SURFACE TRANSPORTATION BOARD DECISION DOCUMENT
    Decision Information

Docket Number:  
EP_720_0

Case Title:  
ACCOUNTING AND REPORTING OF BUSINESS COMBINATIONS, SECURITY INVESTMENTS, COMPREHENSIVE INCOME, DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Decision Type:  
Decision

Deciding Body:  
Entire Board

    Decision Summary

Decision Notes:  
DECISION PROVIDED NOTICE THAT THE BOARD ADOPTED FINAL RULES THAT UPDATE THE ACCOUNTING AND REPORTING REQUIREMENTS UNDER ITS UNIFORM SYSTEM OF ACCOUNTS FOR CLASS I RAILROADS. THE BOARD ALSO REVISED THE SCHEDULES AND INSTRUCTIONS FOR THE ANNUAL REPORT FOR CLASS I RAILROADS.

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    Full Text of Decision

EB

44779 SERVICE DATE – APRIL 6, 2016

EB

 

SURFACE TRANSPORTATION BOARD

 

DECISION

 

Docket No. EP 720

 

ACCOUNTING AND REPORTING OF BUSINESS COMBINATIONS,

SECURITY INVESTMENTS, COMPREHENSIVE INCOME,

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

 

Decided: March 30, 2016

 

AGENCY: Surface Transportation Board.

 

ACTION: Final Rules.

 

SUMMARY: The Surface Transportation Board (STB or Board) is adopting final rules that update the accounting and reporting requirements in its Uniform System of Accounts (USOA) for Class I Railroads so that they are more consistent with current generally accepted accounting principles (GAAP). The Board is also revising the schedules and instructions for the Annual Report for Class I Railroads (R-1 or Form R-1) to better meet regulatory requirements and industry needs. The final rules are set forth in the Appendix.

 

DATES: These rules are effective on May 6, 2016.

 

FOR FURTHER INFORMATION CONTACT: Pedro Ramirez at (202) 245-0333. Assistance for the hearing impaired is available through the Federal Information Relay Service (FIRS) at 1-800-877-8339.

 

SUPPLEMENTAL INFORMATION: The Interstate Commerce Act, as amended by the ICC Termination Act of 1995 (ICCTA), Pub. L. No. 104-88, 109 Stat. 803, authorizes the Board, in 49 U.S.C 11142, to prescribe a uniform accounting system for rail carriers subject to our jurisdiction and, in 49 U.S.C. 11161, to maintain cost accounting rules for rail carriers.[1] Sections 11142 and 11161 both require the Board to conform its accounting rules to GAAP “[t]o the maximum extent practicable.” The USOA is set forth in the Board’s regulations at 49 C.F.R. Part 1201—Subpart A. The USOA is used by the Class I Railroads[2] to comply with their statutory requirement to provide the Board an annual report, known as the R-1 report, that contains information about their finances and operating statistics. 49 U.S.C.  11145(b)(1) & 49 C.F.R.  1241.11.

 

In a notice of proposed rulemaking served on July 8, 2015 (NPR), the Board proposed to make a number of changes to the USOA. First, the Board noted that the existing USOA does not specifically address the proper accounting and reporting for changes in the fair value of certain security investments, derivative instruments, and hedging activities, nor does it contain specific accounts to record amounts related to items of Other Comprehensive Income or provide a format to display comprehensive income in the Form R-1. Without specific instructions and accounts for recording and reporting these transactions and events, inconsistent and incomplete accounting would result. Thus, the Board proposed to amend its USOA and Form R-1 to account for those types of transactions and events. Specifically, the Board proposed updating the USOA to provide for:  (1) fair value presentation of certain security investments, derivative instruments, and hedging activities; and (2) presentation of comprehensive income and components of other comprehensive income.

 

The Board proposed these revisions based on the GAAP promulgated by the Financial Accounting Standards Board (FASB)[3] in the following Accounting Standards Codifications (ASC):  ASC 320 Investments – Debt and Equity Securities; ASC 220 Comprehensive Income; ASC 815 Derivatives and Hedging; and ASC 805 Business Combinations.[4] The Board stated that the purpose of the proposed revisions is to provide consistent accounting and reporting of changes in the fair value of security investments, derivative instruments, and hedging activities.  The Board further stated that the proposed changes would minimize the accounting and reporting burden on railroads under the Board’s jurisdiction, assist the Board in its overall monitoring effort, and improve transparency.

 

Second, the Board proposed revising the USOA to reflect current accounting practices for business combinations by removing existing instructions for the pooling-of-interest method of accounting and replacing those instructions with the acquisition accounting method.  This method of accounting has been standard practice in the accounting industry for some time, and the Board has already agreed that the acquisition method better reflects the investment made in an acquired entity and has affirmed the use of this treatment.[5] Thus, in the NPR, the Board proposed to update the USOA to reflect this accounting treatment.

 

Finally, the Board proposed revising the Form R-1 to include new accounts and a new reporting schedule and eliminating 15 schedules that the Board no longer uses.

 

 The proposed rules were published in the Federal Register, 80 Fed. Reg. 39,021 (July 8, 2015). The Board received comments from the Association of American Railroads (AAR); no reply comments were filed.

 

FINAL RULES

 

The Board has reviewed the issues raised in AAR’s comments and addresses them below, along with any revisions made in response.  The final rules in full are appended to this decision.

 

Accounting and Reporting of Business Combinations, Security Investments, Comprehensive Income, Derivative Instruments, and Hedging Activities

 

In the NPR, the Board proposed to amend its USOA and Form R-1 by adding new general instructions and accounts to recognize changes in the fair value of certain security investments, items of other comprehensive income, derivative instruments, and hedging activities.  Additionally, the Board proposed revising its USOA to reflect current accounting practices for business combinations by removing existing instructions for the pooling-of-interest method of accounting and requiring only the acquisition accounting methodology.  The Board also sought comment on its proposal to revise the Form R-1 to include the new accounts and a new reporting schedule.

No comments were filed in opposition to these proposals. Thus, the Board adopts such proposals here in the final rules. These changes will improve completeness and consistency of accounting and reporting. The addition of the proposed new accounts and related reporting requirements to the Form R-1 will reduce regulatory uncertainty as to the proper accounting and reporting for these items and minimize regulatory burden by reducing the potential differences in the manner in which certain amounts are reported to shareholders and to the Board.  Finally, the reporting of derivative instruments and hedging activities by regulated carriers will assist the Board in its overall monitoring effort as well as its ability to assess railroad industry growth and financial stability.

