Notes to Financial Statements
NOTE 1 DESCRIPTION OF PLAN
The
following description of the Burlington Northern Santa Fe Investment and Retirement Plan (the Plan) provides only general information. Participants should refer to the Plan document for a more complete description of the Plans provisions.
General
The purpose of
the Plan, which is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), is to offer eligible employees of Burlington Northern Santa Fe, LLC and certain affiliated companies (collectively, BNSF) an opportunity to
invest a portion of their income on a regular basis through payroll deductions. These amounts, supplemented by BNSFs matching contributions, may be invested at the participants direction in various investment funds.
Administration
The Plan
is administered by BNSFs Vice President and Chief Human Resources Officer. Vanguard Fiduciary Trust Company (the Trustee) is responsible for the custody and management of the Plans assets, and an affiliate of the Trustee provides
recordkeeping services to the Plan. BNSFs Employee Benefits Committee is responsible for appointing and removing the Trustee, specifying the investment options available under the Plan (if not otherwise mandated by the Plan), and reviewing
benefit claims appeals.
Master Trust
The Plan participates in the BNSF 401(k) Plans Master Trust (the Master Trust) and, along with the BNSF Railway Company
Non-Salaried
Employees 401(k) Retirement Plan (the
Non-Salaried
Plan), owns a percentage of the assets in the Master Trust.
Eligibility
Effective
October 1, 2015, any salaried employee regularly assigned to a salaried position, except a
non-resident
alien, of BNSF who is not subject to a collective bargaining agreement, is eligible to participate
in the Plan immediately upon hire.
Also effective October 1, 2015, the Plan provides for the automatic enrollment of employees who
become newly eligible to participate in the Plan at a rate of six percent of their salary. For employees already eligible, they may become participants in the Plan by authorizing regular payroll deductions and designating an allocation method for
such deductions.
Contributions
Compensation, as generally defined under the Plan, is the total of base salary, commissions and Incentive Compensation Plan bonuses. The Plan
provides that the annual compensation of each employee taken into account under the Plan for any year may not exceed a limitation pursuant to requirements of the Internal Revenue Code (IRC). During 2017, the limitation was $270 thousand.
The maximum limitation on combined total
before-tax
and
after-tax
employee contributions (other than
catch-up
contributions) is 25% of a participants base salary, commissions and Incentive Compensation Plan bonus award
with separate elections for each, not to exceed certain limits as described in the Plan document. All employee-elected contributions are made by means of regular payroll deductions.
BNSF matches 75% of the first 6% of employee-elected
before-tax
contributions and/or Roth
contributions for each pay period. BNSF matching contributions are made in cash, as soon as practicable after the end of each pay period.
5
During the 2017 Plan year, in accordance with the provisions of the IRC, no participant
could elect more than $24 thousand in
before-tax
and/or Roth
after-tax
contributions, which included a $6 thousand limit for
catch-up
contributions for participants age 50 or older before the close of the Plan year. This limitation does not include BNSFs matching contributions. In addition, the Plan provides that annual
contributions for highly-compensated employees (as defined by the IRC) may be limited based on the average rate of contributions for lower-compensated employees. In no event may the total of employee-elected
pre-tax
contributions, employee
after-tax
contributions, and BNSFs matching contributions exceed the lesser of $54 thousand ($60 thousand including
catch-up
contributions) or 100% of a participants compensation, as defined in IRC Section 415(c)(3), for any participant in a calendar year, subject to certain
cost-of-living
adjustments. Contributions with respect to any participant may be further reduced to the extent necessary to prevent disqualification of the Plan under Section 415 of the IRC, which
imposes additional limitations on contributions and benefits with regard to employees who participate in other qualified plans.
Participant Accounts
Each participants account is credited with the participants elective contributions, BNSFs matching contributions, interest,
dividends and gains and losses attributable to such contributions. The benefit to which a participant is entitled is limited to the participants vested account balance.
Participants may direct the investment of their account balances into investment options offered by the Plan. The Plan offers a company stock
fund (the Company Stock Fund) which consists of Berkshire Hathaway Inc. (Berkshire) Class B common stock (BNSF is a wholly-owned, indirect subsidiary of Berkshire), seven mutual funds, fifteen common / collective trusts and a stable value fund
as investment options for participants, all of which are held by the Master Trust.
