2.2.0.7 false Debt 0206 - Disclosure - Debt true false false false 1 USD false false USD Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 $ 2 Debt [Abstract] 0 bni_DebtAbstract bni false na duration Debt. false false false false false true false false false false false false 1 false false false false 0 0 false false false xbrli:stringItemType string Debt. false 3 Debt 1 us-gaap_DebtDisclosureTextBlock us-gaap true na duration No definition available. false false false false false false false false false false false verboselabel false 1 false false false false 0 0   <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>6. Debt</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><u><b>Revolving Credit Facility and Commercial Paper</b></u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     As of June 30, 2010, the Company had borrowing capacity of up to $1.2 billion under its long-term revolving bank credit facility, which expires in September 2012. Senior unsecured debt ratings for BNSF were Baa1/BBB at December 31, 2009, and A3/BBB+ at June 30, 2010. Annual facility fees are currently 0.07 percent for the facility. The rate is subject to change based upon changes in BNSF’s senior unsecured debt ratings. Borrowing rates are based upon (i) LIBOR plus a spread determined by BNSF’s senior unsecured debt ratings; (ii) money market rates offered at the option of the lenders; or (iii) an alternate base rate. BNSF must maintain compliance with certain financial covenants under its revolving bank credit facility. At June 30, 2010, the Company was in compliance with these covenants. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     At June 30, 2010, there were no bank borrowings against the revolving credit facility. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     BNSF issues commercial paper from time to time that is supported by the revolving bank credit facility. Outstanding commercial paper reduces the amount of borrowing capacity available under the facility. The classification of commercial paper is determined by the Company’s ability and intent to use long-term or short-term funding sources to settle the obligations at maturity. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     There was no commercial paper outstanding at June 30, 2010 or December 31, 2009; therefore, the total borrowing capacity available under the revolving bank credit facility was $1.2 billion. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><u><b>Notes and Debentures</b></u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In May 2010, the Board of Managers of the Company authorized an additional $750 million of debt securities that may be issued pursuant to a debt shelf registration statement that has been filed with the Securities and Exchange Commission (SEC), for a total of $1.5 billion of debt securities authorized to be issued. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In May 2010, BNSF issued $750 million of 5.75 percent debentures due May 1, 2040. The net proceeds from the sale of the debentures will be used for general corporate purposes, which may include but are not limited to working capital, capital expenditures, and repayment of outstanding indebtedness and commercial paper. The issuance of these debentures reduced the amount of debt authorized to be issued through the SEC debt shelf registration process to $750 million as of June 30, 2010. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><u><b>Capital Leases</b></u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     During the periods February 13 — June 30, 2010 (Successor), and January 1 — February 12, 2010 (Predecessor), BNSF entered into capital leases totaling $19 million and $8 million, respectively to finance maintenance of way and other vehicles/equipment with lease terms of five to seven years. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><u><b>Fair Value of Debt Instruments</b></u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     At June 30, 2010, and December 31, 2009, the fair value of BNSF’s debt, excluding capital leases and interest rate hedges, was $10,594 million and $9,416 million, respectively, while the book value was $10,072 million and $8,746 million, respectively. The fair value of BNSF’s debt is primarily based on quoted market prices for the same or similar issues, or on the current rates that would be offered to BNSF for debt of the same remaining maturities. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><u><b>Guarantees</b></u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     As of June 30, 2010, BNSF Railway has not been called upon to perform under the guarantees specifically disclosed in this footnote and does not anticipate a significant performance risk in the foreseeable future. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Debt and other obligations of non-consolidated entities guaranteed by the Company as of June 30, 2010, were as follows (dollars in millions): </div> <div style="font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="28%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="18" style="border-bottom: 1px solid #000000"><b>Guarantees</b> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="right" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="right" colspan="2"><b>BNSF</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right" colspan="2"><b>Principal</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right" colspan="2"><b>Maximum</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right" colspan="2"><b>Maximum</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right" colspan="2"><b>Remaining</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="right" colspan="2"><b>Ownership</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right" colspan="2"><b>Amount</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right" colspan="2"><b>Future</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right" colspan="2"><b>Recourse</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right" colspan="2"><b>Term</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right" colspan="2"><b>Capitalized</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>Percentage</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>Guaranteed</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>Payments</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>Amount</b><sup style="font-size: 85%; vertical-align: text-top"><b>a</b></sup></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>(in years)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>Obligations</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Kinder Morgan Energy Partners, L.P. </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">0.5</td> <td nowrap="nowrap">%</td> <td> </td> <td align="left">$</td> <td align="right">190</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">190</td> <td> </td> <td> </td> <td align="left">$</td> <td nowrap="nowrap" align="right">—</td> <td> </td> <td> </td> <td colspan="2" align="right" nowrap="nowrap">Termination of Ownership</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">2</td> <td nowrap="nowrap"> <sup style="font-size: 85%; vertical-align: text-top">b</sup></td> </tr> <tr valign="bottom"> <td nowrap="nowrap"> <div style="margin-left:15px; text-indent:-15px">Chevron Phillips Chemical Company, LP </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">0.0</td> <td nowrap="nowrap">%</td> <td> </td> <td colspan="2" nowrap="nowrap" align="right">N/A</td> <td><sup style="font-size: 85%; vertical-align: text-top">d</sup></td> <td> </td> <td colspan="2" nowrap="nowrap" align="right">N/A</td> <td><sup style="font-size: 85%; vertical-align: text-top">d</sup></td> <td> </td> <td colspan="2" nowrap="nowrap" align="right">N/A</td> <td><sup style="font-size: 85%; vertical-align: text-top">d</sup></td> <td> </td> <td> </td> <td align="right">7</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">12</td> <td nowrap="nowrap"> <sup style="font-size: 85%; vertical-align: text-top">c</sup></td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">All other </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">0.0</td> <td nowrap="nowrap">%</td> <td> </td> <td align="left">$</td> <td align="right">3</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">3</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">1</td> <td> </td> <td> </td> <td colspan="2" align="right">Various</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> </tr>  </table> </div> <div align="left"> <div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">  </div> </div> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr> <td width="3%"></td> <td width="1%"></td> <td width="96"></td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left">a</td> <td> </td> <td>Reflects the maximum amount the Company could recover from a third party other than the counterparty.</td> </tr> <tr style="font-size: 3pt"> <td> </td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left">b</td> <td> </td> <td>Reflects capitalized obligations that are recorded on the Company’s Consolidated Balance Sheet.</td> </tr> <tr style="font-size: 3pt"> <td> </td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left">c</td> <td> </td> <td>Reflects the asset and corresponding liability for the fair value of these guarantees required by authoritative accounting guidance related to guarantees.</td> </tr> <tr style="font-size: 3pt"> <td> </td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left">d</td> <td> </td> <td>There is no cap to the liability that can be sought from BNSF for BNSF’s negligence or the negligence of the indemnified party. However, BNSF could receive reimbursement from certain insurance policies if the liability exceeds a certain amount.</td> </tr> </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 1%"><b><i>Kinder Morgan Energy Partners, L.P.</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Santa Fe Pacific Pipelines, Inc., an indirect, wholly-owned subsidiary of BNSF Railway, has a guarantee in connection with its remaining special limited partnership interest in Santa Fe Pacific Pipelines Partners, L.P. (SFPP), a subsidiary of Kinder Morgan Energy Partners, L.P., to be paid only upon default by the partnership. All obligations with respect to the guarantee will cease upon termination of ownership rights, which would occur upon a put notice issued by BNSF or the exercise of the call rights by the general partners of SFPP. