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**UNITED        STATES**

**SECURITIES        AND EXCHANGE COMMISSION**

**WASHINGTON,        D.C. 20549**

**FORM        10-Q**

| **x** | QUARTERLY                  REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE                  ACT OF                  1934 |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------|

**For        the quarterly period ended June 30, 2007**

| o    | TRANSITION                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                  ACT OF                  1934 |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------|

**BNSF        RAILWAY COMPANY**

**(Exact        name of registrant as specified in its charter)**

| **Delaware**                                                                                            |   | **41-6034000**                                                                |
|---------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------|
| **(State                  or other jurisdiction****of                  incorporation or organization)** |   | **(I.R.S.                  Employer****Identification                  No.)** |

**2650        Lou Menk Drive**

**Fort        Worth, Texas**

**(Address        of principal executive offices)**

**76131-2830**

**(Zip        Code)**

**(800)        795-2673**

**(Registrant’s        telephone number, including area code)**

**Yes  [x]  No  **
**[**
**]**

**                                      Large accelerated filer  [  ]  Accelerated        filer  [  ]   Non-accelerated        filer  [x]**

**Yes  [  ]  No  **
**[x]**

| **Class**                                      |    | **Shares****Outstanding                  at****July                  16, 2007** |
|------------------------------------------------|--------------|--------------------------------------------------------------------------------------|
|                                           |         |                                                                                 |
| Common                  stock, $1.00 par value |    | 1,000 shares                                                                    |

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**Table        of Contents**

| ***PART                  I***        | ***FINANCIAL                  INFORMATION***                                                      | ***PAGE*** |
|--------------------------------------|---------------------------------------------------------------------------------------------------|------------|
| Item                  1.             | Financial                  Statements.                                                            | 3          |
| Item                  2.             | Management’s                  Narrative Analysis of Results of                  Operations. | 25         |
| Item                  4T.            | Controls                  and Procedures.                                                         | 29         |
|  ***PART                  II*** |  ***OTHER                  INFORMATION***                                                    |       |
| Item                  6.             | Exhibits.                                                                                         | 30         |
| Signatures                           |                                                                                              | S-1        |
| Exhibits                             |                                                                                              | E-1        |

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Table            of Contents

**PART        I**

**FINANCIAL        INFORMATION**

**Item        1.    Financial Statements.**

**BNSF        RAILWAY COMPANY and SUBSIDIARIES**

**CONSOLIDATED        STATEMENTS OF INCOME**

**(In        millions)**

**(Unaudited)**

|                                              |   | **Three                  Months Ended** |   |   | **Six                  Months Ended** |   |
|---------------------------------------------------|--------|-----------------------------------------|--------|--------|---------------------------------------|--------|
|                                              |   | **June                  30,**           |   |   | **June                  30,**         |   |
|                                              |   | **2007**                                |   |   | **2006**                              |   |   | **2007** |   |   | **2006** |   |
|                                              |   |                                    |   |   | **(As Adjusted)a**               |   |   |   |   |   | **(As Adjusted)a** |   |
| Revenues                                          |   | $                                       | 3,795  |   |                                  | $      | 3,657 |   |   | $ | 7,396 |   |   | $ | 7,083 |   |
|                                              |   |                                    |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  expenses:              |   |                                    |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| Compensation                  and benefits        |   |                                    | 919    |   |                                  |   | 924 |   |   |   | 1,846 |   |   |   | 1,839 |   |
| Fuel                                              |   |                                    | 771    |   |                                  |   | 678 |   |   |   | 1,423 |   |   |   | 1,239 |   |
| Purchased                  services               |   |                                    | 502    |   |                                  |   | 475 |   |   |   | 1,002 |   |   |   | 941 |   |
| Depreciation                  and amortization    |   |                                    | 321    |   |                                  |   | 289 |   |   |   | 628 |   |   |   | 578 |   |
| Equipment                  rents                  |   |                                    | 237    |   |                                  |   | 232 |   |   |   | 469 |   |   |   | 463 |   |
| Materials                  and other              |   |                                    | 199    |   |                                  |   | 183 |   |   |   | 479 |   |   |   | 350 |   |
| Total                  operating expenses         |   |                                    | 2,949  |   |                                  |   | 2,781 |   |   |   | 5,847 |   |   |   | 5,410 |   |
| Operating                  income                 |   |                                    | 846    |   |                                  |   | 876 |   |   |   | 1,549 |   |   |   | 1,673 |   |
| Interest                  expense                 |   |                                    | 25     |   |                                  |   | 28 |   |   |   | 46 |   |   |   | 60 |   |
| Interest                  income, related parties |   |                                    | (48    | )      |                                  |   | (36 | ) |   |   | (97 | ) |   |   | (69 | ) |
| Other                  expense, net               |   |                                    | 9      |   |                                  |   | 10 |   |   |   | 17 |   |   |   | 18 |   |
|                                              |   |                                    |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| Income                  before income taxes       |   |                                    | 860    |   |                                  |   | 874 |   |   |   | 1,583 |   |   |   | 1,664 |   |
| Income                  tax expense               |   |                                    | 330    |   |                                  |   | 317 |   |   |   | 609 |   |   |   | 618 |   |
| Net                  income                       |   | $                                       | 530    |   |                                  | $      | 557 |   |   | $ | 974 |   |   | $ | 1,046 |   |

| a Prior                  year numbers have been adjusted for the retrospective adoption                  of                  Financial Accounting Standards Board (FASB) Staff Position (FSP)                  AUG                  AIR-1, *Accounting for Planned Major Maintenance Activities*. See                  Note 1 of the Consolidated Financial Statements for additional                  information. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table            of Contents

