News Release

Burlington Northern Santa Fe Reports Record All-Time Quarterly and Annual Revenue and EPS

FORT WORTH, Texas, January 24, 2006:

• Quarterly earnings of $1.13 per diluted share were 24 percent higher than fourth-quarter 2004 earnings of $0.91 per diluted share.
  • Fourth-quarter 2005 earnings per share includes a $0.12 per share loss related to an agreement to sell certain line segments to the state of New Mexico.
• Quarterly freight revenues increased 18 percent compared with the same 2004 period to $3.45 billion.
• Quarterly operating income of $800 million increased $132 million, or 20 percent, compared with the same 2004 period.
• Annual earnings were a record $4.01 per share.
• Full year free cash flow after dividends was $669 million, which was $143 million greater than in 2004.

Burlington Northern Santa Fe Corporation (BNSF) (NYSE: BNI) today reported record quarterly earnings of $1.13 per diluted share, a 24-percent increase over fourth-quarter 2004 earnings of $0.91 per diluted share.

"Since mid-2003, BNSF has been handling unprecedented volumes in response to strong customer demand for rail service. As a result, in 2005, BNSF for the first time moved more than 10 million units, achieved nearly $13 billion in revenues, exceeded $4 in earnings per share and attained $669 million in free cash flow after dividends," said Matthew K. Rose, BNSF Chairman, President and Chief Executive Officer.

Fourth-quarter 2005 freight revenues increased $527 million, or 18 percent, to a quarterly record of $3.45 billion compared with 2004 fourth-quarter freight revenues of $2.92 billion. This resulted from a 3-percent increase in units, a 6-percent increase in price and a 9-percent increase in fuel surcharges. Revenue for the fourth quarter of 2005 included fuel surcharges of $424 million compared with $150 million in the fourth quarter of 2004.

During the fourth quarter, BNSF experienced double-digit revenue increases in three of the Company’s four business groups, as compared with the fourth quarter of 2004. Consumer Products revenues increased $273 million, or 23 percent, to $1,454 million, primarily due to strong revenue increases in the intermodal sectors as well as a favorable $21 million arbitration settlement. Industrial Products revenues increased $132 million, or 21 percent, to $763 million primarily due to double-digit revenue growth in the building products, construction products and petroleum products sectors. Agricultural Products revenues were up $100 million, or 20 percent, to $592 million, due largely to strong exports through the Gulf and Pacific Northwest ports. Coal revenues rose by $22 million, or 4 percent, to $637 million on flat volumes.

As previously announced, the Company recorded a $71 million pre-tax loss in the fourth quarter of 2005 related to an agreement to sell certain line segments to the state of New Mexico. Proceeds from the sale of $76 million are expected to be received over the next 3 years, and the Company expects to recognize a gain of approximately $0.04 per share in the first quarter of 2006. Including the loss from the line sale, operating expenses for the fourth quarter of 2005 were $2.75 billion compared with fourth-quarter 2004 operating expenses of $2.31 billion. The $440 million increase in operating expenses primarily relates to higher fuel expenses of $210 million, a 3-percent increase in units, as well as the line sale loss. Additionally, BNSF’s quarterly operating ratio improved to 76.8 percent.

For 2005, BNSF achieved operating revenues of nearly $13 billion, a 19-percent increase over 2004. This includes double-digit increases in three of the four business groups. In addition, BNSF continued to improve its operating leverage, which enabled the Company to reach $2.92 billion in operating income and improve its operating ratio. Further, BNSF achieved $4.01 earnings per share for 2005 compared with $2.10 for 2004.

BNSF’s subsidiary, 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 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 is an industry leader in Web-enabling a variety of customer transactions at www.bnsf.com.

BNSF’s free cash flow after dividends, 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 free cash flow after dividends excluding the change in BNSF’s accounts receivable sales program (A/R sales program) provides meaningful information about BNSF’s ability to generate cash flows from the operation of its business. Below is the calculation of free cash flow after dividends for the full years 2005 and 2004.

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