Participants may allocate both elective and employer
matching contributions to any or all of the investment options in multiples of 1%. Participants may reallocate amounts from one investment option to another on a daily basis within certain guidelines as described in the Plan document and the
relevant investment prospectus.
No investment election or interfund transfer may result in the investment of more than 20% of the value
of a participants account in the Company Stock Fund. Investment election funds that exceed the 20% limit are invested in a target retirement trust designed for investors planning to retire on a date closest to the participants 65th
birthday.
Vesting
Participants are immediately vested in their elective contributions plus any income or loss thereon. BNSF matching contributions become fully
vested in accordance with the following schedule:
|
|
|
|
|
Number of Years of Vesting Service*
|
|
Vested Percentage
|
|
|
|
Less than 1 year
|
|
|
0%
|
|
1 year but less than 2 years
|
|
|
20%
|
|
2 years but less than 3 years
|
|
|
40%
|
|
3 years but less than 4 years
|
|
|
60%
|
|
4 years but less than 5 years
|
|
|
80%
|
|
5 years or more
|
|
|
100%
|
|
* The term Vesting Service is defined as the number of plan years in which the participant is
compensated for at least 1,000 hours of work by BNSF, in any capacity.
6
BURLINGTON NORTHERN SANTA FE
INVESTMENT AND RETIREMENT PLAN
Notes to Financial Statements (Continued)
Notes Receivable from Participants
Participants may borrow from their accounts a minimum of $1 thousand up to a maximum equal to the lesser of $50 thousand or 50% of
their vested account balance. Participants may have up to two loans outstanding at any time. Loan transactions are treated as a transfer to (from) the investment fund from (to) the participant loan account. Loan terms can be up to five years, or
fifteen years for the purchase of a primary residence. The loans are collateralized by the balance in the participants account and bear interest at the prime rate plus 1%. Interest rates on loans outstanding as of December 31, 2017, range
from 4.25% to 10.50%. Principal and interest are paid ratably through payroll deductions for active employees.
Benefit Payments to
Participants
Subject to certain Plan and IRC restrictions, a participant may, at any time, elect to withdraw all or a specified
portion of the value of the participants account in the Plan, including vested BNSF matching contributions. Both the Plan and the IRC allow a participant who has not attained age 59
1
⁄
2
to withdraw the participants
pre-tax
and Roth
after-tax
contributions only in the event of hardship (as defined in the Plan).
Earnings on
pre-tax
contributions credited after December 31, 1988, are not available for withdrawal for hardship.
No distribution from the Plan, unless in the event of hardship or attainment of age 59
1
⁄
2
, will be made until a participant retires, dies (in which case, payment shall be made to his or her beneficiary), becomes disabled or otherwise terminates employment with BNSF.
By law, a distribution of benefits must occur or commence no later than April 1 of the calendar year following the later of the year when
a participant attains age 70
1
⁄
2
or retires. In the event of the death of a participant, the participants account is distributed to their beneficiary.
Immediate
lump-sum
distributions are required in the case of accounts valued at up to $5 thousand. Mandatory
lump-sum
distributions which are greater than
$1 thousand will be transferred to an individual retirement account for the benefit of the participant unless the participant elects to receive the distribution directly or roll-over the distribution into another eligible retirement plan.
Forfeited Accounts
The
Plan provides for the forfeiture of nonvested BNSF matching contributions related to terminated employees. Forfeitures shall be used in the following order (as described by the Plan document):
-
|
|
First, to restore previously forfeited amounts of other participants who have resumed employment with BNSF;
|
-
|
|
Second, to offset future BNSF matching contributions; and
|
-
|
|
Finally, to pay administrative expenses of the Plan.
|
Forfeitures used were $64 thousand in 2017. At December 31, 2017 and 2016, unused forfeited balances totaled $343 thousand and
$13 thousand, respectively.
Plan Amendment and Termination
The Plan may be amended at any time. No such amendment, however, may adversely affect the rights of participants in the Plan with respect to
contributions made prior to the date of the amendment. BNSF matching contributions may be discontinued and participation by BNSF in the Plan may be terminated at any time at the election of BNSF. In the event the Plan is terminated, each participant
shall receive the full amount of Plan assets in their respective accounts.
7
BURLINGTON NORTHERN SANTA FE
INVESTMENT AND RETIREMENT PLAN
Notes to Financial Statements (Continued)
The Plan is subject to the provisions of ERISA applicable to defined contribution plans. The
Plan provides for an individual account for each participating employee. Plan benefits are based solely on the amount contributed to the participating employees account plus any income, expenses, gains and losses attributed to such account.
