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bnsf 2Q 2002 Investors Report
 

bnsf 2Q 2002 Investors Report

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    bnsf 2Q 2002 Investors Report bnsf 2Q 2002 Investors Report Document Transcript

    • 2nd Quarter 2002 Investors’ Report
    • BURLINGTON NORTHERN SANTA FE CORPORATION INVESTORS' REPORT - UNAUDITED 2nd Quarter 2002 INDEX Page Earnings Press Release 1-3 Consolidated Income Information 4 Consolidated Balance Sheet Information 5 Consolidated Cash Flow Information 6 Operating Statistics 7 Revenue Statistics by Commodity 8 Capital Expenditures and Track Maintenance 9
    • NEWS Contact: Richard Russack FOR IMMEDIATE RELEASE (817) 867-6425 Burlington Northern Santa Fe Reports Second Quarter 2002 Results • Second-quarter 2002 earnings of $0.51 per diluted share compared with second-quarter 2001 earnings of $0.50 per diluted share. • Freight revenues were $2.18 billion, down 3 percent. • Second-quarter operating income of $405 million is $23 million lower than second-quarter 2001. • Other income was $15 million higher than the same period in 2001 reflecting increased land sales. FORT WORTH, Texas, July 23, 2002 - - Burlington Northern Santa Fe Corporation (BNSF) (NYSE: BNI) today reported second-quarter 2002 earnings of $0.51 per diluted share, compared with second-quarter 2001 earnings of $0.50 per diluted share. “BNSF increased earnings per share by 2 percent despite revenues being impacted by continued softness in most of our product sectors,” said Matthew K. Rose, BNSF Chairman, President and Chief Executive Officer. “BNSF maintained its focus on cost control initiatives, while expanding product offerings and recording its third consecutive quarterly record on-time performance for our customers.” Freight revenues for the 2002 second quarter were $2.18 billion, down 3 percent compared with the same 2001 period. Consumer Products revenues increased $3 million, or less than one percent, to $848 million reflecting increased intermodal volumes in the international and truckload businesses; this was partially offset by decreased automotive shipments and lower 1
    • levels of traffic in other intermodal sectors. Industrial Products revenues fell $1 million to $535 million, as a 12 percent increase in Chemicals was more than offset by general softness in the construction products sector. Coal revenues decreased $44 million, or 8 percent, to $488 million, reflecting reduced demand. Agricultural Products revenues declined $16 million, or 5 percent, to $312 million, primarily due to weak wheat and corn exports. Operating expenses of $1.8 billion were $41 million or 2 percent lower than the same period in 2001. Second-quarter operating expenses primarily reflect lower fuel expense due to an 11-cent reduction in fuel price including hedge compared with 2001, and reduced equipment rents. Operating income was $405 million for the 2002 second quarter compared with $428 million a year ago. The operating ratio increased to 81.4 percent for the 2002 second quarter compared with 80.9 percent in the same 2001 period. Interest expense of $105 million was $10 million, or 9 percent, lower than the same period in 2001, primarily as a result of lower short-term interest rates. Other income was $15 million higher than the same period in 2001 reflecting increased land sales. Common Stock Repurchases During the 2002 second quarter, BNSF repurchased 4.2 million shares of its common stock at an average price of $28.58 per share. This brings total repurchases under BNSF’s 120 million share-repurchase program to 110.1 million shares as of June 30, 2002, at an average price of $25.92 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 33,000 route miles covering 28 states and two Canadian provinces. 2
    • Consolidated financial statements follow. Statements made in this release concerning predictions or expectations of financial or operational performance, or concerning other future events or results, are quot;forward-looking statementsquot; within the meaning of the federal securities laws. Forward-looking statements involve a number of risks and uncertainties and actual results may differ materially from that projected or implied 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, changes in the securities and capital markets, and changes in labor costs and labor difficulties, including stoppages affecting either BNSF’s operations or our customers’ abilities to deliver goods to BNSF for shipment; 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, and competition and commodity concentrations, the Company’s ability to achieve its