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(c) Column 2, "Date of Sale or Other Disposition" shall include the day, the month and the year on which each item was sold or otherwise disposed of within the meaning of § 235.1(b) of Part 235.

(d) Column 8, "Net Amount of Gain" shall reflect the net of column 5 minus columns 6 and 7; an entry shall be made transferring an amount equal to the amount in column 8 from account 2940 Unappropriated Retained Earnings to account 2930 Appropriations of Retained Earnings. If an initial measurement of gain is subject to adjustment to reflect losses which result upon collection of installment sales or in converting proceeds to cash, the adjustment should be reported at the time the loss is determined. Upon the investment of gains in flight equipment, an equivalent amount may be returned to account 2940 Unappropriated Retained Earnings.

(e) Column 9, "Disposition" shall reflect the name of the person or organization to which the flight equipment is sold or a notation as to the nature of the disposition if not sold.

(f) Columns 10 and 11 shall reflect the date and amount of each gain deposited in a re-equipment fund for reinvestment in flight equipment. Such deposits shall be recorded in account 1550 Special Funds-Other.

(g) Column 12 shall identify the assets in the fund and shall indicate the location of the fund if not in immediate physical possession of the air carrier.

(h) This schedule shall include a separate memorandum summary of the reequipment funds in account 1550 Special Funds-Other, under benefit of section 406(d) of the Act. The summary shall list the date of sale or other disposition from which the gain was derived and the related balance remaining in account 1550.

Schedule B-9-Inventory of Flight Equipment Spare Parts and Assemblies

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

(b) The indicated data shall be reported separately for each class of airframe parts, aircraft engine parts and other flight equipment parts, by types of airframes or aircraft engines to which applicable, or as "interchangeable” when applicable to more than one aircraft or engine type and shall be reported separately for expendable parts and rotable parts and assemblies. Expend

able parts and rotable parts shall be separately grouped, subtotaled in columns 2 through 8, and identified in column 1 by asset account number.

(c) Column 2, "Inventory at End of Period" shall reflect the book balance for each class of parts and assemblies reflected in column 1 as at the close of the 12-month period for which report is being made and shall agree, in aggregate for expendable parts and rotable parts separately, with the respective balances reflected for such asset classifications in the current schedule B-1 Balance Sheet.

(d) Column 3, "Inventory Subject to Loss Provisions," shall reflect for each class of flight equipment expendable parts reflected in column 1 the predetermined level of inventory against which a reserve for loss in value is being accrued.

(e) Column 4, "Balance Beginning of Period," shall reflect the balance of accumulated valuation reserve provisions existing for each classification reflected in column 1 as at the beginning of the 12-month period for which report is being made and shall agree with the balances shown in column 7, Balance End of Period, on the next previous report.

(f) Column 5, "Provisions During Period," shall reflect for each classification shown in column 1 the net provisions to valuation reserves against flight equipment parts and assemblies during the 12month period for which report is being made, net of adjustments for inventory declines. The amounts reported in this column for expendable parts shall agree with the amounts reported in account 73 for the same 12-month period.

(g) Column 6, "Retirements During Period," shall reflect for each classification shown in column 1 the portion of accumulated valuation reserve provisions for flight equipment parts and assemblies absorbed in abandonment or other retirements of parts and assemblies during the 12-month period for which report is being made.

(h) Column 7, "Balance End of Period," shall reflect the balance of accumulated valuation reserve provisions for each classification shown in column 1, existing as at the close of the 12-month period for which report is being made and shall agree, in aggregate for expendable and rotable parts, separately, with the respective current balances reflected for such asset classifications in schedule B-1 Balance Sheet.

(1) Column 8, "Cost Less Valuation

Reserves," shall reflect the differences between columns 2 and 7.

Schedule B-10-Developmental and
Preoperating Costs

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

(b) Separate copies of this schedule shall be filed for projects directly applicable to each separate operating entity of the air carrier and for the air carrier as a whole covering projects which are applicable in common to all transport operating entities.

(c) Column 1 shall reflect an identification and complete description of each project for which costs are deferred in balance sheet account 1830. The description shall include the CAB Docket number in cases of projects involving a proceeding before the Civil Aeronautics Board.

(d) Explanation of the amounts included in column 3 shall disclose the general characteristics of the amounts deferred during the current quarter for each project, for example, the cost of regulatory proceedings; the cost of pilot, mechanic and ground crew training; special engineering; aircraft development flights; publicity flights; and route familiarization flights.

(e) Column 6, "Unamortized Balance-End of Quarter" shall in total agree, when aggregated for the air carrier as a whole, with the corresponding balance of account 1830 shown in schedule B-1-Balance Sheet.

(f) Column 7, "Development Costs Charged to Account 89" shall reflect costs incurred in projects which do not contribute to or protect air transportation services of the air carrier.

Schedule B-41-Investments Held by, or

for the Account of, Respondent (a) This schedule shall be filed by all route air carriers.

