Burlington Northern Santa Fe (BNI) 10-K 11 Feb 10 2009 FY Annual report Financial data

Document and Company Informatio

Document and Company Information (USD $)
In Millions, except Share data	12 Months Ended Dec. 31, 2009	Feb. 01, 2010	Jun. 30, 2009
Document and Company Information [Abstract]
Entity Registrant Name	BURLINGTON NORTHERN SANTA FE CORP
Entity Central Index Key	0000934612
Document Type	10-K
Document Period End Date	2009-12-31
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$24,794
Entity Common Stock, Shares Outstanding		341,243,913

Consolidated Statements of Inco

Consolidated Statements of Income (USD $)
In Millions, except Per Share data	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Statements of Income [Abstract]
Revenues	$14,016	$18,018	$15,802
Operating expenses:
Compensation and benefits	3,481	3,884	3,773
Fuel	2,372	4,640	3,327
Purchased services	1,873	2,133	2,023
Depreciation and amortization	1,537	1,397	1,293
Equipment rents	777	901	942
Materials and other	714	1,151	958
Total operating expenses	10,754	14,106	12,316
Operating income	3,262	3,912	3,486
Interest expense	613	533	511
Other expense, net	8	11	18
Income before income taxes	2,641	3,368	2,957
Income tax expense	920	1,253	1,128
Net income	$1,721	$2,115	$1,829
Earnings per share:
Basic earnings per share	5.04	6.13	5.15
Diluted earnings per share	5.01	6.06	5.06

Consolidated Balance Sheets

Consolidated Balance Sheets (USD $)
In Millions	Dec. 31, 2009	Dec. 31, 2008
Current assets:
Cash and cash equivalents	$1,269	$633
Accounts receivable, net	787	847
Materials and supplies	633	525
Current portion of deferred income taxes	290	442
Other current assets	277	218
Total current assets	3,256	2,665
Property and equipment, net of accumulated depreciation of $10,736 and $9,912, respectively	32,294	30,847
Other assets	3,125	2,891
Total assets	38,675	36,403
Current liabilities:
Accounts payable and other current liabilities	2,695	3,190
Long-term debt due within one year	644	456
Total current liabilities	3,339	3,646
Long-term debt	9,691	9,099
Deferred income taxes	9,322	8,590
Casualty and environmental liabilities	899	959
Pension and retiree health and welfare liability	783	1,047
Other liabilities	1,843	1,931
Total liabilities	25,877	25,272
Stockholders' equity:
Common stock, $0.01 par value, 600,000 shares authorized; 543,416 shares and 541,346 shares issued, respectively (shares in thousands)	5	5
Additional paid-in-capital	7,776	7,631
Retained earnings	13,941	12,764
Treasury stock, at cost, 202,677 shares and 202,165 shares, respectively (shares in thousands)	(8,428)	(8,395)
Accumulated other comprehensive loss	(496)	(874)
Total stockholders' equity	12,798	11,131
Total liabilities and stockholders' equity	$38,675	$36,403

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) (USD $)
In Millions, except Share data in Thousands	Dec. 31, 2009	Dec. 31, 2008
Assets
Accumulated depreciation	$10,736	$9,912
Stockholders' equity:
Common stock, par value	0.01	0.01
Common stock, shares authorized	600,000	600,000
Common stock, shares issued	543,416	541,346
Treasury stock, shares	202,677	202,165

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Operating Activities
Net income	$1,721	$2,115	$1,829
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,537	1,397	1,293
Deferred income taxes	612	417	280
Long-term casualty and environmental liabilities, net	(90)	150	26
Other, net	(210)	66	162
Changes in current assets and liabilities:
Accounts receivable, net	116	191	20
Change in accounts receivables sales program	(50)	(250)	0
Materials and supplies	(108)	54	(91)
Other current assets	(38)	(31)	12
Accounts payable and other current liabilities	(77)	(132)	(39)
Net cash provided by operating activities	3,413	3,977	3,492
Investing Activities
Capital expenditures excluding equipment	(1,991)	(2,167)	(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)
Other, net	(244)	(241)	(163)
Net cash used for investing activities	(2,637)	(3,073)	(2,415)
Financing Activities
Net decrease in commercial paper and bank borrowings	(100)	(161)	(584)
Proceeds from issuance of long-term debt	825	1,150	1,300
Payments on long-term debt	(429)	(217)	(482)
Dividends paid	(546)	(471)	(380)
Proceeds from stock options exercised	59	91	142
Purchase of BNSF common stock	(16)	(1,147)	(1,265)
Excess tax benefits from equity compensation plans	29	96	121
Proceeds from facility financing obligation	51	68	41
Other, net	(13)	(10)	(15)
Net cash used for financing activities	(140)	(601)	(1,122)
Increase (decrease) in cash and cash equivalents	636	303	(45)
Cash and cash equivalents:
Beginning of year	633	330	375
End of year	1,269	633	330
Supplemental Cash Flow Information
Interest paid, net of amounts capitalized	587	538	494
Income taxes paid, net of refunds	264	820	680
Non-cash asset financing	$514	$258	$461

