News Release

Burlington Northern Santa Fe Reports Third Quarter 2001 Results

FORT WORTH, Texas, October 23, 2001:

• Earnings were $0.58 per diluted share compared with third quarter 2000 earnings of $0.64 per diluted share. Third quarter 2001 includes $.05 per diluted share related to a revenue contract settlement, partially offset by a $.03 per diluted share non-operating loss on investments.
• Freight revenues for the third quarter were $2.31 billion, even with last year.
• Free cash flow for the nine months ended September 30, 2001 was $358 million.

 Burlington Northern Santa Fe Corporation (BNSF) (NYSE: BNI) today reported third quarter 2001 earnings of $0.58 per diluted share, compared with third quarter 2000 earnings of $0.64 per diluted share.

“BNSF continues to focus on revenue quality, operating expense efficiencies and free cash flow,” said Matthew K. Rose, President and Chief Executive Officer. “As we pointed out last July, we are continuing to take steps to align our costs with the current business environment. Part of this initiative will include a reduction of our non-union workforce by approximately 400 positions. In addition, we continue to review our network to further improve our efficiencies.”

Freight revenues for the 2001 third quarter were $2.31 billion, even with last year on slightly higher ton-miles compared with the same 2000 period. Freight revenues include a $32 million settlement related to a transportation contract. Agricultural Commodities revenues increased $11 million, or 3 percent, to $331 million, primarily due to an increased demand for corn, partially offset by a decline in wheat exports and domestic demand for milo and meal.

Consumer products revenues increased $22 million, or 3 percent, to $888 million reflecting the contract settlement and double-digit growth in truckload business, offset by decreases in domestic intermodal shipments resulting from the current economic slowdown. Industrial products revenues fell $7 million or 1 percent, to $576 million because of continued production cutbacks affecting most sectors. Coal revenues decreased $30 million, or 5 percent, to $519 million, despite 3 percent higher volume as a result of increased demand for electricity, and tight Eastern coal supplies. These volume increases were offset by lower revenue per unit on certain contract renewals that occurred at the beginning of this year.

Operating expenses of $1.84 billion were $69 million higher than the 2000 third quarter. Compensation and benefits expense was $40 million higher than 2000 due to higher wages, incentive compensation accruals and health and welfare costs. Fuel expense was $9 million higher than 2000, due to a 4 cent increase in the average cost of diesel fuel. All other expenses were $20 million higher primarily due to casualty expense and purchased services.

Operating income was $502 million for the third quarter 2001 compared with $571 million a year ago.

Common Stock Repurchases

During the third quarter, BNSF repurchased 4.1 million shares at an average price of $26.19 per share. This brings total repurchases under BNSF’s 120 million share-repurchase program to 101.1 million shares as of September 30, 2001 at an average price of $25.71 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 33,500 route miles covering 28 states and two Canadian provinces. BNSF is an industry leader in Web-enabling a wide variety of customer transactions. The railway moves more intermodal traffic than any other rail system in the world, is America’s largest grain-hauling railroad, and hauls enough coal to generate more than 11 percent of the electricity produced in the United States.

Statements made in this release concerning predictions or expectations of financial or operational performance, or concerning other future events or results, are "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from that projected 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, and changes in labor costs and labor difficulties including stoppages; 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, competition and commodity concentrations, the Company’s ability to achieve its operational and financial initiatives and to contain costs, as well as such as severe weather, floods and earthquakes or other disruptions of the Company’s operating systems, structures, or equipment.

Consolidated financial statements

BNSF Headquarters
BNSF Railway Company
2650 Lou Menk Dr. 2nd Floor
P.O. Box 961057
Fort Worth, TX 76161-0057
Phone: (817) 352-1000