**BNSF        RAILWAY COMPANY and SUBSIDIARIES**

**CONSOLIDATED        BALANCE SHEETS**

**(Dollars        in millions)**

**(Unaudited)**

|  ** **                                                                                                                 |   | **June                  30,** |   |   | **December 31,**               |   |
|----------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|--------|--------|-------------------------------------|--------|
|                                                                                                                             |   | **2007**                      |   |   | **2006**                            |   |
|                                                                                                                             |   |                          |   |   | **(As                  Adjusted)a** |   |
| **ASSETS**                                                                                                                       |   |                          |   |   |                                |   |
| Current                  assets:                                                                                                 |   |                          |   |   |                                |   |
| Cash                  and cash equivalents                                                                                       |   | $                             | 29     |   |                                | $      | 20 |   |
| Accounts                  receivable, net                                                                                        |   |                          | 908    |   |                                |   | 871 |   |
| Materials                  and supplies                                                                                          |   |                          | 522    |   |                                |   | 488 |   |
| Current                  portion of deferred income taxes                                                                        |   |                          | 346    |   |                                |   | 337 |   |
| Other                  current assets                                                                                            |   |                          | 444    |   |                                |   | 285 |   |
| Total                  current assets                                                                                            |   |                          | 2,249  |   |                                |   | 2,001 |   |
|                                                                                                                             |   |                          |   |   |                                |   |   |   |
| Property                  and equipment, net                                                                                     |   |                          | 28,579 |   |                                |   | 27,871 |   |
| Other                  assets                                                                                                    |   |                          | 1,972  |   |                                |   | 1,815 |   |
| Intercompany                  notes receivable                                                                                   |   |                          | 3,390  |   |                                |   | 3,317 |   |
| Total                  assets                                                                                                    |   | $                             | 36,190 |   |                                | $      | 35,004 |   |
|                                                                                                                             |   |                          |   |   |                                |   |   |   |
| **LIABILITIES                  AND STOCKHOLDER’S EQUITY**                                                                  |   |                          |   |   |                                |   |   |   |
| Current                  liabilities:                                                                                            |   |                          |   |   |                                |   |   |   |
| Accounts                  payable and other current liabilities                                                                  |   | $                             | 2,871  |   |                                | $      | 2,920 |   |
| Long-term                  debt due within one year                                                                              |   |                          | 193    |   |                                |   | 173 |   |
| Total                  current liabilities                                                                                       |   |                          | 3,064  |   |                                |   | 3,093 |   |
|                                                                                                                             |   |                          |   |   |                                |   |   |   |
| Long-term                  debt and commercial paper                                                                             |   |                          | 1,223  |   |                                |   | 1,215 |   |
| Deferred                  income taxes                                                                                           |   |                          | 8,337  |   |                                |   | 8,293 |   |
| Casualty                  and environmental liabilities                                                                          |   |                          | 853    |   |                                |   | 830 |   |
| Pension                  and retiree health and welfare liability                                                                |   |                          | 608    |   |                                |   | 604 |   |
| Employee                  separation costs                                                                                       |   |                          | 83     |   |                                |   | 86 |   |
| Other                  liabilities                                                                                               |   |                          | 1,338  |   |                                |   | 1,171 |   |
| Intercompany                  notes payable                                                                                      |   |                          | 36     |   |                                |   | 35 |   |
| Total                  liabilities                                                                                               |   |                          | 15,542 |   |                                |   | 15,327 |   |
| Commitments                  and contingencies (see Notes 2, 4 and 5)                                                            |   |                          |   |   |                                |   |   |   |
| Stockholder’s                  equity:                                                                                     |   |                          |   |   |                                |   |   |   |
| Common                  stock, $1 par value, 1,000 shares authorized;issued                  and outstanding and paid-in capital |   |                          | 6,286  |   |                                |   | 6,286 |   |
| Retained                  earnings                                                                                               |   |                          | 14,638 |   |                                |   | 13,677 |   |
| Accumulated                  other comprehensive loss                                                                            |   |                          | (276   | )      |                                |   | (286 | ) |
| Total                  stockholder’s equity                                                                                |   |                          | 20,648 |   |                                |   | 19,677 |   |
| Total                  liabilities and stockholder’s equity                                                                |   | $                             | 36,190 |   |                                | $      | 35,004 |   |

|   | a Prior                  year numbers have been adjusted for the retrospective adoption                  of FSP AUG                  AIR-1, *Accounting for Planned Major Maintenance Activities*. See                  Note 1 of the Consolidated Financial Statements for additional                  information. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table            of Contents

**BNSF          RAILWAY COMPANY and SUBSIDIARIES**

**CONSOLIDATED          STATEMENTS OF CASH FLOWS**

**(In          millions)**

**(Unaudited)**

| **Six                    Months Ended June 30,**                                                                        |   | **2007** |      |   | **2006**                              |     |
|-------------------------------------------------------------------------------------------------------------------------|--------|----------|-----------|--------|---------------------------------------|----------|
|                                                                                                                    |   |     |      |   | **(As                    Adjusted)a** |     |
| **OPERATING                    ACTIVITIES**                                                                             |   |     |      |   |                                  |     |
| Net                    income                                                                                           |   | $        | 974       |   |                                  | $        | 1,046 |   |
| Adjustments                    to reconcile net income to net cash provided by operating                    activities: |   |     |      |   |                                  |     |   |   |
| Depreciation                    and amortization                                                                        |   |     | 628       |   |                                  |     | 578 |   |
| Deferred                    income taxes                                                                                |   |     | 142       |   |                                  |     | 136 |   |
| Employee                    separation costs paid                                                                       |   |     | (10       | )      |                                  |     | (12 | ) |
| Long-term                    casualty and environmental liabilities, net                                                |   |     | 33        |   |                                  |     | (39 | ) |
| Other,                    net                                                                                           |   |     | 43        |   |                                  |     | (17 | ) |
| Changes                    in current assets and liabilities:                                                           |   |     |      |   |                                  |     |   |   |
| Accounts                    receivable, net                                                                             |   |     | (37       | )      |                                  |     | (197 | ) |
| Change                    in accounts receivable sales program                                                          |   | * * | *–* |   |                                  |     | 200 |   |
| Materials                    and supplies                                                                               |   |     | (34       | )      |                                  |     | (70 | ) |
| Other                    current assets                                                                                 |   |     | (26       | )      |                                  |     | (95 | ) |
| Accounts                    payable and other current liabilities                                                       |   |     | (218      | )      |                                  |     | (12 | ) |
| Net                    cash provided by operating activities                                                            |   |     | 1,495     |   |                                  |     | 1,518 |   |
| **INVESTING                    ACTIVITIES**                                                                             |   |     |      |   |                                  |     |   |   |
| Capital                    expenditures                                                                                 |   |     | (1,152    | )      |                                  |     | (1,024 | ) |
| Net                    decrease (increase) in intercompany notes receivable                                             |   |     | (73       | )      |                                  |     | 73 |   |
| Other,                    net                                                                                           |   |     | (168      | )      |                                  |     | (257 | ) |
| Net                    cash used for investing activities                                                               |   |     | (1,393    | )      |                                  |     | (1,208 | ) |
| **FINANCING                    ACTIVITIES**                                                                             |   |     |      |   |                                  |     |   |   |
| Payments                    on long-term debt                                                                           |   |     | (93       | )      |                                  |     | (100 | ) |
| Net                    increase (decrease) in intercompany notes payable                                                |   |     | 1         |   |                                  |     | (225 | ) |
| Other,                    net                                                                                           |   |     | (1        | )      |                                  | * * | *–* |   |
| Net                    cash used for financing activities                                                               |   |     | (93       | )      |                                  |     | (325 | ) |
| Increase                    (decrease) in cash and cash equivalents                                                     |   |     | 9         |   |                                  |     | (15 | ) |
| Cash                    and cash equivalents:                                                                           |   |     |      |   |                                  |     |   |   |
| Beginning                    of period                                                                                  |   |     | 20        |   |                                  |     | 24 |   |
| End                    of period                                                                                        |   | $        | 29        |   |                                  | $        | 9 |   |
| **SUPPLEMENTAL                    CASH FLOW INFORMATION**                                                               |   |     |      |   |                                  |     |   |   |
| Interest                    paid, net of amounts capitalized                                                            |   | $        | 35        |   |                                  | $        | 49 |   |
| Income                    taxes paid, net of refunds                                                                    |   | $        | 445       |   |                                  | $        | 514 |   |
| Non-cash                    asset financing                                                                             |   | $        | 116       |   |                                  | $        | 50 |   |

