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11/6/2012


Rail News: BNSF Railway
BNSF: Revenue, expenses rise in third quarter



In the third quarter, BNSF Railway Co. registered $5.2 billion in revenue and $1 billion in net income compared with $4.9 billion and $852 million, respectively, in third-quarter 2011, according to a U.S. Securities and Exchange Commission (SEC) form 10-Q posted on the Class I's web site.

Total operating expenses climbed from $3.49 billion in the year-ago period to $3.59 billion primarily because of higher compensation and benefits, fuel and purchased services costs.

For 2012's first nine months, BNSF posted total operating revenue of $15.1 billion, up 8 percent compared with the same 2011 period. The gain primarily was driven by higher average revenue per unit, which climbed from $1,982 per car in the year-ago period to $2,067 per car, as a result of an increased rate per unit, BNSF officials said in the SEC filing.

Consumer products revenue rose from $4.4 billion to $4.9 billion; industrial products revenue increased from $3 billion to $3.7 billion; coal revenue dipped from $3.66 billion to $3.61 billion; and agricultural products revenue was relatively flat at $2.7 billion.

Consumer products volume was propelled by higher domestic intermodal business as a result of highway conversions and higher automotive demand, BNSF officials said. Meanwhile, increased shipments of petroleum and construction products, principally sand, drove industrial products revenue, they said.

Coal revenue dipped because of low natural gas prices, a mild winter and spring, and high utility stockpiles, while agricultural products business was impacted by a decrease in wheat and corn exports, which were partially offset by higher soybeans and domestic corn shipments, BNSF officials said.

Operating expenses in the nine-month period rose 4 percent to $10.8 billion primarily because increased unit volumes and inflation contributed to higher compensation and benefits costs, higher diesel prices and volume increased fuel costs, and higher volume-related and equipment maintenance costs drove up purchased service expenses.

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