Elimination of, or Changes to, Certain Schedules

 

The Board stated in the NPR that it had examined the current Form R-1 and determined that 15 of the 47 schedules were no longer used by the Board to perform regulatory and oversight functions.  The Board, therefore, proposed to eliminate the following 15 schedules:

 

230     Capital Stock

339     Accrued Liability - Leased Property

340     Depreciation Base and Rates - Improvements to Road and Equipment Leased from Others

350     Depreciation Base and Rates - Road and Equipment Leased to Others

351     Accumulated Depreciation - Road and Equipment Leased to Others

416     Supporting Schedule - Road

418     Supporting Schedule - Capital Leases

460     Items in Selected Income and Retained Earnings Accounts for the Year

702     Miles of Road at Close of Year - By States and Territories (Single Track)

721     Ties Laid in Replacement

722     Ties Laid in Additional Tracks and in New Lines and Extensions

723     Rails Laid in Replacement

724     Rails Laid in Additional Tracks and in New Lines and Extensions

725     Weight of Rail

726     Summary of Track Replacements

In its comments, AAR states that it supports the Board’s proposal to eliminate these schedules from the Form R-1, with the exception of Schedule 702, Miles of Road at Close of Year-By States and Territories (Single Track). According to AAR, Schedule 702 should be retained because this schedule is used to calculate state tax rates in the Revenue Shortfall Allocation Method.[6]

 

We agree with AAR that Schedule 702 should be retained. The Form R-1 report, filed annually by Class I railroads, includes the mileage necessary to weight average state tax rates that are utilized in the Revenue Shortfall Allocation methodology.[7] Therefore, Schedule 702 will be retained.

 

In addition to the schedules proposed for elimination in the NPR, AAR requests, consistent with its comments previously filed in Improving Regulation & Regulatory Review, Docket No. EP 712, that the Board eliminate Schedule 220, Retained Earnings; Schedule 342, Accumulated Depreciation-Improvements to Road and Equipment Leased from Others; Schedule 501, Guarantees and Suretyships; and Schedule 502, Compensating Balances and Short-Term Borrowing Arrangements. AAR further requests that the Board eliminate Schedule 310, Investments and Advances Affiliated Companies and Schedule 310A, Investments in Common Stocks of Affiliated Companies. According to AAR, these schedules are unnecessary because they capture data that is neither used nor usable to support the Board’s regulatory objectives.

The Board will not adopt AAR’s proposals to eliminate these other schedules. Schedule 220, Retained Earnings, will be retained because it is a significant financial disclosure for stakeholders interested in changes in the retained earnings account during the reporting period and gives important insight into the rail carrier’s financial performance. Schedule 342, Accumulated Depreciation-Improvements to Road and Equipment Leased from Others, will be retained because it is used in the Board’s Uniform Rail Costing System (URCS) and review of depreciation studies. In addition, eliminating Schedule 342 would limit the Board’s ability to collect sufficient detail for R-1 reporting regarding rail carriers’ implementation of the updated GAAP standard for leases. Finally, Schedules 501 (Guarantees and Suretyships), 502 (Compensating Balances and Short-Term Borrowing Arrangements), 310 (Investments and Advances Affiliated Companies), and 310A (Investments in Common Stocks of Affiliated Companies), are currently used by the Board’s Office of Economics in intercompany audits, as they provide detailed information related to the railroads’ financial arrangements with affiliated companies and financial agreements with borrowers and lenders. Those schedules therefore will be retained.

 

AAR further suggests, consistent with its comments in Improving Regulation and Regulatory Review, Docket No. EP 712, that the Board make certain changes to either conform Form R-1 schedules to GAAP or otherwise harmonize Form R-1 reporting requirements. In Schedule 210, Results of Operations, AAR suggests that the Board change the description in Line 41 from “Amortization of Discount on Funded Debt,” to “Amortization of Premium or Discount on Funded Debt,” to reflect that premium amortization is included in interest expenses. AAR also suggests removing Line 22 where amortization of premium on funded debt is currently reported. In Schedule 412, Way and Structures, AAR suggests adding a separate line for “Shop Machinery” to reconcile the amortization expenses and depreciation for road accounts required in Schedules 412 and 335, Accumulated Depreciation—Road and Equipment Owned and Used. For Schedule 415, Supporting Schedule—Equipment, AAR proposes that the Board combine owned and capitalized leases in the schedule and eliminate lines pertaining to “Machinery” because, according to AAR, this data is not in or supported by Schedule 410, Equipment Accounts. Finally, for Schedule 755, Railroad Operating Statistics, AAR suggests eliminating Line 89—Caboose Miles—due to the significant reduction in the use of cabooses by reporting rail carriers.

While the Board will not adopt AAR’s suggestions that the Board make certain other changes to either conform Form R-1 schedules to GAAP or otherwise harmonize Form R-1 reporting requirements, the Board will provide clarifying instructions with respect to one of AAR’s proposals.

 

First, we will not adopt AAR’s requested changes to Schedule 210, Results of Operations. Although AAR’s proposal would simplify the reporting presentation in the Form R-1, the Board’s current practice of presenting premiums and discounts of funded debt separately is preferable because it allows for transparent financial reporting by showing both interest income and expense.

 

Additionally, AAR’s suggestion that the Board combine owned and capitalized leases in Schedule 415 (Supporting Schedule—Equipment) will not be adopted because this change would limit the Board’s ability to collect sufficient detail for R-1 reporting regarding railroads’ implementation of the updated GAAP standards for leases. This change would also require a modification in how Schedule 415 is inputted in URCS. In addition, although AAR suggests that lines pertaining to “Machinery” be eliminated in Schedule 415 because, according to AAR, such data is not in or supported by Schedule 410 (Equipment Accounts), the Board will not do so because Schedule 415, Lines 38-40 reconcile to Schedule 410, Lines 203, 222, and 306.

 

In Schedule 755 (Railroad Operating Statistics), the Board will retain Line 89–Caboose Miles. While reporting carriers have been reducing the use of cabooses over time, a level of use still exists. Further, removing Line 89 would eliminate an operating statistic from the URCS calculation.

 

While AAR suggests adding a separate line for “Shop Machinery” in Schedule 412 (Way and Structures) to reconcile the amortization expenses and depreciation for road accounts required in Schedules 412 (Way and Structures) and 335 (Accumulated Depreciation—Road and Equipment Owned and Used), the Board notes that Schedule 412 reports a railroad’s fixed roadway facilities; “Shop Machinery” does not fall into such a category, but should be recorded in equipment accounts. The Board, however, will clarify instruction 4 in Schedule 412 to read as follows: “Amortization adjustment of each road property type which is included in column (b) shall be repeated in column (d) as a debit or credit to the appropriate line item. The net adjustment on line 29 shall equal the adjustment reported on line 29 of Schedule 335, excluding Account 44, Shop Machinery.”

 

In sum, the final rules will eliminate the schedules previously identified in the NPR except for Schedule 702, Miles of Road at Close of Year-By States and Territories (Single Track), as discussed above. The Board will also clarify R-1 Schedule 412 instruction 4 as it pertains to the treatment of Shop Machinery.