|   | a Prior                    year numbers have been adjusted for the retrospective adoption                    of FSP AUG                    AIR-1, *Accounting for Planned Major Maintenance Activities*. See                    Note 1 of the Consolidated Financial Statements for additional                    information. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table              of Contents

**BNSF        RAILWAY COMPANY and SUBSIDIARIES**

**CONSOLIDATED        STATEMENT OF CHANGES IN STOCKHOLDER’S EQUITY**

**(In        millions)**

**(Unaudited)**

|                                                                                                                                                                                                                                                                                                                                         |   | **Common                  Stock and Paid-in Capital** |      |   | **Retained                  Earnings** |     |      | **Accumulated                  Other Comprehensive Loss** |   |     | **Total                  Stockholder’s****Equity** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------|-----------|--------|----------------------------------------|----------|-----------|-----------------------------------------------------------|--------|----------|----------------------------------------------------------|--------|
| Balance                  at December 31, 2006, as adjusted                                                                                                                                                                                                                                                                                   |   | $                                                     | 6,286     |   |                                   | $        | 13,677    | a                                                    |   | $        | (286                                                     | )      |   | $ | 19,677 | a  |
| Adjustment                  for the adoption of FASB Interpretation No. (FIN) 48                                                                                                                                                                                                                                                             |   | * *                                              | *–* |   |                                   |     | (13       | )                                                         |   | * * | *–*                                                |   |   |   | (13 | ) |
| Comprehensive                  income:                                                                                                                                                                                                                                                                                                       |   |                                                  |      |   |                                   |     |      |                                                      |   |     |                                                     |   |   |   |   |   |
| Net                  income                                                                                                                                                                                                                                                                                                                  |   | * *                                              | *–* |   |                                   |     | 974       |                                                      |   | * * | *–*                                                |   |   |   | 974 |   |
| Amortization                  of prior service costs and actuarial losses, net of tax expense                  of                  $7                                                                                                                                                                                                        |   | * *                                              | *–* |   |                                   | * * | *–* |                                                      |   |     | 10                                                       |   |   |   | 10 |   |
| Gain                  on derivative instruments and other items                                                                                                                                                                                                                                                                              |   | * *                                              | *–* |   |                                   | * * | *–* |                                                      |   | * * | *–*                                                |   |   | * * | *–* |   |
|        Total                  comprehensive income                                                                                                                                                                                                                                                        |   |                                                  |      |   |                                   |     |      |                                                      |   |     |                                                     |   |   |   | 984 |   |
| Balance                  at June 30, 2007                                                                                                                                                                                                                                                                                                    |   | $                                                     | 6,286     |   |                                   | $        | 14,638    |                                                      |   | $        | (276                                                     | )      |   | $ | 20,648 |   |
|                                                                                                                                                                                                                                                                                                                                         |   |                                                  |      |   |                                   |     |      |
| a                  Prior year numbers have been adjusted for the retrospective adoption                  of                  FSP AUG AIR-1, *Accounting for Planned Major Maintenance                  Activities*. See Note 1 of the Consolidated Financial Statements for                  additional information.     |   |

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Table            of Contents

**BNSF              RAILWAY COMPANY and              SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS            (Unaudited)**

**1.    Accounting        Policies and Interim Results**

**Adoption        of New Accounting Pronouncements**

*Planned        Major Maintenance Activities*

*Accounting for Planned Major Maintenance        Activities*

| **Consolidated                  Statement of Income****Three                  Months Ended June 30, 2006**                                      |   | **As                  Reported** |   |   | **Impact                  of Adjustment** |     |      | **As                  Adjusted** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|--------|--------|-------------------------------------------|----------|-----------|----------------------------------|--------|
| Depreciation                  and amortization                                                                                                            |   | $                                | 278    |   |                                      | $        | 11        |                             |   | $ | 289 |   |
| Materials                  and other                                                                                                                      |   |                             | 195    | a      |                                      |     | (12       | )                                |   |   | 183 |   |
| Total                  operating expenses                                                                                                                 |   |                             | 2,782  |   |                                      |     | (1        | )                                |   |   | 2,781 |   |
| Operating                  income                                                                                                                         |   |                             | 875    |   |                                      |     | 1         |                             |   |   | 876 |   |
| Income                  before income taxes                                                                                                               |   |                             | 873    |   |                                      |     | 1         |                             |   |   | 874 |   |
|                                                                                                                                                      |   |                             |   |   |                                      |     |      |                             |   |   |   |   |
| Income                  tax expense                                                                                                                       |   |                             | 317    |   |                                      | * * | *–* |                             |   |   | 317 |   |
| Net                  income                                                                                                                               |   | $                                | 556    |   |                                      | $        | 1         |                             |   | $ | 557 |   |
| a Comparative                  prior period amounts                  have been reclassified to conform to the current                  presentation. |   |

