Burlington Northern Santa Fe Reports All-Time Record EPS and Operating Income

FORT WORTH, Texas, January 23, 2007:

Fourth-quarter 2006 earnings per diluted share were $1.42, or 26 percent higher than fourth-quarter 2005 earnings per diluted share of $1.13.

Fourth-quarter freight revenues increased $323 million to $3.77 billion on a 4-percent increase in volume.

Operating income was $942 million, an increase of $142 million, or 18 percent, compared with the fourth quarter of 2005.

For 2006, BNSF achieved $5.10 earnings per diluted share compared with $4.01 for 2005.

For 2006, BNSF exceeded $1 billion in free cash flow before dividends and achieved $712 million in free cash flow after dividends.

Burlington Northern Santa Fe Corporation (BNSF) (NYSE: BNI) today reported record quarterly earnings of $1.42 per diluted share, a 26-percent increase over fourth-quarter 2005 earnings of $1.13 per diluted share.

"BNSF continued to have industry-leading volume growth in the fourth quarter of 2006, and we experienced our 19th consecutive quarter of year-over-year volume increases," said Matthew K. Rose, BNSF Chairman, President and Chief Executive Officer. "Looking forward, we anticipate strong demand will continue for freight rail transportation, reflecting our diverse portfolio of businesses and leading to improved revenues and earnings."

Fourth-quarter 2006 freight revenues increased $323 million, or 9 percent, to $3.77 billion compared with $3.45 billion in the prior year. Revenue for the fourth quarter of 2006 included fuel surcharges of approximately $450 million compared with approximately $400 million for the fourth quarter of 2005. The increase in fuel surcharges was driven primarily by increased participation in BNSF's fuel surcharge program.

Coal revenues rose by $138 million, or 22 percent, to $775 million, as a result of record loadings of Powder River Basin coal, contractual rate escalations and a favorable mix of traffic. Agricultural Products revenues were up $53 million, or 9 percent, to $646 million, due primarily to strength in corn and fertilizer shipments. Consumer Products revenues increased $80 million, or 6 percent, to $1.46 billion reflecting double-digit increases in the international intermodal and automotive sectors, partially offset by a reduction in the domestic intermodal sector. Industrial Products revenues increased $52 million, or 6 percent, to $885 million led by double-digit revenue growth in chemicals and plastics, petroleum, and construction products. This was partially offset by softness in demand for building products.

Operating expenses for the fourth quarter of 2006 were $2.94 billion compared with fourth-quarter 2005 operating expenses of $2.75 billion. The $190 million increase in operating expenses was largely driven by a $96 million increase in fuel expense primarily reflecting a declining hedge position as well as a 4-percent increase in unit volumes. BNSF achieved record quarterly operating income of $942 million, an increase of $142 million, or 18 percent, compared with the fourth quarter of 2005. BNSF’s operating ratio for the fourth quarter was 75.0 percent.

Fourth-quarter 2005 operating income includes a favorable $26 million arbitration settlement and a net $57 million loss from two commuter-related transactions. Fourth-quarter 2006 net income includes a $12 million increase over 2005 for income tax provision adjustments related to prior periods.

For 2006, BNSF achieved operating revenues of nearly $15 billion, a 15-percent increase over 2005, which includes double-digit increases in each of the Company's four business groups. This increase in revenues and the improvement in the Company's operating ratio enabled BNSF to reach $3.5 billion in operating income, an increase of 20 percent over 2005. As a result, BNSF achieved $5.10 earnings per diluted share for 2006 compared with $4.01 for 2005.

BNSF'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-sulphur 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.

BNSF's free cash flow, 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 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 for 2006.

Free Cash Flow Calculation (in millions)

2006

Net cash provided by operating activities

$ 3,108

Net cash used for investing activities

(2,086)

Free Cash Flow before Dividends

1,022

Dividends paid

(310)

Free Cash Flow after Dividends

$ 712