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News ReleaseBurlington Northern Santa Fe Reports Double-Digit EPS Increase For 2003 Fourth QuarterFORT WORTH, Texas, January 27, 2004:
Burlington Northern Santa Fe Corporation (BNSF) (NYSE: BNI) today reported record fourth-quarter 2003 earnings of $0.61 per share, or 13-percent, higher than fourth-quarter 2002 earnings of $0.54 per share.
“We’re pleased with both the double-digit earnings per share increase and the freight revenue growth of 8 percent realized by BNSF in the fourth quarter. Our revenue growth was again driven by strong volumes in our Consumer Products, Industrial Products and Agricultural businesses,” said Matthew K. Rose, BNSF Chairman, President and Chief Executive Officer. “For 2004, we anticipate continued revenue growth as both the global and U.S economies continue to expand,” Rose added.
Freight revenues for the fourth quarter increased $185 million, or 8 percent, to a record $2.46 billion compared with 2002 fourth-quarter revenues of $2.27 billion. Fourth-quarter freight revenues included fuel surcharges of $31 million compared with $14 million in the prior year. Consumer Products revenues increased $123 million, or 15 percent, to a record $969 million reflecting increased volumes in the international, truckload and perishables sectors. Industrial Products revenues rose $51 million, or 10 percent, to $542 million reflecting increased business in steel, taconite, clay and minerals in the construction products sector along withmilitary, lumber and paper traffic in the building products sector. Agricultural Products revenues were up $26 million, or 7 percent, to $419 million, due to increased export demand for grain and greater ethanol shipments from
Operating expenses of $2.02 billion were $150 million, or 8 percent, higher than the same period in 2002, principally driven by a 9-percent increase in units handled and increased fuel prices.
For the fourth quarter of 2003, operating income rose $41 million, or 9 percent, to $477 million compared with the fourth quarter of 2002. BNSF’s operating ratio was 80.6 percent compared with 80.8 percent for the same period in the prior year.
Year-End 2003 Results
BNSF’s earnings per share before the cumulative effect of a change in accounting principle was $2.09 for the year ended
In the first quarter of 2003, BNSF adopted Statement of Financial Accounting Standards (SFAS) No. 143, Accounting for Asset Retirement Obligations. The statement disallowed the accrual of asset retirement costs that are not legal obligations. The net cumulative effect of this accounting change on years prior to 2003 was an increase to net income of $39 million, net of tax, or $0.10 per share.
Record freight revenues of $9.29 billion were 5 percent higher than 2002 freight revenues of $8.87 billion. Freight revenues in 2003 included fuel surcharges of $110 million, compared with $26 million in the prior year. Operating expenses of $7.75 billion increased by $425 million, or 6 percent, driven primarily by a $240 million, or 29 percent, year-over-year increase in fuel expense and a 6 percent year-over-year increase in units handled. In spite of increased fuel prices, 2003 operating income grew to $1.67 billion. BNSF’s operating ratio was 82.1 percent compared with 81.3 percent in the prior year.
Common Stock Repurchases
During the fourth quarter of 2003, BNSF repurchased approximately 1.3 million shares of its common stock at an average price of $29.68 per share. Approximately 8.0 million shareswere repurchased during 2003 at an average price of $27.25 per share. This brings total repurchases under BNSF’s 150-million share-repurchase program to approximately 124 million shares as of
BNSF’s subsidiary, The Burlington Northern and Santa Fe Railway Company, operates one of the largest railroad networks in
Consolidated Financial Statements
Financial information follows.
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, commodity concentrations, 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, 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 (SEC), which are accessible at www.sec.gov or on the Company’s website at www.bnsf.com, and which you are advised to consult. Investors are encouraged to read the Company's earnings release and investors' report together with its SEC filings for a more complete picture and better understanding of the Company and its financial disclosures. BNSF Headquarters |
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