(j) As a general rule separate reports shall be filed for the air carrier and any associated company air carriers as defined in section 03. However, transactions of associated companies in which 100 percent equity control resides in the reporting air carrier shall be consolidated with transactions of the reporting air carrier when such associated companies perform services related to the transport operations of the reporting air carrier almost exclusively and are not engaged in air transportation for their own account.

(k) Generally, nonscheduled services shall be treated as an integral part of the reporting entity to which most closely related without regard to the geographic area in which such nonscheduled services may actually be performed.

How

ever, supplemental reports shall be made of nonscheduled services (including services for the defense establishment) in areas not encompassed by the prescribed reporting entity in any month in which the available ton-miles of such nonscheduled services exceed 5 percent of the total available ton-miles of the reporting entity. Such supplemental reports shall continue until waived by the Board upon a showing that such nonscheduled operations will not in the subsequent 12-month period exceed the 5 percent limit. The supplemental reports to be filed each month or calendar quarter, as applicable, shall be comprised

Int/Ter-Latin Amer

Int/Ter-Pacific

Dom-Local
Dom-Special
Dom-Special

Int/Ter-Atlantic

Dom-Cargo
Dom-Local

Int/Ter-Pacific

Ter/Dom-Latin Amer

Dom-Local

Dom-Trunk

Int/Ter-Atlantic

Dom/Can-Trunk

Ter/Dom-Pacific

Dom/Can-Local

Dom/Can-Trunk

Int/Ter-Latin Amer
Dom-Special
Dom/Can-Special

of report schedules D-1, P-5, T-1, and T-3. Transport and nontransport revenues pertaining to such separately reported nonscheduled services shall be reflected on schedule P-2 each quarter with appropriate cross-references inserted on schedules P-3 and P-4, as applicable. In addition, airport activity data reported on the regular schedule T-4 shall be subdivided and appropriately identified at each airport for services encompassed by the prescribed reporting entity and for nonscheduled services not encompassed by the prescribed reporting entity.

(1) When and as required in the national interest, any air carrier which performs nonscheduled transport services for the defense establishment of the United States shall, when directed by the Board, make separate reports for such services as if they were conducted by a physically separated transport entity. Such reports shall consist of schedules P-1 through P-9, T-1 and T-3. The letter "D" shall be inserted on such reports, following the schedule number of each P and T schedule. Where a carrier has more than one reporting entity, nonscheduled transport and nonscheduled defense services shall be assigned to the reporting entity to which more closely related.

[ER-327, 26 F.R. 4222, May 16, 1961, as amended by ER-369, 27 F.R. 12819, Dec. 28, 1962; ER-417, 29 F.R. 13530, Oct. 1, 1964]

of days subsequent to the period for which the report is being made, except that only two copies of the Interim Balance Sheet and Income Statement need be filed.

(b) Each air carrier shall file the schedules of the CAB Form 41 reports with the Civil Aeronautics Board in accordance with the above instructions, except that B and P report schedules for the final quarter of each calendar year may be extended to 90 days following the year's end provided that preliminary schedules B-1, P-1.1 or P-1.2 and P-3 are submitted within the standard prescribed 40-day filing period. At the request of an air carrier, and upon a showing by such air carrier that public disclosure of its preliminary year-end report would adversely affect its interests and would not be in the public interest, the Board will withhold such preliminary year-end report from public disclosure until such time as (1) the final report is filed, (2) the final report is due, or (3) information covered by the preliminary report is publicly released by the carrier concerned, whichever first occurs.

(c) If circumstances prevent the filing of a report within the prescribed time limit, consideration will be given to the granting of an extension upon receipt of a written request therefor. Such a request must set forth good and sufficient reason to justify granting the extension, must set forth the date when the report can be filed, and be submitted sufficiently in advance of the due date to permit proper time for consideration and communication to the air carrier of the action taken. Except in cases of emergency no such request will be entertained which is not postmarked in sufficient time to normally reach the Civil Aeronautics Board at least 24 hours before the prescribed due date. If a request is denied, the air carrier remains subject to the filing requirements to the same extent as if no request for extension of time had been made.

(d) Statements of accounting or statistical procedures required to be filed under this system of accounts and reports are recapitulated below. Such procedures shall be regarded as effective 30 days after receipt by the Board unless the carrier is notified before that time of Board objections; provided that effective 60 days following notice the Board may require modification of any previously effective procedure covered by such statements:

(1) Procedures for assigning or prorating profit and loss items between operating entities, as prescribed by section 2-1(b).

