Debt

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Debt

Debt

Notes and Debentures

In June 2024, the Registrant issued $1.3 billion of 5.5 percent debentures due March 15, 2055. 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, repayment of outstanding indebtedness, and distributions.

As of September 30, 2024, $1.65 billion remained authorized by the Board of Directors to be issued through the debt shelf offering process.

The Registrant is required to maintain certain financial covenants in conjunction with $500 million of certain issued and outstanding junior subordinated notes. As of September 30, 2024, the Registrant was in compliance with these financial covenants.

Fair Value of Debt Instruments

As of September 30, 2024 and December 31, 2023, the fair value of BNSF’s debt, excluding finance leases, was $22.7 billion and $22.4 billion, respectively, while the book value as of both September 30, 2024 and December 31, 2023 was $23.4 billion excluding finance leases. The fair value of BNSF’s debt is primarily based on market value price models using observable market-based data for the same or similar issues, or on the estimated rates that would be offered to BNSF for debt of the same remaining maturities (Level 2 inputs).