 

Instruction 2-15.

 

As noted in the NPR, ASC 805 Business Combinations requires the use of the acquisition method of accounting for all business combinations. While this method of accounting has been standard practice in the accounting industry for some time, and the Board has already agreed that the acquisition method better reflects the investment made in an acquired entity and has affirmed the use of this treatment, the USOA has not been updated to incorporate the method.[8] Thus, the NPR proposed to update the USOA to reflect this accounting treatment.

 

In connection with that proposal, the Board specifically sought comment on the application of Instruction 2-15, paragraph (d) with respect to use of the pooling of interest method for transactions involving the acquisition and merger of property of subsidiaries in INSTRUCTIONS FOR PROPERTY ACCOUNTS. No comments were submitted regarding the treatment or application of Instruction 2-15, paragraph (d). Therefore, we will update Instruction 2-15, paragraph (d) to reflect the use of the acquisition accounting methodology and remove any reference or instruction pertaining to the pooling-of-interest methodology.[9]

 

ASC 410

 

In response to the NPR, AAR also suggests that the Board adopt ASC 410, Asset Retirement and Environmental Obligations, which addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. AAR, however, does not explain why it believes ASC 410 should be adopted. The Board has already determined in an Accounting Series Circular served on June 11, 2003, and sent to all accounting officers of Class I railroads, that the Board would not adopt Financial Accounting Standard (FAS) 143, Accounting for Asset Retirement Obligations, now codified as ASC 410, because to do so would be inconsistent with the Board’s accounting rules.[10] Nothing in AAR’s comments suggests any reason for altering the Board’s 2003 determination. Accordingly, we will not adopt ASC 410 as suggested by AAR.

 

Periodic Review

 

  As noted above, 49 U.S.C. 11142 and 11161 require the Board to conform its accounting rules to GAAP “[t]o the maximum extent practicable.” Therefore, in keeping with this requirement, the Board will conduct a periodic review of its accounting standards not less than every five years. 

 

Paperwork Reduction Act

 

In the NPR the Board sought comments pursuant to the Paperwork Reduction Act (PRA), 44 U.S.C.  3501-3549, and Office of Management and Budget (OMB) regulations at 5 C.F.R.  1320.11, regarding:  (1) whether the revisions to the collection of information proposed here are necessary for the proper performance of the functions of the Board, including whether the collection has practical utility; (2) the accuracy of the Board’s burden assessment; (3) ways to enhance the quality, utility, and clarity of the information collected; and (4) ways to minimize the burdens of the collections of information on the respondents, including the use of automated collection techniques or other forms of information technology, when appropriate. Comments regarding the necessity, utility, and clarity of the information collection were received and are addressed above.  No comments concerning the Board’s burden estimates were received.

 

The proposed collection was submitted to OMB for review as required under the PRA, 44 U.S.C.  3507(d), and 5 C.F.R.  1320.11.  OMB withheld approval pending submission of the final rule.  We are today submitting the collection contained in this final rule to OMB for approval.  Once approval is received, we will post a copy of the revised Form R-1 on the Board’s website. Unless renewed, OMB approval of this collection expires three years after the date that OMB approves the collection.

 

Regulatory Flexibility Act Statement

 

The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C.  601-612, generally requires a description and analysis of new rules that would have a significant economic impact on a substantial number of small entities.  In drafting a rule, an agency is required to:  (1) assess the effect that its regulation will have on small entities; (2) analyze effective alternatives that may minimize a regulation’s impact; and (3) make the analysis available for public comment.  5 U.S.C.  601-604.  Under  605(b), an agency is not required to perform an initial or final regulatory flexibility analysis if it certifies that the proposed or final rules will not have a “significant impact on a substantial number of small entities.”

 

Because the goal of the RFA is to reduce the cost to small entities of complying with federal regulations, the RFA requires an agency to perform a regulatory flexibility analysis of small entity impacts only when a rule directly regulates those entities.  In other words, the impact must be a direct impact on small entities “whose conduct is circumscribed or mandated” by the proposed rule.  White Eagle Coop. Ass’n v. Conner, 553 F.3d 467, 478, 480 (7th Cir. 2009).  An agency has no obligation to conduct a small entity impact analysis of effects on entities that it does not regulate.  United Distrib. Cos. v. FERC, 88 F.3d 1105, 1170 (D.C. Cir. 1996). 

 

The rule changes adopted here will not have a significant economic impact upon a substantial number of small entities, within the meaning of the RFA.  The reporting requirements are applicable only to entities that are required to file Form R-1 reports, i.e., the Class I carriers. 49 C.F.R  1241.1. Class I carriers are large railroads; accordingly, there will be no impact on small railroads (small entities).[11] Therefore, the Board certifies under 5 U.S.C.  605(b) that this rule will not have a significant economic impact on a substantial number of small entities within the meaning of the RFA.

 

Authority. 49 U.S.C.  11142 and 11164.

 

List of Subjects in 49 C.F.R. Part 1201.

 

Railroads, Uniform System of Accounts.

 

It is ordered:

 

1.      The final rules set forth in the Appendix to this decision are adopted and will be effective on May 6, 2016. Notice of the rules adopted here will be published in the Federal Register.

2.      This decision is effective on the date of service.

 

By the Board, Chairman Elliott, Vice Chairman Miller, and Commissioner Begeman.


 

Appendix

For the reasons set forth in the preamble, the Surface Transportation Board is amending part 1201 of title 49, chapter X, of the Code of Federal Regulations as follows:

PART 1201 – RAILROAD COMPANIES

1. The authority citation for part 1201 continues to read as follows:

AUTHORITY: 49 U.S.C. 11142 and 11164.

Subpart A—Uniform System of Accounts

2. Amend Regulations Prescribed by revising paragraph (ii), item 16(c), to read as follows:

List of Instructions and Accounts

REGULATIONS PRESCRIBED

* * * * *

(ii) Definitions.

* * * * *

16. * * *

(c) Cost, as applied to a marketable equity security, refers to the original cost as adjusted for unrealized holding gains and losses.

* * * * *

3. Amend General Instructions by adding Instructions 1-19 and 1-20, to read as follows:

 

GENERAL INSTRUCTIONS

* * * * *

1-19 Accounting for Other Comprehensive Income. (a) Railroads will record items of Other Comprehensive Income in account 799.1, Other comprehensive income. Amounts included in this account will be maintained by each category of Other Comprehensive Income. Examples of categories of Other Comprehensive Income include foreign currency items, minimum pension liability adjustments, unrealized gains and losses on available-for-sale type securities and cash-flow hedge amounts.

(b) Supporting records will be maintained for account 799 so that the company can readily identify the cumulative amount of Other Comprehensive Income for each item included in this account.

