EXHIBIT 99.2
NEWS
Contact: Richard Russack
FOR IMMEDIATE RELEASE
(817) 352-6425
Burlington Northern Santa Fe Reports Improved Third Quarter Results
. Net income of $317 million or $0.66 per share -- up 12 percent from
net income of $283 million or $0.60 per share in 1997.
. Revenues of $2.3 billion for the third quarter 1998 were $169 million
or 8 percent higher than third quarter 1997.
. Third quarter 1998 operating income of $614 million -- $73 million or
13 percent higher than a year ago.
. Operating ratio for the third quarter improved to 73.4 percent
compared with 74.7 percent in 1997.
FORT WORTH, Texas, October 20, 1998 -- Burlington Northern Santa Fe
Corporation (BNSF)(NYSE: BNI) today reported third quarter 1998 net income of
$317 million, or $0.66 per share on a diluted basis, compared with third quarter
1997 net income of $283 million, or $0.60 per share.
"Coal, Intermodal and Merchandise volume and revenue growth, coupled with
effective expense controls, contributed to the 12 percent increase in third
quarter 1998 net income over the prior year," said Robert D. Krebs, BNSF
chairman, president and chief executive officer.
Revenues of $2.3 billion for the third quarter 1998 were $169 million or 8
percent higher than third quarter 1997. Coal revenues improved $65 million or
13 percent to $565 million on a 11 percent increase in carloadings. Intermodal
growth in the direct marketing, international and truckload sectors produced
revenues of $659 million, $69 million or 12 percent greater than
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last year. Merchandise revenues grew to $724 million, an increase of $49 million
or 7 percent, driven by volume increases in all sectors. Agricultural commodity
revenues decreased $2 million or 1 percent to $267 million. Automotive revenues
decreased $15 million or 15 percent to $86 million, primarily due to the loss of
a contract with Ford Motor Company as previously announced.
Operating expenses of $1.7 billion increased $96 million or 6 percent over
the prior-year period despite an 8 percent increase in units handled. All
expense categories were higher primarily as a result of increased business
levels. Operating ratio improved to 73.4 percent for the third quarter 1998
compared with 74.7 percent a year earlier.
Common Stock Repurchases and Stock Split
During the 1998 third quarter, BNSF repurchased 3.4 million shares at an
average price of $30.86 per share, bringing total 1998 repurchases under BNSF's
share-repurchase program to 3.6 million shares at an average price of $30.72 per
share. Additionally, a three-for-one common stock split in the form of a stock
dividend and a 20 percent increase in the common stock dividend on the post-
split stock became effective in the third quarter of 1998. All per-share
information has been restated to reflect the three-for-one stock split.
Nine-months 1998 Results
BNSF adjusted net income for the nine months ended September 30, 1998, was
$827 million, or $1.73 per share on a diluted basis, a 24 percent increase from
1997 net income of $668 million, or $1.42 per share. Including a one-time gain
on the March 1998 sale of substantially all of BNSF's interest in Santa Fe
Pacific Pipeline Partners, L.P., BNSF reported net income for the first
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nine months of 1998 of $859 million or $1.80 per common share. Revenues for the
period were $6.7 billion, up 7 percent. Operating expenses were $5.1 billion for
the first nine months of 1998, a 4 percent increase over the same 1997 period.
Operating income was $1.6 billion for the 1998 period compared with $1.3 billion
a year ago. Operating ratio improved to 76.2 percent for the first nine months
of 1998 compared with 78.7 percent a year earlier.
Through its subsidiary, The Burlington Northern and Santa Fe Railway
Company, BNSF operates one of the largest railroad networks in the United
States, with 34,000 route miles covering 28 states and two Canadian provinces.
Consolidated financial statements follow.
