State
of Incorporation
Delaware
|
I.R.S.
Employer Identification No.
41-6034000
|
Address
of principal executive offices, including zip code
2650
Lou Menk Drive
Fort
Worth, Texas 76131-2830
|
Registrant’s
telephone number, including area code
(800)
795-2673
|
Securities
registered pursuant to Section 12(b) of the Act:
The
securities listed below are registered on the New York Stock
Exchange.
Title of
each class
|
|
Burlington
Northern Inc.
(Now
BNSF Railway Company)
Consolidated
Mortgage Bonds
6.55%,
Series K, due 2020
3.80%,
Series L, due 2020
3.20%,
Series M, due 2045
8.15%,
Series N, due 2020
6.55%,
Series O, due 2020
8.15%,
Series P, due 2020
Debenture,
8.75%, due 2022
|
Northern
Pacific Railway Company
General
Lien Railway and Land Grant 3% Bonds, due 2047
|
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. | Yes [ ] No [x] |
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. | Yes [ ] No [x] |
Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such
filing requirement for the past 90 days.
|
Yes [x] No [ ] |
Indicate
by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of
Regulation S-T (§
232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such
files).
|
Yes [ ] No [x] |
Indicate by check mark whether the registrant is a large accelerated filer, accelerated filer, non-accelerated filer, or smaller reporting company (as defined in Rule 12b-2 of the Act). | |
Large
accelerated filer
[ ] Accelerated
filer
[ ] Non-accelerated
filer [x] Smaller reporting company
[ ]
|
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). | Yes [ ] No [x] |
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: | |
1,000 shares of Outstanding Common Stock, $1.00 par value, as of February 11, 2010. | |
*BNSF Railway Company is a wholly–owned subsidiary of Burlington Northern Santa Fe Corporation; as a result, there is no market data with respect to registrant’s shares. |
At
December 31,
|
2009
|
2008
|
2007
|
||||||
Locomotives
|
6,759
|
6,510
|
6,400
|
||||||
Freight
cars:
|
|||||||||
Covered hopper
|
33,878
|
35,381
|
36,439
|
||||||
Gondola
|
13,559
|
14,485
|
13,690
|
||||||
Open hopper
|
11,028
|
11,046
|
11,428
|
||||||
Flat
|
10,179
|
10,073
|
10,470
|
||||||
Box
|
5,493
|
6,145
|
7,948
|
||||||
Refrigerator
|
3,653
|
3,944
|
4,196
|
||||||
Auto rack
|
709
|
618
|
416
|
||||||
Tank
|
433
|
447
|
427
|
||||||
Other
|
397
|
416
|
324
|
||||||
Total freight
cars
|
79,329
|
82,555
|
85,338
|
||||||
Domestic
chassis
|
6,034
|
11,336
|
11,714
|
||||||
Domestic
containers
|
775
|
3,246
|
3,253
|
||||||
Trailers
|
−
|
1,195
|
1,200
|
||||||
Maintenance
of way and other
|
4,637
|
4,499
|
4,232
|
||||||
Commuter
passenger cars
|
164
|
163
|
163
|
||||||
Average
age from date of manufacture–locomotive fleet (years)a
|
16
|
15
|
15
|
||||||
Average
age from date of manufacture–freight car fleet (years)a
|
19
|
18
|
18
|
||||||
aThese averages are not weighted
to reflect the greater capacities of the newer
equipment.
|
Revenues
(in
millions)
|
Cars
/ Units
(in
thousands)
|
Average
Revenue
Per
Car / Unit
|
||||||||||||||
Year
ended December 31,
|
2009
|
2008
|
2009
|
2008
|
2009
|
2008
|
||||||||||
Consumer
Products
|
$
|
4,316
|
$
|
6,064
|
3,911
|
4,818
|
$
|
1,104
|
$
|
1,259
|
||||||
Coal
|
3,564
|
3,970
|
2,390
|
2,516
|
1,491
|
1,578
|
||||||||||
Industrial
Products
|
2,874
|
4,028
|
1,172
|
1,598
|
2,452
|
2,521
|
||||||||||
Agricultural
Products
|
2,834
|
3,441
|
945
|
1,062
|
2,999
|
3,240
|
||||||||||
Total
freight revenues
|
13,588
|
17,503
|
8,418
|
9,994
|
$
|
1,614
|
$
|
1,751
|
||||||||
Other
revenues
|
260
|
284
|
||||||||||||||
Total operating
revenues
|
$
|
13,848
|
$
|
17,787
|
2009
|
2008
|
||||
Total
fuel expense a
|
$
|
2,372
|
$
|
4,640
|
|
BNSF
fuel surcharges
|
$
|
1,226
|
$
|
3,255
|
Year
ended December 31,
|
2009
|
2008
|
|||||
Compensation
and benefits
|
$
|
3,458
|
$
|
3,859
|
|||
Fuel
|
2,372
|
4,640
|
|||||
Purchased
services
|
1,859
|
2,074
|
|||||
Depreciation
and amortization
|
1,534
|
1,395
|
|||||
Equipment
rents
|
777
|
901
|
|||||
Materials
and other
|
640
|
1,022
|
|||||
Total operating
expenses
|
$
|
10,640
|
$
|
13,891
|
|||
Interest
expense
|
$
|
124
|
$
|
97
|
|||
Interest
income, related parties
|
$
|
(3
|
)
|
$
|
(19
|
)
|
|
Other
expense, net
|
$
|
6
|
$
|
18
|
|||
Income
tax expense
|
$
|
1,067
|
$
|
1,438
|
•
|
Expectations
as to operating results, such as revenues and earnings;
|
|
•
|
Expectations
as to the effect on the Company’s financial condition of claims,
litigation, environmental and personal injury costs, commitments,
contingent liabilities, U.S. Surface Transportation Board and other
governmental and regulatory investigations and proceedings, and changes in
the economic laws and regulations applicable to the rail
industry;
|
|
•
|
Plans
and goals for future operational improvements and capital commitments;
and
|
|
•
|
Current
or future volatility in the credit market and future market conditions or
economic performance.
|
•
|
Economic
and industry conditions: material adverse changes in economic or
industry conditions, both in the United States and globally, volatility in
the capital or credit markets, including changes affecting the timely
availability and cost of capital, changes in customer demand, effects of
adverse economic conditions affecting shippers or BNSF Railway’s supplier
base and in the industries and geographic areas that produce and consume
freight, changes in demand due to more stringent regulatory policies
such as the regulation of carbon dioxide emissions that could reduce
the demand for coal or governmental tariffs or subsidies that could affect
the demand for grain, competition and consolidation within the
transportation industry, the extent to which BNSF Railway is successful in
gaining new long-term relationships with customers or retaining existing
ones, level of service failures that could lead customers to use
competitors' services, changes in fuel prices and other key materials and
disruptions in supply chains for these materials, increased customer
bankruptcies, closures or slowdowns and changes in crew availability,
labor costs and labor difficulties, including stoppages affecting either
BNSF Railway’s operations or customers’ abilities to deliver goods to BNSF
Railway for shipment;
|
•
|
Legal,
legislative and regulatory factors: developments and changes in
laws and regulations, including those affecting train operations or the
marketing of services, the ultimate outcome of shipper and rate claims
subject to adjudication or claims, investigations or litigation alleging
violations of the antitrust laws, increased economic regulation of the
rail industry through legislative action and revised rules and standards
applied by the U.S. Surface Transportation Board in various areas
including rates and services, other more general legislative actions,
developments in environmental investigations or proceedings with respect
to rail operations or current or past ownership or control of real
property or properties owned by others impacted by BNSF Railway operations
and developments in and losses resulting from other types of claims and
litigation, including those relating to personal injuries, asbestos and
other occupational diseases, the release of hazardous materials,
environmental contamination and damage to property; the availability of
adequate insurance to cover the risks associated with operations;
and
|
•
|
Operating
factors: technical difficulties, changes in operating conditions
and costs, changes in business mix, the availability of equipment and
human resources to meet changes in demand, the extent of the Company’s
ability to achieve its operational and financial initiatives and to
contain costs in response to changes in demand and other factors, the
effectiveness of steps taken to maintain and improve operations and
velocity and network fluidity, operational and other difficulties in
implementing positive train control technology, restrictions on
development and expansion plans due to environmental concerns,
constraints due to the nation’s aging infrastructure, disruptions to BNSF
Railway’s technology network including computer systems and software, as
well as natural events such as severe weather, fires, floods and
earthquakes or man-made or other disruptions of BNSF Railway’s operating
systems, structures, or equipment including the effects of acts of
terrorism on the Company’s system or other railroads’ systems or other
links in the transportation chain.