Consolidated Statements of Equi

Consolidated Statements of Equity (USD $)
In Millions, except Share data in Thousands	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007	Dec. 31, 2006
Beginning Balance	$11,131	$11,144	$10,528
Comprehensive income:
Net income	1,721	2,115	1,829
Change in unrecognized prior service credit and actuarial losses, net of tax (expense) benefit of ($76), $219 and ($13) for the year 2007, 2008 and 2009, respectively	24	(353)	122
Change in fuel/interest hedge mark-to-market, net of tax (expense) benefit of ($10), $233 and ($203) for the year 2007, 2008 and 2009, respectively	327	(377)	16
Change in other comprehensive income of equity method investees		(5)
Recognized loss on derivative instruments-discontinued hedges, net of tax benefit of $16	27
Total comprehensive income	2,099	1,380	1,967
Adjustment for the adoption of authoritative accounting guidance related to accounting for uncertainty in income taxes			(13)
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		(5)
Adjustment to initially apply authoritative accounting guidance related to defined benefit pension and other postretirement plans to equity method investees		(2)
Common stock dividends, $1.14, $1.44 & $1.60 per share for the year 2007, 2008 & 2009 respectively	(544)	(496)	(403)
Restricted stock and stock options expense	38	69	66
Restricted stock activity and related tax benefit of $23, $25, & $0 for the year 2007, 2008 & 2009 respectively	2	26	24
Exercise of stock options and related tax benefit of $98, $71 & $29 for the year ended 2007, 2008 & 2009 respectively	88	162	240
Purchase of BNSF common stock	(16)	(1,147)	(1,265)
Ending Balance	12,798	11,131	11,144	10,528
Common Stock
Beginning Balance, Shares	541,346	537,330	532,080
Comprehensive income:
Restricted stock activity and related tax benefit of $23, $25, & $0 for the year 2007, 2008 & 2009 respectively, shares	43	697	1
Exercise of stock options and related tax benefit of $98, $71 & $29 for the year ended 2007, 2008 & 2009 respectively, shares	2,027	3,319	5,249
Ending Balance, Shares	543,416	541,346	537,330	532,080
Common Stock and Paid-in Capital
Beginning Balance	7,636	7,353	6,995
Comprehensive income:
Restricted stock and stock options expense	38	69	66
Restricted stock activity and related tax benefit of $23, $25, & $0 for the year 2007, 2008 & 2009 respectively	2	26	24
Exercise of stock options and related tax benefit of $98, $71 & $29 for the year ended 2007, 2008 & 2009 respectively	105	188	268
Ending Balance	7,781	7,636	7,353	6,995
Treasury Stock
Beginning Balance	(8,395)	(7,222)	(5,929)
Beginning Balance, Shares	(202,165)	(189,626)	(174,205)
Comprehensive income:
Restricted stock activity and related tax benefit of $23, $25, & $0 for the year 2007, 2008 & 2009 respectively, shares	1	1	(48)
Exercise of stock options and related tax benefit of $98, $71 & $29 for the year ended 2007, 2008 & 2009 respectively	(17)	(26)	(28)
Exercise of stock options and related tax benefit of $98, $71 & $29 for the year ended 2007, 2008 & 2009 respectively, shares	(267)	(255)	(319)
Purchase of BNSF common stock	(16)	(1,147)	(1,265)
Purchase of BNSF common stock, shares	(246)	(12,285)	(15,054)
Ending Balance	(8,428)	(8,395)	(7,222)	(5,929)
Ending Balance, Shares	(202,677)	(202,165)	(189,626)	(174,205)
Retained Earnings
Beginning Balance	12,764	11,152	9,739
Comprehensive income:
Net income	1,721	2,115	1,829
Total comprehensive income	1,721	2,115	1,829
Adjustment for the adoption of authoritative accounting guidance related to accounting for uncertainty in income taxes			(13)
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)
Common stock dividends, $1.14, $1.44 & $1.60 per share for the year 2007, 2008 & 2009 respectively	(544)	(496)	(403)
Ending Balance	13,941	12,764	11,152	9,739
Accumulated Other Comprehensive Loss
Beginning Balance	(874)	(139)	(277)
Comprehensive income:
Change in unrecognized prior service credit and actuarial losses, net of tax (expense) benefit of ($76), $219 and ($13) for the year 2007, 2008 and 2009, respectively	24	(353)	122
Change in fuel/interest hedge mark-to-market, net of tax (expense) benefit of ($10), $233 and ($203) for the year 2007, 2008 and 2009, respectively	327	(377)	16
Change in other comprehensive income of equity method investees		(5)
Recognized loss on derivative instruments-discontinued hedges, net of tax benefit of $16	27
Total comprehensive income	378	(735)	138
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		2
Adjustment to initially apply authoritative accounting guidance related to defined benefit pension and other postretirement plans to equity method investees		(2)
Ending Balance	($496)	($874)	($139)	($277)

Consolidated Statement of Equit

Consolidated Statement of Equity (Parenthetical) (USD $)
In Millions, except Per Share data	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Dividends declared per share	1.6	1.44	1.14
Restricted stock activity, tax benefit	$0	$25	$23
Exercise of stock options, tax benefit	29	71	98
Change in unrecognized prior service credit and actuarial losses, tax (expense) benefit	(13)	219	(76)
Change in fuel/interest hedge mark-to-market, tax (expense) benefit	(203)	233	(10)
Adjustment to change the measurement date pursuant to adoption of authoritative accounting guidance related to defined benefit pension and other postretirement plans, tax benefit		3
Recognized loss on derivative instruments - discontinued hedges, tax benefit	16
Common Stock and Paid-in Capital
Restricted stock activity, tax benefit	0	25	23
Exercise of stock options, tax benefit	29	71	98
Treasury Stock
Exercise of stock options, tax benefit	29	71	98
Retained Earnings
Dividends declared per share	1.6	1.44	1.14
Adjustment to change the measurement date pursuant to adoption of authoritative accounting guidance related to defined benefit pension and other postretirement plans, tax benefit		3
Accumulated Other Comprehensive Loss
Change in unrecognized prior service credit and actuarial losses, tax (expense) benefit	(13)	219	(76)
Change in fuel/interest hedge mark-to-market, tax (expense) benefit	(203)	233	(10)
Adjustment to change the measurement date pursuant to adoption of authoritative accounting guidance related to defined benefit pension and other postretirement plans, tax benefit		3
Recognized loss on derivative instruments - discontinued hedges, tax benefit	$16