(c) When an item of Other Comprehensive Income enters into the determination of earnings in the current or subsequent periods, a reclassification adjustment will be recorded in account 799 to avoid double counting of when an item included in net income was also included in Other Comprehensive Income in the same or prior period.

1-20 Accounting for derivative instruments and hedging activities. (a) A carrier will recognize derivative instruments as either assets or liabilities in the financial statements and measure those instruments at fair value. A derivative instrument is a financial instrument or other contract with all three of the following characteristics:

(1) The derivative instrument has one or more underlyings and a notional amount or payment provision. Those terms determine the amount of the settlement or settlements, and, in some cases, whether or not a settlement is required.

(2) The derivative instrument requires no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have similar responses to changes in market factors.

(3) The derivative instrument’s terms require or permit net settlement; the derivative instrument can readily be settled net by a means outside the contract; or the derivative instrument’s terms provide for delivery of an asset that puts the recipient in a position not substantially different from net settlement.

(b) The accounting for the changes in the fair value of derivative instruments depends upon their intended use and designation. Changes in the fair value of derivative instruments not designated as fair value or cash flow hedges will be recorded in account 713.5, Derivative instrument assets, or account 763.5, Derivative instrument liabilities, as appropriate, with the gains or losses charged to earnings in account 551, Miscellaneous income charges.

(c) A derivative instrument may be specifically designated as a fair-value or cash-flow hedge. A hedge may be used to manage risk to price, interest rates, or foreign currency transactions. An entity will maintain documentation of the hedge relationship at the inception of the hedge that details the risk management objective and strategy for undertaking the hedge, the nature of the risk being hedged, and how hedge effectiveness will be determined.

(d) If the carrier designates the derivative instrument as a fair-value hedge against exposure to changes in the fair value of a recognized asset, liability, or a firm commitment, it will record the change in fair value of the derivative instrument designated as a fair-value hedge to account 713.6, Derivative instruments assets–hedges, or account 763.6, Derivative instrument liabilities–hedges, as appropriate, with a corresponding adjustment to the sub-account of the item being hedged. The ineffective portion of the hedge transaction will be reflected in the same income or expense account that would have been used if the hedged item had been disposed of or settled. In the case of a fair-value hedge of a firm commitment, a new asset or liability is created. As a result of the hedge relationship, the new asset or liability will become part of the carrying amount of the item being hedged.

(e) If the carrier designates the derivative instrument as a cash-flow hedge against exposure to variable cash flows of a probable forecasted transaction, it will record changes in the fair value of the derivative instrument in account 713.6, Derivative instrument assets–hedges, or account 763.6, Derivative instrument liabilities–hedges, as appropriate, with a corresponding amount in account 799.1, Other comprehensive income, for the effective portion of the hedge. The ineffective portion of the hedge transaction will be reflected in the same income or expense account that would have been used if the hedged item had been disposed of or settled. Amounts recorded in Other Comprehensive Income will be reclassified into earnings in the same period or periods that the hedged forecasted item affects earnings.

4. Amend Instructions For Property Accounts by:

a. Revising paragraph (a) in Instruction 2-15;

b. Removing paragraph (b) in Instruction 2-15;

c. Redesignating paragraph (c) as paragraph (b) in Instruction 2-15;

d. Revising the newly designated paragraph (b) in Instruction 2-15;

e. Redesignating paragraph (d) as paragraph (c) in Instruction 2-15; and

f. Revising the newly designated paragraph (c) in Instruction 2-15.

The revisions read as follows:

 

INSTRUCTIONS FOR PROPERTY ACCOUNTS

* * * * *

2-15 * * * (a) When a railway or portion thereof constituting an operating unit or system is acquired in a business combination, that business combination shall be recorded in the accounts in the manner stated hereunder.

(b) Purchase:

(1) The amount includable in account 731, Road and equipment property, shall be the cost at the date of acquisition to the purchaser of the transportation property acquired. The cost assigned the property, as well as other assets acquired, shall be the amount of the cost consideration given. Where property and other assets are acquired for other than cash, including liabilities assumed and shares of stock issued, cost shall be determined by either the fair value of the consideration given or the fair value of the assets acquired, whichever is more clearly evident. In addition to any liabilities assumed, provision shall be made for such estimated liabilities as may be necessary.

(2) When the costs of individual units or classes of transportation property are not specified in the agreement, the cost assigned such property shall be apportioned among the appropriate primary accounts using the percentage relationship between the fair values for each class of property acquired and the total of such values.

(c) Merger of subsidiaries:

The acquisition and merger of property of subsidiaries controlled through ownership of the majority shares of voting stock is to be accounted for using the acquisition accounting methodology.

5. Amend Instructions For Income And Balance Sheet Accounts by revising Instruction 5-2, paragraph (a), items (2), (3), and (4) to read as follows:

INSTRUCTIONS FOR INCOME AND BALANCE SHEET ACCOUNTS

* * * * *

5-2 * * *

(a) * * *

(2) Account 702, Temporary cash investments, account 721, Investments and advances; affiliated companies, and account 722, Other investments and advances, shall be maintained in such a manner as to reflect the marketable equity portion (see definition 26) and other securities or investments.

(3) For the purpose of determining net ledger value, the marketable equity securities in account 702 shall be considered the current portfolio and the marketable equity securities in accounts 721 and 722 (combined) shall be considered the noncurrent portfolio.

(4) Carriers will categorize their security investments as held-to-maturity, trading, or available-for-sale. Unrealized holding gains and losses on trading type investment securities will be recorded in account 551, Miscellaneous income charges. Unrealized holding gains and losses on available-for-sale type investment securities will be recorded in account 799.1, Other comprehensive income.

* * * * *

6. Amend Income Accounts – Ordinary Items by adding a sentence at the end of the list of inclusions for account 551 "Miscellaneous income charges," paragraph (a) to read as follows:

INCOME ACCOUNTS

Ordinary Items

* * * * *

 

551 Miscellaneous income charges.

(a) * * *

Unrealized holding gains and losses on trading type investment securities.

* * * * *

7. Amend General Balance Sheet Accounts Explanations – Assets, Current Assets by:

a. Adding a sentence to the end of the first paragraph in account 702 "Temporary cash investment”;

b. Adding accounts 713.5 "Derivative instrument assets” and 713.6 "Derivative instrument assets–hedges."

The additions read as follows:

GENERAL BALANCE SHEET ACCOUNTS EXPLANATIONS

Assets

Current Assets

* * * * *

702 Temporary cash investments.

* * * This account shall also include unrealized holding gains and losses on trading and available-for-sale types of security investments.

* * * * *

713.5 Derivative instrument assets.

This account shall include the amounts paid for derivative instruments, and the change in the fair value of all derivative instrument assets not designated as cash-flow or fair-value hedges. Account 551, Miscellaneous income charges, will be charged with the corresponding amount of the change in the fair value of the derivative instrument.