(2) Procedures for retroactive adjustments made to conform accounts with mail rate actions, as required by section 2-4(d).

(3) Procedures for accrual of selfinsurance reserves, as prescribed by section 2-13(c).

(4) Procedures for establishment of expense equalization reserves, as prescribed by section 2-13(d).

(5) Procedures for depreciation of property and equipment, as prescribed by section 2-14(b).

(6) Procedures of accounting for airframe and aircraft engine overhauls and airworthiness reserves as prescribed by section 5-4(g) (8).

(7) Procedures for amortization of developmental and preoperating costs and other intangibles, as prescribed by section 5-5(b), section 6-1870(c), and section 6-1880.

(8) Procedures for the accrual of obsolescence and deterioration reserves for flight equipment expendable parts, as required by section 6-1311(d).

(9) Procedures for accrual of unearned transportation revenues, as prescribed by section 6-2160(b).

(10) Procedures for assigning or prorating expenses between incidental services and transport operations, as prescribed by section 9-4600(d).

(11) Procedures for applying maintenance burden, as prescribed by section 10-5300 (c), section 11-5300 (c) and section 24, Schedule P-6, paragraph (f).

(12) Procedures for computing available seat-miles and available ton-miles for each aircraft type, as required by paragraph (g), in section 25, Schedule T-3.

(13) Procedures for the accrual of vacation liability, as required by Section 6-2120 (c).

The foregoing statements, where applicable, shall be filed in duplicate either before or with the Form 41 report for the quarter in which procedures are either established or revised. Each statement shall be submitted on a separate page to facilitate processing and filing.

(e) All financial data reported on B, P, and G schedules shall reflect the status of the air carrier's books of account for the period for which report is being made and shall conform to the instructions of this Uniform System of

Accounts and Reports. At the option of the air carrier financial data may be reported in thousands of dollars by Group III air carriers, and in whole dollars by Group I and Group II air carriers, by either dropping or rounding the hundreds of dollars and the cents respectively, provided all amounts are balanced within and between schedules and zero digits are inserted for the actual money amounts eliminated.

(f) Traffic and other operational statistics included in schedules of the CAB Form 41 reports shall reflect data pertaining to the month, quarter or 12months-to-date period for which the report is being made.

(g) Adjustments correcting errors in previously reported traffic and other operational statistics shall not be included in data reported in schedules for the current period but shall be effected by submission of corrected schedules for the period to which applicable or, if only a few items are involved, by written notice and authorization to the Civil Aeronautics Board to correct previously filed reports except that any correction which amounts to less than one-half of one percent (0.5%) of the corrected amount for the month to which related may be included in the report for the current month provided the amount of the correction is clearly noted on the Form 41 Report.

(h) All letters and statements of correction or revision of reported data shall be a part of the CAB Form 41 reports.

(i) All changes in accounting methods having a material impact upon the particular financial elements involved, (including but not limited to changes in methods of or bases for reserve accruals, depreciation, allocations between operating divisions or nontransport activities, and all changes in methods of computing and reporting traffic and capacity statistics having a material impact upon the particular statistic involved) shall be adequately explained and identified in the report first reflecting such changes. Such explanations related to financial position of financial results, shall be made on schedules B-2 and P-2-Notes to Balance Sheet and Notes to Income Statement, respectively. Changes in methods for computing or reporting traffic and capacity statistics shall be identified and explained on a separate sheet attached to the first report affected. (See section 2-16.) The re

porting requirements shall not be construed, in any sense, as relieving the air carrier of the responsibility for conforming its procedures to those otherwise prescribed in this system of accounts and reports.

[ER-327, 26 F.R. 4222, May 16, 1961, as amended by ER-336, 26 F.R. 6808, July 29, 1961; ER-417, 29 F.R. 13530, Oct. 1, 1964; 29 F.R. 14105, Oct. 14, 1964; ER-435, 30 F.R. 7704, June 15, 1965; ER-437, 30 F.R. 8830, July 14, 1965; ER-437, 30 F.R. 9001, July 17, 1965; ER-447, 30 F.R. 14197, Nov. 11, 1965] Section 23-Certification and Balance Sheet Elements

Schedule A-Certification

(a) The certification of the CAB Form 41 report shall be signed by an elective corporate officer, executive or director, or such other person as may be authorized by the carrier to sign the certification provided a written authorization disclosing the individual's name and title is forwarded to the Civil Aeronautics Board. Since corrections or revisions of reported data are a part of the CAB Form 41 report, all correspondence relating to such matters shall be signed only by persons authorized to sign the certification.