The Company

The Company
	12 Months Ended Dec. 31, 2009 USD / shares
The Company [Abstract]
The Company	1. The Company Burlington Northern Santa Fe Corporation (BNSF or the Company)is a holding company that conducts no operating activities and owns no significant assets other than through its interests in its subsidiaries. BNSFs principal, wholly-owned subsidiary is BNSF Railway Company (BNSF Railway), which operates one of the largest railroad networks in North America with approximately 32,000 route miles in 28 states and two Canadian provinces. Through one operating transportation services segment, BNSF Railway transports a wide range of products and commodities including the transportation of Consumer Products, Coal, Industrial Products and Agricultural Products, derived from manufacturing, agricultural and natural resource industries, which constituted 32percent, 26 percent, 21percent and 21percent, respectively, of total freight revenues for the year ended December31, 2009. These Consolidated Financial Statements include BNSF, BNSF Railway and other majority-owned subsidiaries, all of which are separate legal entities. Proposed Merger Berkshire Hathaway Inc., a Delaware corporation (Berkshire), R Acquisition Company, LLC, a Delaware limited liability company and an indirect wholly owned subsidiary of Berkshire (Merger Sub), and the Company have entered into a definitive Agreement and Plan of Merger (the Merger Agreement) dated as of November 2, 2009. Pursuant to the Merger Agreement and subject to the conditions set forth therein, the Company will merge with and into Merger Sub (the Merger) with Merger Sub surviving as an indirect wholly owned subsidiary of Berkshire. Merger Sub will change its name to Burlington Northern Santa Fe, LLC upon completion of the Merger. Under the Merger Agreement, approximately 60% of the total merger consideration payable by Berkshire to BNSF stockholders will be in the form of cash and approximately 40% will be in the form of Berkshire common stock. Fractional shares of Berkshire Class A common stock will not be issued in the Merger. Instead, shares of Berkshire Class B common stock will be issued in lieu of any fractional shares of Berkshire Class A common stock, and cash will be paid in lieu of any fractional shares of Berkshire Class B common stock. On February 11, 2010, the Merger Agreement was adopted by the necessary votes of BNSF stockholders. The Merger is expected to close on February 12, 2010.

Significant Accounting Policies

Significant Accounting Policies
	12 Months Ended Dec. 31, 2009 USD / shares
Significant Accounting Policies [Abstract]
Significant Accounting Policies	2. Significant Accounting Policies Adoption of Accounting Standards Codification In June2009, the Financial Accounting Standards Board (FASB)issued authoritative accounting guidance which established the FASB Accounting Standards Codification (Codification or ASC) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities and stated that all guidance contained in the Codification carries an equal level of authority. The authoritative accounting guidance recognized that rules and interpretive releases of the Securities and Exchange Commission (SEC)under federal securities laws are also sources of authoritative Generally Accepted Accounting Principles (GAAP)for SEC registrants. The Company adopted the provisions of the authoritative accounting guidance on July1, 2009, the adoption of which did not have a material effect on the Companys consolidated financial statements. Principles of Consolidation The Consolidated Financial Statements include the accounts of BNSF, including its principal subsidiary BNSF Railway. All significant intercompany accounts and transactions have been eliminated. The Company evaluates its less than majority-owned investments for consolidation pursuant to authoritative accounting guidance related to the consolidation of variable interest entities. Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles in the United States of America (GAAP)requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. These estimates and assumptions are periodically reviewed by management. Actual results could differ from those estimates. Revenue Recognition Transportation revenues are recognized based upon the proportion of service provided as of the balance sheet date. Revenues from ancillary services are recognized when performed. Customer incentives, which are primarily provided for shipping a specified cumulative volume or shipping to/from specific locations, are recorded as a reduction to revenue on a pro-rata basis based on actual or projected future customer shipments. When using projected shipments, the Company relies on historic trends as well as economic and other indicators to estimate the liability for customer incentives. Accounts Receivable, Net Accounts receivable, net includes accounts receivable reduced by an allowance for bill adjustments and uncollectible accounts. The allowance for bill adjustments and uncollectible accounts is based on historical experience as well as any known trends or uncertainties related to customer billing and account collectibility. Additionally, accounts receivable, net is reduced by receivables sold under the Accounts Receivable sales program (see Note 6 to the Consolidated Financial Statements). Cash and Cash Equivalents All short-term investments with original maturities of 90days or less are considered cash equi

Hedging Activities

Hedging Activities
	12 Months Ended Dec. 31, 2009 USD / shares
Hedging Activities [Abstract]
Hedging Activities	3. Hedging Activities The Company uses derivative financial instruments to hedge against increases in diesel fuel prices and interest rates as well as to convert a portion of its fixed-rate, long-term debt to floating-rate debt. The Company does not use derivative financial instruments for trading or speculative purposes. The Company formally documents the relationship between the hedging instrument and the hedged item, as well as the risk management objective and strategy for the use of the hedging instrument. This documentation includes linking the derivatives that are designated as fair value or cash flow hedges to specific assets or liabilities on the balance sheet, commitments or forecasted transactions. The Company assesses at the time a derivative contract is entered into, and at least quarterly thereafter, whether the derivative item is effective in offsetting the changes in fair value or cash flows. Any change in fair value resulting from ineffectiveness, as defined by authoritative accounting guidance related to derivatives and hedging, is recognized in current period earnings. For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative instrument is recorded in accumulated other comprehensive loss (AOCL)as a separate component of stockholders equity and reclassified into earnings in the period during which the hedge transaction affects earnings. Cash flows related to fuel and interest rate derivatives are classified as operating activities in the Consolidated Statements of Cash Flows. BNSF monitors its hedging positions and credit ratings of its counterparties and does not anticipate any losses due to counterparty nonperformance. All counterparties were financial institutions with credit ratings of A2/A or higher as of December31, 2009. The maximum amount of loss the Company could incur from credit risk based on the gross fair value of derivative instruments in asset positions as of December31, 2009 and 2008, was $104million and $77million, respectively. Other than as disclosed under the heading Fuel; Total Fuel-Hedging Activities, the Companys hedge agreements do not include provisions requiring collateral. Certain of the Companys hedge instruments are covered by master netting arrangements whereby, in the event of a default, the non-defaulting party has the right to setoff any amounts payable against any obligation of the defaulting party under the same counterparty agreement. As such, the Companys net asset exposure to counterparty credit risk was $90million and $53million as of December31, 2009 and 2008, respectively. Additional disclosures related to derivative instruments are included in Note 8 and Note 9 to the Consolidated Financial Statements. The amounts recorded in the Consolidated Balance Sheets for derivative transactions were as follows (in millions). These amounts exclude $106million of collateral posted for certain fuel hedge contracts as of December31, 2008. Year ended December 31, 2009 2008 Short-term hedge asset $ 34 $ 5 Long-term hedge asset 57 72 Short-te

