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SURFACE TRANSPORTATION BOARD MAKES RAIL REVENUE ADEQUACY DETERMINATION FOR 2011
The Surface Transportation Board announced today that it has made its annual determination of revenue adequacy for the Nation's Class I freight railroads for 2011. The Board found that Norfolk Southern Corporation (NS) and Union Pacific Railroad Company (UP) were "revenue adequate" for 2011.
A railroad is considered to be revenue adequate, under 49 U.S.C. 10704(a), if it achieves a rate of return on net investment equal to at least the current cost of capital for the railroad industry for 2011, which the Board determined to be 11.57%. Congress directed the Board to conduct such revenue adequacy determinations on an annual basis. The Board's finding today is that NS and UP achieved a rate of return equal to or greater than the Board's calculation of the average cost of capital to the freight rail industry.
The Board's decision in the case,
Railroad Revenue Adequacy—2011 Determination, Docket No. EP 552 (Sub-No. 16)
, can be found on the Board's website,