Carrier quarterly income reports

Burlington Northern Santa Fe

Burlington Northern Santa Fe reported all-time record earnings of $0.96 per diluted share, a 43 percent increase over second-quarter 2004 earnings of $0.67 per diluted share. Second-quarter 2005 freight revenues increased $406 million, or 15 percent, to a quarterly record of $3.04 billion compared with 2004 second-quarter freight revenues of $2.64 billion. Revenue for the second quarter of 2005 included fuel surcharges of $234 million compared with $65 million in the second quarter of 2004.

Operating expenses for the second quarter of 2005 of $2.43 billion were $251 million, or 12 percent, higher than the same period in 2004, primarily driven by a 4-percent increase in gross ton-miles and 37 percent higher fuel prices after hedge benefit.

In the second-quarter of 2005, BNSF posted an operating income of $710 million, a $202 million, or 40 percent, increase over the second quarter of 2004. In addition, BNSF's operating ratio decreased four percentage points to 76.7 percent from 80.7 percent in the same quarter of the prior year.

Canadian National Railway

CN reported strong financial and operating results for the second quarter and six-month period ended June 30, 2005. Financial highlights included: Diluted earnings per share of $1.47 for the second quarter of 2005, up 30 percent from $1.13 reported for second-quarter 2004; Second-quarter 2005 net income of $416 million, an increase of 28 percent from second-quarter 2004 net income of $326 million; and Second-quarter 2005 operating income of $713 million, an increase of 24 percent.

CN also boasted a record second-quarter operating ratio of 61.2 percent, a 4.3-percentage point improvement over second-quarter 2004 performance.

Second-quarter revenues increased by 10 percent to $1,838 million, largely owing to freight rate increases, which included a higher fuel surcharge as a result of increases in crude oil prices, and the inclusion of revenues from the rail and related holdings of Great Lakes Transportation LLC (GLT) and BC Rail. Partly offsetting these gains was the unfavorable $80 million translation impact of the stronger Canadian dollar on U.S.-dollar denominated revenues.

Canadian Pacific Railway

Second-quarter profit rose 46 percent at Canadian Pacific Railway Ltd. as stronger freight prices, especially for coal, offset lower overall shipments and higher fuel costs. CP Rail, which maintained its profit outlook for the year, said it earned C$123 million ($101 million), or 77 Canadian cents a share, in the second quarter, up from a profit of C$84 million, or 53 Canadian cents a share, a year earlier.

Excluding foreign exchange losses on long-term debt, earnings would have been 87 Canadian cents a share, the company said.

The company, which operates in Canada and the United States, said revenue rose 10 percent to C$1.1 billion in the period, driven by higher revenues for coal, grain, and intermodal shipping. Shipments fell by 2.9 percent, with the biggest drop in carloads coming in coal, down 10.5 percent, sulfur and fertilizers, off 10.1 percent, and automotive, which fell 5.1 percent.

Operating expenses rose 6.5 percent, mostly because of soaring fuel prices.

CP Rail's operating ratio, a measure of efficiency used by the railroad industry, improved to 75.5 percent from 78 percent in the second quarter 2004.

CSX Transportation

Rail and transportation conglomerate CSX Corp. said that second-quarter earnings rose more than 38 percent on higher surface shipping revenues, especially of coal.

The Jacksonville-based company reported earnings of $165 million, or 73 cents a share, up from $119 million, or 53 cents a share, a year ago. Excluding one-time expenses and benefits, earnings were 96 cents a share. CSX said revenues at its core surface transportation business were $2.17 billion, up about 8 percent from $2 billion a year earlier. The strength was led by the coal and merchandise shipping markets.

Merchandise revenues were $1.06 billion, up 7 percent from $991 million, and coal, coke and iron ore revenues were $541 million, up 22 percent from $442 million. Intermodal revenues were $330 million, up 2 percent from $325 million.

Its operating ratio improved 4.7 percentage points over the same 2004 quarter to 80.5 percent.

Also in the quarter, CSX repurchased $1 billion of its debt, which strengthened the company's balance sheet, reduced its interest expense going forward, and improved its credit profile.

Kansas City Southern

Kansas City Southern reported second quarter 2005 financial results, which included the consolidation of TFM's results following the acquisition of control on April 1, 2005. For the second quarter 2005, KCS consolidated revenues were $381.1 million versus $153.9 million in 2004. On a same rail system comparative basis, KCS consolidated second quarter revenues grew 12.5% over the 2004 pro forma combined revenues of the Company.

In connection with the April 1, 2005, acquisition of an additional 48.5% interest in GTFM, KCS consolidated operating expenses for the second quarter of 2005 were adversely impacted by a non-cash, pre-tax charge of $35.6 million related to a series of Mexican Supreme Court rulings, which eliminated TFM's ability to use net operating losses to offset future employer statutory profit sharing contributions. Primarily as a result of the above charge, as well as others related to GTFM, KCS recorded a net loss of $25.8 million for the second quarter of 2005, compared with $7.0 million of net income available to common shareholders for the second quarter of 2004.

Norfolk Southern

For the second quarter of 2005, Norfolk Southern Corporation reported record net income of $424 million, or $1.04 per diluted share, compared with $213 million, or $0.54 per diluted share, for the same period of 2004. Second-quarter net income included two previously announced items (the effects of Ohio tax legislation and settlements of two coal rate cases) totaling $120 million, or $0.29 per diluted share. Excluding these items, net income would have been $304 million, or $0.75 per diluted share. This is the highest income before accounting changes for any quarter in Norfolk Southern's history.

Second-quarter operating revenues of $2.15 billion were the highest of any quarter in Norfolk Southern's history.

The second-quarter operating ratio of 72.5 percent was an improvement of 4.1 percentage points compared with second-quarter 2004. For the first six months, the operating ratio was 75.8 percent, which was 2.2 percentage points better than the same period a year earlier.

Union Pacific

Union Pacific Corporation reported second quarter 2005 net income of $233 million, or $.88 per diluted share. This is a 47 percent improvement compared to the second quarter of 2004 when the company reported net income of $158 million, or $.60 per diluted share. Operating income during the second quarter of 2005 was $468 million, up 30 percent from $359 million reported in the second quarter of 2004. Second quarter overview:

Second Quarter Railroad Commodity Revenue Summary versus 2004:

The railroad's operating ratio was 86 percent for the quarter, an improvement of 88.1 percent in the same quarter of 2004.



© 2005 Brotherhood of Locomotive Engineers and Trainmen