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Rail News: Financials

BNSF cites drivers for nine-month revenue, cost increases in SEC filing


In 2011’s first nine months, BNSF Railway Co. generated revenue of $14.3 billion, up 35 percent compared with the period between Feb. 13 (when the Class I became a private company owned by Berkshire Hathaway Inc.) and Sept. 30, 2010, according to a Form 10-Q the Class I recently filed with the U.S. Securities and Exchange Commission.

The revenue increase is directly attributable to comparing operating results from 273-day and 230-day periods, which primarily caused a 21 percent increase in unit volumes, BNSF officials wrote in the form.

In addition, the following changes in underlying trends, based on a comparable number of days, impacted the revenue gain, they said:
• consumer products revenue included increased unit volumes for domestic intermodal resulting from tightening truck capacity and highway conversions to rail, as well as international volumes outpacing West Coast imports;
• coal revenue reflected lower unit volumes, partially resulting from the impacts of severe flooding along key coal routes;
• industrial products revenue included increased unit volumes primarily driven by increased demand for construction and petroleum products;
• agricultural products revenue reflected increased wheat shipments resulting from strong export demand; and
• average revenue per car increased as a result of increased rates per car and higher fuel surcharges, which were driven by increased fuel prices.

Operating expenses for the nine-month period totaled $10.6 billion, up 38 percent compared with the Feb. 13-Sept. 30, 2010, period.

In addition to the differing comparison periods, the following changes in underlying trends, based on a comparable number of days, impacted expenses, BNSF officials wrote:
• increased unit volumes, wage and health and welfare inflation, training and weather-related costs contributed to an increase in compensation and benefits expenses;
• higher fuel prices accounted for the majority of increased fuel expenses;
• purchased services expenses rose due to higher volume-related costs, including purchased transportation for BNSF Logistics, and weather impacts; and
• higher locomotive and freight-car material costs, increased crew transportation, travel costs, and higher casualty and other costs increased materials and other expenses.

Contact Progressive Railroading editorial staff.

More News from 11/22/2011