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Table            of Contents

| **Consolidated                  Statement of Income****Six                  Months Ended June 30, 2006**   |   | **As                  Reported** |   |   | **Impact                  of Adjustment** |   |   | **As                  Adjusted** |   |
|----------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|--------|--------|-------------------------------------------|--------|--------|----------------------------------|--------|
| Depreciation                  and amortization                                                                       |   | $                                | 555    |   |                                      | $      | 23     |                             |   | $ | 578 |   |
| Materials                  and other                                                                                 |   |                             | 375    | a      |                                      |   | (25    | )                                |   |   | 350 |   |
| Total                  operating expenses                                                                            |   |                             | 5,412  |   |                                      |   | (2     | )                                |   |   | 5,410 |   |
| Operating                  income                                                                                    |   |                             | 1,671  |   |                                      |   | 2      |                             |   |   | 1,673 |   |
| Income                  before income taxes                                                                          |   |                             | 1,662  |   |                                      |   | 2      |                             |   |   | 1,664 |   |
|                                                                                                                 |   |                             |   |   |                                      |   |   |                             |   |   |   |   |
| Income                  tax expense                                                                                  |   |                             | 617    |   |                                      |   | 1      |                             |   |   | 618 |   |
| Net                  income                                                                                          |   | $                                | 1,045  |   |                                      | $      | 1      |                             |   | $ | 1,046 |   |

| **Consolidated                  Balance Sheet****December                  31, 2006**   |   | **As                  Reported** |   |   | **Impact                  of Adjustment** |   |   | **As                  Adjusted** |   |
|---------------------------------------------------------------------------------------------------|--------|----------------------------------|--------|--------|-------------------------------------------|--------|--------|----------------------------------|--------|
| Property                  and equipment, net                                                      |   | $                                | 27,626 |   |                                      | $      | 245    |                             |   | $ | 27,871 |   |
| Other                  assets                                                                     |   |                             | 1,906  |   |                                      |   | (91    | )                                |   |   | 1,815 |   |
| Total                  assets                                                                     |   |                             | 34,850 | a      |                                      |   | 154    |                             |   |   | 35,004 |   |
|                                                                                              |   |                             |   |   |                                      |   |   |                             |   |   |   |   |
| Deferred                  income taxes                                                            |   |                             | 8,211  |   |                                      |   | 82     |                             |   |   | 8,293 |   |
| Other                  liabilities                                                                |   |                             | 1,231  |   |                                      |   | (60    | )                                |   |   | 1,171 |   |
| Total                  liabilities                                                                |   |                             | 15,305 | a      |                                      |   | 22     |                             |   |   | 15,327 |   |
|                                                                                              |   |                             |   |   |                                      |   |   |                             |   |   |   |   |
| Retained                  earnings                                                                |   |                             | 13,545 |   |                                      |   | 132    |                             |   |   | 13,677 |   |
| Total                  stockholder’s equity                                                 |   |                             | 19,545 |   |                                      |   | 132    |                             |   |   | 19,677 |   |
| Total                  liabilities and stockholder’s equity                                 |   | $                                | 34,850 | a      |                                      | $      | 154    |                             |   | $ | 35,004 |   |

| **Consolidated                  Statement of Cash Flows****Six                  Months Ended June 30, 2006**                                    |   | **As                  Reported** |   |   | **Impact                  of Adjustment** |   |   | **As                  Adjusted** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|--------|--------|-------------------------------------------|--------|--------|----------------------------------|--------|
| Net                  income                                                                                                                               |   | $                                | 1,045  |   |                                      | $      | 1      |                             |   | $ | 1,046 |   |
| Depreciation                  and amortization                                                                                                            |   |                             | 555    |   |                                      |   | 23     |                             |   |   | 578 |   |
| Deferred                  income taxes                                                                                                                    |   |                             | 135    |   |                                      |   | 1      |                             |   |   | 136 |   |
| Operating                  activities other, net                                                                                                          |   |                             | (23    | )      |                                      |   | 6      |                             |   |   | (17 | ) |
| Net                  cash provided by operating activities                                                                                                |   |                             | 1,487  |   |                                      |   | 31     |                             |   |   | 1,518 |   |
|                                                                                                                                                      |   |                             |   |   |                                      |   |   |                             |   |   |   |   |
| Investing                  activities other, net                                                                                                          |   |                             | (226   | )      |                                      |   | (31    | )                                |   |   | (257 | ) |
| Net                  cash used for investing activities                                                                                                   |   | $                                | (1,177 | )a     |                                      | $      | (31    | )                                |   | $ | (1,208 | ) |
| a Comparative                  prior period amounts                  have been reclassified to conform to the current                  presentation. |   |

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**BNSF              RAILWAY COMPANY and              SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) -            (Continued)**

Table            of Contents

*Uncertain        Tax Positions*

*Accounting for Uncertainty in Income        Taxes—an interpretation of FASB Statement No. 109, Accounting for Income        Taxes*

**2.    Hedging        Activities**

*        Accounting for Derivative Instruments and Hedging Activities, as amended,*

**Fuel**

***Total        Fuel-Hedging Activities***

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Table            of Contents

|                                                |   | **Three                  Months Ended****June                  30,**    |      |   | **Six                  Months Ended****June                  30,**    |     |
|-----------------------------------------------------|--------|----------------------------------------------------------------------------------------|-----------|--------|--------------------------------------------------------------------------------------|----------|
|                                                |   | **2007**                                                                               |      |   | **2006**                                                                             |     |   | **2007** |   |   | **2006** |   |
| Hedge                  benefit (loss)               |   | $                                                                                      | (2        | )      |                                                                                 | $        | 120 |   |   | $ | 24 |   |   | $ | 227 |   |
| Ineffective                  portion of open hedges |   |                                                                                   | 1         |   |                                                                                 | * * | *–* |   |   | * * | *–* |   |   | * * | *–* |   |
| Tax                  effect                         |   | * *                                                                               | *–* |   |                                                                                 |     | (46 | ) |   |   | (9 | ) |   |   | (87 | ) |
| Hedge                  benefit (loss), net of tax   |   | $                                                                                      | (1        | )      |                                                                                 | $        | 74 |   |   | $ | 15 |   |   | $ | 140 |   |

|                                                                 |   | **June                  30,** |      |   | **December                  31,** |   |
|----------------------------------------------------------------------|--------|-------------------------------|-----------|--------|-----------------------------------|--------|
|                                                                 |   | **2007**                      |      |   | **2006**                          |   |
| Short-term                  fuel-hedging asset                       |   | $                             | 3         |   |                              | $      | 13 |   |
| Long-term                  fuel-hedging asset                        |   |                          | 7         |   |                              |   | – |   |
| Short-term                  fuel-hedging liability                   |   |                          | –   |   |                              |   | (2 | ) |
| Ineffective                  portion of open hedges                  |   | * *                      | *–* |   |                              |   | 1 |   |
| Tax                  effect                                          |   |                          | (4        | )      |                              |   | (4 | ) |
| Amount                  included in AOCL, net of tax                 |   | $                             | 6         |   |                              | $      | 8 |   |
|                                                                 |   |                          |      |   |                              |   |   |   |
| Settled                  fuel-hedging contracts receivable (payable) |   | $                             | (2        | )      |                              | $      | 37 |   |