|
Year
ended December 31,
|
2009
|
2008
|
|||||
Fuel-hedge
loss (including ineffective portion of unexpired hedges)
|
$
|
(195
|
)
|
$
|
(5
|
)
|
|
Tax
effect
|
75
|
2
|
|||||
Hedge
loss, net of tax
|
$
|
(120
|
)
|
$
|
(3
|
)
|
Sensitivity
Analysis
|
||||
Hedged
Commodity Price Change
|
Fuel-Hedge
Annual Pre-Tax Earnings Impact
|
Balance
Sheet Impact of Change in Fuel-Hedge Fair Value
|
||
10-percent
increase
|
$54
million increase
|
$112
million increase
|
||
10-percent
decrease
|
$51
million decrease
|
$108
million decrease
|
Sensitivity
Analysis
|
|||
Hypothetical
Change
in
Interest Rates
|
Change
in Fair Value
|
||
Total
Debt
|
|||
1-percent
decrease
|
$79
million increase
|
||
1-percent
increase
|
$70
million decrease
|
Year
ended December 31,
|
2009
|
2008
|
2007
|
|||||||
Revenues
|
$
|
13,848
|
$
|
17,787
|
$
|
15,610
|
||||
Operating
expenses:
|
||||||||||
Compensation and
benefits
|
3,458
|
3,859
|
3,754
|
|||||||
Fuel
|
2,372
|
4,640
|
3,327
|
|||||||
Purchased
services
|
1,859
|
2,074
|
1,995
|
|||||||
Depreciation and
amortization
|
1,534
|
1,395
|
1,292
|
|||||||
Equipment rents
|
777
|
901
|
942
|
|||||||
Materials and other
|
640
|
1,022
|
790
|
|||||||
Total operating expenses
|
10,640
|
13,891
|
12,100
|
|||||||
Operating
income
|
3,208
|
3,896
|
3,510
|
|||||||
Interest
expense
|
124
|
97
|
87
|
|||||||
Interest
income, related parties
|
(3
|
)
|
(19
|
)
|
(191
|
)
|
||||
Other
expense, net
|
6
|
18
|
31
|
|||||||
Income before income taxes
|
3,081
|
3,800
|
3,583
|
|||||||
Income
tax expense
|
1,067
|
1,438
|
1,384
|
|||||||
Net income
|
$
|
2,014
|
$
|
2,362
|
$
|
2,199
|
December
31,
|
2009
|
2008
|
|||||
Assets
|
|||||||
Current
assets:
|
|||||||
Cash and cash
equivalents
|
$
|
20
|
$
|
209
|
|||
Accounts receivable,
net
|
810
|
873
|
|||||
Materials and
supplies
|
632
|
524
|
|||||
Current portion of deferred
income taxes
|
282
|
434
|
|||||
Other current
assets
|
375
|
337
|
|||||
Total current
assets
|
2,119
|
2,377
|
|||||
Property
and equipment, net of accumulated depreciation of $10,731 and $9,908,
respectively
|
32,278
|
30,838
|
|||||
Other
assets
|
3,193
|
2,910
|
|||||
Total assets
|
$
|
37,590
|
$
|
36,125
|
|||
Liabilities
and Stockholder’s Equity
|
|||||||
Current
liabilities:
|
|||||||
Accounts payable and other
current liabilities
|
$
|
2,548
|
$
|
3,114
|
|||
Long-term debt due within one
year
|
335
|
254
|
|||||
Total current liabilities
|
2,883
|
3,368
|
|||||
Long-term
debt
|
2,118
|
1,821
|
|||||
Deferred
income taxes
|
9,360
|
8,672
|
|||||
Casualty
and environmental liabilities
|
899
|
959
|
|||||
Pension
and retiree health and welfare liability
|
783
|
1,047
|
|||||
Other
liabilities
|
1,799
|
1,892
|
|||||
Total
liabilities
|
17,842
|
17,759
|
|||||
Commitments
and contingencies (see Notes 3, 9 and 10)
|
|||||||
Stockholder’s
equity:
|
|||||||
Common stock, $1 par value,
1,000 shares authorized;
issued and outstanding and
paid-in-capital
|
6,331
|
6,331
|
|||||
Retained
earnings
|
14,866
|
12,852
|
|||||
Intercompany notes
receivable
|
(948
|
)
|
(6
|
)
|
|||
Accumulated other comprehensive
loss
|
(501
|
)
|
(811
|
)
|
|||
Total stockholder’s
equity
|
19,748
|
18,366
|
|||||
Total liabilities and
stockholder’s equity
|
$
|
37,590
|
$
|
36,125
|
Year
ended December 31,
|
2009
|
2008
|
2007
|
|||||||
Operating
Activities
|
||||||||||
Net
income
|
$
|
2,014
|
$
|
2,362
|
$
|
2,199
|
||||
Adjustments
to reconcile net income to net cash provided
by
operating activities:
|
||||||||||
Depreciation
and amortization
|
1,534
|
1,395
|
1,292
|
|||||||
Deferred
income taxes
|
610
|
420
|
302
|
|||||||
Long-term
casualty and environmental liabilities, net
|
(90
|
)
|
150
|
26
|
||||||
Other,
net
|
(261
|
)
|
11
|
80
|
||||||
Changes
in current assets and liabilities:
|
||||||||||
Accounts
receivable, net
|
120
|
176
|
(120
|
)
|
||||||
Change
in accounts receivable sales program
|
(50
|
)
|
(250
|
)
|
–
|
|||||
Materials
and supplies
|
(108
|
)
|
55
|
(91
|
)
|
|||||
Other
current assets
|
(36
|
)
|
(28
|
)
|
12
|
|||||
Accounts
payable and other current liabilities
|
(245
|
)
|
(49
|
)
|
(123
|
)
|
||||
Net
cash provided by operating activities
|
3,488
|
4,242
|
3,577
|
|||||||
Investing
Activities
|
||||||||||
Capital
expenditures excluding equipment
|
(1,988
|
)
|
(2,165
|
)
|
(2,248
|
)
|
||||
Acquisition
of equipment
|
(733
|
)
|
(949
|
)
|
(745
|
)
|
||||
Proceeds
from sale of equipment financed
|
368
|
348
|
778
|
|||||||
Construction
costs for facility financing obligation
|
(37
|
)
|
(64
|
)
|
(37
|
)
|
||||
Net
increase in intercompany notes receivable
|
−
|
−
|
(993
|
)
|
||||||
Other,
net
|
(238
|
)
|
(228
|
)
|
(147
|
)
|
||||
Net
cash used for investing activities
|
(2,628
|
)
|
(3,058
|
)
|
(3,392
|
)
|
||||
Financing
Activities
|
||||||||||
Proceeds
from issuance of long-term debt
|
75
|
−
|
−
|
|||||||
Payments
on long-term debt
|
(228
|
)
|
(216
|
)
|
(182
|
)
|
||||
Proceeds
from facility financing obligation
|
51
|
68
|
41
|
|||||||
Net
increase in intercompany notes receivable classified as
equity
|
(942
|
)
|
(850
|
)
|
−
|
|||||
Net
decrease in intercompany notes payable
|
−
|
−
|
(35
|
)
|
||||||
Other,
net
|
(5
|
)
|
(1
|
)
|
(4
|
)
|
||||
Net
cash used for financing activities
|
(1,049
|
)
|
(999
|
)
|
(180
|
)
|
||||
(Decrease)
increase in cash and cash equivalents
|
(189
|
)
|
185
|
5
|
||||||
Cash
and cash equivalents:
|
||||||||||
Beginning
of year
|
209
|
24
|
19
|
|||||||
End
of year
|
$
|
20
|
$
|
209
|
$
|
24
|
||||
Supplemental
Cash Flow Information
|
||||||||||
Interest
paid, net of amounts capitalized
|
$
|
113
|
$
|
112
|
$
|
75
|
||||
Income
taxes paid, net of refunds
|
$
|
626
|
$
|
1,052
|
$
|
930
