2. BURLINGTON NORTHERN SANTA FE CORPORATION
INVESTORS' REPORT - UNAUDITED
2nd Quarter 2002
INDEX
Page
Earnings Press Release 1-3
Consolidated Income Information 4
Consolidated Balance Sheet Information 5
Consolidated Cash Flow Information 6
Operating Statistics 7
Revenue Statistics by Commodity 8
Capital Expenditures and Track Maintenance 9
3. NEWS
Contact: Richard Russack FOR IMMEDIATE RELEASE
(817) 867-6425
Burlington Northern Santa Fe Reports
Second Quarter 2002 Results
• Second-quarter 2002 earnings of $0.51 per diluted share compared with
second-quarter 2001 earnings of $0.50 per diluted share.
• Freight revenues were $2.18 billion, down 3 percent.
• Second-quarter operating income of $405 million is $23 million lower than
second-quarter 2001.
• Other income was $15 million higher than the same period in 2001 reflecting
increased land sales.
FORT WORTH, Texas, July 23, 2002 - - Burlington Northern Santa Fe Corporation
(BNSF) (NYSE: BNI) today reported second-quarter 2002 earnings of $0.51 per diluted share,
compared with second-quarter 2001 earnings of $0.50 per diluted share.
“BNSF increased earnings per share by 2 percent despite revenues being impacted by
continued softness in most of our product sectors,” said Matthew K. Rose, BNSF Chairman,
President and Chief Executive Officer. “BNSF maintained its focus on cost control initiatives,
while expanding product offerings and recording its third consecutive quarterly record on-time
performance for our customers.”
Freight revenues for the 2002 second quarter were $2.18 billion, down 3 percent
compared with the same 2001 period. Consumer Products revenues increased $3 million, or less
than one percent, to $848 million reflecting increased intermodal volumes in the international
and truckload businesses; this was partially offset by decreased automotive shipments and lower
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4. levels of traffic in other intermodal sectors. Industrial Products revenues fell $1 million to $535
million, as a 12 percent increase in Chemicals was more than offset by general softness in the
construction products sector. Coal revenues decreased $44 million, or 8 percent, to $488 million,
reflecting reduced demand. Agricultural Products revenues declined $16 million, or 5 percent, to
$312 million, primarily due to weak wheat and corn exports.
Operating expenses of $1.8 billion were $41 million or 2 percent lower than the same
period in 2001. Second-quarter operating expenses primarily reflect lower fuel expense due to
an 11-cent reduction in fuel price including hedge compared with 2001, and reduced equipment
rents.
Operating income was $405 million for the 2002 second quarter compared with $428
million a year ago. The operating ratio increased to 81.4 percent for the 2002 second quarter
compared with 80.9 percent in the same 2001 period.
Interest expense of $105 million was $10 million, or 9 percent, lower than the same
period in 2001, primarily as a result of lower short-term interest rates. Other income was $15
million higher than the same period in 2001 reflecting increased land sales.
Common Stock Repurchases
During the 2002 second quarter, BNSF repurchased 4.2 million shares of its common
stock at an average price of $28.58 per share. This brings total repurchases under BNSF’s 120
million share-repurchase program to 110.1 million shares as of June 30, 2002, at an average price
of $25.92 per share since the program was announced in July 1997.
Through The Burlington Northern and Santa Fe Railway Company, BNSF operates one
of the largest railroad networks in the United States, with 33,000 route miles covering 28 states
and two Canadian provinces.
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5. Consolidated financial statements follow.
Statements made in this release concerning predictions or expectations of financial or
operational performance, or concerning other future events or results, are quot;forward-looking
statementsquot; 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, 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 claims, environmental investigations or proceedings and other
types of claims and litigation; and operating factors: technical difficulties, changes in operating
conditions and costs, and competition and commodity concentrations, 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.
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6. Burlington Northern Santa Fe Corporation
Consolidated Income Information *
(in millions, except per share data)
Three Months Six Months
Ended June 30, Ended June 30,
2002 2001 2002 2001
Operating revenues
Freight revenues $ 2,183 $ 2,241 $ 4,321 $ 4,504
Other revenues 24 30 49 60
Total operating revenues 2,207 2,271 4,370 4,564
Operating expenses
Compensation and benefits 696 694 1,410 1,423
Purchased services 279 274 553 536
Depreciation and amortization 231 230 461 458
Equipment rents 179 190 355 377
Fuel 207 246 391 503
Materials and other 210 209 427 420
Total operating expenses 1,802 1,843 3,597 3,717
Operating income 405 428 773 847
Interest expense 105 115 214 235
Other (income) expense, net (10) 5 (26) 78
Income before income taxes 310 308 585 534
Income tax expense 116 113 219 199
Income before extraordinary charge 194 195 366 335
Extraordinary charge, net of tax - - - (6)
Net income $ 194 $ 195 $ 366 $ 329
Diluted earnings per share after
extraordinary charge $ 0.51 $ 0.50 $ 0.95 $ 0.84
Diluted average shares outstanding 382.3 393.8 383.9 393.9
Operating ratio 81.4% 80.9% 82.1% 81.2%
* Year-to-date 2001 earnings include unusual items related to non-rail investment charges of $0.10 per diluted share and an
extraordinary charge related to the early extinguishment of debt of $0.02 per diluted share.