(b) The data shall be grouped and separately subtotaled according to: (1) Investments in subsidiary companies; (2) investments in other associated companies, and investments in other than associated companies; and (3) notes and accounts receivable due to the air carrier one year beyond the date of the report.

(c) Column 1 shall reflect the name of each associated company, and each other issuer of securities held by the air carrier. This column shall also reflect the name of each company from which non

current notes and accounts receivable are due to the air carrier.

(d) Column 2 shall reflect the type of security, such as stocks, bonds, notes, etc., with respect to investments, and the words "a/c rec." or "notes rec.", as appropriate, with respect to noncurrent receivables.

(e) Column 3 shall reflect the words "yes" for investments held in the name of the air carrier and "no" for investments held in the name of others for the account of the air carrier.

(f) Column 4 "Cost" shall reflect the cost of the investments to the carrier. The cost of investments in subsidiary companies, plus the equity in undistributed earnings or losses since acquisition reflected in column 5, "Equity or Book Value", shall agree in aggregate with the corresponding amounts in balance sheet subaccount 1510.1 Investments in Subsidiary Companies. The cost of investments in other associated companies shall agree in total with corresponding amounts reflected in balance sheet accounts 1510.2 Investments in Other Associated Companies and 1530 Other Investments and Receivables, respectively.

(g) Column 5 "Equity or Book Value" shall reflect the equity in undistributed earnings or losses of subsidiary companies since acquisition, or the book value of investments in other associated companies and other than associated companies as of the date of this schedule. This column does not apply to investments in industry-owned service organizations which operate on a nonprofit basis.

(h) Column 6 "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 carrier.

Schedule B-42-Accounts 1410 ShortTerm Prepayments, 1550 Special Funds-Other, 1820 Long-Term Prepayments, 1880 Other Intangibles, 1890 Other Deferred Charges, 2390 Other Deferred Credits

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

(b) The data in this schedule shall be grouped and subtotaled for each indicated balance sheet account in numerical order and shall identify the nature and amount of each item included in each such balance sheet account as at

the close of the current accounting period. Schedule B-43—Inventory of Airframes and Aircraft Engines

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

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

(c) 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 on a group basis by type of engine and by type of aircraft to which related.

(d) Data in this schedule shall be grouped and subtotaled as between data pertaining to airframes and data pertaining to aircraft engines. Data pertaining to nonoperating airframes and aircraft engines shall be reported in a group below the data for operating equipment.

(e) The data to be reported shall include owned and rented airframes and aircraft engines currently in operation or in conversion. 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.

(f) Column 8, "Cost" shall agree in totals for owned and operating airframes and aircraft engines, respectively, with corresponding amounts reflected in accounts 1601 and 1602 in column 7 of Schedule B-5 as at December 31 of the reporting year.

(g) Column 9, "Reserve for Depreciation" shall include the accumulations of all provisions for losses due to use and obsolescence as recorded in balance sheet accounts 1611 Reserve for Depreciation-Airframes and 1612 Reserve for Depreciation-Aircraft Engines.

(h) Column 10, "Depreciated Cost" shall reflect Cost (column 8) less Reserve for Depreciation (column 9).

(i) Column 11, "Estimated Residual Value" shall reflect in dollars the residual value assigned to airframes and aircraft engines respectively, including any overhaul value not subject to depreciation.

(j) Column 12, "Estimated Depreciable Life (Months)" shall reflect the esti

mated depreciable life of each airframe and each group of aircraft engines.

(k) Column 13, "Flight Equipment Airworthiness Reserves or Maintenance Liability" shall include amounts accumulated for owned airframes and aircraft engines in account 1629 Flight Equipment Airworthiness Reserves and amounts accumulated for leased airframes and aircraft engines in accounts 2190 Other Current Liabilities and 2290 Other Noncurrent Liabilities.

(1) 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 Liabilities and 2290 Other Noncurrent Liabilities shall be shown in column 13.

Schedule B-44-Transactions With
Associated Companies

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

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

(c) The data in this schedule shall be grouped and subtotaled separately for balance sheet accounts 1250 Notes and Accounts Receivable-Associated Companies, 1510 Investments in Associated Companies, 2050 Notes and Accounts Payable-Associated Companies, and 2240 Advances from Associated Companies.

(d) Column 1 shall reflect, under each affected balance sheet account, the name of each associated company.

(e) Column 2 shall reflect, for each item listed in column 1, the balance as at the close of the next previous calendar year.

(f) Column 3 shall reflect, for each item listed in column 1, the total billings to associated companies in the case of asset accounts, or the total billings from associated companies in the case of liability accounts, during the calendar year. Billings by associated companies shall not be offset against billings to associated companies but shall each be reported separately in gross amounts billed after reflection of debit or credit adjustments to correct or otherwise modify amounts previously billed

whether such adjustments originate with the billed or billing company.

