The Code of Federal Regulations of the United States of America

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

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

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

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

(6) 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.

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

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

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

(10) Procedures for applying maintenance burden, as prescribed by section 10-5300 (c), section 11-5300 (c) and section 34, Schedule P-6, paragraph (e).

(11) Procedures for computing available seat-miles and available ton-miles for each aircraft type, as required by paragraph (g), in section 35, Schedule T-3.1.

(12) 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 supplemental 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 supplemental air carrier, financial data may be reported in whole dollars by either dropping or rounding cents; 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 or quarter 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 statistics involved) shall be adequately explained and identified in the report first reflecting such changes. Such explanations related to financial position or financial results shall be made on schedules B-2.1 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. 2-16.) The reporting requirements shall not be construed, in any sense, as relieving the supplemental air carrier of the responsibility for conforming its procedures to those otherwise prescribed in this system of accounts and reports. [ER-369, 27 F.R. 12821, Dec. 28, 1962, as amended by ER-417, 29 F.R. 13532, Oct. 1, 1964; ER-423, 29 F.R. 14875, Nov. 3, 1964] Section 33-Certification and Balance Sheet Elements

(See section

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 each supplemental air carrier.

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

(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 during 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 each supplemental air carrier.

(b) This schedule shall reflect the balances as at the close of business on the last day of each calendar quarter, for the overall 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-2.1-Notes to Balance Sheet; Corporate Paid-In Capital; Analysis of Sole Proprietorship Capital or Partnership Capital

(a) This schedule shall be filed by each supplemental air carrier.

(b) All substantive matters which may influence materially interpretations or conclusions in regard to the financial

"condition of the supplemental air carrier which are not clearly identified in the body of the balance sheet shall be completely and clearly stated in this schedule and cross-referenced 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.

(e) 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.

(f) 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.

(g) In the "Analysis of Sole Proprietorship Capital or Partnership Capital" section of this schedule, individual proprietors shall report the required data in the column headed "Total Capital." Partnerships shall reflect the names of the partners at the head of the columns provided therefor.

(h) All transactions and amounts affecting the proprietor's or partners' investments during the current quarter shall be reflected. Any items other than profits, losses, additional investments or withdrawals shall be shown under "Other Credits" or "Other Debits" in detail with a full explanation as to their

nature. The "Total Capital” balance at the end of the current quarter shall agree with the corresponding amount reported on schedule B-1 Balance Sheet. Schedule B-7-Airframes and Aircraft Engines Acquired

(a) This schedule shall be filed by each supplemental air carrier.

(b) The indicated data shall be reported for each individual airframe, identified by type, model, and design of cabin as to use for passengers exclusively, cargo exclusively, or both passengers and cargo in combination. Data pertaining to aircraft engines shall be reported in aggregate for each type or model. Airframe units leased from others for a period of more than 90 days shall be reported in a separate subsection of this schedule. In addition, a notation shall be made by license number of airframe units of the air carrier returned after lease to others for a period of more than 90 days. Airframe units obtained through interchange lease arrangements shall not be so reported.

(c) All dates shall indicate the day, the month and the year; shall be provided on a unit basis for airframes only; and, shall be reported for each aircraft engine group by date of transaction.

(d) Report shall be made in the quarter in which each airframe and each group of aircraft engines is actually acquired irrespective of whether the cost thereof is reflected in the property and equipment accounts during the current quarter or a subsequent quarter. If the cost data are not reflected in the current quarter a footnote to that effect shall accompany the report of acquisition. The costs shall be reported during the quarter in which determined and the equipment to which related shall be listed again in this schedule, with complete information, and shall be identified as being the same equipment reported at the earlier date.

(e) Column 2, "Date Placed in Transport Service" shall relate to airframes only and shall be the date on which each airframe was or will be placed in regular service by the reporting entity. If this date is not known at the time of submission of the report an estimated date bearing the notation "estimate" shall be provided with the exact date shown by footnote on a subsequent schedule B-7 in which the airframe is reidentified by license number, type of aircraft and date acquired.

(f) Column 8, “Maximum Continuous Horsepower" shall reflect the maximum continuous horsepower rating of each type of aircraft engine acquired. (See section 03 for definition as applied in this system of accounts and reports).

(g) Column 9, "Aircraft Engines per Airframe" shall reflect the number of aircraft engines for which each acquired airframe is designed.

(h) Column 10, "Maximum Seat Capacity" shall reflect the number of passenger seats installed in each airframe acquired. When the configuration of airframes provides sleeping accommodations the passenger capacity shall be shown in terms of a sleeper version and a nonsleeper version. When airframes are designed for multiple adjustable seating configurations, the maximum number of seats for which designed shall be reported. When the seating configuration of airframes is modified subsequent to original acquisition, the revised passenger capacity of each airframe shall be reported in the quarter in which modified and referenced to identify original capacity reported.

(i) Columns 12 and 15, "Reserve for Depreciation" and "Flight Equipment Airworthiness Reserves," respectively, shall include the amount of such reserves applicable to property and equipment transferred from nontransport divisions.

Schedule B-8-Property and Equipment Retired

(a) This schedule shall be filed by each supplemental air carrier.