***New        York Mercantile Exchange (NYMEX) #2 Heating Oil (HO)        Hedges***

|                                               |   | **Quarter                    Ending** |   |   |                                |   |
|----------------------------------------------------|--------|---------------------------------------|--------|--------|-------------------------------------|--------|
| **2007**                                           |   | **September                    30,**  |   |   | **December                    31,** |   |   | **Total** |   |
| **HO                    Swaps**                    |   |                                  |   |   |                                |   |   |   |   |
| Gallons                    hedged (in millions)    |   |                                  | 18.90  |   |                                |   | 18.90 |   |   |   | 37.80 |   |
| Average                    swap price (per gallon) |   | $                                     | 2.11   |   |                                | $      | 2.17 |   |   | $ | 2.14 |   |
| Fair                    value (in millions)        |   | $                                     | (1     | )      |                                | $      | (1 | ) |   | $ | (2 | ) |

***West        Texas Intermediate (WTI) Crude Oil        Hedges***

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|                                                     |   | **Quarter                  Ending** |   |   |                          |   |
|----------------------------------------------------------|--------|-------------------------------------|--------|--------|-------------------------------|--------|
| **2008**                                                 |   | **March                  31,**      |   |   | **June                  30,** |   |   | **September                  30,** |   |   | **December                  31,** |   |   | **Total** |   |
| **WTI                  Swaps**                           |   |                                |   |   |                          |   |   |   |   |   |   |   |   |   |   |
| Barrels                  hedged (in thousands)           |   |                                | 290    |   |                          |   | 260 |   |   |   | 230 |   |   |   | 230 |   |   |   | 1,010 |   |
| Equivalent                  gallons hedged (in millions) |   |                                | 12.18  |   |                          |   | 10.92 |   |   |   | 9.66 |   |   |   | 9.66 |   |   |   | 42.42 |   |
| Average                  swap price (per barrel)         |   | $                                   | 63.69  |   |                          | $      | 63.77 |   |   | $ | 63.70 |   |   | $ | 63.70 |   |   | $ | 63.72 |   |
| Fair                  value (in millions)                |   | $                                   | 3      |   |                          | $      | 2 |   |   | $ | 2 |   |   | $ | 2 |   |   | $ | 9 |   |

|                                                     |   | **Quarter                  Ending** |   |   |                          |   |
|----------------------------------------------------------|--------|-------------------------------------|--------|--------|-------------------------------|--------|
| **2009**                                                 |   | **March                  31,**      |   |   | **June                  30,** |   |   | **September                  30,** |   |   | **December                  31,** |   |   | **Total** |   |
| **WTI                  Swaps**                           |   |                                |   |   |                          |   |   |   |   |   |   |   |   |   |   |
| Barrels                  hedged (in thousands)           |   |                                | 100    |   |                          |   | 100 |   |   |   | 100 |   |   |   | 70 |   |   |   | 370 |   |
| Equivalent                  gallons hedged (in millions) |   |                                | 4.20   |   |                          |   | 4.20 |   |   |   | 4.20 |   |   |   | 2.94 |   |   |   | 15.54 |   |
| Average                  swap price (per barrel)         |   | $                                   | 65.10  |   |                          | $      | 65.10 |   |   | $ | 65.10 |   |   | $ | 65.00 |   |   | $ | 65.08 |   |
| Fair                  value (in millions)                |   | $                                   | 1      |   |                          | $      | 1 |   |   | $ | 1 |   |   | $ | – |   |   | $ | 3 |   |

|                                                     |   | **Quarter                  Ending** |    |   |                          |   |
|----------------------------------------------------------|--------|-------------------------------------|---------|--------|-------------------------------|--------|
| **2010**                                                 |   | **March                  31,**      |    |   | **June                  30,** |   |   | **September                  30,** |   |   | **December                  31,** |   |   | **Total** |   |
| **WTI                  Swaps**                           |   |                                |    |   |                          |   |   |   |   |   |   |   |   |   |   |
| Barrels                  hedged (in thousands)           |   |                                | 70      |   |                          |   | – |   |   |   | – |   |   |   | – |   |   |   | 70 |   |
| Equivalent                  gallons hedged (in millions) |   |                                | 2.94    |   |                          |   | – |   |   |   | – |   |   |   | – |   |   |   | 2.94 |   |
| Average                  swap price (per barrel)         |   | $                                   | 64.80   |   |                          | $      | – |   |   | $ | – |   |   | $ | – |   |   | $ | 64.80 |   |
| Fair                  value (in millions)                |   | $                                   | – |   |                          | $      | – |   |   | $ | – |   |   | $ | – |   |   | $ | – |   |

**Interest        Rate**

**Total        Interest Rate Hedging Program**

***Cash        Flow Interest Rate Hedges***

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**BNSF              RAILWAY COMPANY and              SUBSIDIARIES**

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|                                                               |   | **June                    30,** |    |   | **December                    31,** |    |
|--------------------------------------------------------------------|--------|---------------------------------|---------|--------|-------------------------------------|---------|
|                                                               |   | **2007**                        |    |   | **2006**                            |    |
| Unrecognized                    gain on closed hedges              |   | $                          | 1       |   |                                | $  | 1 |   |
| Tax                    effect                                      |   |                            | – |   |                                |    | – |   |
| Interest                    rate hedging asset in AOCL, net of tax |   | $                               | 1       |   |                                | $       | 1 |   |

**3.    Accounts        Receivable, Net**

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**BNSF              RAILWAY COMPANY and              SUBSIDIARIES**