|
||||
Non-cash
asset financing
|
$
|
514
|
$
|
258
|
$
|
461
|
||||
Non-cash
dividend
|
$
|
−
|
$
|
1,300
|
$
|
4,100
|
Common
Stock and Paid-in-Capital
|
Retained
Earnings
|
Intercompany
Notes
Receivable
|
Accumulated
Other
Comprehensive
Income
(Loss)
|
Total
Stockholder’s
Equity
|
||||||||||||
Balance
at December 31, 2006
|
$
|
6,331
|
$
|
13,711
|
$
|
–
|
$
|
(286
|
)
|
$
|
19,756
|
|||||
Comprehensive
income:
|
||||||||||||||||
Net
income
|
–
|
2,199
|
–
|
–
|
2,199
|
|||||||||||
Change
in unrecognized prior service credit and actuarial losses, net of tax
expense of $76
|
–
|
–
|
–
|
122
|
122
|
|||||||||||
Change
in fuel hedge mark-to-market, net of tax expense of $11
|
–
|
–
|
–
|
16
|
16
|
|||||||||||
Total comprehensive
income
|
–
|
2,199
|
–
|
138
|
2,337
|
|||||||||||
Adjustment
for the adoption of authoritative accounting guidance related to
accounting for uncertainty in income taxes
|
–
|
(13
|
)
|
–
|
–
|
(13
|
)
|
|||||||||
Non-cash
dividend ($4.1 per share)
|
–
|
(4,100
|
)
|
–
|
–
|
(4,100
|
)
|
|||||||||
Intercompany
notes receivable
|
–
|
–
|
(456
|
)
|
–
|
(456
|
)
|
|||||||||
Balance
at December 31, 2007
|
6,331
|
11,797
|
(456
|
)
|
(148
|
)
|
17,524
|
|||||||||
Comprehensive
income:
|
||||||||||||||||
Net
income
|
–
|
2,362
|
–
|
–
|
2,362
|
|||||||||||
Change
in unrecognized prior service credit and actuarial losses, net of tax
benefit of $219
|
–
|
–
|
–
|
(353
|
)
|
(353
|
)
|
|||||||||
Change
in fuel hedge mark-to-market, net of tax benefit of $189
|
–
|
–
|
–
|
(305
|
)
|
(305
|
)
|
|||||||||
Change in other comprehensive income of equity method
investees
|
–
|
–
|
–
|
(5
|
)
|
(5
|
)
|
|||||||||
Total comprehensive
income
|
–
|
2,362
|
–
|
(663
|
)
|
1,699
|
||||||||||
Adjustment
to change the measurement date pursuant to adoption of authoritative
accounting guidance related to defined benefit pension and other
postretirement plans, net of tax benefit of $3
|
–
|
(7
|
)
|
–
|
2
|
(5
|
)
|
|||||||||
Adjustment
to initially apply authoritative accounting guidance related to defined
benefit pension and other postretirement plans to equity method
investees
|
–
|
–
|
–
|
(2
|
)
|
(2
|
)
|
|||||||||
Non-cash
dividend ($1.3 per share)
|
–
|
(1,300
|
)
|
–
|
–
|
(1,300
|
)
|
|||||||||
Intercompany
notes receivable
|
–
|
–
|
450
|
–
|
450
|
|||||||||||
Balance
at December 31, 2008
|
|
6,331
|
|
12,852
|
|
(6
|
)
|
|
(811
|
)
|
|
18,366
|
||||
Comprehensive
income:
|
||||||||||||||||
Net
income
|
–
|
2,014
|
–
|
–
|
2,014
|
|||||||||||
Change
in unrecognized prior service credit and actuarial losses, net of tax
expense of $13
|
–
|
–
|
–
|
24
|
24
|
|||||||||||
Change
in fuel hedge mark-to-market, net of tax expense of $177
|
–
|
–
|
–
|
286
|
286
|
|||||||||||
Total comprehensive
income
|
–
|
2,014
|
–
|
310
|
2,324
|
|||||||||||
Intercompany
notes receivable
|
–
|
–
|
(942
|
)
|
–
|
(942
|
)
|
|||||||||
Balance
at December 31, 2009
|
$
|
6,331
|
$
|
14,866
|
$
|
(948
|
)
|
$
|
(501
|
)
|
$
|
19,748
|
·
|
Level
1–Quoted prices for identical assets or liabilities in active markets that
the Company has the ability to access at the measurement
date.
|
·
|
Level
2–Quoted prices for similar assets or liabilities in active markets;
quoted prices for identical or similar assets or liabilities in markets
that are not active; and model-derived valuations in which all significant
inputs are observable market data.
|
·
|
Level
3–Valuations derived from valuation techniques in which one or more
significant inputs are unobservable.
|
Year
ended December 31,
|
2009
|
2008
|
|||||
Short-term
hedge asset
|
$
|
20
|
$
|
−
|
|||
Long-term
hedge asset
|
40
|
−
|
|||||
Short-term
hedge liability
|
(25
|
)
|
(279
|
)
|
|||
Long-term
hedge liability
|
(12
|
)
|
(193
|
)
|
|||
Total
derivatives
|
$
|
23
|
$
|
(472
|
)
|
Fair
Value of Derivative Instruments
|
||||||||
Asset
Derivatives
|
||||||||
Balance
Sheet
|
||||||||
December
31,
|
2009
|
2008
|
Location
|
|||||
Derivatives
designated as hedging instruments under ASC 815-20
|
||||||||
Fuel
Contracts
|
$
|
20
|
$
|
−
|
Other
current assets
|
|||
Fuel
Contracts
|
40
|
−
|
Other
assets
|
|||||
Fuel
Contracts
|
10 |
−
|
Accounts
payable and other current liabilities
|
|||||
Fuel
Contracts
|
3 |
−
|
|
Other
liabilities
|
||||
Total
Asset Derivatives designated as hedging instruments under ASC
815-20
|
$
|
73
|
$
|
−
|
Liability
Derivatives
|
||||||||
Balance
Sheet
|
||||||||
December
31,
|
2009
|
2008
|
Location
|
|||||
Derivatives
designated as hedging instruments under ASC 815-20
|
||||||||
Fuel Contracts |
$
|
35
|
$
|
279
|
Accounts
payable and other current liabilities
|
|||
Fuel
Contracts
|
15
|
193
|
Other
liabilities
|
|||||
Total
Liability Derivatives designated as hedging instruments under ASC
815-20
|
$
|
50
|
$
|
472
|
The
Effect of Derivative Instruments Gains and Losses
for
the Twelve Month Periods Ended December 31, 2009, 2008 and
2007
|
Derivatives
in ASC 815-20 Cash Flow Hedging Relationships
|
Amount
of Gain or (Loss) Recognized
in
OCI
on
Derivatives
(Effective
Portion)
|
Location
of Gain or (Loss) Recognized from AOCL into Income
|
Amount
of Gain or (Loss) Recognized
from
AOCL
into Income
(Effective
Portion)
|
Location
of Gain or (Loss) Recognized in Income on Derivatives
|
Amount
of Gain or (Loss) Recognized
in
Income
on
Derivatives
(Ineffective
Portion and Amount
Excluded
from
Effectiveness
Testing)a
|
||||||||||||||||||||||||||
2009
|
2008
|
2007
|
2009
|
2008
|
2007
|
2009
|
2008
|
2007
|
|||||||||||||||||||||||
Fuel
Contracts
|
$
$
|
268
|
$
|
(499)
|
$
|
58
|
Fuel
expense
|
$
|
(227)
|
$
|
12
|
$
|
30
|
Fuel
expense
|
$
|
32
|
$
|
(17)
|
$
|
1
|
|||||||||||
Total
derivatives
|
$
$
|
268
|
$
|
(499)
|
