Related Party Transactions

12 Months Ended

Dec. 31, 2015

BNSF Railway is involved with BNSF and certain of its subsidiaries in related party transactions in the ordinary course of business, which include payments made on each other’s behalf and performance of services. Under the terms of a tax allocation agreement with BNSF, BNSF Railway made federal and state income tax payments, net of refunds, of $1,430 million, $1,645 million and $2,455 million during the years ended December 31, 2015, 2014 and 2013, respectively, which are reflected in changes in working capital in the Consolidated Statement of Cash Flows.

At December 31, 2015 and 2014, BNSF Railway had $116 million and $44 million, respectively, of intercompany receivables which are reflected in accounts receivable in the respective Consolidated Balance Sheets. At December 31, 2015 and 2014, BNSF Railway had $19 million and $23 million of intercompany payables, which are reflected in accounts payable in the respective Consolidated Balance Sheets. Net intercompany balances are settled in the ordinary course of business.

At December 31, 2015 and 2014, BNSF Railway had $12,597 million and $9,963 million, respectively, of intercompany notes receivable from BNSF. During the years ended December 31, 2015, 2014 and 2013, loans to BNSF were $3,191 million, $2,806 million and $2,781 million, respectively, partially offset by repayments received of $557 million, $1,240 million and $809 million, respectively. All intercompany notes have a variable interest rate of 1.0 percent above the monthly average of the daily effective Federal Funds rate. Interest is collected semi-annually on all intercompany notes receivable. Interest income from intercompany notes receivable is presented in interest income, related parties in the Consolidated Statements of Income.

BNSF Railway engages in various transactions with related parties in the ordinary course of business. The following table summarizes revenues earned by BNSF Railway for services provided to related parties and expenditures to related parties (in millions):



	Year Ended		Year Ended		Year Ended
	December 31, 2015		December 31, 2014		December 31, 2013
Revenues	$	198	$	175	$	179
Expenditures	$	367	$	368	$	318

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References + Details

BNSF RAILWAY CO 10-K