(b) The certification of the Form 41 reports, embodied in Schedule A thereof, shall read as follows:

I, the undersigned---

(Title of officer in charge of accounts) of the

(Full name of the reporting company) do certify that this report and all schedules and supporting documents which are submitted herewith or have been submitted heretofore as parts of this report filed for the above indicated period have been prepared under my direction; that I have carefully examined them and declare that they correctly reflect the accounts and records of the company, and to the best of my knowledge and belief are a complete and accurate statement, after adjustments to reflect full accruals, of the operating revenues and expenses, income items, assets, liabilities, capital, surplus, and operating statistics for the periods reported in the several schedules; that the various items herein reported were determined in accordance with the Uniform System of Accounts and Reports for Certificated Air Carriers prescribed by the Civil Aeronautics Board; and that the data contained herein are reported on a basis consistent with that of the preceding report except as specifically noted in explanations accompanying the financial and statistical statements.

Schedule A-1-Status of Accounting

Plans Required To Be Filed

(a) This schedule shall be filed by all route carriers.

(b) This schedule shall be filed for the overall or system operations of the air carrier.

(c) The indicated data shall be entered on this schedule for each accounting plan listed in section 22(d).

(d) Columns 1 and 2 shall reflect the title of the accounting plan and its applicable section under this Uniform System of Accounts and Reports.

(e) Column 3 shall indicate for each plan, by insertion of either "Yes" or "No", whether the plan was revised this period.

(f) Columns 4 and 5 shall reflect for each plan the date filed with the Board and its effective date.

Schedule B-1 Balance Sheet

(a) This schedule shall be filed by all route air carriers.

(b) This schedule shall reflect the balances as at the close of business on the last day of each calendar quarter, for the overall or system operations of each air carrier in conformance with the provisions of sections 4, 5, and 6.

(c) Individual proprietors or partners shall report the aggregate capital contributed by the proprietor or partners in account 2890 Other Paid-In Capital. Schedule B-2-Notes to Balance Sheet (a) This schedule shall be filed by all route air carriers.

(b) All substantive matters which may influence materially interpretations or conclusions in regard to the financial condition of the air carrier which are not clearly identified in the body of the balance sheet shall be completely and clearly stated in this schedule and crossreferenced to the affected balance sheet account.

(c) The amounts and estimated delivery dates of any purchase commitments of material size and not of a recurrent routine character shall be explained on this schedule. In the case of commitments involving flight equipment, the amount for each equipment type may be given in total, including any engines, airframes and spares; but the number of airframes and the number of engines by type shall be given, as well as the estimated delivery date for each complete aircraft. Reports on commitments other than for flight

equipment are required only in the December 31 report of each calendar year. (d) The balances in subaccounts of balance sheet account 2390 Other Deferred Credits titled "Investment Tax Credits Available" and "Unrealized Investment Tax Credits" shall be set forth in this schedule as at the end of each calendar quarter.

Schedule B-3-Paid-in Capital; SelfInsurance Reserves and Appropriations of Retained Earnings; Deferred Income Taxes

(a) This schedule shall be filed by all route air carriers.

(b) Each class and series of the air carrier's capital stock, as at the end of each calendar quarter, shall be listed and the indicated information entered within the "Paid-In Capital" section of this schedule.

(c) All transactions and amounts affecting paid-in capital during the current quarter shall be fully explained for each class and series of capital stock to which related. Total paid-in capital and total treasury stock reported on this schedule as at the end of each calendar quarter shall agree with corresponding amounts reported on schedule B-1 Balance Sheet.

(d) Individual proprietors or partners shall reflect the name of the proprietor or each partner at the head of the columns captioned "Class of Stock" and the balance of contributions to the business entity by the proprietor or each partner on line 11 Total Paid-In Capital.

(e) All credits and debits to selfinsurance reserves and appropriations of retained earnings, respectively, shall be identified and explained in the "SelfInsurance and Appropriations of Retained Earnings" section of this schedule. The balances of accounts 2350 Reserve for Self-Insurance and 2930 Appropriations of Retained Earnings as at the end of each calendar quarter shall agree with corresponding amounts reported on schedule B-1-Balance Sheet.

(f) Column 1 of the "Deferred Income Tax" section of this schedule shall identify the source of each type of tax deferral; for example, depreciation under § 167 of the Internal Revenue Code, or deferred training costs. The amounts reflected in column 2 shall agree with amounts reflected in column 6 for the same sources at the close of the preceding quarter. The amounts reflected in column 6 shall, in aggregate, agree with