Other Expense, Net

Other Expense, Net
	12 Months Ended Dec. 31, 2009 USD / shares
Other Expense, Net [Abstract]
Other Expense, Net	4. Other Expense, Net Other expense, net includes the following (in millions): Year ended December 31, 2009 2008 2007 Accounts receivable sales fees $ 3 $ 12 $ 19 Loss from participation in synthetic fuel partnership 5 Miscellaneous, net 5 (1 ) (6 ) Total $ 8 $ 11 $ 18 The decrease in other expense, net was predominantly due to lower accounts receivable sales fees (see Note 6 to the Consolidated Financial Statements for additional information), partially offset by lower interest and investment income. During the fourth quarter of 2004, BNSF Railway indirectly purchased a 4.17percent ownership of a synthetic fuel partnership through a 50percent interest in a limited liability company with an unrelated entity. The synthetic fuel partnership generated Section29 synthetic fuel tax credits, which reduced the Companys effective tax rate (see Note 5 to the Consolidated Financial Statements for additional information). In 2007, BNSF Railway received a tax benefit from its participation in the partnership of approximately $7million related to the fuel tax credits and the deduction of partnership operating losses. In 2007, the Company recorded approximately $5million of other expense, net related to the Companys share of the partnerships losses under the equity method of accounting. The partnership did not qualify for consolidation under authoritative accounting guidance related to the consolidation of variable interest entities, as BNSF Railway was not the primary beneficiary of the partnership. Under the tax law, the Section29 synthetic fuel tax credits terminated on December31, 2007; under the BNSF Railways purchase agreement, it did not have any additional exposure to loss from the synthetic fuel partnership after that date.

Income Taxes

Income Taxes
	12 Months Ended Dec. 31, 2009 USD / shares
Income Taxes [Abstract]
Income Taxes	5. Income Taxes Income tax expense was as follows (in millions): Year ended December 31, 2009 2008 2007 Current: Federal $ 282 $ 735 $ 741 State 26 101 107 Total current 308 836 848 Deferred: Federal 535 383 245 State 77 34 35 Total deferred 612 417 280 Total $ 920 $ 1,253 $ 1,128 Reconciliation of the federal statutory income tax rate to the effective tax rate was as follows: 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 2.5 2.6 3.1 Property donations (3.0 ) Synthetic fuel credits (0.2 ) Other, net 0.3 (0.4 ) 0.3 Effective tax rate 34.8 % 37.2 % 38.2 % The components of deferred tax assets and liabilities were as follows (in millions): December 31, 2009 2008 Deferred tax liabilities: Depreciation and amortization $ (9,939 ) $ (9,522 ) Hedging (12 ) Other (173 ) (167 ) Total deferred tax liabilities (10,124 ) (9,689 ) Deferred tax assets: Casualty and environmental 398 428 Pension and retiree health and welfare benefits 328 431 Compensation and benefits 141 178 Hedging 207 Other 225 297 Total deferred tax assets 1,092 1,541 Net deferred tax liability $ (9,032 ) $ (8,148 ) Non-current deferred income tax liability $ (9,322 ) $ (8,590 ) Current portion of deferred income taxes 290 442 Net deferred tax liability $ (9,032 ) $ (8,148 ) All federal income tax returns of BNSF are closed through 1999. Internal Revenue Service (IRS) examination of the years 2000 through 2007 for BNSF is completed, and the un-agreed issues for 2000 through 2007 are pending before IRS Appeals. It is anticipated that a settlement with the IRS for the years 2000 through 2005 may be reached within the next twelve months. BNSF is currently under examination for year 2008. BNSF and its subsidiaries have various state income tax returns in the process of examination, administrative appeal or litigation. State income tax returns are generally subject to examination for a period of three to five years after filing of the respective return. The state impact of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states. A significant portion of the audit issues relate to state income tax issues with various taxing authorities and with the IRS related to whether certain valuations of donated property are appropriate. A