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**4.    Debt**

**Guarantees**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | **Guarantees**                                         |   |                                                |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | **BNSF                  Railway Ownership Percentage** |   | **Principal****Amount                  Guaranteed** |   | **Maximum****Future                  Payments** |   | **Maximum****Recourse****Amounta** |   | **Remaining                  Term****(in                  years)** |   | **Capitalized                  Obligationsb** |   |
| Kinder                  Morgan Energy Partners, L.P.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | 0.5%                                                   |   | $                                                   | 190    |   | $ | 190 |   | $ | *–* |   | Termination                  of Ownership |   | $ | – |   |
| Kansas                  City Terminal Intermodal Transportation Corporation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | 0.0%                                                   |   | $                                                   | 59     |   | $ | 87 |   | $ | 87 |   | 11 |   | $ | 32 |   |
| Westside                  Intermodal Transportation Corporation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | 0.0%                                                   |   | $                                                   | 40     |   | $ | 63 |   | $ | – |   | 16 |   | $ | 34 |   |
| The                  Unified Government of Wyandotte County/Kansas City, Kansas                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | 0.0%                                                   |   | $                                                   | 13     |   | $ | 19 |   | $ | – |   | 16 |   | $ | 11 |   |
| Various                  lessors(Residual                  value guarantees)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | 0.0%                                                   |   |                                                | N/A    |   | $ | 271 |   | $ | 271 |   | Various |   | $ | 69 | c |
| All                  other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | 0.0%                                                   |   | $                                                   | 6      |   | $ | 7 |   | $ | 3 |   | Various |   | $ | – |   |
| a                  Reflects the                  maximum amount the Company could recover from a third party other                  than the                  counterparty.b                  Reflects                  capitalized obligations that are recorded on the Company’s Consolidated                  Balance Sheets.c                  Reflects FIN 45, *Guarantor’s Accounting                  and                  Disclosure Requirements for Guarantees*, asset                  and corresponding                  liability for the fair value of the residual value guarantees on                  the                  Company’s Consolidated Balance Sheets. |   |

***Kinder        Morgan Energy Partners, L.P.***

***Kansas        City Terminal Intermodal Transportation Corporation***

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***Westside        Intermodal Transportation Corporation and The Unified Government        of***

***Wyandotte        County/Kansas City, Kansas***

***Residual        value guarantees (RVG)***

***All        other***

***Indemnities***

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**BNSF              RAILWAY COMPANY and              SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) -            (Continued)**

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**5.            Commitments and Contingencies**

**Personal        Injury**

***Asbestos***

|                                        |   | **Three                  Months Ended****June                  30,**    |    |   | **Six                  Months Ended****June                  30,**    |   |
|---------------------------------------------|--------|----------------------------------------------------------------------------------------|---------|--------|--------------------------------------------------------------------------------------|--------|
|                                        |   | **2007**                                                                               |    |   | **2006**                                                                             |   |   | **2007** |   |   | **2006** |   |
| Beginning                  balance          |   | $                                                                                      | 301     |   |                                                                                 | $      | 322 |   |   | $ | 306 |   |   | $ | 326 |   |
| Accruals                                    |   |                                                                                   | – |   |                                                                                 |   | – |   |   |   | – |   |   |   | – |   |
| Payments                                    |   |                                                                                   | (4      | )      |                                                                                 |   | (4 | ) |   |   | (9 | ) |   |   | (8 | ) |
| Ending                  balance at June 30, |   | $                                                                                      | 297     |   |                                                                                 | $      | 318 |   |   | $ | 297 |   |   | $ | 318 |   |

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|                                                             |   | **Three                  Months Ended****June                  30,**    |   |   | **Six                  Months Ended****June                  30,**    |   |
|------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------------|--------|
|                                                             |   | **2007**                                                                               |   |   | **2006**                                                                             |   |   | **2007** |   |   | **2006** |   |
| Claims                  unresolved at beginning of period        |   |                                                                                   | 1,941  |   |                                                                                 |   | 2,153 |   |   |   | 1,975 |   |   |   | 2,121 |   |
| Claims                  filed                                    |   |                                                                                   | 93     |   |                                                                                 |   | 150 |   |   |   | 232 |   |   |   | 361 |   |
| Claims                  settled, dismissed or otherwise resolved |   |                                                                                   | (104   | )      |                                                                                 |   | (150 | ) |   |   | (277 | ) |   |   | (329 | ) |
| Ending                  balance at June 30,                      |   |                                                                                   | 1,930  |   |                                                                                 |   | 2,153 |   |   |   | 1,930 |   |   |   | 2,153 |   |

***Other        Personal Injury***

*Reasonable Estimation of the Amount of Loss*

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**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) -            (Continued)**

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|                                        |   | **Three                  Months Ended****June                  30,**    |   |   | **Six                  Months Ended****June                  30,**    |   |
|---------------------------------------------|--------|----------------------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------------|--------|
|                                        |   | **2007**                                                                               |   |   | **2006**                                                                             |   |   | **2007** |   |   | **2006** |   |
| Beginning                  balance          |   | $                                                                                      | 434    |   |                                                                                 | $      | 432 |   |   | $ | 439 |   |   | $ | 422 |   |
| Accruals                                    |   |                                                                                   | 46     |   |                                                                                 |   | 47 |   |   |   | 93 |   |   |   | 96 |   |
| Payments                                    |   |                                                                                   | (43    | )      |                                                                                 |   | (53 | ) |   |   | (95 | ) |   |   | (92 | ) |
| Ending                  balance at June 30, |   | $                                                                                      | 437    |   |                                                                                 | $      | 426 |   |   | $ | 437 |   |   | $ | 426 |   |

|                                                             |   | **Three                  Months Ended****June                  30,**    |   |   | **Six                  Months Ended****June                  30,**    |   |
|------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------------|--------|
|                                                             |   | **2007**                                                                               |   |   | **2006**                                                                             |   |   | **2007** |   |   | **2006** |   |
| Claims                  unresolved at beginning of period        |   |                                                                                   | 3,222  |   |                                                                                 |   | 3,536 |   |   |   | 3,130 |   |   |   | 3,617 |   |
| Claims                  filed                                    |   |                                                                                   | 945    |   |                                                                                 |   | 901 |   |   |   | 1,866 |   |   |   | 1,777 |   |
| Claims                  settled, dismissed or otherwise resolved |   |                                                                                   | (1,036 | )      |                                                                                 |   | (1,049 | ) |   |   | (1,865 | ) |   |   | (2,006 | ) |
| Ending                  balance at June 30,                      |   |                                                                                   | 3,131  |   |                                                                                 |   | 3,388 |   |   |   | 3,131 |   |   |   | 3,388 |   |

***BNSF        Insurance Company***

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**BNSF              RAILWAY COMPANY and              SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) -            (Continued)**