713.6 Derivative instrument assets–hedges.

(a) This account shall include the amounts paid for derivative instruments, and the change in the fair value of derivative instrument assets designated by the carrier as cash-flow or fair-value hedges.

(b) When a carrier designates a derivative instrument asset as a cash-flow hedge, it will record the change in the fair value of the derivative instrument in this account with a concurrent charge to account 799.1, Other comprehensive income, with the effective portion of the derivative’s gain or loss. The ineffective portion of the cash-flow hedge will be charged to the same income or expense account that would have been used if the hedged item had been disposed of or otherwise settled.

(c) When a carrier designates a derivative instrument as a fair-value hedge, it will record the change in the fair value of the derivative instrument in this account with a concurrent charge to a sub-account of the asset or liability that carries the item being hedged. The ineffective portion of the fair-value hedge will be charged to the same income or expense account that would have been used if the hedged item had been disposed of or otherwise settled.

* * * * *

8. Amend General Balance Sheet Accounts Explanations – Assets, Special Funds by:

a. In account 715 "Sinking funds," adding two sentences to the end of paragraph (b);

b. In account 716 "Capital funds," adding a sentence to the end of paragraph (a); and

c. In account 717 "Other funds," adding Note E.

The additions read as follows:

GENERAL BALANCE SHEET ACCOUNTS EXPLANATIONS

Assets

Special Funds

715 Sinking funds.

* * * * *

(b) * * * This account shall also include unrealized holding gains and losses on trading and available-for-sale types of security investments. The cash value of life insurance policies on the lives of employees and officers to the extent that the carrier is the beneficiary of such policies shall also be included in this account.

* * * * *

716 Capital funds.

(a) * * * This account shall also include unrealized holding gains and losses on trading and available-for-sale types of security investments.

* * * * *

717 Other funds.

* * * * *

Note E: This account shall also include unrealized holding gains and losses on trading and available-for-sale types of security investments.

9. Amend General Balance Sheet Accounts Explanations – Assets, Investments by:

a. In account 722 "Other investments and advances," adding two sentences to the end of paragraph (a); and

b. Removing account 724 "Allowance for net unrealized loss on noncurrent marketable equity securities—Cr."

The addition reads as follows:

GENERAL BALANCE SHEET ACCOUNTS EXPLANATIONS

Assets

Investments

* * * * *

722 Other investments and advances.

(a) * * * This account shall also include unrealized holding gains and losses on trading and available-for-sale types of security investments. Include also the offsetting entry to the recording of amortization of discount or premium on interest bearing investments.

* * * * *

10. Amend General Balance Sheet Accounts Explanations – Liabilities and Shareholders’ Equity, Current Liabilities by adding accounts 763.5 "Derivative instrument liabilities" and 763.6 "Derivative instrument liabilities–hedges", to read as follows:

GENERAL BALANCE SHEET ACCOUNTS EXPLANATIONS

Liabilities and Shareholders' Equity

Current Liabilities

* * * * *

763.5 Derivative instrument liabilities.

This account shall include the change in the fair value of all derivative instrument liabilities not designated as cash-flow or fair-value hedges. Account 551, Miscellaneous income charges, will be charged with the corresponding amount of the change in the fair value of the derivative instrument.

763.6 Derivative instrument liabilities–hedges.

(a) This account shall include the change in the fair value of derivative instrument liabilities designated by the carrier as cash-flow or fair-value hedges.

(b) A carrier will record the change in the fair value of a derivative instrument liability related to a cash-flow hedge in this account, with a concurrent charge to account 799.1, Other comprehensive income, with the effective portion of the derivative instrument’s gain or loss. The ineffective portion of the cash-flow hedge will be charged to the same income or expense account that would have been used if the hedged item had been disposed of or otherwise settled.

(c) A carrier will record the change in the fair value of a derivative instrument liability related to a fair-value hedge in this account, with a concurrent charge to a sub-account of the asset or liability that carries the item being hedged. The ineffective portion of the fair-value hedge will be charged to the same income or expense account that would have been used if the hedged item had been disposed of or otherwise settled.

* * * * *

11. Amend General Balance Sheet Accounts Explanations – Liabilities and Shareholders’ Equity, Shareholders’ Equity by:

a. Removing account 798.1 "Net unrealized loss on noncurrent marketable securities"; and

b. Adding account 799 "Accumulated Other Comprehensive Income."

The addition reads as follows:

GENERAL BALANCE SHEET ACCOUNTS EXPLANATIONS

Liabilities and Shareholders' Equity

Shareholders’ Equity

* * * * *

799 Accumulated Other Comprehensive Income.

(a) This account shall include revenues, expenses, gains, and losses that are properly includable in Other Comprehensive Income during the period. Examples of items of Other Comprehensive Income include foreign currency items, minimum pension liability adjustments, unrealized gains and losses on certain investments in debt and equity securities, and cash-flow hedges. Records supporting the entries to this account shall be maintained so that the carrier can furnish the amount of Other Comprehensive Income for each item included in this account.

(b) This account shall also be debited or credited, as appropriate, with amounts of accumulated Other Comprehensive Income that have been included in the determination of net income during the period and in accumulated Other Comprehensive Income in prior periods. Separate records for each category of items will be maintained to identify the amount of the reclassification adjustments from accumulated Other Comprehensive Income to earnings made during the period.

12. Revise Form of General Balance Sheet Statement to read as follows:

Form of General Balance Sheet Statement

The classified form of general balance sheet statement is designed to show the financial condition of the accounting company at any specified date.

Assets

Current assets:

701.

Cash.

702.

Temporary cash investments.

703.

Special deposits.

704.

Loans and notes receivable.

705.

Accounts receivable; Interline and other balances.

706.

Accounts receivable; Customers.

707.

Accounts receivable; Other.

708.

Interest and dividends receivable.

708.5.

Receivables from affiliated companies.

709.

Accrued accounts receivable.

709.5.

Allowance for uncollectible accounts.

   

   Net receivables.

710.

Working funds.

711.

Prepayments.

712.

Material and supplies.

713.

Other current assets.

713.5

Derivative instrument assets

713.6

Derivative instrument assets-hedges

714.

Deferred income tax debits.

   

   Total current assets.

Special funds:

715.

Sinking funds.

716.

Capital funds.

717.

Other funds.

   

   Total special funds.

Investments:

721.

Investments and advances; affiliated companies.

   

   Undistributed earnings from certain investments in account 751.

721.5.

Adjustments; investments and advances—affiliated companies.

   

   Net—investments and advances—affiliated companies.

722.

Other investments and advances.

723.

Adjustments; Other investments and advances.

   

   Net—other investments and advances.

   

   Total investments.

Tangible property:

731.

Road and equipment property.

735.

Accumulated depreciation; Road and equipment property.