Accounts Receivable, Net

Accounts Receivable, Net
	12 Months Ended Dec. 31, 2009 USD / shares
Accounts Receivable, Net [Abstract]
Accounts Receivable, Net	6. Accounts Receivable, Net BNSF Railway sells a portion of its accounts receivable to Santa Fe Receivables Corporation (SFRC), a special purpose subsidiary. The sole purpose and activity of SFRC is to purchase receivables from BNSF Railway. SFRC transfers an undivided interest in such receivables, with limited exceptions, to a master trust and causes the trust to issue an undivided interest in the receivables to investors (the A/R sales program). The undivided interests in the master trust may be in the form of certificates or purchased interests and are isolated from BNSF Railway which eliminates all of BNSF Railways control over the undivided interest. BNSF Railways total capacity to sell undivided interests to investors under the A/R sales program was $700million at December31, 2009, which was comprised of two $175million, 364-day accounts receivable facilities and two $175million, 3-year accounts receivable facilities. In November 2009, BNSF Railway extended the commitment termination date of the two 364-day facilities to November2010. The two 3-year facilities were entered into in November2007 and have a commitment termination date in November2010. Each of the financial institutions providing credit for the facilities is rated Aa3/A or higher. There was no outstanding undivided interest held by investors at December31, 2009. Outstanding undivided interests held by investors under the A/R sales program were $50million at December31, 2008, with $12.5million allocated to each facility. The undivided interests in receivables held by investors are excluded from accounts receivable by BNSF Railway in connection with the sale of undivided interests under the A/R sales program. As of December31, 2009 and 2008, an interest in $801million and $878million, respectively, of receivables had been transferred by SFRC to the master trust. When SFRC transfers the interest in these receivables to the master trust, it retains an undivided interest in the receivables, which is included in accounts receivable in the Companys Consolidated Balance Sheets. The interest that continued to be held by SFRC of $801million and $828million at December31, 2009 and 2008, respectively, less an allowance for uncollectible accounts, reflected the total accounts receivable transferred by SFRC to the master trust less $50million of outstanding undivided interests held by investors at December31, 2008. Due to a relatively short collection cycle, the fair value of the undivided interest transferred to investors in the A/R sales program approximated book value, and there was no gain or loss from the transaction. BNSF Railway retains the collection responsibility with respect to the accounts receivable. Proceeds from collections reinvested in the A/R sales program were approximately $15.2billion, $19.5billion and $16.8billion in 2009, 2008 and 2007, respectively. No servicing asset or liability has been recorded because the fees BNSF Railway receives for servicing the receivables approximate the related costs. SFRCs costs of the sale of receivables are included in other expense, net and were $3million, $12million and $19million for the years ended December31,

Property and Equipment, Net

Property and Equipment, Net
	12 Months Ended Dec. 31, 2009 USD / shares
Property and Equipment, Net [Abstract]
Property and Equipment, Net	7. Property and Equipment, Net Property and equipment, net (in millions), and the weighted average annual depreciation rates (%) were as follows: 2009 Depreciation December 31, 2009 2008 Rates Land $ 1,803 $ 1,751 % Track structure 20,281 19,108 3.5 % Other roadway 13,245 12,924 2.6 % Locomotives 4,759 4,210 7.2 % Freight cars and other equipment 2,246 2,140 5.1 % Computer hardware, software and other 696 626 12.3 % Total cost 43,030 40,759 Less accumulated depreciation and amortization (10,736 ) (9,912 ) Property and equipment, net $ 32,294 $ 30,847 The Consolidated Balance Sheets at December31, 2009 and 2008, included $1,876million, net of $772million of amortization and $1,648million, net of $572million of amortization, respectively, for property and equipment under capital leases, primarily for rolling stock. The Company capitalized $18million, $17million and $17million of interest for the years ended December31, 2009, 2008 and 2007, respectively.

Accounts Payable and Other Curr

Accounts Payable and Other Current Liabilities
	12 Months Ended Dec. 31, 2009 USD / shares
Accounts Payable and Other Current Liabilities [Abstract]
Accounts Payable and Other Current Liabilities	8. Accounts Payable and Other Current Liabilities Accounts payable and other current liabilities consisted of the following (in millions): December 31, 2009 2008 Compensation and benefits payable $ 512 $ 610 Rents and leases 283 276 Casualty and environmental liabilities 250 280 Accounts payable 244 290 Property tax liabilities 177 157 Accrued interest 177 135 Dividends payable 137 136 Customer incentives 125 141 Hedge liabilitiesa 48 333 Other 742 832 Total $ 2,695 $ 3,190 a 2008 hedge liabilities include a reduction of $92million for collateral paid (see Note 3 to the Consolidated Financial Statements for additional information).

Debt

Debt
	12 Months Ended Dec. 31, 2009 USD / shares
Debt [Abstract]
Debt	9. Debt Debt outstanding was as follows (in millions): December 31, 2009a 2008a Notes and debentures, due 2010 to 2097 $ 8,095 6.0 % $ 7,593 6.3 % 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 Commercial paper 100 4.7 Unamortized discount and other, net (37 ) (38 ) Total 10,335 9,555 Less current portion of long-term debt (644 ) 5.1 % (456 ) 4.8 % Long-term debt $ 9,691 $ 9,099 a Amounts represent debt outstanding and weighted average effective interest rates for 2009 and 2008, respectively. Maturities are as of December31, 2009. Notes and debentures include a fair value adjustment increase for hedges of $26million and $73million at December31, 2009 and 2008, respectively. As of December31, 2009, certain BNSF Railway properties and other assets were subject to liens securing $94million of mortgage debt. Certain locomotives and rolling stock of BNSF Railway were subject to equipment obligations and capital leases. The following table provides fair value information for the Companys debt obligations including principal cash flows and related weighted average interest rates by contractual maturity dates. The Company had no outstanding commercial paper at December31, 2009. The remaining weighted average variable rates are based on implied forward rates in the yield curve at December31, 2009. December 31, 2009 Total Total Fair Value Including Excluding Excluding Maturity Date Capital Capital Capital 2010 2011 2012 2013 2014 Thereafter Leases Leases Leases Fixed-rate debt (in millions) $ 385 $ 673 $ 509 $ 446 $ 638 $ 7,008 $ 9,659 $ 8,070 $ 8,740 Average interest rate 6.4 % 6.5 % 5.9 % 5.1 % 6.8 % 6.4 % 6.4 % Variable-rate debt (in millions) $ 259 $ $ $ $ $ 417 $ 676 $ 676 $ 676 Average interest rate 3.4 % % % % % 5.4 % 4.6 % As of December31, 2008, the fair value excluding capital leases of fixed-rate debt and variable-rate debt was $7,300million and $1,023million, respectively. The fair value of BNSFs long-term 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. Capital leases have been excluded from the calculation of fair value for both 2009 and 2008. Notes