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 1%"><b><i>Chevron Phillips Chemical Company, LP</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In the third quarter of 2007, BNSF Railway entered into an indemnity agreement with Chevron Phillips Chemical Company, LP (Chevron Phillips), granting certain rights of indemnity from BNSF Railway, in order to facilitate access to a new storage facility. Under certain circumstances, payment under this obligation may be required in the event Chevron Phillips were to incur certain liabilities or other incremental costs resulting from trackage access. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 1%"><b><i>All Other</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     As of June 30, 2010, BNSF guaranteed $3 million of other debt and leases. BNSF holds a performance bond and has the option to sub-lease property to recover up to $1 million of the $3 million of guarantees. These guarantees expire between 2011 and 2013. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 1%"><b><i>Indemnities</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In the ordinary course of business, BNSF enters into agreements with third parties that include indemnification clauses. In general, these clauses are customary for the types of agreements in which they are included. At times, these clauses may involve indemnification for the acts of the Company, its employees and agents, indemnification for another party’s acts, indemnification for future events, indemnification based upon a certain standard of performance, indemnification for liabilities arising out of the Company’s use of leased equipment or other property, or other types of indemnification. Due to the uncertainty of whether events which would trigger the indemnification obligations would ever occur, the Company does not believe that these indemnity agreements will have a material adverse effect on the Company’s results of operations, financial position or liquidity. Additionally, the Company believes that, due to lack of historical payment experience, the fair value of indemnities cannot be estimated with any amount of certainty and that the fair value of any such amount would be immaterial to the Consolidated Financial Statements. Agreements that contain unique circumstances, particularly agreements that contain guarantees that indemnify for another party’s acts are disclosed separately if appropriate. Unless separately disclosed above, no fair value liability related to indemnities has been recorded in the Consolidated Financial Statements. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 1%"><u><b>Variable Interest Entities</b></u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     As discussed in Note 1 to the Consolidated Financial Statements, on January 1, 2010, the Company prospectively adopted authoritative accounting guidance which amended accounting guidance related to VIEs. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     BNSF Railway has entered into various equipment lease transactions in which the structure of the lease contains VIEs. These VIEs were created solely for the lease transactions and have no other activities, assets or liabilities outside of the lease transactions. In some of the arrangements, BNSF Railway has the option to purchase some or all of the equipment at a fixed-price, thereby creating variable interests for BNSF Railway in the VIEs. The future minimum lease payments associated with the VIE leases were approximately $5 billion as of June 30, 2010. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In the event the leased equipment is destroyed, BNSF Railway is obligated to either replace the equipment or pay a fixed loss amount. The inclusion of the fixed loss amount is a standard clause within equipment lease arrangements. Historically, BNSF Railway has not incurred significant losses related to this clause. As such, it is not anticipated that the maximum exposure to loss would materially differ from the future minimum lease payments. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     BNSF Railway does not provide financial support to the VIEs that it was not previously contractually obligated to provide. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     BNSF Railway maintains and operates the equipment based on contractual obligations within the lease arrangements, which set specific guidelines consistent within the industry. As such, BNSF Railway has no control over activities that could materially impact the fair value of the leased equipment. BNSF Railway does not hold the power to direct the activities of the VIEs and therefore does not control the ongoing activities that have a significant impact on the economic performance of the VIEs. Additionally, BNSF Railway does not have the obligation to absorb losses of the VIEs or the right to receive benefits of the VIEs that could potentially be significant to the VIEs. Depending on market conditions, the fixed-price purchase options could potentially provide benefit to the Company; however, any benefits potentially received from a fixed-price purchase option are expected to be minimal. Based on these factors, BNSF Railway is not the primary beneficiary of the VIEs. As BNSF Railway is not the primary beneficiary and the VIE leases are classified as operating leases, there are no assets or liabilities related to the VIEs recorded in the Company’s consolidated statement of financial position. </div> </div>  <!-- Begin Block Tagged Note false false false us-types:textBlockItemType textblock Information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 129 -Paragraph 2, 4 false 1 2 false UnKnown UnKnown UnKnown false true