The Company did not repurchase shares during 1Q09. During the three months ended March 31, 2009, the Company acquired shares from employees at a cost of $4.0 million to satisfy tax withholding obligations. Free cash flow during 1Q09 was approximately $207.0 million versus $60.0 million in 1Q08. Management reduced its planned 2009 capital expenditure expectation by approximately $100.0 million to $2,600.0 million from a prior guidance of $2,700.0 million, reflecting lower expansion capital and better labor productivity on capital projects. The Company said that about half, or $50.0 million, of the planned spending reduction will come out of its maintenance budget, which for 2009 now accounts for about $1.850 million of the total. Cash capital expenditures were $462.0 million. At the end of 1Q09, net debt was $9,081 million, including $610.0 million in cash and cash equivalents.

During 1Q09, the Company entered into a 12-year capital lease to finance $368.0 million of locomotives and freight cars. Additionally, it entered into capital leases totaling $27.0 million to finance maintenance of way and other vehicles/equipment with lease terms of five to seven years. It took delivery of 130 locomotives under a long-term commitment. As of March 31, 2009, BNSF’s remaining commitment was to acquire 738 locomotives by 2013.

The Company expects to spend about $2.0 billion in 2009 to keep the railway's infrastructure strong by upgrading technologies and refreshing track, signal systems, structures and freight cars.

• The decline of fuel hedges in the rising fuel cost environment continues to act as a headwind to BNI shares.
• The Powder River Basin (PRB) line is still under repair, and limits the carload volume in that area. In addition, terminal dwell and train speeds are slowing, which suggest that BNI is close to full capacity. This will require an increase in capex.
• A significant part of railroad traffic involves imported goods, and as a result, global economic conditions that affect import and export volumes present considerable risk for the rail industry. Excess truck capacity is also leading to a weakness in demand.
• Weather issues, unionized labor disruptions, network capacity constraints, political factors, and industry regulations tend to pose risks to the smooth growth of the Company.