Burlington Northern Santa Fe LLC

11/03/2025 | Press release | Distributed by Public on 11/03/2025 07:03

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Narrative Analysis of Results of Operations
Management's narrative analysis relates to the results of operations of Burlington Northern Santa Fe, LLC and its subsidiaries. The principal operating subsidiary of BNSF is BNSF Railway through which BNSF derives substantially all of its revenues. The following narrative analysis should be read in conjunction with the Consolidated Financial Statements and the accompanying notes.
The following narrative analysis of results of operations includes a brief discussion of the factors that materially affected the Company's operating results in the nine months ended September 30, 2025, and a comparative analysis of the nine months ended September 30, 2024.
Results of Operations
Revenues Summary
The following tables present BNSF's revenue information by business group:
Revenues (in millions) Cars / Units (in thousands)
Nine Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
Consumer Products $ 6,126 $ 6,213 4,194 4,044
Agricultural and Energy Products a
4,810 4,647 1,043 1,039
Industrial Products a
3,782 3,836 1,044 1,085
Coal 2,245 2,168 911 878
Total freight revenues 16,963 16,864 7,192 7,046
Other revenues 482 439
Total operating revenues $ 17,445 $ 17,303
Average Revenue Per Car / Unit
Nine Months Ended September 30,
2025 2024
Consumer Products $ 1,461 $ 1,536
Agricultural and Energy Products a
4,612 4,473
Industrial Products a
3,623 3,535
Coal 2,464 2,469
Total freight revenues $ 2,359 $ 2,393
aPrior year numbers have been recast to conform to the current year presentation based on internal reorganization of business groups.
Fuel Surcharges
Freight revenues include both revenue for transportation services and fuel surcharges. Where BNSF's fuel surcharge program is applied, it is intended to recover BNSF's incremental fuel costs when fuel prices exceed a threshold fuel price. Fuel surcharges are calculated differently depending on the type of commodity transported. BNSF has two standard fuel surcharge programs - Percent of Revenue and Mileage-Based. In addition, in certain commodities, fuel surcharge is calculated using a fuel price from a time period that can be up to 60 days earlier. In a period of volatile fuel prices or changing customer business mix, changes in fuel expense and fuel surcharge may differ significantly.
The following table presents fuel surcharge and fuel expense information (in millions):
Nine Months Ended September 30,
2025 2024
Fuel expense a
$ 2,240 $ 2,475
Fuel surcharges $ 1,319 $ 1,663
aFuel expense includes locomotive and non-locomotive fuel.
Nine Months Ended September 30, 2025 vs. Nine Months Ended September 30, 2024
Revenues
Revenues for the nine months ended September 30, 2025 were $17.4 billion, an increase of $142 million, or 1 percent, as compared with the nine months ended September 30, 2024. This was primarily due to a 2 percent increase in unit volume and core pricing gains, partially offset by lower fuel surcharge revenue and unfavorable business mix. Revenue amounts also included the following changes between periods:
▪Consumer Products volumes increased primarily due to higher intermodal shipments resulting from higher west coast imports and an increase in automotive volume from higher vehicle production.
▪Agricultural and Energy Products volumes increased primarily due to higher grain exports, partially offset by lower domestic grain and feed shipments.
▪Industrial Products volumes decreased primarily due to lower demand for construction products and lower petroleum products shipments.
▪Coal volumes increased primarily due to the competitive effects of higher natural gas prices.
Expenses
Operating expenses for the nine months ended September 30, 2025 were $11.5 billion, a decrease of $241 million, or 2 percent, as compared with the nine months ended September 30, 2024. A significant portion of this decrease is due to the following changes in expenses:
▪Fuel expense decreased primarily due to lower average fuel prices and improved fuel efficiency.
▪Materials and other expense decreased primarily due to ongoing cost management efforts and litigation accruals.
▪Purchased services expense increased primarily due to higher volume related costs, continued cargo security investments, and general inflation.