Consequently, Plan benefits are not insured by the Pension Benefit Guaranty Corporation pursuant to Title IV of ERISA.
Voting Rights
Each participant is entitled to exercise voting rights attributable to the shares of Berkshires Class B common stock
allocated to the participants account.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following accounting policies, which conform with accounting principles generally accepted in the United States of America and with the
requirements of ERISA, have been used consistently in the preparation of the Plans financial statements:
Basis of Accounting
The financial statements of the Plan have been prepared under the accrual method of accounting.
Authoritative accounting guidance requires investment contracts held by a defined contribution plan to be reported at fair value. However,
contract value is the relevant measurement attribute for that portion of the net assets available for benefits of a defined contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount
participants would receive if they were to initiate a permitted withdrawal transaction under the terms of the Plan. The Plan invests in investment contracts through the Master Trust. The Statements of Net Assets Available for Benefits present the
fair value of the investment in the Master Trust as well as the contract value relating to investment contracts. The Statement of Changes in Net Assets Available for Benefits is prepared on a contract value basis.
Use of Estimates
The
preparation of financial statements 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 additions and deductions during the reporting period. Actual results could differ from these estimates.
Income Recognition
Purchases and sales of investments are recorded on a trade-date basis. Interest income is recorded when earned. Dividend income is
recorded on the
ex-dividend
date. Capital gain distributions are included in dividend income. Net appreciation or depreciation in the fair value of investments consists of realized and unrealized gains and
losses on investments.
Risks and Uncertainties
The Plan provides for various investment options that include stocks, mutual funds, common / collective trusts and other investment
securities. Investment securities are exposed to various risks, such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of
investment securities will occur in the near term and that such changes could materially affect participants account balances and the amounts reported in the Plans financial statements.
8
BURLINGTON NORTHERN SANTA FE
INVESTMENT AND RETIREMENT PLAN
Notes to Financial Statements (Continued)
Benefit Payments to Participants
Benefits are recorded when paid.
Recent Accounting Pronouncements
In February 2017, the Financial Accounting Standards Board issued Accounting Standards Update (ASU)
No. 2017-06,
Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plan Master Trust
Reporting. This ASU requires a plans interest in a master trust and any change in that interest to be presented in separate line items in the statement of net assets available for benefits and in the statement of changes in net assets
available for benefits, respectively. This ASU also requires all plans to disclose the dollar amount of their investments measured at fair value by general type of investment and the investments and other assets and liabilities of the master trust,
as well as the dollar amount of its interest in these balances. The effective date is plan year 2020 and will be applied retrospectively with early adoption permitted. The adoption will not have a material effect on the statement of net assets
available for benefits and statement of changes in net assets available for benefits, but additional disclosures will be required. We plan to adopt this ASU for plan year 2020.
NOTE 3 VALUATION
Various inputs
are used to determine the fair value of the Plans investments. These inputs are summarized in the three broad levels listed below:
Level 1 Quoted prices for identical assets or liabilities in active markets that BNSF has the ability to access at
the measurement date.
Level 2 Quoted prices for similar assets or liabilities in active markets; quoted
prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations in which all significant inputs are observable market data.
Level 3 Valuations derived from valuation techniques in which one or more significant inputs are unobservable.
The Plans investment in the Master Trust for other than fully benefit-responsive investment contracts is stated at fair value. The
fair value of the Plans interest in the Master Trust is based on the specific interest that each plan has in the underlying participant-directed investment options. The investments held by the Master Trust are valued as follows:
(1) Investments in registered investment companies are valued at the quoted net asset value of the respective investment company. Net asset value is considered a Level 1 input if redemptions at this value are available to all shareholders
without restriction. (2) The Company Stock Fund is valued using a quoted active market price which is considered a Level 1 input. (3) Common / collective trusts are valued at the calculated net asset value of the respective investment
entity. Although these trusts are not publicly traded and are considered a Level 2 input, the underlying assets are publicly traded on exchanges and price quotes for the assets held by these trusts are readily available.