$
|
58
|
$
|
(227)
|
$
|
12
|
$
|
30
|
$
|
32
|
$
|
(17)
|
$
|
1
|
|||||||||||||
December
31,
|
2009
|
2008
|
|||||
Settled
fuel-hedging contracts payable
|
$
|
(23
|
)
|
$
|
(38
|
)
|
Quarter
Ending
|
||||||||||||||||
2010
|
March
31,
|
June
30,
|
September
30,
|
December
31,
|
Annual
|
|||||||||||
HO
Swaps
|
||||||||||||||||
Gallons
hedged (in millions)
|
5.60
|
8.35
|
6.10
|
6.50
|
26.55
|
|||||||||||
Average
swap price (per gallon)
|
$
|
1.79
|
$
|
1.81
|
$
|
1.87
|
$
|
1.93
|
$
|
1.85
|
||||||
Fair
value (in millions)
|
$
|
2
|
$
|
3
|
$
|
2
|
$
|
2
|
$
|
9
|
Quarter
Ending
|
||||||||||||||||
2011
|
March
31,
|
June
30,
|
September
30,
|
December
31,
|
Annual
|
|||||||||||
HO
Swaps
|
||||||||||||||||
Gallons
hedged (in millions)
|
8.30
|
8.30
|
7.50
|
7.50
|
31.60
|
|||||||||||
Average
swap price (per gallon)
|
$
|
1.91
|
$
|
1.89
|
$
|
1.95
|
$
|
2.01
|
$
|
1.94
|
||||||
Fair
value (in millions)
|
$
|
3
|
$
|
3
|
$
|
3
|
$
|
3
|
$
|
12
|
Quarter
Ending
|
||||||||||||||||
2012
|
March
31,
|
June
30,
|
September
30,
|
December
31,
|
Annual
|
|||||||||||
HO
Swaps
|
||||||||||||||||
Gallons
hedged (in millions)
|
17.20
|
2.00
|
−
|
−
|
19.20
|
|||||||||||
Average
swap price (per gallon)
|
$
|
2.08
|
$
|
2.18
|
$
|
−
|
$
|
−
|
$
|
2.09
|
||||||
Fair
value (in millions)
|
$
|
5
|
$
|
−
|
$
|
−
|
$
|
−
|
$
|
5
|
Quarter
Ending
|
||||||||||||||||
2010
|
March
31,
|
June
30,
|
September
30,
|
December
31,
|
Annual
|
|||||||||||
WTI
Swaps
|
||||||||||||||||
Barrels
hedged (in thousands)
|
1,210
|
1,110
|
1,125
|
1,235
|
4,680
|
|||||||||||
Equivalent
gallons hedged (in millions)
|
50.82
|
46.62
|
47.25
|
51.87
|
196.56
|
|||||||||||
Average
swap price (per barrel)
|
$
|
85.05
|
$
|
87.89
|
$
|
87.82
|
$
|
86.27
|
$
|
86.71
|
||||||
Fair
value (in millions)
|
$
|
(6
|
)
|
$
|
(7
|
)
|
$
|
(5
|
)
|
$
|
(2
|
)
|
$
|
(20
|
)
|
|
WTI
Costless Collars
|
||||||||||||||||
Barrels
hedged (in thousands)
|
420
|
420
|
420
|
320
|
1,580
|
|||||||||||
Equivalent
gallons hedged (in millions)
|
17.64
|
17.64
|
17.64
|
13.44
|
66.36
|
|||||||||||
Average
cap price (per barrel)
|
$
|
78.23
|
$
|
79.79
|
$
|
81.33
|
$
|
82.84
|
$
|
80.40
|
||||||
Average
floor price (per barrel)
|
$
|
72.35
|
$
|
73.84
|
$
|
75.15
|
$
|
76.54
|
$
|
74.34
|
||||||
Fair
value (in millions)
|
$
|
1
|
$
|
2
|
$
|
2
|
$
|
1
|
$
|
6
|
Quarter
Ending
|
||||||||||||||||
2011
|
March
31,
|
June
30,
|
September
30,
|
December
31,
|
Annual
|
|||||||||||
WTI
Swaps
|
||||||||||||||||
Barrels
hedged (in thousands)
|
995
|
1,000
|
1,005
|
1,055
|
4,055
|
|||||||||||
Equivalent
gallons hedged (in millions)
|
41.79
|
42.00
|
42.21
|
44.31
|
170.31
|
|||||||||||
Average
swap price (per barrel)
|
$
|
85.59
|
$
|
85.20
|
$
|
85.52
|
$
|
85.88
|
$
|
85.55
|
||||||
Fair
value (in millions)
|
$
|
−
|
$
|
1
|
$
|
1
|
$
|
1
|
$
|
3
|
||||||
WTI
Costless Collars
|
||||||||||||||||
Barrels
hedged (in thousands)
|
200
|
200
|
200
|
200
|
800
|
|||||||||||
Equivalent
gallons hedged (in millions)
|
8.40
|
8.40
|
8.40
|
8.40
|
33.60
|
|||||||||||
Average
cap price (per barrel)
|
$
|
84.00
|
$
|
84.70
|
$
|
85.39
|
$
|
86.10
|
$
|
85.05
|
||||||
Average
floor price (per barrel)
|
$
|
77.75
|
$
|
78.40
|
$
|
79.05
|
$
|
79.70
|
$
|
78.73
|
||||||
Fair
value (in millions)
|
$
|
1
|
$
|
1
|
$
|
1
|
$
|
1
|
$
|
4
|
Quarter
Ending
|
||||||||||||||||
2012
|
March
31,
|
June
30,
|
September
30,
|
December
31,
|
Annual
|
|||||||||||
WTI
Swaps
|
||||||||||||||||
Barrels
hedged (in thousands)
|
205
|
200
|
−
|
−
|
405
|
|||||||||||
Equivalent
gallons hedged (in millions)
|
8.61
|
8.40
|
−
|
−
|
17.01
|
|||||||||||
Average
swap price (per barrel)
|
$
|
76.95
|
$
|
77.52
|
$
|
−
|
$
|
−
|
$
|
77.23
|
||||||
Fair
value (in millions)
|
$
|
2
|
$
|
2
|
$
|
−
|
$
|
−
|
$
|
4
|
Quarter
Ending
|
||||||||||||||||
2010
|
March
31,
|
June
30,
|
September
30,
|
December
31,
|
Annual
|
|||||||||||
HO-WTI
Swaps
|
||||||||||||||||
Barrels
hedged (in thousands)
|
215
|
180
|
135
|
100
|
630
|
|||||||||||
Equivalent
gallons hedged (in millions)
|
9.03
|
7.56
|
5.67
|
4.20
|
26.46
|
|||||||||||
Average
swap price (per barrel)
|
$
|
7.82
|
$
|
7.64
|
$
|
8.61
|
$
|
10.03
|
$
|
8.29
|
||||||
Fair
value (in millions)
|
$
|
−
|
$
|
−
|
$
|
−
|
$
|
−
|
$
|
−
|
Quarter
Ending
|
||||||||||||||||
2011
|
March
31,
|
June
30,
|
September
30,
|
December
31,
|
Annual
|
|||||||||||
HO-WTI
Swaps
|
||||||||||||||||
Barrels
hedged (in thousands)
|
−
|
−
|
85
|
85
|
170
|
|||||||||||
Equivalent
gallons hedged (in millions)
|
−
|
−
|
3.57
|
3.57
|
7.14
|
|||||||||||
Average
swap price (per barrel)
|
$
|
−
|
$
|
−
|
$
|
10.49
|
$
|
12.03
|
$
|
11.26
|
||||||
Fair
value (in millions)
|
$
|
−
|
$
|
−
|
$
|
−
|
$
|
−
|
$
|
−
|
Year
ending December 31,
|
2009
|
2010
|
2011
|
|||||||
WTI
Swaps
|
||||||||||
Barrels
hedged (in thousands)
|
5,005
|
4,680
|
3,570
|
|||||||
Equivalent
gallons hedged (in millions)
|
210.21
|
196.56
|
149.94
|
|||||||
Average
swap price (per barrel)
|
$
|
74.71
|
$
|
86.71
|
$
|
86.88
|
||||
Fair
value (in millions)
|
$
|
(98
|
)
|
$
|
(104
|
)
|
$
|
(62
|
)
|
|
WTI
Costless Collars
|
||||||||||
Barrels
hedged (in thousands)
|
2,725
|
1,500
|
800
|
|||||||
Equivalent
gallons hedged (in millions)
|
114.45
|
63.00
|
33.60
|
|||||||
Average
cap price (per barrel)
|
$
|
129.95
|
$
|
80.43
|
$
|
85.05
|
||||
Average
floor price (per barrel)
|
$
|
119.82
|
$
|
74.57
|
$
|
78.73
|
||||
Fair
value (in millions)
|
$
|
(181
|
)
|
$
|
(19
|
)
|
$
|
(8
|
)
|
Year
ended December 31,
|
2009
|
2008
|
2007
|
||||||
Accounts
receivable sales fees
|
$
|
3
|
$
|
12
|
$
|
19
|
|||
Loss
from participation in synthetic fuel partnership
|
−
|
−
|
5
|
||||||
Miscellaneous,
net
|
3
|
6
|
7