736.

Accumulated amortization; Road and equipment property—Defense projects.

   

   Net road and equipment property.

732.

Improvements on leased property.

733.

Accumulated depreciation; Improvements on leased property.

734.

Accumulated amortization; Improvements on leased property—Defense projects.

   

   Net improvements on leased property.

   

   Total carrier property.

737.

Property used in other than carrier operations.

738.

Accumulated depreciation; Property used in other than carrier operations.

   

   Net—property used in other than carrier operations.

   

   Total tangible property.

Intangible property:

739.

Organization expenses.

Other assets and deferred debits:

741.

Other assets.

743.

Other deferred debits.

744.

Accumulated deferred income tax debits.

   

   Total other assets and deferred debits.

   

   Total assets.

liabilities and shareholders' equity

Current liabilities:

751.

Loans and notes payable.

752.

Accounts payable; Interline and other balances.

753.

Audited accounts and wages payable.

754.

Accounts payable; Other.

755.

Interest payable.

756.

Dividends payable.

757.

Payables to affiliated companies.

759.

Accrued accounts payable.

760.

Federal income taxes accrued.

761.

State and other income taxes accrued.

761.5.

Other taxes accrued.

762.

Deferred income tax credits.

763.

Other current liabilities.

763.5

Derivative instrument liabilities

763.6

Derivative instrument liabilities-hedges

764.

Equipment obligations and other long-term debt due within one year.

   

   Total current liabilities.

Long-term debt due after one year:1

765.

Funded debt unmatured.

766.

Equipment obligations.

766.5.

Capitalized lease obligations.

767.

Receivers' and trustees' securities.

768.

Debt in default.

769.

Accounts payable; Affiliated companies.

770.1

Unamortized debt discount.

770.2

Unamortized premium on debt.

   

   Total long-term debt due after one year.

Other long-term liabilities:

771.

Accrued liability; Pension and welfare.

772.

Accrued liability; Leased property.

774.

Accrued liability; Casualty and other claims.

775.

Other accrued liabilities.

781.

Interest in default.

782.

Other liabilities.

   

   Total other long-term liabilities.

Deferred credits:

783.

Deferred revenues—transfers from government authorities.

784.

Other deferred credits.

786.

Accumulated deferred income tax credits.

   

   Total deferred credits.

Shareholders' equity:

   Capital stock:

791.

Capital stock.

792.

Liability for conversion of capital stock.

793.

Discount on capital stock.

   

   Total capital stock.

   Additional capital:

794.

Premiums and assessments on capital stock.

795.

Other capital.

   

   Total additional capital.

Retained earnings:

797.

Retained earnings; Appropriated.

798.

Retained earnings; Unappropriated.

   

   Total retained earnings.

798.5

Treasury stock.

799.

Accumulated Other Comprehensive Income

   

   Total shareholders' equity.

   

   Total liabilities and shareholders' equity.

   

1To be divided as to “Total issued” and “Held by or for company.”

13. Amend Conversion Tables by revising General Balance Sheet Accounts Conversion Table to read as follows:

 

CONVERSION TABLES

* * * * *

General Balance Sheet Accounts Conversion Table

 

System of accounts eff. prior to April 2016

System of accounts eff. April 2016

Account title

No.

No.

Account title

Cash

701

701

Cash.

Temporary cash investments

702

702

Temporary cash investments.

Special deposits

703

703

Special deposits.

Loans and notes receivable

704

704

Loans and notes receivable.

708.5

Receivables from affiliated companies.

709.5

Allowance for uncollectible accounts.

Traffic, car service and other balances—dr

705

705

Accounts receivable; interline and other balances.

709.5

Allowances for uncollectible accounts.

752

Accounts payable; interline and other balances.

Net balance receivable from agents and conductors

706

706

Accounts receivable; customers.

Miscellaneous accounts receivable

707

707

Accounts receivable; other.

708.5

Receivables from affiliated companies.

709.5

Allowance for uncollectible accounts.

Interest and dividends receivable

708

708

Interest and dividends receivable.

708.5

Receivables from affiliated companies.

709.5

Allowance for uncollectible accounts.

Accrued accounts receivable

709

709

Accrued accounts receivable.

Working fund advances

710

710

Working funds.

Prepayments

711

711

Prepayments.

Material and supplies

712

712

Material and supplies.

Other current assets

713

713

Other current assets.

 

 

713.5

Derivative instrument assets

 

 

713.6

Derivative instrument assets-hedges

Deferred income tax charges

714

714

Deferred income tax debits.

Sinking funds

715

715

Sinking funds.

Capital and other reserve funds

716

716

Capital funds.

Insurance and other funds

717

717

Other funds.

Investment in affiliated companies

721

721

Investments and advances; affiliated companies.

Other investments

722

722

Other investments and advances.

Reserve for adjustment of investment in securities—cr

723

721.5

Adjustments; investments and advances—affiliated companies.

723

Adjustments; other investments and advances.

Road and equipment property

731

731

Road and equipment property.

Organization expenses

71

739

Organization expenses.

Improvements on leased property

732

732

Improvements on leased property.

Accrued depreciation; improvements on leased property

733

733

Accumulated depreciation; improvements on leased property.

Accrued depreciation; road and equipment

735

735

Accumulated depreciation; road and equipment property.

Amortization of defense projects; road and equipment

736

736

Accumulated amortization; road and equipment property—defense projects.

734

Accumulated amortization; improvements on leased property—defense projects.

Miscellaneous physical property

737

737

Property used in other than carrier operations.

Accrued depreciation; miscellaneous physical property

738

738

Accumulated depreciation; property used in other than carrier operations.

Other assets

741

741

Other assets.

Unamortized discount on long-term debt

770.1

770.1

Unamortized debt discount.

Other deferred charges

743

743

Other deferred debits.

Accumulated deferred income tax charges

744

744

Accumulated deferred income tax debits.

Liabilities

Loans and notes payable

751

751

Loans and notes payable.

757

Payables to affiliated companies.

Traffic, car service and other balances—cr

752

752

Accounts payable; interline and other balances.

705

Accounts receivable; interline and other balances.

709.5

Allowance for uncollectible accounts.

Audited accounts and wages payable

753

753

Audited accounts and wages payable.

Miscellaneous accounts payable

754

754

Accounts payable; other.

757

Payables to affiliated companies.

Interest matured unpaid

755

755

Interest payable.

757

Payables to affiliated companies.

Dividends matured unpaid

756

756

Dividends payable.

757

Payables to affiliated companies.

Unmatured interest accrued

757

755

Interest payable.

757

Payables to affiliated companies.

Unmatured dividends declared

758

756

Dividends payable.

757

Payables to affiliated companies.

Accrued accounts payable

759

759

Accrued accounts payable.

Federal income taxes accrued

760

760

Federal income taxes accrued.