The following table summarizes the Plans investments at fair value as of December 31, 2017, based on the valuation inputs (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
Level 1
Inputs
|
|
|
|
|
Level 2
Inputs
|
|
Registered investment companies
|
|
$
|
|
|
448,305
|
|
|
$
|
|
|
448,305
|
|
|
$
|
|
|
|
|
Common / Collective Trusts
|
|
|
|
|
785,748
|
|
|
|
|
|
|
|
|
|
|
|
785,748
|
|
Company Stock Fund
|
|
|
|
|
180,942
|
|
|
|
|
|
180,942
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investments measured at fair value
|
|
$
|
|
|
1,414,995
|
|
|
$
|
|
|
629,247
|
|
|
$
|
|
|
785,748
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9
BURLINGTON NORTHERN SANTA FE
INVESTMENT AND RETIREMENT PLAN
Notes to Financial Statements (Continued)
Total investments of the Plan as of December 31, 2017 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Investments at fair value
|
|
$
|
|
|
1,414,995
|
|
Investments at contract value
|
|
|
|
|
266,320
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
|
|
1,681,315
|
|
|
|
|
|
|
|
|
The following table summarizes the Plans investments at fair value as of December 31, 2016, based
on the valuation inputs (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
Level 1
Inputs
|
|
|
|
|
Level 2
Inputs
|
|
Registered investment companies
|
|
$
|
|
|
641,697
|
|
|
$
|
|
|
641,697
|
|
|
$
|
|
|
|
|
Common / Collective Trusts
|
|
|
|
|
395,420
|
|
|
|
|
|
|
|
|
|
|
|
395,420
|
|
Company Stock Fund
|
|
|
|
|
161,567
|
|
|
|
|
|
161,567
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investments measured at fair value
|
|
$
|
|
|
1,198,684
|
|
|
$
|
|
|
803,264
|
|
|
$
|
|
|
395,420
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investments of the Plan as of December 31, 2016 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Investments at fair value
|
|
$
|
|
|
1,198,684
|
|
Investments at contract value
|
|
|
|
|
289,410
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
|
|
1,488,094
|
|
|
|
|
|
|
|
|
NOTE 4 INVESTMENT IN MASTER TRUST
All of the Plans investments are in a Master Trust, which was established for the investment of assets of the Plan and of the
Non-Salaried
Plan of BNSF Railway Company. Each participating retirement plan has an undivided interest in the Master Trust. The assets of the Master Trust are held by the Trustee. For the Plan years ended
December 31, 2017 and 2016, the Plans interest in the net assets of the Master Trust was approximately 37%.
The following
table presents the total of investments in the Master Trust (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31,
|
|
|
|
|
|
2017
|
|
|
|
|
2016
|
|
Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment
companies
|
|
$
|
|
|
1,213,355
|
|
|
$
|
|
|
1,745,070
|
|
Common / Collective
Trusts
|
|
|
|
|
2,242,264
|
|
|
|
|
|
1,161,234
|
|
Company Stock Fund
|
|
|
|
|
499,198
|
|
|
|
|
|
436,172
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investments measured at
fair value
|
|
|
|
|
3,954,817
|
|
|
|
|
|
3,342,476
|
|
Alternative GICs
|
|
|
|
|
606,352
|
|
|
|
|
|
641,166
|
|
Cash and cash
equivalents
|
|
|
|
|
24,536
|
|
|
|
|
|
39,503
|
|
Traditional GICs
|
|
|
|
|
19,385
|
|
|
|
|
|
22,024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investments measured at
contract value
|
|
|
|
|
650,273
|
|
|
|
|
|
702,693
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
|
|
4,605,090
|
|
|
$
|
|
|
4,045,169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
BURLINGTON NORTHERN SANTA FE
INVESTMENT AND RETIREMENT PLAN
Notes to Financial Statements (Continued)
Investment income for the Master Trust was as follows (in thousands):
|
|
|
|
|
|
|
|
|
Year Ended
December 31,
2017
|
Investment income:
|
|
|
|
|
|
|
|
Net investment appreciation
|
|
$
|
|
561,215
|
|
|
|
Interest and dividend income
|
|
|
|
90,429
|
|
|
|
|
|
Total
|
|
$
|
|
651,644
|
|
|
|
|
|
The Master Trusts investment at contract value is a stable-value fund, which invests in traditional and
alternative guaranteed investment contracts (GICs). GICs are contracts between an issuer and the Plan that provide for a fixed return on principal amounts invested over a fixed period of time. GICs are valued at contract value and, as required by
authoritative accounting guidance, the Statement of Net Assets Available for Benefits presents the contract value of the GIC.