|
||||||
Total
|
$
|
6
|
$
|
18
|
$
|
31
|
Year
ended December 31,
|
2009
|
2008
|
2007
|
||||||
Current:
|
|||||||||
Federal
|
$
|
420
|
$
|
866
|
$
|
950
|
|||
State
|
38
|
152
|
132
|
||||||
Total current
|
458
|
1,018
|
1,082
|
||||||
Deferred:
|
|||||||||
Federal
|
554
|
382
|
248
|
||||||
State
|
55
|
38
|
54
|
||||||
Total deferred
|
609
|
420
|
302
|
||||||
Total
|
$
|
1,067
|
$
|
1,438
|
$
|
1,384
|
Year
ended December 31,
|
2009
|
2008
|
2007
|
||||
Federal
statutory income tax rate
|
35.0
|
%
|
35.0
|
%
|
35.0
|
%
|
|
State
income taxes, net of federal tax benefit
|
2.0
|
3.2
|
3.4
|
||||
Property
donations
|
(2.6
|
)
|
–
|
–
|
|||
Synthetic
fuel credits
|
–
|
–
|
(0.1
|
)
|
|||
Other,
net
|
0.2
|
(0.4
|
)
|
0.3
|
|||
Effective tax
rate
|
34.6
|
%
|
37.8
|
%
|
38.6
|
%
|
December
31,
|
2009
|
2008
|
|||||
Deferred
tax liabilities:
|
|||||||
Depreciation
and amortization
|
$
|
(9,938
|
)
|
$
|
(9,503
|
)
|
|
Hedging
|
(10
|
)
|
−
|
||||
Other
|
(182
|
)
|
(174
|
)
|
|||
Total deferred tax
liabilities
|
(10,130
|
)
|
(9,677
|
)
|
|||
Deferred
tax assets:
|
|||||||
Casualty
and environmental
|
382
|
409
|
|||||
Pension
and retiree health and welfare benefits
|
328
|
431
|
|||||
Compensation
and benefits
|
139
|
178
|
|||||
Hedging
|
−
|
167
|
|||||
Other
|
203
|
254
|
|||||
Total deferred tax
assets
|
1,052
|
1,439
|
|||||
Net deferred tax
liability
|
$
|
(9,078
|
)
|
$
|
(8,238
|
)
|
|
Non-current
deferred income tax liability
|
$
|
(9,360
|
)
|
$
|
(8,672
|
)
|
|
Current
portion of deferred income taxes
|
282
|
434
|
|||||
Net deferred tax
liability
|
$
|
(9,078
|
)
|
$
|
(8,238
|
)
|
2009
|
2008
|
2007
|
||||||||
Beginning
balance
|
$
|
150
|
$
|
125
|
$
|
87
|
||||
Additions
for tax positions related to current year
|
49
|
19
|
29
|
|||||||
(Reductions)
additions for tax positions taken in prior years
|
(8
|
)
|
9
|
12
|
||||||
(Reductions)
additions for tax positions as a result of:
|
||||||||||
Settlements
|
(13
|
)
|
2
|
−
|
||||||
Lapse
of statute of limitations
|
(12
|
)
|
(5
|
)
|
(3
|
)
|
||||
Ending
balance
|
$
|
166
|
$
|
150
|
$
|
125
|
December
31,
|
2009
|
2008
|
2009
Depreciation
Rates
|
||||||
Land
|
$
|
1,803
|
$
|
1,751
|
–
|
%
|
|||
Track
structure
|
20,281
|
19,108
|
3.5
|
%
|
|||||
Other
roadway
|
13,245
|
12,922
|
2.6
|
%
|
|||||
Locomotives
|
4,759
|
4,210
|
7.2
|
%
|
|||||
Freight
cars and other equipment
|
2,246
|
2,140
|
5.1
|
%
|
|||||
Computer
hardware and software
|
675
|
615
|
11.8
|
%
|
|||||
Total cost
|
43,009
|
40,746
|
|||||||
Less
accumulated depreciation and amortization
|
(10,731
|
)
|
(9,908
|
)
|
|||||
Property and equipment,
net
|
$
|
32,278
|
$
|
30,838
|
December
31,
|
2009
|
2008
|
||||
Compensation
and benefits payable
|
$
|
510
|
$
|
609
|
||
Accounts
payable
|
305
|
346
|
||||
Rents
and leases
|
283
|
276
|
||||
Casualty
and environmental liabilities
|
250
|
280
|
||||
Property
tax liabilities
|
177
|
157
|
||||
Customer
incentives
|
125
|
141
|
||||
Income
tax liabilities
|
106
|
286
|
||||
Hedge
liabilitiesa
|
48
|
225
|
||||
Other
|
744
|
794
|
||||
Total
|
$
|
2,548
|
$
|
3,114
|
|
a
2008 hedge liabilities include a reduction of $92 million for collateral
paid (see Note 3 to the Consolidated Financial Statements for additional
information).
|
December
31,
|
2009a
|
2008a
|
|||||||||
Notes
and debentures, due 2022
|
$
|
200
|
8.8
|
%
|
$
|
200
|
8.8
|
%
|
|||
Equipment
obligations, due 2010 to 2027
|
271
|
6.2
|
244
|
6.7
|
|||||||
Capitalized
lease obligations, due 2010 to 2028
|
1,589
|
5.5
|
1,281
|
5.3
|
|||||||
Mortgage
bonds, due 2010 to 2047
|
94
|
5.9
|
97
|
6.0
|
|||||||
Financing
obligations, due 2010 to 2028
|
323
|
6.2
|
278
|
6.2
|
|||||||
Unamortized
discount and other, net
|
(24
|
)
|
(25
|
)
|
|||||||
Total
|
2,453
|
2,075
|
|||||||||
Less
current portion of long-term debt
|
(335
|
)
|
6.2
|
%
|
(254
|
)
|
6.7
|
%
|
|||
Long-term debt
|
$
|
2,118
|
$
|
1,821
|
|||||||
a Amounts represent debt outstanding and weighted
average effective interest rates for 2009 and 2008, respectively.
Maturities are as of December 31, 2009.
|
December
31, 2009
|
|||||||||||||||||||||||||||
Total
Including Capital Leases
|
Total
Excluding Capital Leases
|
Fair
Value Excluding Capital Leases
|
|||||||||||||||||||||||||
Maturity
Date
|
|||||||||||||||||||||||||||
2010
|
2011
|
2012
|
2013
|
2014
|
Thereafter
|
||||||||||||||||||||||
Fixed-rate
debt (in millions)
|
$
|
335
|
$
|
273
|
$
|
209
|
$
|
196
|
$
|
138
|
$
|
1,302
|
$
|
2,453
|
$
|
864
|
$
|
936
|
|||||||||
Average
interest rate
|
6.2
|
%
|
5.9
|
%
|
6.0
|
%
|
6.2
|
%
|
5.9
|
%
|
6.4
|
%
|
6.2
|
%
|
Guarantees
|
|||||||||||||||||
BNSF
Railway
Ownership
Percentage
|
Principal
Amount
Guaranteed
|
Maximum
Future
Payments
|
Maximum
Recourse
Amount
a
|
Remaining
Term
(in
years
|
)
|
Capitalized
Obligations
|
|||||||||||
Kinder
Morgan Energy Partners, L.P.
|
0.5
|
%
|
$
|
190
|
$
|
190
|
$
|
–
|
Termination
of Ownership
|
$
|
–
|
||||||
Kansas
City Terminal Intermodal Transportation Corporation
|
0.0
|
%
|
$
|
48
|
$
|
67
|
$
|
67
|
9
|
$
|
27
|
b
|
|||||
Westside
Intermodal Transportation Corporation
|
0.0
|
%
|
$
|
37
|
$
|
54
|
$
|
–
|
14
|
$
|
29
|
b
|
|||||
The
Unified Government of Wyandotte County/Kansas City, Kansas
|
0.0
|
%
|
$
|
12
|
$
|
17
|
$
|
–
|
14
|
$
|
9
|
b
|
|||||
Chevron
Phillips Chemical Company, LP
|
0.0
|
%
|
N/A
|
d
|
N/A
|
d
|
N/A
|
d
|
8
|
$
|
11
|
c
|
|||||
Various
lessors (Residual
value guarantees)
|
0.0
|
%
|
N/A
|
$
|
270
|
$
|
270
|
Various
|
$
|
68
|
c
|
||||||
All
other
|
0.0
|
%
|
$
|
3
|
$
|
4
|
$
|
1
|
Various
|
$
|
–
|
||||||
aReflects the maximum amount the
Company could recover from a third party other than the
counterparty.
