.
• Operating income was $436 million compared with $401 million a year ago, or $467 million adjusted.

Burlington Northern Santa Fe Corporation (BNSF) (NYSE: BNI) today reported fourth quarter 2002 earnings of $0.54 per share compared with $0.46 per share including an adjustment for workforce reduction related costs in 2001, or $0.57 per share excluding these costs.

In spite of the economic challenges BNSF faced throughout 2002, we posted our fifth consecutive year-over-year quarterly record for on-time performance for our customers,” said Matthew K. Rose, BNSF Chairman, President and Chief Executive Officer. “We achieved fourth quarter and annual record revenues in our international intermodal, truckload and perishables sectors within Consumer Products as well as several annual revenue records in the Industrial Products sector. In addition, for the fourth consecutive year BNSF generated significant positive free cash flow.”

Freight revenues of $2.27 billion for the fourth quarter 2002 were flat compared with 2001 fourth quarter. Consumer Products revenues increased $27 million, or 3 percent, to $846 million, primarily reflecting increased volumes in the international, truckload, and perishables sectors. Industrial Products revenues were essentially flat at $491 million as general softness in the building, construction and petroleum products sectors was partially offset by new chemical traffic. Coal revenues decreased $6 million, or 1 percent, to $540 million, reflecting decreased shipments compared to the same 2001 period. Agricultural Products revenues declined $22 million, or 5 percent, to $393 million, primarily as a result of reduced soybean export and domestic corn demand.

Operating expenses of $1.87 billion were $35 million lower than the same 2001 period, or $31 million higher excluding the 2001 fourth quarter workforce reduction related costs included in materials and other expense. Compensation and benefits expense driven by higher wage and benefit rates, and higher purchased services expense were partially offset by lower equipment rents.

Operating income was $436 million for the 2002 fourth quarter compared with operating income in the same 2001 period of $401 million, or $467 million adjusted. BNSF’s operating ratio was 80.8 percent for the 2002 fourth quarter compared with 82.4 percent in 2001, or 79.4 percent adjusted.

Rose said, “Going forward, we will continue to focus on customer service, revenue quality, operating efficiencies and technological innovation, building on the excellent foundation we have laid over the past two years. As the U.S. economic recovery picks up steam in 2003, BNSF is well-positioned for strong earnings growth.”

Year-End 2002 Results

BNSF’s earnings per share for the year ended December 31, 2002, was $2.00 on a diluted basis compared with prior period earnings of $1.87 per diluted share.

Freight revenues for the year were $8.87 billion compared with 2001 revenues of $9.09 billion. Operating expenses of $7.32 billion decreased by $135 million. Operating income fell to $1.66 billion from $1.75 billion as compared with the prior period. 2001 earnings include unusual items comprised of an automotive contract settlement gain, losses on non-rail investments, work force reduction related costs and an expense associated with the early extinguishment of debt.

Common Stock Repurchases

During the 2002 fourth quarter, BNSF repurchased approximately 3 million shares of its common stock at an average price of $25.76 per share. This brings total repurchases under BNSF’s 120-million share-repurchase program to approximately 116 million shares as of December 31, 2002, at an average price of $25.97 per share since the program was announced in July 1997.

Through its subsidiary, The Burlington Northern and Santa Fe Railway Company, BNSF operates one of the largest railroad networks in North America, with 33,000 route miles covering 28 states and two Canadian provinces. BNSF is an industry leader in Web-enabling a variety of customer transactions at www.bnsf.com. The railway is among the world’s top transporters of intermodal traffic, moves more grain than any other American railroad, transports the mineral components of many of the products we depend on daily, and hauls enough coal to generate about 10 percent of the electricity produced in the United States.

Consolidated Financial Statements

Statements made in this release concerning projections or expectations of financial or operational performance, or concerning other future events or objectives or results, are "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements involve a number of risks and uncertainties and actual results may differ materially from that projected or implied in those statements. Important factors that could cause such differences include, but are not limited to, economic and industry conditions: material adverse changes in economic or industry conditions, both within the United States and globally, customer demand, effects of adverse economic conditions affecting shippers, adverse economic conditions in the industries and geographic areas that produce and consume freight, competition and consolidation within the transportation industry, the extent to which BNSF is successful in gaining new long-term relationships with customers or retaining existing ones, changes in fuel prices, changes in the securities and capital markets, and changes in labor costs and labor difficulties, including stoppages affecting either BNSF’s operations or our customers’ abilities to deliver goods to BNSF for shipment; legal and regulatory factors: developments and changes in laws and regulations and the ultimate outcome of shipper and rate claims subject to adjudication, environmental investigations or proceedings and other types of claims and litigation; and operating factors: technical difficulties, changes in operating conditions and costs, competition, and commodity concentrations, the Company’s ability to achieve its operational and financial initiatives and to contain costs, as well as natural events such as severe weather, floods and earthquakes or other disruptions of the Company’s operating systems, structures, or equipment.

The Company cautions against placing undue reliance on forward-looking statements, which reflect its current beliefs and are based on information currently available to it as of the date a forward-looking statement is made. The Company undertakes no obligation to revise forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs. In the event the Company does update any forward-looking statement, no inference should be made that the Company will make additional updates with respect to that statement, related matters, or any other forward-looking statement. Any corrections or revisions may appear in the Company’s public filings with the Securities and Exchange Commission, which are accessible at www.sec.gov or on the Company’s website at www.bnsf.com, and which you are advised to consult.

BNSF Headquarters
BNSF Railway Company
2650 Lou Menk Dr. 2nd Floor
P.O. Box 961057
Fort Worth, TX 76161-0057
Phone: (817) 352-1000