Commitments and Contingencies

Commitments and Contingencies
	12 Months Ended Dec. 31, 2009 USD / shares
Commitments and Contingencies [Abstract]
Commitments and Contingencies	10. Commitments and Contingencies Lease Commitments BNSF has substantial lease commitments for locomotives, freight cars, trailers and containers, office buildings, operating facilities and other property, and many of these leases provide the option to purchase the leased item at fair market value at the end of the lease. However, some provide fixed price purchase options. Future minimum lease payments as of December31, 2009, are summarized as follows (in millions): December 31, Capital Leases Operating Leasesa 2010 $ 349 $ 613 2011 285 602 2012 215 541 2013 169 517 2014 138 499 Thereafter 922 3,553 Total 2,078 $ 6,325 Less amount representing interest (489 ) Present value of minimum lease payments $ 1,589 a Excludes leases having non-cancelable lease terms of less than one year and per diem leases. Lease rental expense for all operating leases, excluding per diem leases, was $644million, $689million and $706million for the years ended December31, 2009, 2008 and 2007, respectively. When rental payments are not made on a straight-line basis, the Company recognizes rental expense on a straight-line basis over the lease term. Contingent rentals and sublease rentals were not significant. Other Commitments In the normal course of business, the Company enters into long-term contractual requirements for future goods and services needed for the operations of the business. Such commitments are not in excess of expected requirements and are not reasonably likely to result in performance penalties or payments that would have a material adverse effect on the Companys liquidity. Personal Injury and Environmental Costs Personal Injury Personal injury claims, including asbestos claims and employee work-related injuries and third-party injuries (collectively, other personal injury), are a significant expense for the railroad industry. Personal injury claims by BNSF Railway employees are subject to the provisions of the Federal Employers Liability Act (FELA)rather than state workers compensation laws. FELAs system of requiring the finding of fault, coupled with unscheduled awards and reliance on the jury system, contributed to increased expenses in past years. Other proceedings include claims by non-employees for punitive as well as compensatory damages. A few proceedings purport to be class actions. The variability present in settling these claims, including non-employee personal injury and matters in which punitive damages are alleged, could result in increased expenses in future years. BNSF has implemented a number of safety programs designed to reduce the number of personal injuries as well as the associated claims and personal injury expense. BNSF records a liability for personal injury claims when the expected loss is both probable and reasonably estimable. The liability and ultimate expense projections are estimated using standard actuarial methodologies. Liabilities recorded for unasserted personal injury claims

Employee Separation Costs

Employee Separation Costs
	12 Months Ended Dec. 31, 2009 USD / shares
Employee Separation Costs [Abstract]
Employee Separation Costs	11. Employee Separation Costs Employee separation costs activity was as follows (in millions): 2009 2008 2007 Beginning balance at January1, $ 79 $ 91 $ 107 Accruals 15 3 5 Payments (17 ) (15 ) (21 ) Ending balance at December31, $ 77 $ 79 $ 91 Employee separation liabilities of $77million were included in the Consolidated Balance Sheet at December31, 2009, and principally represent the following: (i) $75million for deferred benefits payable upon separation or retirement to certain active conductors, trainmen and locomotive engineers; and (ii) $2million for certain non-union employee severance costs. Employee separation expenses are recorded in materials and other in the Consolidated Statements of Income. At December 31, 2009, $27million of the remaining liabilities were included in current liabilities. The deferred benefits payable upon separation or retirement to certain active conductors, trainmen and locomotive engineers were primarily incurred in connection with labor agreements reached prior to the business combination of BNSFs predecessor companies, Burlington Northern Inc. and Santa Fe Pacific Corporation. These agreements, among other things, reduced train crew sizes and allowed for more flexible work rules. The majority of the remaining costs will be paid between 2010 and 2020. As of December31, 2009, the Company had updated its estimate and recorded an additional liability of $15million related to deferred benefits (see (i)above). The remaining costs for the non-union employee severance costs (ii)are expected to be paid out between 2010 and approximately 2021 based on deferral elections made by the affected employees.

Earnings Per Share

Earnings Per Share
	12 Months Ended Dec. 31, 2009 USD / shares
Earnings Per Share [Abstract]
Earnings Per Share	12. Earnings Per Share Basic earnings per share is based on the weighted average number of the Companys common shares outstanding for the periods shown below. Diluted earnings per share is based on basic earnings per share adjusted for the effect of potential common shares outstanding that were dilutive during the period, arising from employee stock awards and incremental shares calculated using the treasury stock method. Weighted average stock options totaling 4.3million, 2.4million and 2.2million for 2009, 2008 and 2007, respectively, were not included in the computation of diluted earnings per share, because the options exercise price exceeded the average market price of the Companys stock for those periods. The Company adopted authoritative accounting guidance which requires non-vested shares that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) to be considered participating securities, and therefore be included in computing earnings per share using the two-class method. The Company has retrospectively applied the provisions to the financial information included herein, which resulted in a reduction in both basic earnings per share and diluted earnings per share of $0.02 and $0.04 for the years ended December31, 2008 and 2007, respectively. The following table is a reconciliation of net income available to common stockholders used in the basic and diluted EPS computations (in millions, except per share amounts): Year ended December 31, 2009 2008 2007 Income Statement: Net income $ 1,721 $ 2,115 $ 1,829 Net income allocated to participating securities (6 ) (9 ) (13 ) Net income available to common stockholders $ 1,715 $ 2,106 $ 1,816 Average Shares: Basic 340.0 343.8 352.5 Diluted 342.5 347.8 358.9 Earnings Per Share: Basic $ 5.04 $ 6.13 $ 5.15 Diluted $ 5.01 $ 6.06 $ 5.06