bReflects capitalized obligations
that are recorded on the Company’s Consolidated Balance Sheet.
cReflects the asset and
corresponding liability for the fair value of these guarantees required by
authoritative accounting guidance related to guarantees.
d There
is no cap to the liability that can be sought from BNSF Railway for BNSF
Railway’s negligence or the negligence of the indemnified
party. However, BNSF Railway could receive reimbursement from
certain insurance policies if the liability exceeds a certain
amount.
|
December
31,
|
Capital
Leases
|
Operating
Leases
|
a
|
||||
2010
|
$
|
349
|
$
|
613
|
|||
2011
|
285
|
601
|
|||||
2012
|
215
|
541
|
|||||
2013
|
169
|
516
|
|||||
2014
|
138
|
499
|
|||||
Thereafter
|
922
|
3,553
|
|||||
Total
|
2,078
|
$
|
6,323
|
||||
Less
amount representing interest
|
(489
|
)
|
|||||
Present
value of minimum lease payments
|
$
|
1,589
|
|||||
aExcludes leases having
non-cancelable lease terms of less than one year and per diem
leases.
|
|
•Because
BNSF Railway did not have detailed employment records in order to compute
the population of potentially exposed employees, it computed an estimate
using Company employee data from 1970 forward and estimated the BNSF
Railway employee base from 1938-1969 using railroad industry historical
census data and estimating BNSF Railway’s representation in the total
railroad population.
|
|
•The
projected incidence of disease was estimated based on epidemiological
studies using employees’ age, duration and intensity of exposure while
employed.
|
|
•An
estimate of the future anticipated claims filing rate by type of disease
(non-malignant, cancer and mesothelioma) was computed using the Company’s
average historical claim filing rates for the period 2004-2006.
|
|
•An
estimate of the future anticipated dismissal rate by type of claim was
computed using the Company’s historical average dismissal rates observed
in 2005-2007.
|
|
•An
estimate of the future anticipated settlement by type of disease was
computed using the Company’s historical average of dollars paid per claim
for pending and future claims using the average settlement by type of
incidence observed during
2005-2007.
|
2009
|
2008
|
2007
|
||||||||
Beginning
balance
|
$
|
251
|
$
|
270
|
$
|
306
|
||||
Accruals
|
–
|
–
|
(17
|
)
|
||||||
Payments
|
(15
|
)
|
(19
|
)
|
(19
|
)
|
||||
Ending balance at December
31,
|
$
|
236
|
$
|
251
|
$
|
270
|
2009
|
2008
|
||||||
Claims
unresolved at January 1,
|
1,833
|
1,781
|
|||||
Claims
filed
|
290
|
494
|
|||||
Claims
settled, dismissed or otherwise resolved
|
(512
|
)
|
(442
|
)
|
|||
Claims unresolved at December
31,
|
1,611
|
1,833
|
|
•Size
and demographics (employee age and craft) of the
workforce.
|
|
•Activity
levels (manhours by employee craft and
carloadings).
|
|
•Expected
claim frequency rates by type of claim (employee FELA or third-party
liability) based on historical claim frequency
trends.
|
|
•Expected
dismissal rates by type of claim based on historical dismissal
rates.
|
|
•Expected
average paid amounts by type of claim for open and incurred but not
reported claims that eventually close with
payment.
|
2009
|
2008
|
2007
|
||||||||
Beginning
balance
|
$
|
442
|
$
|
439
|
$
|
439
|
||||
Accruals
|
73
|
159
|
190
|
|||||||
Payments
|
(119
|
)
|
(156
|
)
|
(190
|
)
|
||||
Ending balance at December
31,
|
$
|
396
|
$
|
442
|
$
|
439
|
2009
|
2008
|
||||||
Claims
unresolved at January 1,
|
3,349
|
3,322
|
|||||
Claims
filed
|
3,460
|
4,313
|
|||||
Claims
settled, dismissed or otherwise resolved
|
(3,437
|
)
|
(4,286
|
)
|
|||
Claims unresolved at December
31,
|
3,372
|
3,349
|
2009
|
2008
|
2007
|
||||||||
Beginning
balance
|
$
|
546
|
$
|
380
|
$
|
318
|
||||
Accruals
|
64
|
251
|
126
|
|||||||
Payments
|
(93
|
)
|
(85
|
)
|
(64
|
)
|
||||
Ending balance at December
31,
|
$
|
517
|
$
|
546
|
$
|
380
|
BNSF
Railway Sites
|
|||||||
2009
|
2008
|
||||||
Number
of sites at January 1,
|
336
|
346
|
|||||
Sites
added during the period
|
13
|
19
|
|||||
Sites
closed during the period
|
(29
|
)
|
(29
|
)
|
|||
Number of sites at December
31,
|
320
|
336
|
2009
|
2008
|
2007
|
||||||||
Beginning
balance at January 1,
|
$
|
79
|
$
|
91
|
$
|
107
|
||||
Accruals
|
15
|
3
|
5
|
|||||||
Payments
|
(17
|
)
|
(15
|
)
|
(21
|
)
|
||||
Ending balance at December
31,
|
$
|
77
|
$
|
79
|
$
|
91
|
Pension
Benefits
|
Retiree
Health and Welfare Benefits
|
||||||||||||||||||
Year
ended December 31,
|
2009
|
2008
|
2007
|
2009
|
2008
|
2007
|
|||||||||||||
Service
cost
|
$
|
28
|
$
|
25
|
$
|
25
|
$
|
3
|
$
|
2
|
$
|
2
|
|||||||
Interest
cost
|
102
|
102
|
97
|
15
|
18
|
17
|
|||||||||||||
Expected
return on plan assets
|
(107
|
)
|
(112
|
)
|
(105
|
)
|
–
|
–
|
–
|
||||||||||
Amortization
of net loss
|
24
|
16
|
35
|
1
|
5
|
6
|
|||||||||||||
Amortization
of prior service credit
|
–
|
–
|
–
|
(6
|
)
|
(8
|
)
|
(8
|
)
|
||||||||||
Net cost
recognized
|
$
|
47
|
$
|
31
|
$
|
52
|
$
|
13
|
$
|
17
|
$
|
17
|
Pension
Benefits
|
Retiree
Health and
Welfare
Benefits
|
||||||||||||
Change
in Benefit Obligation
|
2009
|
2008
|
a
|
2009
|
2008
|
a
|
|||||||
Benefit
obligation at beginning of period
|
$
|
1,840
|
$
|
1,763
|
$
|
269
|
$
|
304
|
|||||
Service
cost
|
28
|
32
|
3
|
3
|
|||||||||
Interest
cost
|
102
|
127
|
15
|
22
|
|||||||||
Plan
participants’ contributions
|
–
|
–
|
9
|
11
|
|||||||||
Actuarial
loss (gain)
|
35
|
86
|
–
|
(36
|
)
|
||||||||
Medicare
subsidy
|
–
|
–
|
2
|
2
|
|||||||||
Benefits
paid
|
(141
|
)
|
(168
|
)
|
(32
|
)
|
(37
|
)
|
|||||
Projected benefit obligation at
end of period
|
1,864
|
1,840
|
266
|
269
|
|||||||||
Component representing future
salary increases
|
(53
|
)
|
(82
|
)
|
–
|
–
|
|||||||
Accumulated benefit obligation at
end of period
|
$
|
1,811
|
$
|
1,758
|
$
|
266
|
$
|
269
|
|||||
a In accordance with the
transition to new authoritative accounting guidance, the beginning balance
in 2009 and 2008 was December 31, 2008, and September 30, 2007,
respectively; therefore, 2008 includes 15 months of
activity.
|
Pension
Benefits
|
Retiree
Health and
Welfare
Benefits
|
||||||||||||
Change
in Plan Assets
|
2009
|
2008
|
a
|
2009
|
2008
|
a
|
|||||||
Fair
value of plan assets at beginning of period
|
$
|
1,034
|
$
|
1,588
|
$
|
–
|
$
|
–
|
|||||
Actual
return on plan assets
|
160
|
(395
|
)
|
–
|
–
|
||||||||
Employer
contributionsb
|
266
|
9
|
21
|
24
|
|||||||||
Plan
participants’ contributions
|
–
|
–
|
9
|
11
|
|||||||||
Medicare
subsidy
|
–
|
–
|
2
|
2
|
|||||||||
Benefits
paid
|
(141
|
)
|
(168
|
)
|
(32
|
)
|
(37
|
)
|
|||||
Fair value of plan assets at
measurement date
|
$
|
1,319
|
$
|
1,034
|
$
|
–
|
$
|
–
|
|||||
a In accordance with
the transition to new authoritative accounting guidance, the beginning
balance in 2009 and 2008 was December 31, 2008, and September 30, 2007,
respectively; therefore, 2008 includes 15 months of
activity.