(b) The indicated data shall be reported for the sale or retirement of each airframe, each type of aircraft engine (stating the number of units retired) and, to the extent retired along with airframes and engines, in aggregates by accounts, for operating property and equipment included in accounts 1603 through 1608 and nonoperating property and equipment included in accounts 1703 through 1708. Disposition of properties in accounts 1603 through 1608 and 1703 through 1708 not related to airframe and aircraft engine retirements shall be reported in a separate group for each account. Ground property and equipment disposed of shall be reported in aggregate for all accounts, with subdivisions between operating and nonoperating property and equipment. Airframe units leased from others for a period of more

than 90 days shall be reported, upon return to the lessor, in a separate subsection of this schedule. In addition, a notation shall be made by license number and name of lessee of airframe units leased to others for a period of more than 90 days. Airframe units leased under interchange arrangements shall not be so reported.

(d) All dates shall include the day, the month and the year of each transaction.

(e) Column 7, "Cost" shall agree in totals for each account with the corresponding cost of property and equipment retired.

(f) Column 10, "Realization" shall reflect the proceeds from disposition, including any insurance proceeds or amounts covered by a self-insurance reserve established in accordance with section 2-13(c).

(g) Column 13, "Disposition" shall reflect the name of the person or organization to which airframes and aircraft engines are sold or a notation as to the nature of the retirement and the account to which any depreciated cost has been charged if not sold. Items included in accounts 1603 through 1608, and 1703 through 1708, sold as a part of airframe or aircraft engine sales transactions, shall also be identified by the name of the buyer. Other sales of items included in these accounts shall be reported in a separate group in aggregate for each property account affected, while all ground property dispositions shall be reported in a single aggregate and need not be identified by names of the buyers. Schedule B-11-Current and Long Term Receivables; Current and Long Term Payables

(a) This schedule shall be filed by each supplemental air carrier.

(b) This schedule shall reflect the balances of receivables and payables as at the close of each month.

(c) Columns 1 and 2 reflect the account number and description of the type of receivable or payable for which report is to be made.

(d) Column 3, "Total Receivables" and "Total Payables," shall reflect the total amount recorded in each account, and shall agree with the amounts reported on the carrier's balance sheet as at the preparation date of this schedule.

(e) Column 4, “Amounts not Overdue", shall reflect receivables or payables which are not overdue.

(f) Columns 5 through 8, "Amounts Overdue," shall reflect receivables or payables which are overdue for periods of 30 days or less, 31 to 60 days, 61 to 90 days, and over 90 days, respectively.

(g) Account 2210, "Long Term Debt," shall be detailed by class of debt, showing separately amounts held by associated companies and by others, giving the maturity dates, and effective interest rates. Describe any significant covenants relative to the debt in footnote.

(h) Line items which include claims in litigation on unpaid court judgments shall be footnoted and such claims and judgments shall be listed by amount and explained at the bottom of the schedule in the space provided therefor. Schedule B-41-Investments Held by, or

for the Account of, Respondent

(a) This schedule shall be filed by each supplemental air carrier.

(b) The data in this schedule shall be grouped as between investments held in the name of the air carrier and investments held in the name of others for the account of the air carrier. Each group shall be separately subtotaled by investments in associated companies and by investments in other than associated companies.

(c) Column 1 shall reflect the name of each associated company, and each other issuer of securities held by the air carrier.

(d) Column 4, "Book Cost," in total, for investments held in the name of the air carrier, shall agree with corresponding amounts reflected in schedule B-1 Balance Sheet, accounts 1510 and 1530.

(e) Column 5, "Number of Shares or Debt Principal Amount" shall reflect the number of shares of stock or the principal amount of bonds or notes held by the air carrier, for each class of security reported in column 2.

Schedule B-43-Inventory of Airframes and Aircraft Engines

(a) This schedule shall be filed by each supplemental air carrier.

a group basis by type of engine and type of aircraft to which related.

(c) Data in this schedule shall be grouped and subtotaled as between data pertaining to airframes and data pertaining to aircraft engines.

(d) The data to be reported shall include owned and rented airframes and aircraft engines currently in operation or in conversion. The data shall be grouped separately as to owned or leased operating equipment. Totals for owned operating equipment shall agree with property and equipment accounts 1601 Airframes; 1611 Reserve for Depreciation-Airframes; 1602 Aircraft Engines; 1612 Reserve for Depreciation-Aircraft Engines; and 1629 Flight Equipment Airworthiness Reserves. The airworthiness liabilities for rented equipment included in accounts 2190 Other Current Liabilites and 2290 Other Noncurrent Liabilities shall be shown in column 13. Data pertaining to nonoperating airframes and aircraft engines shall be reported in group below the data for operating equipment.

(e) Data pertaining to rented airframes and aircraft engines shall be listed in columns 1 through 7 and in column 13; the cost of improvements thereto shall be listed in columns 8 through 12.

Schedule B-46-Long-Term and ShortTerm Non-Trade Debt

(a) This schedule shall be filed by each supplemental air carrier and shall reflect information pertaining to each issue of long-term debt and short-term debt (other than trade liabilities) in excess of 5 percent of total outstanding debt.

(b) A single set of this schedule shall be filed for the overall corporate or other legal entity comprising the air carrier.

(c) Column 1 shall reflect a description of each particular issue of debt, such as "Sinking Fund Debentures", "Bank Notes", "Credit Agreement", etc. This column shall also reflect for each issue, a brief description of the terms of payment and, where applicable, conversion privileges, including conversion periods, rates of conversion, and the securities into which convertible.

(d) Columns 2, 3, and 4 shall reflect the date of issue, date of maturity, and the interest rate per annum, respectively.

(e) Column 5 shall reflect the amount of bonds or other evidences of debt originally issued, as distinguished from the amount authorized.

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