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**Environmental**

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|                                        |   | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|---------------------------------------------|--------|----------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|--------|
|                                        |   | **2007**                                                             |   |   | **2006**                                                           |   |   | **2007** |   |   | **2006** |   |
| Beginning                  balance          |   | $                                                                    | 370    |   |                                                               | $      | 346 |   |   | $ | 318 |   |   | $ | 370 |   |
| Accruals                                    |   |                                                                 | 7      |   |                                                               |   | – |   |   |   | 74 |   |   |   | (2 | ) |
| Payments                                    |   |                                                                 | (15    | )      |                                                               |   | (11 | ) |   |   | (30 | ) |   |   | (33 | ) |
| Ending                  balance at June 30, |   | $                                                                    | 362    |   |                                                               | $      | 335 |   |   | $ | 362 |   |   | $ | 335 |   |

|                                                      |   | **Three                    Months Ended****June                    30,**         |    | **Six                    Months Ended****June                    30,**         |     |
|-----------------------------------------------------------|--------|--------------------------------------------------------------------------------------------|---------|------------------------------------------------------------------------------------------|----------|
| **BNSF                    Sites**                         |   | **2007**                                                                                   |    |                                                                                     | **2006** |   |   | **2007** |   |   | **2006** |   |
| Number                    of sites at beginning of period |   |                                                                                       | 368     |                                                                                     |     |   | 374 |   |   |   | 375 |   |   |   | 369 |   |
| Sites                    added during the period          |   |                                                                                       | 7       |                                                                                     |     |   | 8 |   |   |   | 12 |   |   |   | 16 |   |
| Sites                    closed during the period         |   |                                                                                       | (28     | )                                                                                        |     |   | (8 | ) |   |   | (40 | ) |   |   | (11 | ) |
| Number                    of sites at June 30,            |   |                                                                                       | 347     |                                                                                     |     |   | 374 |   |   |   | 347 |   |   |   | 374 |   |
|                                                      |   |                                                                                       |    |                                                                                     |     |   |   |   |   |   |   |
|                                                      |   | **Three                    Months Ended****June                    30,**    |    | **Six                    Months Ended****June                    30,**    |     |
| **Superfund                    Sites**                    |   | **2007**                                                                                   |    |                                                                                     | **2006** |   |   | **2007** |   |   | **2006** |   |
| Number                    of sites at beginning of period |   |                                                                                       | 20      |                                                                                     |     |   | 20 |   |   |   | 20 |   |   |   | 20 |   |
| Sites                    added during the period          |   |                                                                                       | – |                                                                                     |     |   | – |   |   |   | – |   |   |   | – |   |
| Sites                    closed during the period         |   |                                                                                       | – |                                                                                     |     |   | – |   |   |   | – |   |   |   | – |   |
| Number                    of sites at June 30,            |   |                                                                                       | 20      |                                                                                     |     |   | 20 |   |   |   | 20 |   |   |   | 20 |   |

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**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) -            (Continued)**

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**Other        Claims and Litigation**

**6.    Employee        Separation Costs**

| **Six                  Months Ended June 30,**   |   | **2007** |   |   | **2006** |   |
|--------------------------------------------------|--------|----------|--------|--------|----------|--------|
| Beginning                  balance at January 1, |   | $        | 107    |   |     | $      | 132 |   |
| Accruals                                         |   |     | 5      |   |     |   | – |   |
| Payments                                         |   |     | (10    | )      |     |   | (12 | ) |
| Ending                  balance at June 30,      |   | $        | 102    |   |     | $      | 120 |   |

**7.    Employment        Benefit Plans**

*Employers' Accounting for        Defined Benefit Pension and Other Postretirement Plans*
*an amendment of        FASB Statements No. 87, 88, 106 and 132(R)*

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**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) -            (Continued)**

Table            of Contents

|                                            |   | **Pension                  Benefits**            |   |
|-------------------------------------------------|--------|--------------------------------------------------|--------|
|                                            |   | **Three                  Months Ended June 30,** |   |   | **Six                  Months Ended****June                  30,** |   |
| **Net                  Periodic Cost**          |   | **2007**                                         |   |   | **2006** |   |   | **2007** |   |   | **2006** |   |
| Service                  cost                   |   | $                                                | 6      |   |   | $ | 6 |   |   | $ | 12 |   |   | $ | 12 |   |
| Interest                  cost                  |   |                                             | 25     |   |   |   | 23 |   |   |   | 49 |   |   |   | 47 |   |
| Expected                  return on plan assets |   |                                             | (27    | )  |   |   | (24 | )  |   |   | (53 | )  |   |   | (48 | )  |
| Amortization                  of net loss       |   |                                             | 9      |   |   |   | 12 |   |   |   | 18 |   |   |   | 23 |   |
| Net                  periodic benefit cost      |   | $                                                | 13     |   |   | $ | 17 |   |   | $ | 26 |   |   | $ | 34 |   |

|                                                |   | **Retiree                  Health and Welfare Benefits** |   |
|-----------------------------------------------------|--------|----------------------------------------------------------|--------|
|                                                |   | **Three                  Months Ended June 30,**         |   |   | **Six                  Months Ended****June                  30,** |   |
| **Net                  Periodic Cost**              |   | **2007**                                                 |   |   | **2006** |   |   | **2007** |   |   | **2006** |   |
| Service                  cost                       |   | $                                                        | 1      |   |   | $ | 1 |   |   | $ | 2 |   |   | $ | 2 |   |
| Interest                  cost                      |   |                                                     | 4      |   |   |   | 4 |   |   |   | 8 |   |   |   | 7 |   |
| Amortization                  of net loss           |   |                                                     | 2      |   |   |   | 1 |   |   |   | 3 |   |   |   | 2 |   |
| Amortization                  of prior service cost |   |                                                     | (2     | ) |   |   | (2 | ) |   |   | (4 | ) |   |   | (4 | ) |
| Net                  periodic benefit cost          |   | $                                                        | 5      |   |   | $ | 4 |   |   | $ | 9 |   |   | $ | 7 |   |

**8.    Uncertain        Tax Positions**

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**9.    Related        Party Transactions**

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**10.    Stock-Based        Compensation**