|
|||||||||||||
b Employer
contributions were classified as Other, Net under Operating Activities in
the Company’s Consolidated Statements of Cash Flows.
|
Pension
Benefits
|
Retiree
Health and
Welfare
Benefits
|
||||||||||||
2009
|
2008
|
2009
|
2008
|
||||||||||
Funded
status (plan assets less projected benefit obligations)
|
$
|
(545
|
)
|
$
|
(806
|
)
|
$
|
(266
|
)
|
$
|
(269
|
)
|
Pension
Benefits
|
Retiree
Health and
Welfare
Benefits
|
||||||||||||||||||
Change
in AOCL
|
2009
|
2008
|
2007
|
2009
|
2008
|
2007
|
|||||||||||||
Balance
at January 1,
|
$
|
834
|
$
|
233
|
$
|
429
|
$
|
14
|
$
|
46
|
$
|
48
|
|||||||
Measurement
date adjustment pursuant to adoption of authoritative accounting guidance
issued September 2006
|
–
|
(4
|
)
|
–
|
–
|
1
|
–
|
||||||||||||
Amortization
of actuarial loss
|
(24
|
)
|
(16
|
)
|
(35
|
)
|
(1
|
)
|
(5
|
)
|
(6
|
)
|
|||||||
Amortization
of prior service credit
|
–
|
–
|
–
|
6
|
8
|
8
|
|||||||||||||
Actuarial
(gain) loss
|
(18
|
)
|
621
|
(161
|
)
|
–
|
(36
|
)
|
(4
|
)
|
|||||||||
Balance at December
31,
|
$
|
792
|
$
|
834
|
$
|
233
|
$
|
19
|
$
|
14
|
$
|
46
|
Pension
Benefits
|
Retiree
Health and
Welfare
Benefits
|
||||||||||||
2009
|
2008
|
2009
|
2008
|
||||||||||
Net
actuarial loss
|
$
|
792
|
$
|
834
|
$
|
25
|
$
|
26
|
|||||
Prior
service credit
|
−
|
−
|
(6
|
)
|
(12
|
)
|
|||||||
Pre-tax amount recognized in
AOCL at December 31,
|
792
|
834
|
19
|
14
|
|||||||||
After-tax amount recognized in
AOCL at December 31,
|
$
|
489
|
$
|
515
|
$
|
11
|
$
|
9
|
Assumptions
Used to Determine Net Cost
for
Fiscal Years Ended December 31,
|
Pension
Benefits
|
Retiree
Health and
Welfare
Benefits
|
|||||||||||
2009
|
2008
|
2007
|
2009
|
2008
|
2007
|
||||||||
Discount
rate
|
5.75
|
%
|
6.00
|
%
|
5.50
|
%
|
5.75
|
%
|
6.00
|
%
|
5.50
|
%
|
|
Expected
long-term rate of return on plan assets
|
8.00
|
%
|
8.00
|
%
|
8.00
|
%
|
–
|
%
|
–
|
%
|
–
|
%
|
|
Rate
of compensation increase
|
3.80
|
%
|
3.80
|
%
|
3.90
|
%
|
3.80
|
%
|
3.80
|
%
|
3.90
|
%
|
Assumptions
Used to Determine Benefit
Obligations
at December 31,
|
Pension
Benefits
|
Retiree
Health and
Welfare
Benefits
|
|||||||
2009
|
2008
|
2009
|
2008
|
||||||
Discount
rate
|
5.75
|
%
|
5.75
|
%
|
5.75
|
%
|
5.75
|
%
|
|
Rate
of compensation increase
|
3.80
|
%
|
3.80
|
%
|
3.80
|
%
|
3.80
|
%
|
Sensitivity
Analysis
|
||||
Change
in Net Benefit Cost
|
||||
Hypothetical
Discount Rate Change
|
Pension
|
Retiree
Health and Welfare
|
||
50
basis point decrease
|
$6
million increase
|
$200
thousand decrease
|
||
50
basis point increase
|
$6
million decrease
|
$100
thousand increase
|
||
Hypothetical
Rate of Return
on
Plan Assets Change
|
Pension
|
|||
50
basis point decrease
|
$7
million increase
|
|||
50
basis point increase
|
$7
million decrease
|
December
31,
|
2009
|
2008
|
2007
|
|||||||
Assumed
health care cost trend rate for next year
|
9.00
|
%
|
9.75
|
%
|
10.50
|
%
|
||||
Rate
to which health care cost trend rate is expected to decline and remain
|
5.00
|
%
|
5.00
|
%
|
5.00
|
%
|
||||
Year
that the rate reaches the ultimate trend rate
|
2016
|
2016
|
2016
|
One
Percentage-Point Increase
|
One
Percentage-Point Decrease
|
||||||
Effect
on total service and interest cost
|
$
|
1
|
$
|
(1
|
)
|
||
Effect
on postretirement benefit obligation
|
$
|
20
|
$
|
(17
|
)
|
Target
Allocation
|
Percentage
of Pension Plan Assets
|
||||||
Plan
Asset Allocation
|
2009
|
2009
|
2008
|
||||
Equity
Securities
|
45
– 75
|
%
|
62
|
%
|
55
|
%
|
|
Fixed
Income Securities
|
20
– 40
|
%
|
30
|
30
|
|||
Real
Estate
|
5
– 15
|
%
|
8
|
15
|
|||
Total
|
100
|
%
|
100
|
%
|
Asset
Category
|
Total
as of December 31, 2009
|
Level
1 Inputs
a
|
Level
2 Inputs
a
|
Level
3 Inputs
a
|
||||||||
Equity
securities:
|
||||||||||||
U.
S.
|
$
|
443
|
$
|
443
|
$
|
−
|
$
|
−
|
||||
International
|
336
|
336
|
−
|
−
|
||||||||
Corporate
debt securities
|
157
|
−
|
157
|
−
|
||||||||
Government
debt securities
|
114
|
−
|
114
|
−
|
||||||||
Real
estate
|
103
|
−
|
−
|
103
|
||||||||
Collateralized
obligations and mortgage backed securities (MBS)
|
78
|
−
|
77
|
1
|
||||||||
Cash
and cash equivalents
|
48
|
38
|
10
|
−
|
||||||||
Registered
investment companies
|
34
|
23
|
11
|
−
|
||||||||
Total
b
|
$
|
1,313
|
$
|
840
|
$
|
369
|
$
|
104
|
||||
a See
Note 2 to the Consolidated Financial Statements under the heading “Fair
Value Measurements” for a definition of each of these levels of
inputs.
b Excludes
$6 million accrued for dividend and interest
receivable.
|
Level
3 Inputs
|
Total
|
U.S.
