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8/7/2018



Rail News: BNSF Railway

BNSF posts revenue, income growth in Q2


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BNSF Railway Co. reported second-quarter net income rose 37 percent to $1.3 billion and total revenue climbed 12 percent to nearly $5.9 billion compared with the same quarter a year ago.

The Class I attributed the revenue growth to a 5 percent increase in unit volume, according to a performance summary posted on BNSF's website.

Operating income during the quarter climbed 6 percent to $1.88 billion compared with second-quarter 2017.

BNSF posted the following volume highlights for the quarter compared with a year ago:
• Consumer products rose 5 percent due to higher intermodal volumes. The increases were driven by economic growth and tight truck capacity, leading to a conversion from highway to rail, as well as strength in imports and containerized agricultural product exports, offset by a contract loss.
• Industrial products were up 10 percent, primarily due to strength in the energy and industrial sectors that drove demand for sand, petroleum products, steel and plastics.
• Agricultural products increased 9 percent due to strong export and domestic grain shipments, as well as higher fertilizer and other grain products.
• Coal remained relatively flat for the quarter due to plant retirements partially offset by market-share gains and improved export volume.

Operating expenses for the quarter were up 15 percent compared with the same period in 2017, primarily due to inflation, including higher fuel prices, and higher volumes. Compensation and benefits expenses rose 6 percent; purchased services increased 17 percent; and materials and other expenses climbed 54 percent.

The Class I's capital commitments for the year will be $3.4 billion. Those capital expenses will include $2.4 billion on maintenance and replacement projects —such as replacing and upgrading rail, ties and ballast — as well as on maintaining rolling stock.

BNSF also will spend $500 million on expansion and efficiency projects along its southern and northern Transcon routes; and $400 million on freight cars and other equipment acquisitions. Another $100 million has been allocated to continued implementation of positive train control.



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