Other taxes accrued

761

711

Prepayments.

761

State and other income taxes accrued.

761.5

Other taxes accrued.

Deferred income tax credits

762

762

Deferred income tax credits.

Other current liabilities

763

763

Other current liabilities.

 

 

763.5

Derivative instrument liabilities

 

 

763.6

Derivative instrument liabilities-hedges

Equipment obligations and other debt due within one year

764

764

Equipment obligations and other long-term debt due within 1 year.

Funded debt unmatured

765

765

Funded debt unmatured.

Equipment obligations

766

766

Equipment obligations.

Capitalized lease obligations

766.5

766.5

Capitalized lease obligations.

Receivers' and trustees' securities

767

767

Receivers' and trustees' securities.

Debt in default

768

768

Debt in default.

Amounts payable to affiliated companies

769

769

Accounts payable; affiliated companies.

Pension and welfare reserves

771

771

Accrued liability; pension and welfare.

Casualty and other reserves

774

774

Accrued liability; casualty and other claims.

775

Other accrued liabilities.

Interest in default

781

781

Interest in default.

Other liabilities

782

782

Other liabilities.

Deferred revenues-transfers from government authorities

783

783

Deferred revenues-transfers from government authorities

Unamortized premium on long-term debt

790.2

770.2

Unamortized premium on debt.

Other deferred credits

784

784

Other deferred credits.

Accrued liability; leased property

785

772

Accrued liability; leased property.

Accumulated deferred income tax credits

786

786

Accumulated deferred income tax credits.

Shareholders' Equity

Capital stock issued

791

791

Capital stock.

Stock liability for conversion

792

792

Liability for conversion of capital stock.

Discount on capital stock

793

793

Discount on capital stock.

Premiums and assessment on capital stock

794

794

Premiums and assessments on capital stock.

Paid-in surplus

795

795

Other capital.

Other capital surplus

796

795

Do.

Retained income; appropriated

797

797

Retained earnings; appropriated.

Retained income; unappropriated

798

798

Retained earnings; unappropriated.

Treasury stock

798.5

798.5

Treasury stock.

 

 

799

Accumulated Other Comprehensive Income

 

APPENDIX A

 

Road Initials:

Year:

5

200. COMPARATIVE STATEMENT OF FINANCIAL POSITION – ASSETS

(Dollars in Thousands)

 

 

 

 

 

 

 

Line

Cross

Account

Title

Balance at close

Balance at begin-

Line

No.

Check

 

 

of year

ing of year

No.

 

 

 

(a)

(b)

(c)

 

 

 

 

 

 

 

 

 

 

 

Current Assets

 

 

 

1

 

701

Cash

 

 

1

2

 

702

Temporary cash investments

 

 

2

3

 

703

Special deposits

 

 

3

 

 

 

Accounts receivable

 

 

 

4

 

704

- Loan and notes

 

 

4

5

 

705

- Interline and other balances

 

 

5

6

 

706

- Customers

 

 

6

7

 

707

- Other

 

 

7

8

 

709, 708

- Accrued accounts receivables

 

 

8

9

 

708.5

- Receivables from affiliated companies

 

 

9

10

 

709.5

- Less: Allowance for uncollectible accounts

 

 

10

11

 

710, 711, 714

Working funds prepayments deferred income tax debits

 

 

11

12

 

712

Materials and supplies

 

 

12

13

 

713, 713.5,
713.6

Other current assets

 

 

13

14

 

 

TOTAL CURRENT ASSETS

 

 

14

 

 

 

Other Assets

 

 

 

15

 

715, 716, 717

Special funds

 

 

15

16

 

721, 721.5

Investments and advances affiliated companies

 

 

16

 

 

 

(Schs. 310 and 310A)

 

 

 

17

 

722, 723

Other investments and advances

 

 

17

18

 

737, 738

Property used in other than carrier operation

 

 

18

 

 

 

(Less depreciation) $

 

 

 

19

 

739, 741

Other assets

 

 

19

20

 

743

Other deferred debits

 

 

20

21

 

744

Accumulated deferred income tax debits

 

 

21

22

 

 

TOTAL OTHER ASSETS

 

 

22

 

 

 

Road and Equipment

 

 

 

23

 

731, 732

Road (Sch. 330) L-30 Col h & b

 

 

23

24

 

731, 732

Equipment (Sch 330) L-39 Col h & b

 

 

24

25

 

731, 732

Unallocated items

 

 

25

26

 

733, 735

Accumulated depreciation and amortization

 

 

26

 

 

 

(Schs. 335, 342)

 

 

 

27

 

 

Net Road and Equipment

 

 

27

28

*

 

Total Assets

 

 

28

NOTES AND REMARKS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Railroad Annual Report R-1

 

 

 

 

 

 

6

Road Initials:

Year:

200. COMPARATIVE STATEMENT OF FINANCIAL POSITION - LIABILITIES AND SHAREHOLDERS' EQUITY

(Dollars in Thousands)

 

 

 

 

 

 

 

Line

Cross

Account

Title

Balance at close

Balance at begin-

Line

No.

Check

 

 

of year

ing of year

No.

 

 

 

(a)

(b)

(c)

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

30

 

751

Loans and notes payable

 

 

30

31

 

752

Accounts payable: interline and other balances

 

 

31

32

 

753

Audited accounts and wages

 

 

32

33

 

754

Other accounts payable

 

 

33

34

 

755, 756

Interest and dividends payable

 

 

34

35

 

757

Payables to affiliated companies

 

 

35

36

 

759

Accrued accounts payable

 

 

36

37

 

760, 761, 761.5

Taxes accrued

 

 

37

 

 

762

 

 

 

 

38

 

763, 763.5,
763.6

Other current liabilities

 

 

38

39

 

764

Equipment obligations and other long-term debt due within one year

 

 

39

40

 

 

TOTAL CURRENT LIABILITIES

 

 

40

 

 

 

Non-Current Liabilities

 

 

 

41

 

765, 767

Funded debt unmatured

 

 

41

42

 

766

Equipment obligations

 

 

42

43

 

766.5

Capitalized lease obligations

 

 

43

44

 

768

Debt in default

 

 

44

45

 

769

Accounts payable: affiliated companies

 

 

45

46

 

770.1, 770.2

Unamortized debt premium

 

 

46

47

 

781

Interest in default

 

 

47

48

 

783

Deferred revenues - transfers from govt. authorities

 

 

48

49

 

786

Accumulated deferred income tax credits

 

 

49

50

 

771, 772, 774,

Other long-term liabilities and deferred credits

 

 

50

 

 

775, 782, 784

 

 

 

 

51

 

 

TOTAL NON-CURRENT LIABILITIES

 

 

51

 

 

 

Shareholders' Equity

 

 

 

52

 

791, 792

Total capital stock

 

