BNSF Railway Company (BNSF) announced a planned 2009 capital commitment program of $2.7 billion, which is expected to be approximately $150 million lower than 2008. BNSF currently expects to spend $1.9 billion to refresh track, signal systems, structures, and freight cars, and to upgrade technologies. The Company also anticipates acquiring approximately 350 locomotives at a cost of about $675 million. These locomotives are about 15% more fuel efficient than the locomotives they will replace.
“Our 2009 capital program reflects a continued focus on ensuring our infrastructure remains strong and improving the efficiency of our operations,” said Matthew K. Rose, BNSF Chairman, President and Chief Executive Officer. “Because of the significant volume declines associated with the economy, the expansion portion of the 2009 capital program is minimal, reflecting ongoing work on projects already started.”
For 2008, BNSF’s Return on Invested Capital (ROIC) was 10.7%, up from 10.0% in 2007 but slightly lower than 2006’s ROIC of 10.8%. “Over the last few years we have been able to maintain our ROIC above 10%. We recognize the importance of achieving adequate returns for our shareholders, which will allow continued investment in our infrastructure. As we look forward, we continue to believe in the long-term growth potential of our franchise and in our ability to improve returns,” said Rose.