[BNSF LOGO]
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Burlington Northern Santa Fe Corporation
Adjusted Consolidated Statement of Income
(Unaudited, In millions, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
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1998 1997 1998 1997
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Revenues $2,307 $2,138 $6,688 $6,226
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Operating Expenses
Compensation and benefits 695 661 2,087 2,006
Purchased services 243 217 707 644
Depreciation and amortization 211 195 618 574
Equipment rents 203 200 597 601
Fuel 178 173 541 555
Materials and other 163 151 548 517
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Total Operating Expenses 1,693 1,597 5,098 4,897
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Operating Income 614 541 1,590 1,329
Interest Expense 91 86 264 255
Other Income (Expense)--Net (19) (10) (13) (13)
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Income Before Income Taxes 504 445 1,313 1,061
Income Tax Expense 187 162 486 393
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Adjusted Net Income $ 317 $ 283 $ 827 $ 668
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Adjusted Diluted Earnings Per Share $ 0.66 $ 0.60 $ 1.73 $ 1.42
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Reported Earnings
Net Income $ 317 $ 283 $ 859 $ 668
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Basic Earnings Per Share $ 0.67 $ 0.61 $ 1.82 $ 1.44
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Diluted Earnings Per Share $ 0.66 $ 0.60 $ 1.80 $ 1.42
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Average Shares Outstanding
Basic $471.4 465.8 470.9 463.4
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Diluted 477.0 472.2 476.8 470.3
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Statement Explanation:
1998 adjusted net income and diluted earnings per share exclude other income
attributable to a first quarter gain on pipeline partnership sale of $32 million
($67 million pre-tax) or $0.07 per share after tax. All per share information
has been restated to reflect the third quarter 1998 three-for-one stock split.
Burlington Northern Santa Fe Corporation
(Unaudited, In millions)
Condensed Consolidated Balance Sheet
September 30, December 31,
1998 1997
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Assets
Cash and cash equivalents $ 17 $ 31
Other current assets 1,199 1,203
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Total current assets 1,216 1,234
Properties and other assets 21,044 20,102
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Total Assets $22,260 $21,336
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Liabilities and Stockholders' Equity
Current liabilities $ 2,116 $ 2,060
Long-term debt and commercial paper 5,154 5,181
Deferred income taxes 5,479 5,175
Other liabilities 1,970 2,108
Stockholders' equity 7,541 6,812
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Total Liabilities and Stockholders' Equity $22,260 $21,336
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Condensed Consolidated Statement of Cash Flows
Three Months Ended Nine Months Ended
September 30, September 30,
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1998 1997 1998 1997
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Cash Provided by Operating Activities $ 551 $ 477 $ 1,552 $ 1,110
Cash Used for Capital Expenditures (606) (631) (1,558) (1,476)
Net Proceeds of Borrowings 192 220 398 542
Dividends Paid (47) (46) (141) (138)
Purchase of BNSF Common Stock (104) - (110) -
Cash Used for Other Activities - (17) (155) (40)
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Increase (Decrease) in Cash and Cash Equivalents $ (14) $ 3 $ (14) $ (2)
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Burlington Northern Santa Fe Corporation
Supplemental Data
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1998 1997 1998 1997
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Revenues (In millions)
Intermodal $ 659 $ 590 $ 1,825 $ 1,660
Coal 565 500 1,678 1,471
Agricultural Commodities 267 269 771 800
Automotive 86 101 278 315
Merchandise
Chemicals 213 200 632 614
Metals and Minerals 208 199 606 559
Forest Products 159 145 464 428
Consumer Goods 144 131 420 377
------ ------ ------ ------
Total Freight Revenues 2,301 2,135 6,674 6,224
Other Revenues 6 3 14 2
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Total Revenues $2,307 $2,138 $6,688 $6,226
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Operating ratio 73.4% 74.7% 76.2% 78.7%
Revenue ton miles (billions) 118.4 106.1 347.3 309.6
Freight revenue per thousand revenue ton miles $19.44 $20.12 $19.22 $20.11
Cars/Units (thousands) 2,038 1,884 5,851 5,393
Average revenue per car/unit $1,129 $1,133 $1,141 $1,154
Employees (average) 45,055 44,060 44,612 43,135