operational and financial initiatives and to contain costs, as well as natural events such as severe weather, floods and earthquakes or other disruptions of the Company’s operating systems, structures, or equipment. The Company cautions against placing undue reliance on forward-looking statements, which reflect its current beliefs and are based on information currently available to it as of the date a forward-looking statement is made. The Company undertakes no obligation to revise forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs. In the event the Company does update any forward-looking statement, no inference should be made that the Company will make additional updates with respect to that statement, related matters, or any other forward-looking statement. 3
    • Burlington Northern Santa Fe Corporation Consolidated Income Information * (in millions, except per share data) Three Months Six Months Ended June 30, Ended June 30, 2002 2001 2002 2001 Operating revenues Freight revenues $ 2,183 $ 2,241 $ 4,321 $ 4,504 Other revenues 24 30 49 60 Total operating revenues 2,207 2,271 4,370 4,564 Operating expenses Compensation and benefits 696 694 1,410 1,423 Purchased services 279 274 553 536 Depreciation and amortization 231 230 461 458 Equipment rents 179 190 355 377 Fuel 207 246 391 503 Materials and other 210 209 427 420 Total operating expenses 1,802 1,843 3,597 3,717 Operating income 405 428 773 847 Interest expense 105 115 214 235 Other (income) expense, net (10) 5 (26) 78 Income before income taxes 310 308 585 534 Income tax expense 116 113 219 199 Income before extraordinary charge 194 195 366 335 Extraordinary charge, net of tax - - - (6) Net income $ 194 $ 195 $ 366 $ 329 Diluted earnings per share after extraordinary charge $ 0.51 $ 0.50 $ 0.95 $ 0.84 Diluted average shares outstanding 382.3 393.8 383.9 393.9 Operating ratio 81.4% 80.9% 82.1% 81.2% * Year-to-date 2001 earnings include unusual items related to non-rail investment charges of $0.10 per diluted share and an extraordinary charge related to the early extinguishment of debt of $0.02 per diluted share. 4
    • Burlington Northern Santa Fe Corporation Consolidated Balance Sheet Information (in millions, except per share amounts) June 30, December 31, 2002 2001 Assets Current assets: Cash and cash equivalents $ 178 $ 26 Accounts receivable, net 197 172 Materials and supplies 217 191 Current portion of deferred income taxes 328 306 Other current assets 138 28 Total current assets 1,058 723 Property and equipment, net 23,503 23,110 Other assets 920 888 Total assets $ 25,481 $ 24,721 Liabilities and stockholders' equity Current liabilities: Accounts payable and other current liabilities $ 1,903 $ 1,873 Long-term debt due within one year 291 288 Total current liabilities 2,194 2,161 Long-term debt and commercial paper 6,714 6,363 Deferred income taxes 6,958 6,731 Casualty and environmental liabilities 432 423 Employee merger and separation costs 184 216 Other liabilities 998 978 Total liabilities 17,480 16,872 Stockholders' equity: Common stock and additional paid-in capital 5,667 5,589 Retained earnings 5,322 5,048 Treasury stock (2,955) (2,745) Unearned compensation (50) (34) Other 17 (9) Total stockholders' equity 8,001 7,849 Total liabilities and stockholders' equity $ 25,481 $ 24,721 Book value per share $ 20.98 $ 20.34 Common shares outstanding 381.3 385.8 Net debt to total capital * 46.0% 45.8% * Net debt is calculated as total debt less cash. 5
    • Burlington Northern Santa Fe Corporation Consolidated Cash Flow Information (in millions) Three Months Six Months Ended June 30, Ended June 30, 2002 2001 2002 2001 Operating activities Net income $ 194 $ 195 $ 366 $ 329 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 231 230 461 458 Deferred income taxes 122 68 190 107 Employee merger and separation costs paid (11) (10) (31) (27) Other - net (29) (8) (33) 59 Changes in working capital 20 96 (71) 5 Net cash provided by operating activities 527 571 882 931 Investing activities and dividends paid Capital expenditures (381) (403) (641) (637) Other - net 9 50 (98) (16) Dividends paid (46) (48) (92) (96) Free cash flow after dividends paid 109 170 51 182 Financing activities Purchase of BNSF common stock (119) (92) (199) (157) Proceeds from stock options exercised 8 56 35 101 Other - net (2) (8) (2) (17) Net debt paid (incurred) $ (4) $ 126 $ (115) $ 109 6