Alternative
GICs (a form of wrap contract) are typically paired with an underlying single or multiple high quality fixed income investment, fixed income mutual funds, or with units of a collective trust bond portfolio. The wrap contract is owned by the Plan
while the underlying investments may or may not be owned by the Plan, depending on the contract. Wrap contracts are issued by insurance or financial services institutions. Investment gains and losses are amortized over the expected duration of the
underlying investments of that contract through the calculation of an interest rate applicable to the contract on a prospective basis. The wrap contracts provide for a variable crediting rate, which typically resets quarterly, and the issuer of the
wrap contract provides assurance that future adjustments to the crediting rate cannot result in a crediting rate less than zero.
The wrap
contract crediting rate is typically based on the current
yield-to-maturity
of the covered investments, plus or minus an amortization of the difference between the
market value and contract value of the covered investments over the duration of the covered investments at the time of computation. The crediting rate is affected by the change in the annual effective
yield-to-maturity
of the underlying securities, and is also affected by the differential between the contract value and the market value of the covered investments. In addition, changes in duration from reset
period to reset period can affect the crediting rate.
Certain events can limit the ability of the Plan to transact at contract value.
Such events can include, but are not limited to, the following: (i) complete or partial Plan termination or merger with another plan; (ii) changes to the Plans prohibition on competing investment options or deletion of equity wash
provisions; (iii) bankruptcy of BNSF or other BNSF events (e.g., divestitures or
spin-off
of a subsidiary) which cause a significant withdrawal from the Plan; or (iv) the failure of the Plan or
Master Trust to qualify for exemption from federal income taxes or any required prohibited transaction exemption under ERISA. The Plan Administrator does not believe that the occurrence of any such event, which would limit the Plans ability to
transact at contract value with participants, is probable.
Investment contracts generally impose conditions on the Plan. If an event of
default occurs and is not cured, the issuer may terminate the contract. These events may include: (i) a breach of material obligation under the contract; (ii) a material misrepresentation; or (iii) a material amendment to the Plan
agreement that is not approved and accepted by the issuer. The Plan may terminate wrap contracts at any time with notice, subject to certain conditions. Other than for reasons of Plan default, wrap contract issuers may generally only terminate
contracts upon the completion of certain contract requirements, such as completion of a specified period of time.
If, in the event of
default of an issuer, the Plan was unable to obtain a replacement investment contract, the Plan may experience losses if the value of the Plans assets no longer covered by the contract is below contract value. The Plan may seek to add
additional issuers over time to diversify the Plans exposure to such risk, but
11
BURLINGTON NORTHERN SANTA FE
INVESTMENT AND RETIREMENT PLAN
Notes to Financial Statements (Continued)
there is no assurance that the Plan may be able to do so. The combination of the default of an issuer and an inability to obtain a replacement agreement could render the Plan unable to achieve
its objective of maintaining a stable contract value. Contract termination occurs whenever the contract value or market value of the covered investments reaches zero or upon certain events of default. If the contract terminates due to issuer
default, the issuer will generally be required to pay to the Plan the excess, if any, of contract value over market value on the date of termination. If the contract terminates when the market value equals zero, the issuer will pay the excess of
contract value over market value to the Plan to the extent necessary for the Plan to satisfy outstanding contract value withdrawal requests.
As described in Note 2, because the investment contracts are fully benefit-responsive, contract value is the relevant measurement attribute
for that portion of the net assets available for benefits attributable to the investment contracts. Contract value represents contributions made under the contract, plus earnings, less participant withdrawals and administrative expenses.
Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value.
Net assets and
net investment income are allocated to participating plans based on number of units owned.
NOTE 5 RELATED PARTY TRANSACTIONS
Certain Plan investments held in the Master Trust are shares of mutual funds managed by the Trustee. The Plan also invests in the Class B
common stock of Berkshire through the Company Stock Fund, which is also held in the Master Trust. The Master Trust recorded purchases of $34 million and sales of $62 million of Berkshire Class B common stock during the year ended
December 31, 2017. Transactions in such investments qualify as
party-in-interest
transactions, which are exempt from the prohibited transaction rules.
Administrative expenses of the Plan, except for certain participant loan fees and Qualified Domestic Relations Order fees, are paid by BNSF.
For the year ended December 31, 2017, BNSF paid $318 thousand in administrative expenses on behalf of the Plan.