Equity Securities
|
Corporate
Debt Securities
|
Real
Estate
|
Collateralized
Obligations & MBS
|
Cash
and Cash Equivalentsa
|
Registered
Investment Companies
|
|||||||||||||||
Balance
as of December 31, 2008
|
$
|
162
|
$
|
1
|
$
|
6
|
$
|
151
|
$
|
4
|
$
|
(2
|
)
|
$
|
2
|
|||||||
Actual
return on plan assets:
|
||||||||||||||||||||||
Relating
to assets still held at reporting date
|
(399
|
)
|
−
|
2
|
(42
|
)
|
(1
|
)
|
2
|
−
|
||||||||||||
Relating
to assets sold during the period
|
(5
|
)
|
(1
|
)
|
−
|
(2
|
)
|
−
|
(2
|
)
|
−
|
|||||||||||
Purchases,
sales and settlements
|
(8
|
)
|
−
|
(3
|
)
|
(4
|
)
|
(1
|
)
|
2
|
(2
|
)
|
||||||||||
Transfers
out of Level 3
|
(6
|
)
|
−
|
(5
|
)
|
−
|
(1
|
)
|
−
|
−
|
||||||||||||
Balance
as of December 31, 2009
|
$
|
104
|
$
|
−
|
$
|
−
|
$
|
103
|
$
|
1
|
$
|
−
|
$
|
−
|
||||||||
a Balance
at December 31, 2008, represents a temporary deficit in a securities
lending program. As of December 31, 2009, the Company no longer
participates in the program.
|
Fiscal
year
|
Expected
Pension
Plan
Benefit Payments
|
a
|
Expected
Retiree
Health
and
Welfare Payments
|
Expected
Medicare
Subsidy
|
||||||
2010
|
$
|
137
|
$
|
23
|
$
|
(2
|
)
|
|||
2011
|
138
|
24
|
(3
|
)
|
||||||
2012
|
139
|
24
|
(3
|
)
|
||||||
2013
|
139
|
24
|
(3
|
)
|
||||||
2014
|
141
|
24
|
(3
|
)
|
||||||
2015–2019
|
702
|
118
|
(17
|
)
|
||||||
aPrimarily consists of the BNSF
Retirement Plan payments, which are made from the plan trust and do not
represent an immediate cash outflow to the Company.
|
Year
ended December 31,
|
2009
|
2008
|
2007
|
|||||||
Weighted
average expected life (years)
|
4.8
|
4.7
|
4.6
|
|||||||
Weighted
average expected volatility
|
29.6
|
%
|
24.0
|
%
|
24.0
|
%
|
||||
Weighted
average expected dividend yield
|
1.96
|
%
|
1.50
|
%
|
1.15
|
%
|
||||
Weighted
average risk free interest rate
|
2.15
|
%
|
3.09
|
%
|
4.31
|
%
|
||||
Weighted
average fair value per share at date of grant
|
$
|
15.09
|
$
|
22.92
|
$
|
21.91
|
Year
ended December 31, 2009
|
Options
|
Weighted
Average Exercise Prices
|
Weighted
Average Remaining
Contractual
Term
(in
years)
|
Aggregate
Intrinsic Value
|
||||||||
Balance
at beginning of year
|
9,668
|
$
|
62.95
|
|||||||||
Granted
|
2,556
|
64.63
|
||||||||||
Exercised
|
(2,027
|
)
|
37.27
|
|||||||||
Cancelled
|
(177
|
)
|
81.54
|
|||||||||
Balance at end of
year
|
10,020
|
$
|
68.24
|
6.16
|
$
|
316
|
||||||
Options
exercisable at year end
|
6,334
|
$
|
62.35
|
4.65
|
$
|
235
|
Year
ended December
31, 2009
|
Time
Based
|
Performance
Based
Units
|
Performance
Stock
|
BNSF
Incentive Bonus Stock Program
|
BNSF
Discounted Stock Purchase Program
|
Total
|
||||||||||||||||||||||||
Balance
at beginning
of year
|
457
|
$
|
76.49
|
1,056
|
$
|
92.48
|
612
|
$
|
89.24
|
64
|
$
|
81.31
|
20
|
$
|
81.34
|
2,209
|
$
|
87.84
|
||||||||||||
Granted
|
58
|
66.67
|
558
|
64.97
|
279
|
59.75
|
−
|
−
|
23
|
66.25
|
918
|
63.52
|
||||||||||||||||||
Vested
|
(233
|
)
|
75.74
|
(209
|
)
|
80.17
|
(54
|
)
|
80.17
|
(64
|
)
|
81.31
|
(12
|
)
|
81.32
|
(572
|
)
|
78.52
|
||||||||||||
Forfeited
|
(6
|
)
|
84.77
|
(40
|
)
|
88.18
|
(171
|
)
|
81.26
|
−
|
−
|
−
|
−
|
(217
|
)
|
82.62
|
||||||||||||||
Balance at end of
year
|
276
|
$
|
74.89
|
1,365
|
$
|
83.24
|
666
|
$
|
79.67
|
−
|
$
|
−
|
31
|
$
|
70.41
|
2,338
|
$
|
81.06
|
Grant
Date Fair Market Value of Awards Granted
|
Time
Based
|
Performance
Based
Units
|
Performance
Stock
|
BNSF
Incentive Bonus Stock Program
|
BNSF
Discounted Stock Purchase Program
|
||||||||||
Year
ended December 31, 2008
|
$
|
102.06
|
$
|
105.23
|
$
|
100.13
|
$
|
−
|
$
|
86.56
|
|||||
Year
ended December 31, 2007
|
$
|
86.38
|
$
|
88.80
|
$
|
88.77
|
$
|
−
|
$
|
79.28
|
Total
Fair Value of Shares Vested
(in
millions)
|
Time
Based
|
Performance
Based
Units
|
Performance
Stock
|
BNSF
Incentive Bonus Stock Program
|
BNSF
Discounted Stock Purchase Program
|
Total
|
||||||||||||
Year
ended December 31, 2009
|
$
|
15
|
$
|
14
|
$
|
4
|
$
|
4
|
$
|
1
|
$
|
38
|
||||||
Year
ended December 31, 2008
|
$
|
31
|
$
|
30
|
$
|
15
|
$
|
51
|
$
|
1
|
$
|
128
|
||||||
Year
ended December 31, 2007
|
$
|
49
|
$
|
21
|
$
|
–
|
$
|
18
|
$
|
1
|
$
|
89
|
2009
|
2008
|
2007
|
||||||||
Compensation
cost
|
$
|
41
|
$
|
69
|
$
|
66
|
||||
Income
tax benefit
|
(15
|
)
|
(25
|
)
|
(23
|
)
|
||||
Total
|
$
|
26
|
$
|
44
|
$
|
43
|
||||
Compensation
cost capitalized
|
$
|
6
|
$
|
6
|
$
|
7
|
As
of December 31,
|
2009
|
2008
|
|||||
Unrecognized
prior service credit and actuarial losses, net of tax (see Note
12)
|
$
|
(500
|
)
|
$
|
(524
|
)
|
|
Fuel/interest
hedge mark-to-market, net of tax (see Note 3)
|
5
|
(281
|
)
|
||||
Accumulated
other comprehensive income of equity method investees, net of tax
|
(6
|
)
|
(6
|
)
|
|||
Total
Accumulated other comprehensive loss
|
$
|
(501
|
)
|
$
|
(811
|
)
|
Dollars
in millions
|
Fourth
|
Third
|
Second
|
First
|
||||||||
2009
|
||||||||||||
Revenues
|
$
|
3,641
|
$
|
3,549
|
$
|
3,275
|
$
|
3,383
|
||||
Operating
income
|
$
|
865
|
$
|
890
|
$
|
792
|
$
|
661
|
||||
Net
income
|
$
|
620
|
$
|
546
|
$
|
464
|
$
|
384
|
||||
2008
|
||||||||||||
Revenues
|
$
|
4,319
|
$
|
4,837
|
$
|
4,420
|
$
|
4,211
|
||||
Operating
income
|
$
|
1,106
|
$
|
1,197
|
$
|
711
|
$
|
882
|
||||
Net
income
|
$
|
659
|
$
|
759
|
$
|
417
|
$
|
527
|
(a) |
The
following documents are filed as part of this report:
|
|
1. | Consolidated Financial Statements—see Item 8. | |
Schedules are omitted because they are not required or applicable, or the required information is included in the Consolidated Financial Statements or related notes. | ||
2. | Exhibits: | |
See Index to Exhibits beginning on page E-1 for a description of the exhibits filed as a part of this Report on Form 10-K. |
BNSF
Railway Company
|
||||
By:
|
/s/
Matthew K. Rose
|
|||
Dated:
February 11, 2010
|
Matthew
K. Rose
|
|||
Chairman,
President and Chief
|
||||
Executive
Officer
|
Signature | Title |
/s/ Matthew K. Rose | Chairman, President and Chief Executive Officer |
Matthew K. Rose | (Principal Executive Officer), and Director |
/s/ Thomas N. Hund | Executive Vice President and Chief Financial Officer |
Thomas N. Hund | (Principal Financial Officer), and Director |
/s/ Julie A. Piggott | Vice President - Planning & Studies and Controller |
Julie A. Piggott | (Principal Accounting Officer) |
/s/ Carl R. Ice | Director |
Carl R. Ice | |
/s/ John P. Lanigan, Jr. | Director |
John P. Lanigan, Jr. | |
/s/ Roger Nober | Director |
Roger Nober |
Exhibit
Number and Description
|
Incorporated
by Reference
(if
applicable)
|
||||||
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
|
||