    • Burlington Northern Santa Fe Corporation Operating Statistics Three Months Six Months Ended June 30, Ended June 30, 2002 2001 2002 2001 Cars/units (in thousands) 2,036 2,016 3,963 4,002 Average revenue per car/unit $ 1,072 $ 1,112 $ 1,090 $ 1,125 Revenue ton miles (in millions) 120,123 122,510 240,245 248,237 Gross ton miles (in millions) 214,334 220,109 426,795 443,315 RTM/GTM 0.560 0.557 0.563 0.560 Freight revenue/thousand RTM $ 18.17 $ 18.29 $ 17.99 $ 18.14 Operating expense/thousand RTM $ 15.00 $ 15.04 $ 14.97 $ 14.97 Freight revenue/thousand GTM $ 10.19 $ 10.18 $ 10.12 $ 10.16 Operating expense/thousand GTM $ 8.41 $ 8.37 $ 8.43 $ 8.38 Compensation and benefits/thousand GTM $ 3.25 $ 3.15 $ 3.30 $ 3.21 Average employees 37,838 39,747 37,432 39,008 Period end employees 37,577 39,490 37,577 39,490 Thousand RTM/average employee 3,175 3,082 6,418 6,364 Thousand GTM/average employee 5,665 5,538 11,402 11,365 Gallons of fuel used (in millions) 283 293 566 590 Average price per gallon of fuel (cents) (a) 73.1 84.0 69.1 85.3 GTM/gallon of fuel 757 751 754 751 Freight train miles (in millions) 36 36 71 72 GTM/freight train hours (in thousands) 146 138 147 142 Route Miles Operated 32,954 33,340 32,954 33,340 (a) Includes handling, taxes and hedge effect. 7
    • Burlington Northern Santa Fe Corporation Revenue Statistics by Commodity Three Months Six Months Ended June 30, Percent Ended June 30, Percent Revenues (in millions) 2002 2001 Change 2002 2001 Change Intermodal $ 693 $ 660 5.0 % $ 1,326 $ 1,289 2.9 % Automotive 86 114 (24.6) 167 225 (25.8) Other Consumer Products 69 71 (2.8) 133 137 (2.9) Total Consumer Products 848 845 0.4 1,626 1,651 (1.5) Industrial Products 535 536 (0.2) 1,026 1,053 (2.6) Coal 488 532 (8.3) 996 1,058 (5.9) Agricultural Products 312 328 (4.9) 673 742 (9.3) Total freight revenue 2,183 2,241 (2.6) 4,321 4,504 (4.1) Other revenue 24 30 (20.0) 49 60 (18.3) Total revenues $ 2,207 $ 2,271 (2.8) % $ 4,370 $ 4,564 (4.3) % Cars/units (in thousands) Intermodal 905 833 8.6 % 1,709 1,639 4.3 % Automotive 40 56 (28.6) 77 109 (29.4) Other Consumer Products 41 42 (2.4) 80 83 (3.6) Total Consumer Products 986 931 5.9 1,866 1,831 1.9 Industrial Products 373 376 (0.8) 705 726 (2.9) Coal 500 527 (5.1) 1,011 1,043 (3.1) Agricultural Products 177 182 (2.7) 381 402 (5.2) Total cars/units 2,036 2,016 1.0 % 3,963 4,002 (1.0) % Average revenue per car/unit Intermodal $ 766 $ 792 (3.3) % $ 776 $ 786 (1.3) % Automotive 2,150 2,036 5.6 2,169 2,064 5.1 Other Consumer Products 1,683 1,690 (0.4) 1,663 1,651 0.7 Total Consumer Products 860 908 (5.3) 871 902 (3.4) Industrial Products 1,434 1,426 0.6 1,455 1,450 0.3 Coal 976 1,009 (3.3) 985 1,014 (2.9) Agricultural Products 1,763 1,802 (2.2) 1,766 1,846 (4.3) Average revenue per car/unit $ 1,072 $ 1,112 (3.6) % $ 1,090 $ 1,125 (3.1) % Revenue ton-miles (in millions) Intermodal 23,246 21,873 6.3 % 44,093 43,649 1.0 % Automotive 1,267 1,702 (25.6) 2,499 3,213 (22.2) Other Consumer Products 3,030 2,956 2.5 6,008 5,988 0.3 Total Consumer Products 27,543 26,531 3.8 52,600 52,850 (0.5) Industrial Products 24,312 25,241 (3.7) 46,500 49,870 (6.8) Coal 50,294 52,775 (4.7) 100,867 104,245 (3.2) Agricultural Products 17,974 17,963 0.1 40,278 41,272 (2.4) Total revenue ton-miles 120,123 122,510 (1.9) % 240,245 248,237 (3.2) % Freight revenue per thousand ton-miles Intermodal $ 29.81 $ 30.17 (1.2) % $ 30.07 $ 29.53 1.8 % Automotive 67.88 66.98 1.3 66.83 70.03 (4.6) Other Consumer Products 22.77 24.02 (5.2) 22.14 22.88 (3.2) Total Consumer Products 30.79 31.85 (3.3) 30.91 31.24 (1.1) Industrial Products 22.01 21.24 3.6 22.06 21.11 4.5 Coal 9.70 10.08 (3.8) 9.87 10.15 (2.8) Agricultural Products 17.36 18.26 (4.9) 16.71 17.98 (7.1) Freight revenue per thousand ton-miles $ 18.17 $ 18.29 (0.7) % $ 17.99 $ 18.14 (0.8) % 8
    • Burlington Northern Santa Fe Corporation Capital Expenditures and Track Maintenance Three Months Six Months Ended June 30, Ended June 30, 2002 2001 2002 2001 Capital expenditures (in millions) Maintenance of way Rail $ 62 $ 71 $ 105 $ 111 Ties 81 84 135 127 Surfacing 45 41 68 58 Other 83 82 144 146 Total maintenance of way 271 278 452 442 Mechanical 34 44 62 70 Information services 23 21 41 30 Other 21 18 27 27 Total maintenance of business 349 361 582 569 Terminal and line expansion 27 39 49 62 Other 5 3 10 6 Total capital expenditures $ 381 $ 403 $ 641 $ 637 Operating lease commitments $ 100 $ 97 $ 106 $ 97 Total capital commitments $ 481 $ 500 $ 747 $ 734 Track maintenance Track miles of rail laid Maintenance of business 229 254 319 326 Expansion projects 2 12 2 12 Total 231 266 321 338 Cross ties inserted (thousands) Maintenance of business 971 846 1,449 1,176 Expansion projects 6 39 7 40 Total 977 885 1,456 1,216 Track resurfaced (miles) 4,179 3,519 5,727 4,771 Statement Explanation Certain prior period amounts have been reclassified to conform with the current period presentation. 9