We always begin with safety. Nothing is more important than safety and we cannot consider ourselves successful until we have eliminated all injuries. By the close of 2018, our injury frequency and severity rates were both improved compared with 2017, but we know we must continue to drive improvement. We remain confident that we have the right safety processes in place to reach and sustain our safety vision.

We also cannot be successful unless we provide service levels that meet our customers’ expectations. Our volumes increased 4 percent over 2017 reflective of a robust economy and our ability to gain market share. However, in 2018 we were not consistent in our service. In response, we moved quickly to add resources, including people and our available locomotive fleet. We know we can and will do better.

We know we can provide consistent and reliable service that is best-in-class because we have done it. We delivered another perfect holiday shipping season in 2018 for one of the largest package delivery companies in the world. We handled more than 34,000 of their loads carrying about 70 million packages during the holidays. And we delivered that volume without a single service failure, enabling them to deliver on their promise to their customers.

This is just one example of the continued growth we are seeing in our domestic intermodal business where volumes were up 3 percent compared with 2017. The increase was driven in large part by economic growth and tight truck capacity leading to conversion from highway to rail.

Our industrial products segment volumes increased 10 percent compared with 2017. This was primarily due to strength in the industrial and energy sectors, which drove higher demand for petroleum products, rock, steel and plastics.

Volumes in our agricultural products segment increased 9 percent, due to strong export and domestic grain shipments, as well as higher fertilizer and other grain products volumes. These volumes represented an all-time record for our agricultural business.

Coal volumes decreased 1 percent compared with 2017, primarily due to plant retirements combined with competition from natural gas and renewables, partially offset by market share gains and improved export volumes. While these declines were less than we anticipated, we expect additional declines in the years ahead.

As we look to the future, we must remain focused on who we are as a railroad and what will continue to drive our success. A key part of delivering the level of service our customers expect is having the capacity to say yes to our customers’ growth. Since 2000 we have invested nearly $65 billion in our railroad, ensuring it’s in the best shape it has ever been. Our Southern Transcon route is virtually entirely double-tracked, and our Northern Corridor has been significantly rebuilt with sufficient capacity for our existing business and capability to grow with our customers. This year we will invest $3.57 billion to continue to maintain the strength and reliability of our infrastructure, while selectively expanding where we need more capacity. This positions us to use our network in new ways to increase efficiency. Through our investments and technology, we should expect to have a better cost structure as we harness our increased capabilities to achieve higher velocity, healthier asset utilization and improved productivity across all aspects of our business.

Our strength and resilience will always be reflected in the most important reason we will remain successful – our people. We can be proud of what we are achieving because what we do is important – safely moving the freight our customers need and the goods that are vital to our nation and our economy. I am optimistic about what’s ahead because I have confidence in our team and know what we can accomplish together. This Is BNSF and I know our best years are still ahead of us.

Carl Ice President and
Chief Executive Officer