**Stock        Options**

**Other        Incentive Programs**

**11.    Comprehensive          Income**

|                                                                                                                                                               |   | **Three                    Months Ended June 30,** |   |   | **Six                    Months Ended June 30,** |     |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------|--------|--------|--------------------------------------------------|----------|
|                                                                                                                                                               |   | **2007**                                           |   |   | **2006**                                         |     |   | **2007** |   |   | **2006** |   |
| Net                    income                                                                                                                                      |   | $                                                  | 530    |   |                                             | $        | 557 |   |   | $ | 974 |   |   | $ | 1,046 |   |
| Other                    comprehensive income (loss):                                                                                                              |   |                                               |   |   |                                             |     |   |   |   |   |   |   |   |   |   |   |
|     Amortization                    of prior service costs and actuarial losses, net of tax (see                    Note                    7) |   |                                               | 5      |   |                                             | * * | *–* |   |   |   | 10 |   |   | * * | *–* |   |
| Gain                    (loss) on derivative instruments and other items, net of tax                    (see Note                    2)                            |   |                                               | 7      |   |                                             |     | (49 | ) |   | * * | *–* |   |   |   | (85 | ) |
| Total                    comprehensive income                                                                                                                      |   | $                                                  | 542    |   |                                             | $        | 508 |   |   | $ | 984 |   |   | $ | 961 |   |

**12.    Report        of Independent Registered Public Accounting Firm**

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Table            of Contents

**Report        of Independent Registered Public Accounting Firm**

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Table            of Contents

**Item        2.    Management’s Narrative Analysis of        Results of Operations.**

**Results        of Operations **

***Six        Months Ended**June 30,**2007**,**Compared with        Six Months Ended**June 30,**2006***

***Revenues***

|                                      |   | **Revenues****(in                  millions)** |   |   | **Cars                  / Units****(in                  thousands)** |   |   | **Average                  Revenue****Per                  Car / Unit** |   |
|-------------------------------------------|--------|------------------------------------------------|--------|--------|----------------------------------------------------------------------|--------|--------|-------------------------------------------------------------------------|--------|
|                                      |   | **2007**                                       |   |   | **2006**                                                             |   |   | **2007**                                                                |   |   | **2006** |   |   | **2007** |   |   | **2006** |   |
|                                      |   |                                           |   |   |                                                                 |   |   |                                                                    |   |
| Consumer                  Products        |   | $                                              | 2,712  |   |                                                                 | $      | 2,657  |                                                                    |   |   | 2,575 |   |   |   | 2,681 |   |   | $ | 1,053 |   |   | $ | 991 |   |
| Industrial                  Products      |   |                                           | 1,794  |   |                                                                 |   | 1,751  |                                                                    |   |   | 821 |   |   |   | 844 |   |   |   | 2,185 |   |   |   | 2,075 |   |
| Coal                                      |   |                                           | 1,536  |   |                                                                 |   | 1,392  |                                                                    |   |   | 1,205 |   |   |   | 1,194 |   |   |   | 1,275 |   |   |   | 1,166 |   |
| Agricultural                  Products    |   |                                           | 1,235  |   |                                                                 |   | 1,159  |                                                                    |   |   | 487 |   |   |   | 481 |   |   |   | 2,536 |   |   |   | 2,410 |   |
| Total                  Freight Revenues   |   |                                           | 7,277  |   |                                                                 |   | 6,959  |                                                                    |   |   | 5,088 |   |   |   | 5,200 |   |   | $ | 1,430 |   |   | $ | 1,338 |   |
| Other                  Revenues           |   |                                           | 119    |   |                                                                 |   | 124    |                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  Operating Revenues |   | $                                              | 7,396  |   |                                                                 | $      | 7,083  |                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

*Consumer        Products*

*Industrial        Products*

*Coal*

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*Agricultural        Products*

*Other        Revenues*

***Expenses***

*Compensation        and benefits*

*Fuel*

*Purchased        services*

*Depreciation        and amortization*

*Equipment        rents*

*Materials        and other*

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*Income        taxes*

**Forward-Looking        Information**

**Economic        and industry conditions:**

**Legal        and regulatory factors:**

**Operating        factors:**

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**Item        4T.    Controls and        Procedures.**

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**BURLINGTON        NORTHERN SANTA FE CORPORATION and        SUBSIDIARIES**

**PART        II OTHER INFORMATION**

**Item        6.    Exhibits.**

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**SIGNATURES**

| BNSF                  Railway Company(Registrant) |
|---------------------------------------------------|
|                                              |   |   |
| By:                                               |   | /s/    Thomas                  N. Hund         |
|                                              |   | **Thomas                  N. Hund****Executive                  Vice President and Chief Financial Officer****(On                  behalf of the Registrant and****as                  principal financial                  officer)** |

| Dated:  July                  24, 2007 |
|--------------------------------------------------|

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**BNSF        RAILWAY COMPANY and SUBSIDIARIES**

**Exhibit        Index**

|   |   |   |                                                                                                                                             |   | Incorporated                  by Reference(if                  applicable) |
|--------|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------|
|   |   |   | Exhibit                  Number and Description                                                                                                  |   | Form                                                                       | File                  Date | File                  No. | Exhibit |
|   |   |   |                                                                                                                                             |   |                                                                       |   |   |   |
|   | 3.1    |   | Restated                  Certificate of Incorporation of BNSF Railway Company, dated January                  17,                  2005.        |   | 10-Q                                                                       | 7/26/2005 | 001-06324 | 3.1 |
|   |   |   |                                                                                                                                             |   |                                                                       |   |   |   |
|   | 3.2    |   | By-Laws                  of BNSF Railway Company, as amended August 30, 2005.                                                                    |   | 10-Q                                                                       | 10/25/2005 | 001-06324 | 3.1 |
|   |   |   |                                                                                                                                             |   |                                                                       |   |   |   |
|   | 12.1   |   | Computation                  of Ratio of Earnings to Fixed                  Charges.*                                                            |   |                                                                       |   |   |   |
|   |   |   |                                                                                                                                             |   |                                                                       |   |   |   |
|   | 31.1   |   | Principal                  Executive Officer’s Certifications Pursuant to                  Section 302 of the Sarbanes-Oxley Act of 2002.* |   |                                                                       |   |   |   |
|   |   |   |                                                                                                                                             |   |                                                                       |   |   |   |
|   | 31.2   |   | Principal                  Financial Officer’s Certifications Pursuant to                  Section 302 of the Sarbanes-Oxley Act of 2002.* |   |                                                                       |   |   |   |
|   |   |   |                                                                                                                                             |   |                                                                       |   |   |   |
|   | 32.1   |   | Certification                  Pursuant to 18 U.S.C. § 1350 (Section 906                  of the Sarbanes-Oxley Act of 2002).*              |   |                                                                       |   |   |   |

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