NOTE 6 INCOME TAX
STATUS
The Internal Revenue Service determined and informed BNSF by letter dated September 7, 2012 that the Plan was qualified
under IRC Section 401(a). The Plan has subsequently been amended and restated since receiving the determination letter; however, the Plan Administrator and tax counsel believe the Plan is designed and is currently operating in compliance with
the applicable requirements of the IRC. Therefore, no provision for income taxes has been included in the Plans financial statements.
In accordance with IRC Section 401(k), amounts deducted from participants salaries as
before-tax
contributions are not income taxable to the participants until withdrawn or distributed.
Non-Roth
after-tax
contributions are not subject to taxation upon withdrawal or distribution. Roth
after-tax
contributions and earnings are not subject to taxation upon withdrawal or distribution.
Generally accepted accounting principles require management to evaluate tax positions taken by the Plan and recognize a tax liability (or
asset) if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the Internal Revenue Service. The Plan sponsor has analyzed the tax positions taken by the Plan and has concluded that as of
December 31, 2017, there are no uncertain positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The Plan is subject to routine audits by taxing jurisdictions;
however, there are currently no audits for any tax periods in progress.
12
BURLINGTON NORTHERN SANTA FE
INVESTMENT AND RETIREMENT PLAN
Notes to Financial Statements (Continued)
NOTE 7 RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The financial statements of the Plan include distributions to participants as deductions when paid. The Department of Labor requires
participant loans that violate the IRC to be recorded as deemed distributions on the Form 5500, although the Plan still holds the participant loans as an asset.
The following is a reconciliation of net assets available for benefits from the financial statements to the Form 5500 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31,
|
|
|
|
|
2017
|
|
|
|
2016
|
Net assets available for benefits from the financial statements
|
|
$
|
|
1,711,261
|
|
$
|
|
1,517,225
|
Participant loans reduced by current year deemed distributions
|
|
|
|
(133)
|
|
|
|
(264)
|
Participant loans reduced by deemed distributions in prior years and currently
outstanding
|
|
|
|
(1,045)
|
|
|
|
(918)
|
|
|
|
|
|
|
|
|
|
Net assets available for benefits from the Form 5500
|
|
$
|
|
1,710,083
|
|
$
|
|
1,516,043
|
|
|
|
|
|
|
|
|
|
The following is a reconciliation of the change in net assets available for benefits from the financial
statements to the Form 5500 (in thousands):
|
|
|
|
|
|
|
|
|
Year
Ended
December 31,
2017
|
Net increase in net assets available for benefits per the financial statements
|
|
$
|
|
194,036
|
Deemed distributions of participant loans for the current year
|
|
|
|
(133)
|
Deemed distributions of participant loans for the prior year
|
|
|
|
137
|
|
|
|
|
|
Net increase in net assets available for benefits per the Form 5500
|
|
$
|
|
194,040
|
|
|
|
|
|
13
BURLINGTON NORTHERN SANTA FE
INVESTMENT AND RETIREMENT PLAN
SCHEDULE H, Line 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AS OF DECEMBER 31, 2017
(Dollars in thousands)
|
|
|
|
|
|
|
EIN 27-1754839
|
|
|
Attachment to Form 5500, Schedule H, Line 4i:
|
|
Plan # 002
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
(b)
|
|
(c)
|
|
|
|
(e)
|
|
|
|
|
|
|
|
Identity of Issue, Borrower or Similar
Party
|
|
Description of Investment, including
Maturity Date, Rate of Interest, Collateral, Par or
Maturity Value
|
|
|
|
Current Value
|
|
|
|
|
|
|
|
|
*
|
|
BNSF 401(k) Plans Master Trust
|
|
Investment in Master Trust
|
|
$
|
|
1,681,315
|
|
|
|
|
|
*
|
|
Notes receivable from participants
|
|
Interest rates of 4.25% - 10.50% with maturities from less than one year to fifteen years
|
|
|
|
28,782
|
|
|
|
|
|
|
|
|
|
|
|
Total assets held for investment purposes
|
|
|
|
$
|
|
1,710,097
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Represents a party-in-interest, as defined by ERISA.
Column (d) is excluded from the presentation, as all
investing activity is participant-directed; therefore, no disclosure of cost information is required.
|
|
|
14
BURLINGTON NORTHERN SANTA FE
INVESTMENT AND RETIREMENT PLAN