Employment Benefit Plans

Employment Benefit Plans
	12 Months Ended Dec. 31, 2009 USD / shares
Employment Benefit Plans [Abstract]
Employment Benefit Plans	13. Employment Benefit Plans BNSF sponsors a funded, noncontributory qualified pension plan, the BNSF Retirement Plan, which covers most non-union employees, and an unfunded non-tax-qualified pension plan, the BNSF Supplemental Retirement Plan, which covers certain officers and other employees. The benefits under these pension plans are based on years of credited service and the highest consecutive sixty months of compensation for the last ten years of salaried employment with BNSF. BNSFs funding policy is to contribute annually not less than the regulatory minimum and not more than the maximum amount deductible for income tax purposes with respect to the funded plan. Certain salaried employees of BNSF that have met age and years of service requirements are eligible for life insurance coverage and medical benefits, including prescription drug coverage, during retirement. This postretirement benefit plan, referred to as the retiree health and welfare plan, is contributory and provides benefits to retirees, their covered dependents and beneficiaries. Retiree contributions are adjusted annually. The plan also contains fixed deductibles, coinsurance and out-of-pocket limitations. The basic life insurance plan is noncontributory and covers retirees only. Optional life insurance coverage is available for some retirees; however, the retiree is responsible for the full cost. BNSFs policy is to fund benefits payable under the medical and life insurance plans as they come due. Generally, employees beginning salaried employment with BNSF subsequent to September22, 1995, are not eligible for medical benefits during retirement. In September2006, the FASB issued authoritative accounting guidance related to employers accounting for defined benefit pension and other postretirement plans, which requires the recognition of the overfunded or underfunded status of a defined benefit postretirement plan in the Companys Consolidated Balance Sheets. This portion of the new guidance was adopted by the Company on December31, 2006. Additionally, the pronouncement eliminates the option for the Company to use a measurement date prior to the Companys fiscal year-end effective December31, 2008. This authoritative accounting guidance provides two approaches to transition to a fiscal year-end measurement date, both of which are to be applied prospectively. BNSF elected to apply the transition option under which a 15-month measurement was determined as of September30, 2007 that covered the period until the fiscal year-end measurement was required on December31, 2008. As a result, the Company recorded a $7million decrease to retained earnings in January2008. Components of the net cost for these plans were as follows (in millions): 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 ne

Stock-Based Compensation

Stock-Based Compensation
	12 Months Ended Dec. 31, 2009 USD / shares
Share-based Compensation [Abstract]
Stock-Based Compensation	14. Stock-Based Compensation On April15, 1999, BNSF shareholders approved the Burlington Northern Santa Fe 1999 Stock Incentive Plan and authorized 20million shares of BNSF common stock to be issued in connection with stock options, restricted stock, restricted stock units and performance stock. On April18, 2001, April17, 2002, April21, 2004 and April19, 2006, BNSF shareholders approved the amendments to the Burlington Northern Santa Fe 1999 Stock Incentive Plan, which authorized additional awards of 9million, 6million, 7million and 11million shares, respectively, of BNSF common stock to be issued in connection with stock options, restricted stock, restricted stock units and performance stock. Approximately 5million common shares were available for future grant at December31, 2009. Additionally, on April18, 1996, BNSF shareholders approved the non-employee directors stock plan and authorized 900,000 shares of BNSF common stock to be issued in connection with this plan. Approximately 403,000 common shares were available for future grant at December31, 2009. Upon completion of the proposed Merger, no further grants of BNSF stock will be made under the BNSF stock-based compensation plans. See Note 1 to the Consolidated Financial Statements for information related to the proposed Merger. Stock Options Under BNSFs stock plans, options were granted to directors, officers and salaried employees at the fair market value of BNSFs common stock on the date of grant. Stock option grants generally vest ratably over three years and expire within ten years after the date of grant. Shares issued upon exercise of options may be issued from treasury shares or from authorized but unissued shares. The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. The following assumptions apply to the options granted for the periods presented: 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 Expected volatilities are based on historical volatility of BNSFs stock, implied volatilities from traded options on BNSFs stock and other factors. The Company uses historical experience with exercise and post-vesting employment termination behavior to determine the options expected life. The expected life represents the period of time that options granted are expected to be outstanding. The risk-free rate is based on the U.S. Treasury rate with a maturity date corresponding to the options expected life. A summary of the status of stock options as of, and for the year ended December31, 2009, is presented below (options in thousands, aggregate intrinsic value in millions): Weighted Average Remaining

Common Stock and Preferred Capi

Common Stock and Preferred Capital Stock
	12 Months Ended Dec. 31, 2009 USD / shares
Common Stock and Preferred Capital Stock [Abstract]
Common Stock and Preferred Capital Stock	15. Common Stock and Preferred Capital Stock Common Stock BNSF is authorized to issue 600million shares of common stock, $0.01 par value. At December31, 2009, there were 341million shares of common stock outstanding. Each holder of common stock is entitled to one vote per share in the election of directors and on all matters submitted to a vote of shareholders. Subject to the rights and preferences of any future issuances of preferred stock, each share of common stock is entitled to receive dividends as may be declared by the Board out of funds legally available and to share ratably in all assets available for distribution to shareholders upon dissolution or liquidation. No holder of common stock has any preemptive right to subscribe for any securities of BNSF. Upon completion of the proposed Merger, shares of Burlington Northern Santa Fe Corporation common stock will no longer be available for issuance. See Note 1 to the Consolidated Financial Statements for information related to the proposed Merger. Preferred Capital Stock At December31, 2009, BNSF had 50million shares of ClassA Preferred Stock, $0.01 par value and 25million shares of preferred stock, $0.01 par value available for issuance. The Board has the authority to issue such stock in one or more series, to fix the number of shares and to fix the designations and the powers, rights and qualifications and restrictions of each series. As of December31, 2009, no shares of ClassA Preferred Stock had been issued. Upon completion of the proposed Merger, shares of ClassA Preferred Stock will no longer be available for issuance. See Note 1 to the Consolidated Financial Statements for information related to the proposed Merger. Share Repurchase Program In February2007, the Board authorized the extension of the current BNSF share repurchase program, adding 30million shares to the total of 180million shares previously authorized in equal amounts in July1997, December1999, April2000, September2000, January2003 and December2005. The Company did not repurchase shares related to its share repurchase program during 2009. During 2008 and 2007, the Company repurchased approximately 12million and 15million shares, respectively, of its common stock at average prices of $92.96 per share and $83.96 per share, respectively. Total repurchases through December31, 2009, were 192million shares at a total average cost of $41.53 per share, leaving 18million shares available for repurchase out of the 210 million shares presently authorized. During 2009 and apart from the share repurchase program, the Company repurchased shares from employees at a cost of $16million to satisfy tax withholding obligations on the vesting of restricted stock or the exercise of stock options. Upon completion of the proposed Merger, the share repurchase program will be terminated. See Note 1 to the Consolidated Financial Statements for information related to the proposed Merger.