 

52

53

 

 

Common stock

 

 

53

54

 

 

Preferred stock

 

 

54

55

 

 

Discount on capital stock

 

 

55

56

 

794, 795

Additional capital

 

 

56

 

 

 

Retained earnings:

 

 

 

57

 

797

Appropriated

 

 

57

58

 

798

Unappropriated

 

 

58

59

 

798.5

Less treasury stock

 

 

59

60

 

799

Accumulated Other Comprehensive Income or (loss)

 

 

60

61

 

 

Total stockholders equity

 

 

61

62

 

 

Non-controlling interest

 

 

62

63

 

 

Total equity (Lines 61 + 62)

 

 

63

64

 

 

Total Liabilities & Shareholders' Equity

 

 

64

NOTES AND REMARKS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Railroad Annual Report R-1

 

 

 

 

 

 

 

Road Initials:

Year:

7

200. COMPARATIVE STATEMENT OF FINANCIAL POSITION - EXPLANATORY NOTES

(Dollars in Thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The notes listed below are provided to disclose supplementary information on matters which have an important effect on the financial

condition of the carrier. The carrier shall give the particulars called for herein and where there is nothing to report, insert the word "none"; and

in addition thereto shall enter in separate notes with suitable particulars other matters involving material amounts of the character commonly

disclosed in financial statements under generally accepted accounting principles, except as shown in other schedules. This includes statements

explaining (1) service interruption insurance policies and indicating the amount of indemnity to which respondent will be entitled for work

stoppage losses and the maximum amount of additional premium respondent may be obligated to pay in the event such losses are sustained by

other railroads; (2) particulars concerning obligations for stock purchase options granted to officers and employees; and (3) what entries

have been made for net income or retained income restricted under provisions of mortgages and other arrangements.

 

 

 

1. Amount (estimated, if necessary) of net income or retained income which has to be provided for capital expenditures, and for sinking funds,

pursuant to provisions of reorganization plans, mortgages, deeds of trust, or other contracts. _________________ $_____________

 

 

2. Estimated amount of future earnings which can be realized before paying Federal income taxes because of unused and available net

operating loss carryover on January 1 of the year following that for which the report is made. ___________________ $______________

 

 

3. (a) Explain the procedure in accounting for pension funds and recording in the accounts the current and past service pension costs,

indicating whether or not consistent with the prior year. ______________________________________________________________

__________________________________________________________________________________________________________

__________________________________________________________________________________________________________

 

 

(b) State amount, if any, representing the excess of the actuarially computed value of vested benefits over the total of the pension fund.

_____________________________________________________________________________$_________________________

 

 

 

(c) Is any part of the pension plan funded? Specify. Yes _____ No _____

 

 

 

 

If funding is by insurance, give name of insuring company ______________________________________________________

 

 

 

If funding is by trust agreement, list trustee(s) ________________________________________________________________

 

Date of trust agreement or latest amendment ________________________________________________________

 

If respondent is affiliated in any way with the trustee(s), explain affiliation. _________________________________

 

______________________________________________________________________________________________________

 

 

(d) List affiliated companies which are included in the pension plan funding agreement and describe basis for allocating charges under the

agreement. _____________________________________________________________________________________________

 

 

 

(e) Is any part of the pension plan fund invested in stock or other securities of the respondent or its affiliates? Specify Yes ___ No ___

 

If yes, give number of the shares for each class of stock or other security. ___________________________________

 

_______________________________________________________________________________________________

 

 

 

Are voting rights attached to any securities held by the pension plan? Specify Yes ___ No ___ If yes, who determines how stock

 

is voted? _________________________________________________________________________________________

 

 

 

4. State whether a segregated political fund has been established as provided by the Federal Election Campaign Act of 1971 (18 U.S.C. 610).

 

Yes ___ No ___

 

 

 

5. (a) The amount of employer's contribution to employee stock ownership plans for the current year was $_______________________

 

 

(b) The amount of investment tax credit used to reduce current income tax expense resulting from contributions to qualified employee

stock ownership plans for the current year was $____________________

 

 

 

6. In reference to Docket 37465, specify the total amount of business entertainment expenditures charged to the non-operating expense

account. $___________________

 

 

 

 

 

Continued on following page

Railroad Annual Report R-1

 

 

 

 

 

8

Road Initials:

Year:

200. COMPARATIVE STATEMENT OF FINANCIAL POSITION - EXPLANATORY NOTES – Continued

 

 

 

 

7. Give particulars with respect to contingent assets and liabilities at the close of the year, in accordance with instruction 5-6 in the Uniform

System of Accounts for Railroad Companies, that are not reflected in the amounts of the respondent.

 

 

 

Disclose the nature and amount of contingency that is material.

 

 

 

Examples of contingent liabilities are items which may become obligations as a result of pending or threatened litigation, assessments or

possible assessments of additional taxes, and agreements or obligations to repurchase securities or property. Additional pages may be

added if more space is needed. (Explain and/or reference to the following pages.)

 

 

 

 

 

(a) Changes in valuation accounts.

 

 

 

8. Marketable equity securities.

 

 

 

 

 

 

 

 

Dr. (Cr.)

Dr. (Cr.) to

 

 

Cost

Market

to Income

Stockholder's Equity

 

 

 

 

 

 

 

(Current Yr.)

Current Portfolio

 

 

 

N/A

as of / /

Noncurrent Portfolio

 

 

N/A

 

(Previous Yr.)

Current Portfolio

 

 

N/A

N/A

as of / /

Noncurrent Portfolio

 

 

N/A

N/A

 

 

 

 

 

At / / , gross unrealized gains and losses pertaining to marketable equity securities were as follows:

 

 

 

 

 

Gains

Losses

 

 

 

 

 

 

 

Current

 

 

 

 

Noncurrent

 

 

 

 

 

 

 

A net unrealized gain (loss) of $___________________ on the sale of marketable securities was included in net income for _____ (year)

 

 

The cost of securities was based on the _______________________ (method) cost of all the shares of each security held at time of sale.

 

 

Significant net realized and net unrealized gains and losses arising after date of the financial statements but prior to the filing, applicable to

marketable equity securities owned at balance sheet date shall be disclosed below:

 

 

 

 

 

NOTE: / / (date) Balance sheet date of reported year unless specified as previous year.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Railroad Annual Report R-1

 

Road Initials:

Year:

9

200. COMPARATIVE STATEMENT OF FINANCIAL POSITION - EXPLANATORY NOTES - Continued

 

 

NOTES TO FINANCIAL STATEMENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Railroad Annual Report R-1

 

 

 

 

 

10

Road Initials:

Year:

200. COMPARATIVE STATEMENT OF FINANCIAL POSITION - EXPLANATORY NOTES - Continued

 

 

NOTES TO FINANCIAL STATEMENTS