BNSF Reports Mixed Financial Results for Q3 and Nine Months, Despite Decline in Coal Revenue

Burlington Northern Santa Fe, LLC (BNSF) reported mixed financial results for the third quarter and the nine months ended September 30, 2024. Revenues for the third quarter reached $5,904 million, a slight increase from $5,847 million in the same period of 2023. However, for the nine-month period, revenues decreased to $17,303 million from $17,694 million, reflecting a decline of $391 million or 2%.

Operating expenses for the third quarter fell to $3,849 million from $4,041 million year-over-year, while for the nine months, they decreased to $11,705 million from $12,222 million, a reduction of $517 million or 4%. This decline in operating expenses was attributed to lower purchased services expenses, reduced fuel costs due to lower average fuel prices, and cost reductions in materials and other expenses. Despite these reductions, BNSF faced increased litigation accruals related to an ongoing legal case with the Swinomish Tribe.

Operating income for the third quarter improved to $2,055 million, up from $1,806 million in 2023, and for the nine months, it rose to $5,598 million from $5,472 million. Income before income taxes also increased, reaching $1,846 million for the third quarter compared to $1,608 million in the prior year, and $4,987 million for the nine months, up from $4,872 million.

Net income for the third quarter was $1,383 million, an increase from $1,221 million in 2023, while for the nine months, it slightly rose to $3,753 million from $3,732 million. Total comprehensive income for the third quarter was $1,379 million, compared to $1,214 million in the previous year.

BNSF's revenue from Consumer Products surged to $2,121 million for the third quarter, up from $1,982 million, and for the nine months, it increased to $6,213 million from $5,744 million. Agricultural Products revenue also rose to $1,392 million for the third quarter and $4,247 million for the nine months. Conversely, Coal revenue declined to $795 million for the third quarter and $2,168 million for the nine months, attributed to lower natural gas prices displacing coal as a utility fuel.

Strategically, BNSF completed the acquisition of Montana Rail Link, Inc. (MRL), with the results included in the consolidated statements from April 7, 2023. In June 2024, BNSF issued $1.3 billion in debentures for general corporate purposes, with $1.65 billion remaining authorized for issuance through the debt shelf offering process. The company maintained compliance with financial covenants related to its junior subordinated notes as of September 30, 2024.