Accounting Pronouncements

Accounting Pronouncements
	12 Months Ended Dec. 31, 2009 USD / shares
Accounting Pronouncements [Abstract]
Accounting Pronouncements	16. Accounting Pronouncements In June2009, the FASB amended authoritative accounting guidance related to transfers of financial assets which updates existing guidance. The amended authoritative accounting guidance limits the circumstances in which financial assets can be derecognized and requires enhanced disclosures regarding transfers of financial assets and a transferors continuing involvement with transferred financial assets. The amended authoritative accounting guidance also eliminates the concept of a qualifying special-purpose entity (QSPE), which will require companies to evaluate former QSPEs for consolidation. In June2009, the FASB amended authoritative accounting guidance related to the consolidation of variable interest entities (VIEs). The amended authoritative accounting guidance updates existing guidance used to determine whether or not a company is required to consolidate a VIE and requires enhanced disclosures. The amended authoritative accounting guidance also eliminates quantitative-based assessments and will require companies to perform ongoing qualitative assessments to determine whether or not the VIE should be consolidated. The Company adopted the amended authoritative accounting guidance on January1, 2010. As discussed in Note 6, the Companys A/R sales program involves a master trust that issues an undivided interest in receivables to investors. The A/R sales master trust is not currently consolidated in the Companys financial statements and the undivided interest in receivables that have been sold to investors is derecognized. The amended authoritative accounting guidance will require the Company to consolidate the A/R sales master trust and to no longer derecognize the undivided interest sold to investors effective January1, 2010. The Company intends to apply this guidance prospectively. As a result, the Companys Consolidated Balance Sheets will reflect an increase in accounts receivable, net and an increase in current liabilities for the amount of undivided interests sold to investors and any related cash flow impacts will be included in Financing Activities rather than Operating Activities in the Consolidated Statements of Cash Flows. There were no outstanding undivided interests held by investors under the A/R sales program at December31, 2009. Outstanding undivided interests held by investors under the A/R sales program were $50million at December31, 2008. The Company did not record any additional financial statement adjustments as a result of the adoption of the amended authoritative accounting guidance.

Accumulated Other Comprehensive

Accumulated Other Comprehensive Loss
	12 Months Ended Dec. 31, 2009 USD / shares
Accumulated Other Comprehensive Loss [Abstract]
Accumulated Other Comprehensive Loss	17. Accumulated Other Comprehensive Loss The following table provides the components of accumulated other comprehensive loss (in millions): As of December 31, 2009 2008 Unrecognized prior service credit and actuarial losses, net of tax (see Note 13) $ (500 ) $ (524 ) Fuel/interest hedge mark-to-market, net of tax (see Note 3) 10 (344 ) Accumulated other comprehensive income of equity method investees, net of tax (6 ) (6 ) Total Accumulated other comprehensive loss $ (496 ) $ (874 )

Quarterly Financial Data-Unaudi

Quarterly Financial Data-Unaudited
	12 Months Ended Dec. 31, 2009 USD / shares
Quarterly Financial Data-Unaudited [Abstract]
Quarterly Financial Data-Unaudited	18. Quarterly Financial DataUnaudited Dollars in millions, except per share data Fourth Third Second First 2009 Revenues $ 3,681 $ 3,595 $ 3,316 $ 3,424 Operating income $ 895 $ 901 $ 797 $ 669 Net income $ 536 $ 488 $ 404 $ 293 Basic earnings per share $ 1.57 $ 1.43 $ 1.18 $ 0.86 Diluted earnings per share $ 1.55 $ 1.42 $ 1.18 $ 0.86 Dividends declared per share $ 0.40 $ 0.40 $ 0.40 $ 0.40 Common stock pricea: High $ 98.84 $ 84.98 $ 77.33 $ 80.21 Low $ 76.17 $ 67.79 $ 60.50 $ 52.35 2008 Revenues $ 4,373 $ 4,906 $ 4,478 $ 4,261 Operating income $ 1,116 $ 1,207 $ 714 $ 875 Net income $ 615 $ 695 $ 350 $ 455 Basic earnings per shareb $ 1.80 $ 2.01 $ 1.01 $ 1.31 Diluted earnings per shareb $ 1.78 $ 1.99 $ 1.00 $ 1.29 Dividends declared per share $ 0.40 $ 0.40 $ 0.32 $ 0.32 Common stock pricea: High $ 90.71 $ 107.36 $ 112.96 $ 94.53 Low $ 70.91 $ 92.32 $ 92.79 $ 76.02 a Average of high and low reported daily stock price. b The retrospective application of new authoritative accounting guidance in 2009 reduced basic earnings per share by $0.01 for both of the three month periods ended September30, 2008 and December31, 2008, and diluted earnings per share by $0.01 for each of the three month periods ended March31, 2008, September30, 2008, and December 31, 2008. See Note 12 to the Consolidated Financial Statements for further information.