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News Release

BNSF Announces $2.4 Billion Capital Commitment Program for 2006; About $400 Million Again Slated for Track/Facilities Expansion

FORT WORTH, TEXAS, January 24, 2006:

BNSF Railway Company (BNSF) today announced its planned $2.4 billion capital commitment program for 2006, about 10 percent higher than 2005’s spending. For the second consecutive year, BNSF anticipates investing about $400 million in track and facilities to expand capacity – for customers in coal, agricultural products, industrial products and intermodal – to meet increasing demand for consistent freight rail service.

Matthew K. Rose, BNSF Chairman, President and Chief Executive Officer, pointed out that, "We are increasing our capital investment program in 2006 to meet anticipated future volumes because we are confident that our Return on Invested Capital (ROIC) will continue to improve. For 2005, ROIC was 10.1 percent, a significant improvement from 7.9 percent in 2004 and 6.6 percent in 2003."

"For 2006, BNSF currently expects to spend more than $1.4 billion to keep our infrastructure strong by replacing track, signal systems, structures, rebuilding rolling stock, and implementing new technologies," Rose said. "Compared with 2005, this represents an increase of about $100 million. Also, we will acquire 310 locomotives at a cost of about $550 million."

Some of the major 2006 capacity expansion programs are:

  • Southern Transcon -- Double- or triple-track another 40 miles and start building a second main line across Abo Canyon, a project scheduled for completion in 2007;
  • Coal Route – Expand Lincoln, Nebraska, Yard, and add about 50 miles of double- and triple-track on the Powder River Basin Joint Line and in Nebraska;
  • Intermodal Facilities – Expansions at Alliance, Texas; Houston; Logistics Park –Chicago; Memphis; San Bernardino, California; Seattle; Los Angeles, and St. Paul, Minnesota.
  • Other Infrastructure – Extend sidings in Washington, Texas and British Columbia; expand and improve fueling facilities in Nebraska, Texas, Illinois and New Mexico.

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

BNSF’s ROIC, as discussed above, is a non-GAAP measure and should be considered in addition to, but not as a substitute or preferable to, other information prepared in accordance with GAAP. However, the information is included herein as management believes that ROIC provides meaningful information that can be useful in assessing the long-term performance of the Company’s business and in evaluating potential strategic transactions. Below is the calculation of ROIC for the years ended December 31, 2005, 2004, and 2003.

Return on Invested Capital Reconciliation




Average capitalization (a)








Operating income







Other expense







Financing charges (b)







Exclude 2004 charge for change in environmental and asbestos estimate







Taxes (c)







After-tax income excluding financing charges and 2004 charge








Return on invested capital (d)







(a) Average capitalization is calculated as the 13-month moving average of the sum of net debt (total debt less cash and cash equivalents), stockholders’ equity, net present value of future operating lease commitments, and the receivables sold under the accounts receivable sales program (A/R sales).

(b) Financing charges represent the estimated interest expense included in operating lease payments and A/R sales fees.

(c) Taxes are calculated as the sum of monthly net operating income, other expense, A/R sales, and an operating lease interest factor (estimated interest expense included in operating lease payments) multiplied by a federal tax rate respective to each month.

(d) Return on invested capital is calculated as the total after-tax income excluding financing charges and 2004 charge divided by average capitalization.

Statements made in this release concerning predictions or expectations of financial or operational performance, including the Company’s planned capital commitment program, are "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from that projected in those statements. Important factors that could cause actual results to differ materially include, but are not limited to: material adverse changes in economic or industry conditions, both in the United States and globally, changes in customer demand, changes in fuel prices, changes in the securities and capital markets, changes in crew availability, labor costs and labor difficulties, including stoppages affecting either BNSF Railway Company’s operations or our customers’ abilities to deliver goods to BNSF for shipment, changes in operating conditions and costs, and natural events such as severe weather, floods and earthquakes or man-made or other disruptions of BNSF Railway 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 statements. 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 and on the Company’s website at www.bnsf.com, and which investors 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

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