- Total operating expenses are expected to be up about 15% from the first quarter of 2007 on a GAAP basis or about 18% higher when excluding last year''s unusual items for environmental and technology. About three-quarters of the expected increase are due to higher fuel prices.
- Interest expense is expected to be about $140 million, primarily driven by increased debt levels.
- The company expects first quarter tax rate to be a normal level of about 38%.

- The company expects freight revenue growth in the low teens, with about half of that coming from fuel surcharge and other half coming from price.
- The company expects earnings per share growth in the high single-digits for adjusted 2007 earnings of $1.10 per share, which excludes the 14 cents per share charge for the environmental expenses and the technology system write-off. This is despite a fuel headwind of about 10 cents a share based on the current forward curve.
- The company expects to see service and productivity improvements from the fourth quarter continue into this year.

Fiscal 2008 Outlook

- The company expects to see freight revenue growth in the high single-digits.
- Revenue outlook assumes unit volumes are about flat, or give or take 1% or 2% for the rest of the year. Pricing is firm, but less robust in 2007, and year-over-year increases in fuel surcharge revenue moderate as the company laps the 2007 run up in fuel prices.
- The company reduced capital program to $2.450 billion based on volume outlook and the capacity on network. Once again, free cash flow should increase to around $800 million, after dividends.

- The company is committed to resuming trend of improving return on invested capital.
- Capital commitments were $2.59 billion and the company anticipates 2008 capital be $2.45 billion. That $150 million decrease is driven by a reduction of expansion capital.
Due to the soft economy, the company is continuing to see slower volumes and looking forward, the company expects to see this trend continue during the first quarter of 2008. However, the company anticipates positive revenue growth based on continued yield management. Additionally, as a result of higher fuel prices, fuel surcharge revenue will also increase.

- In Coal, PRB burn is expected to increase over last year and BNSF is well positioned to handle growth. In Ag, the company expects to see continued strong PNW, corn and soybean exports. Wheat in the PNW and Gulf exports are expected to be flat as high prices are discouraging additional demand.
- Domestic shipments will pick up beginning in the second quarter as new Ethanol plants come online. Industrial Products should continue to feel the impact of the economic slowdown in building product sector, offset by yield and revenue growth in the other sectors. In Consumer, in spite of soft demand, the company expects to see modest revenue growth, which should improve during the year as eastbound trade improves. So overall, the company expects revenue growth in the low teens.
- The company expects to see continued improvement throughout this year as it remains focused on key initiatives of line and terminal throughput, train network design, train size, locomotive distribution, and maintenance reliability.

Key questions from the fourth quarter earnings call conducted by Burlington Northern Santa Fe Corp. on January 29, 2008.

Edward Wolfe (Bear Stearns): The double-digit earnings outlook is on a base of what?

Thomas N. Hund: That is on a GAAP basis of 510.

Edward Wolfe (Bear Stearns): What are you basing the first quarter 2007 off of?

Thomas N. Hund: Adjusted, it is the same thing.

Edward Wolfe (Bear Stearns): What led to the big acceleration year-over-year, quarter-over-quarter in yields?

Matthew K. Rose: We do have contracts that come due every quarter and we have been on a long range trend of positive pricing performance. A combination of mix and yield improvement led to the performance. For example, in Consumer Products and International Intermodal, the mix and change in revenue empties is a positive from a standpoint of RPU.

Edward Wolfe (Bear Stearns): What do you think about pricing in 2008?

Matthew K. Rose: We are going to continue to have firm pricing going into 2008. We do not like to forecast pricing because we do have some moving parts, but we plan to continue our long standing improvement in yield.

Edward Wolfe (Bear Stearns): Can you talk about export coal and is there any ability for you to benefit from that trend right now?

John P. Lanigan, Jr.: We do have export coal that goes out through Roberts Bank, down to South America at this point, it is relatively small number compared to what goes on of the East Coast ports.

Matthew K. Rose: Our biggest opportunity will be as the Eastern people export more, that will force supplies up of Eastern coal as well as less supply in it, that should allow PRB to infiltrate further east.

Edward Wolfe (Bear Stearns): What the export grain tonnage was in 2007 and what the potential is in 2008?

Matthew K. Rose: We do not specifically talk about the tonnage but part of it, depends on the crop. We think that there has been a fundamental change in the world markets and the rest of the world being able to supply the growing demand in developing countries like China, in India, as they continue to change their diet. We do think long-term, we have got great prospects for export grain and lot of it is going to have to do with the quality of the crops this year, as to what those numbers look like.