▪Compensation and benefits expense increased slightly due to wage inflation, which was almost fully offset by employee productivity.
▪There were no significant changes in equipment rents expense, or depreciation and amortization expense.
The effective tax rate was 22.4 percent and 24.7 percent for the nine months ended September 30, 2025 and 2024, respectively. Income tax expense decreased due to lower deferred state tax expenses arising from changes in enacted rates during the second quarter of 2025.
Forward-Looking Information
To the extent that statements relate to the Company's future economic performance or business outlook, projections or expectations of financial or operational results, or refer to matters that are not historical facts, such statements are "forward-looking" statements within the meaning of the federal securities laws.
Forward-looking statements involve a number of risks and uncertainties, and actual performance or results may differ materially. For a discussion of material risks and uncertainties that the Company faces, see the discussion in "Part I, Item 1A. Risk Factors" of the Company's Annual Report on Form 10-K for the year ended December 31, 2024. Important factors that could cause actual results to differ materially include, but are not limited to, the following:
• Economic and industry conditions:material adverse changes in economic or industry conditions, both in the United States and globally; inflation; volatility in the capital or credit markets including changes affecting the timely availability and cost of capital; changes in customer demand; effects of adverse economic conditions affecting shippers or BNSF's supplier base; effects due to more stringent regulatory policies such as the regulation of greenhouse gas emissions that could reduce the demand for coal or governmental tariffs or subsidies that could affect the demand for products BNSF hauls; the impact of low natural gas or oil prices on energy-related commodities demand; changes in environmental laws and other laws and regulations that could affect the demand for drilling products and products produced by drilling; changes in prices of fuel and other key materials, the impact of high barriers to entry for prospective new suppliers, and disruptions in supply chains for these materials; competition and consolidation within the transportation industry; and changes in crew availability, labor and benefits costs and labor difficulties, including stoppages affecting either BNSF's operations or customers' abilities to deliver goods to BNSF for shipment.
• Legal, legislative and regulatory factors:developments and changes in laws and regulations, including those affecting train operations, the marketing of services or regulatory restrictions on equipment; the ultimate outcome of shipper and rate claims subject to adjudication; claims, investigations, or litigation alleging violations of the antitrust laws; new legislation impacting corporate income tax provisions; increased economic regulation of the rail industry through legislative action and revised rules and standards applied by the STB in various areas including rates and services; developments in environmental investigations or proceedings with respect to rail operations or current or past ownership or control of real property or properties owned by others impacted by BNSF operations; losses resulting from claims and litigation relating to personal injuries, asbestos, and other occupational diseases; the release of hazardous materials, environmental contamination, and damage to property; regulation, restrictions or caps, or other controls on transportation of energy-related commodities or other operating restrictions that could affect operations or increase costs; the availability of adequate insurance to cover the risks associated with operations; and changes in tax rates and tax laws.
• Operating factors:changes in operating conditions and costs; operational and other difficulties with positive train control technology, including increased compliance or operational costs or penalties; restrictions on development and expansion plans due to environmental concerns; disruptions to BNSF's or third-party service providers' technology networks including computer systems and software, such as cybersecurity intrusions, unauthorized access to or misappropriation of assets or sensitive information, corruption of data or operational disruptions; network congestion, including effects of greater than anticipated demand for transportation services and equipment; as well as pandemics or natural events such as severe weather, fires, floods, and earthquakes or man-made or other disruptions of BNSF's or other railroads' operating systems, structures, or equipment including the effects of acts of war or terrorism on the Company's system or other railroads' systems or other links in the transportation chain.
The Registrant 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 Registrant undertakes no obligation to revise forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs. In the event the Registrant does update any forward-looking statement, no inference should be made that the Registrant will make additional updates with respect to that statement, related matters, or any other forward-looking statements.
Burlington Northern Santa Fe LLC published this content on November 03, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on November 03, 2025 at 13:04 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]