Business Combinations

12 Months Ended

Dec. 31, 2025

Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]

Business Combination

Business Combinations

On March 8, 2023, the Surface Transportation Board issued a decision approving the discontinuance of service by Montana Rail Link, Inc. (MRL) over that certain line owned by BNSF Railway and leased to MRL, with BNSF Railway to resume providing service over the line. This decision became effective April 7, 2023.

As a result of the approved lease termination, consideration exchanged between BNSF Railway and MRL has been accounted for in accordance with ASC Topic 805 (ASC 805). The amount allocable to goodwill under ASC 805 is deductible for U.S. federal income tax purposes. Based on additional information obtained during the fourth quarter of 2023, BNSF recorded $1.0 billion in net measurement period adjustments primarily related to property and equipment, resulting in a decrease to goodwill. The measurement period adjustment to property and equipment resulted in additional depreciation expense of $9 million for the year ended December 31, 2023, which is included within depreciation and amortization on the Consolidated Statements of Income. The purchase price allocation was finalized as of March 31, 2024.

The allocation of total consideration to the fair values of the assets is as follows (in millions):

	April 7, 2023
Property and equipment	$	1,571
Materials and supplies	10
Goodwill	532
Fair value of assets	$	2,113

Property and equipment of $1.6 billion primarily includes land for transportation purposes, track structure, and other roadway assets. As a result of the approved lease termination, total goodwill was $15.4 billion as of December 31, 2025.

This transaction is not material with respect to BNSF’s financial statements when reviewed under the quantitative and qualitative considerations of Regulation S-X Article 11 and ASC 805, so the Company has not provided pro forma information relating to the period prior to the transaction.