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7. Burlington Northern Santa Fe Corporation
Consolidated Balance Sheet Information
(in millions, except per share amounts)
June 30, December 31,
2002 2001
Assets
Current assets:
Cash and cash equivalents $ 178 $ 26
Accounts receivable, net 197 172
Materials and supplies 217 191
Current portion of deferred income taxes 328 306
Other current assets 138 28
Total current assets 1,058 723
Property and equipment, net 23,503 23,110
Other assets 920 888
Total assets $ 25,481 $ 24,721
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and other current liabilities $ 1,903 $ 1,873
Long-term debt due within one year 291 288
Total current liabilities 2,194 2,161
Long-term debt and commercial paper 6,714 6,363
Deferred income taxes 6,958 6,731
Casualty and environmental liabilities 432 423
Employee merger and separation costs 184 216
Other liabilities 998 978
Total liabilities 17,480 16,872
Stockholders' equity:
Common stock and additional paid-in capital 5,667 5,589
Retained earnings 5,322 5,048
Treasury stock (2,955) (2,745)
Unearned compensation (50) (34)
Other 17 (9)
Total stockholders' equity 8,001 7,849
Total liabilities and stockholders' equity $ 25,481 $ 24,721
Book value per share $ 20.98 $ 20.34
Common shares outstanding 381.3 385.8
Net debt to total capital * 46.0% 45.8%
* Net debt is calculated as total debt less cash.
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8. Burlington Northern Santa Fe Corporation
Consolidated Cash Flow Information
(in millions)
Three Months Six Months
Ended June 30, Ended June 30,
2002 2001 2002 2001
Operating activities
Net income $ 194 $ 195 $ 366 $ 329
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 231 230 461 458
Deferred income taxes 122 68 190 107
Employee merger and separation costs paid (11) (10) (31) (27)
Other - net (29) (8) (33) 59
Changes in working capital 20 96 (71) 5
Net cash provided by operating activities 527 571 882 931
Investing activities and dividends paid
Capital expenditures (381) (403) (641) (637)
Other - net 9 50 (98) (16)
Dividends paid (46) (48) (92) (96)
Free cash flow after dividends paid 109 170 51 182
Financing activities
Purchase of BNSF common stock (119) (92) (199) (157)
Proceeds from stock options exercised 8 56 35 101
Other - net (2) (8) (2) (17)
Net debt paid (incurred) $ (4) $ 126 $ (115) $ 109
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9. Burlington Northern Santa Fe Corporation
Operating Statistics
Three Months Six Months
Ended June 30, Ended June 30,
2002 2001 2002 2001
Cars/units (in thousands) 2,036 2,016 3,963 4,002
Average revenue per car/unit $ 1,072 $ 1,112 $ 1,090 $ 1,125
Revenue ton miles (in millions) 120,123 122,510 240,245 248,237
Gross ton miles (in millions) 214,334 220,109 426,795 443,315
RTM/GTM 0.560 0.557 0.563 0.560
Freight revenue/thousand RTM $ 18.17 $ 18.29 $ 17.99 $ 18.14
Operating expense/thousand RTM $ 15.00 $ 15.04 $ 14.97 $ 14.97
Freight revenue/thousand GTM $ 10.19 $ 10.18 $ 10.12 $ 10.16
Operating expense/thousand GTM $ 8.41 $ 8.37 $ 8.43 $ 8.38
Compensation and benefits/thousand GTM $ 3.25 $ 3.15 $ 3.30 $ 3.21
Average employees 37,838 39,747 37,432 39,008
Period end employees 37,577 39,490 37,577 39,490
Thousand RTM/average employee 3,175 3,082 6,418 6,364
Thousand GTM/average employee 5,665 5,538 11,402 11,365
Gallons of fuel used (in millions) 283 293 566 590
Average price per gallon of fuel (cents) (a) 73.1 84.0 69.1 85.3
GTM/gallon of fuel 757 751 754 751
Freight train miles (in millions) 36 36 71 72
GTM/freight train hours (in thousands) 146 138 147 142
Route Miles Operated 32,954 33,340 32,954 33,340
(a) Includes handling, taxes and hedge effect.
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11. Burlington Northern Santa Fe Corporation
Capital Expenditures and Track Maintenance
Three Months Six Months
Ended June 30, Ended June 30,
2002 2001 2002 2001
Capital expenditures (in millions)
Maintenance of way
Rail $ 62 $ 71 $ 105 $ 111
Ties 81 84 135 127
Surfacing 45 41 68 58
Other 83 82 144 146
Total maintenance of way 271 278 452 442
Mechanical 34 44 62 70
Information services 23 21 41 30
Other 21 18 27 27
Total maintenance of business 349 361 582 569
Terminal and line expansion 27 39 49 62
Other 5 3 10 6
Total capital expenditures $ 381 $ 403 $ 641 $ 637
Operating lease commitments $ 100 $ 97 $ 106 $ 97
Total capital commitments $ 481 $ 500 $ 747 $ 734
Track maintenance
Track miles of rail laid
Maintenance of business 229 254 319 326
Expansion projects 2 12 2 12
Total 231 266 321 338
Cross ties inserted (thousands)
Maintenance of business 971 846 1,449 1,176
Expansion projects 6 39 7 40
Total 977 885 1,456 1,216
Track resurfaced (miles) 4,179 3,519 5,727 4,771
Statement Explanation
Certain prior period amounts have been reclassified to conform with the current period presentation.
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