Burlington Northern Santa Fe LLC

05/04/2026 | Press release | Distributed by Public on 05/04/2026 06:11

Quarterly Report for Quarter Ending March 31, 2026 (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 three months ended March 31, 2026, and a comparative analysis of the three months ended March 31, 2025.
Results of Operations
Revenues Summary
The following tables present BNSF's revenue information by business group:
Revenues (in millions) Cars / Units (in thousands)
Three Months Ended March 31, Three Months Ended March 31,
2026 2025 2026 2025
Consumer Products $ 2,042 $ 2,033 1,402 1,382
Agricultural and Energy Products 1,797 1,565 385 345
Industrial Products 1,227 1,199 330 332
Coal 742 734 291 298
Total freight revenues 5,808 5,531 2,408 2,357
Other revenues 162 162
Total operating revenues $ 5,970 $ 5,693
Average Revenue Per Car / Unit
Three Months Ended March 31,
2026 2025
Consumer Products $ 1,456 $ 1,471
Agricultural and Energy Products 4,668 4,536
Industrial Products 3,718 3,611
Coal 2,550 2,463
Total freight revenues $ 2,412 $ 2,347
Fuel Surcharges
Freight revenues include both revenue for transportation services and fuel surcharges. During the three-months ended March 31, 2026 and 2025, BNSF's fuel surcharges generated freight revenues of $452 million and $434 million, respectively. Fuel surcharge revenues increased in the first quarter of 2026 compared to 2025 due to higher fuel prices offset by the lag impact of fluctuating fuel prices where it can take generally up to 60 days for changing fuel prices to affect fuel surcharge revenues. In a period of volatile fuel prices or changing customer business mix, changes in fuel expense and fuel surcharge may differ significantly.
Three Months Ended March 31, 2026 vs. Three Months Ended March 31, 2025
Revenues
Revenues for the three months ended March 31, 2026 were $6.0 billion, an increase of $277 million, or 5 percent, as compared with the three months ended March 31, 2025. This was primarily due to a 2 percent increase in unit volume and a 3 percent increase in average revenue per car / unit resulting from business mix, core pricing gains, and higher fuel surcharge revenue from higher fuel prices. Revenue amounts also included the following changes between periods:
▪Consumer Products volumes increased primarily due to higher west coast imports.
▪Agricultural and Energy Products volumes increased primarily due to higher demand for grains, petroleum fuels, and oilseeds and meals.
▪Industrial Products volumes decreased primarily due to lower shipments of plastics and lower demand for building products due to softness in the housing market.
▪Coal volumes decreased primarily due to plant retirements, partially offset by increased demand from higher natural gas prices.
Expenses
Operating expenses for the three months ended March 31, 2026 were $3.9 billion, an increase of $51 million, or 1 percent, as compared with the three months ended March 31, 2025. A significant portion of the increase is due to the following changes in expenses:
▪Compensation and benefits expense was flat as wage inflation was offset by employee productivity.
▪Fuel expense was flat as increased fuel efficiency offset higher volumes and higher average fuel prices.
▪Materials and other expense increased primarily due to higher casualty related spend.
▪There were no significant changes in purchased services expense, depreciation and amortization expense, or equipment rents expense.
The effective tax rate was 24.3 percent for both the three months ended March 31, 2026 and 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, 2025. 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 U.S. 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; increased economic regulation of the rail industry through legislative action and revised rules and standards applied by the U.S. Surface Transportation Board (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, including new legislation impacting corporate income tax provisions.
• 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 technology networks upon which BNSF relies 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 May 04, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on May 04, 2026 at 12:11 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]