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BNSF Lowers Capital Expenditures Budget Slightly For 2020

FreightWaves

BNSF lowered its overall budget for capital expenditures in 2020 from 2019 levels, although more funding will be allocated toward replacing and upgrading network assets.

The privately-held,  Western U.S. carrier expects capital investments to total $3.4 billion, according to a Jan. 31 note to customers. Of that, approximately $2.55 billion will go to replace and upgrade rail, rail ties and ballast, as well as maintain BNSF's rolling stock. Maintenance improvements will involve approximately 11,000 miles of track surface and/or undercutting work, and it will include approximately 489 miles of rail and nearly 2.7 million rail ties.

Also in this year's capital expenditures budget is $581 million that will go toward expansion and efficiency projects in key growth areas such as BNSF's Southern and Northern Transcon routes and connections between Southern California and Chicago, as well as the Pacific Northwest to the Upper Midwest.

In contrast, BNSF planned a capital investment budget of $3.57 billion in 2019, which included $2.47 billion for the replacement and maintenance of core network assets, $760 million for expansion and efficiency projects, and $340 million for freight cars and other equipment acquisitions.

"BNSF's 2020 capital investment plan reflects our emphasis on keeping the network in the best condition it has ever been as well as expansion projects aimed at meeting customer demands," BNSF said in its Friday note. "Every year, we work to ensure that our capital plan enables us to continue to operate a safe and reliable rail network as well as addresses the needs of our customers today and in the future."

BNSF's parent company, Berkshire Hathaway (NYSE: BRK), will likely provide more information about BNSF's fourth-quarter financial performance later this month.The annual meeting for the company will be on May 2.

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