(g) Column 4 shall reflect, for each item listed in column 1, adjustments resulting from restatements stemming from changes in foreign exchange rates. (h) Column 5 shall reflect, for each item listed in column 1, the amount of account settlements effected during the calendar year.

(1) Column 6 shall reflect, for each item listed in column 1, the balance as at the close of the current calendar year.

(j) Column 7 shall reflect, for each item listed in column 1, the amount of contra debits to liability accounts or contra credits to asset accounts during the calendar year which affected other balance sheet accounts.

(k) Column 8 shall reflect, for each item listed in column 1, the amount of contra debits to liability accounts or contra credits to asset accounts during the calendar year which affected profit and loss accounts. The sum of the amounts shown for each associated company account in columns 7 and 8 shall agree with the amount shown for total billings listed in column 3 for each such account.

(1) Amounts to be reported on this schedule shall include all transactions cleared through balance sheet accounts 1250, 1510, 2050, and 2240. Transactions with associated companies for transport services settled through airline clearing houses shall not be reflected in this schedule unless transferred from clearing houses for direct settlement between the air carrier and associated companies. The contra amounts to billings shall be classified in terms of their inherent characteristics as to balance sheet or profit and loss impact and the ultimate disposition to be made of such amounts without regard to any intermediate accounting which may be performed.

Schedule B-45 [Reserved] Schedule B-46-Long-Term and ShortTerm Non-Trade Debt

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

tion 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.

(f) Columns 6 and 7 shall reflect the balance outstanding at the end of the reporting period in accounts 2210 LongTerm Debt and 2010 Current Notes Payable on Schedule B-1, respectively.

(g) Columns 8 and 9 shall reflect the name and address of holders of more than 5 percent of the issue or $500,000, whichever is smaller, showing for each such holder the amount held as at the end of the reporting period.

Schedule B-47-Lease Obligations—
Flight Equipment

(a) This schedule shall be filed by all route air carriers and shall reflect information pertaining to each flight-equipment lease obligation with annual rental of $500,000 or 1 percent of total debt and equity capital, whichever is less, but excluding leases with annual rental of less than $100,000.

(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 item of flight equipment under lease by the reporting carrier of the magnitude specified in paragraph (a).

(d) Column 2 shall reflect the beginning date of the lease.

(e) Column 3 shall reflect the life of the lease and any renewal periods. Where a lease is not renewable, the word "none" shall be reported.

(f) Column 4 shall reflect the name and address of the lessor.

(g) Column 5 shall reflect the aggregate amount of the contractual obligation payable over the full life of the lease, including interest and other charges.

(h) Column 6 shall reflect the total amount due and payable under the lease in the ensuing twelve-month period including interest and other charges. If

the lease is conditional, the minimum amount due in the twelve months shall be stated with explanation. Where the amount varies from year to year, a schedule of payments shall be attached.

(i) Column 7 shall indicate whether the lease contains purchase option provisions by insertion of the word "yes" or "no".

Memorandum Subclassification of

Ground Property Investment

(a) This schedule shall be filed in duplicate by each Group III air carrier.

(b) This schedule shall include the net investment after depreciation and the current depreciation expense for ground property and equipment in the accounts listed on the schedule.

(c) Column 1 lists the accounts and subclassifications in which the ground property or equipment is to be reported, according to its use in the normal course of the carrier's operations. "General" and "other" subclassifications are provided for units of property normally utilized in more than one type of service or for other than the services listed. With respect to account 1636 Furniture, Fixtures and Office Equipment, data processing equipment used for reservations purposes shall be included in the data processing equipment subclassification; all other technical reservations equipment, such as remote inquiry stations, whether at reservations control centers or at ticket counters, shall be classified as reservations equipment.

[ER-327, 26 F.R. 4222, May 16, 1961, as amended by ER-369, 27 F.R. 12819, Dec. 28, 1962; ER-415, 29 F.R. 12674, Sept. 9, 1964; ER-417, 29 F.R. 13530, Oct. 1, 1964; ER-425, 30 F.R. 746, Jan. 23, 1965; ER 435, 30 FR. 7704, June 15, 1965; ER-483, 32 F.R. 2812, Feb. 11, 1967; ER-484, 32 F.R. 5368, Mar. 30, 1967; ER-530, 33 F.R. 4797, Mar. 21, 1968; ER-546, 33 F.R. 18698, Dec. 18, 1968; ER-562, 34 F.R. 3741, Mar. 4, 1969; ER-606, 35 F.R. 4614, Mar. 17, 1970]

Section 24-Profit and Loss Elements

Schedule P-1.1-Income StatementGroup I Air Carriers

Schedule P-1.2-Income StatementGroup II and Group III Air Carriers

(a) Schedule P-1.1 shall be filed by each Group I route air carrier and schedule P-1.2 shall be filed by each Group II air carrier and each Group III air carrier.

(b) Separate income statements shall be filed, covering all indicated items through "Net Income After Special

Items" for each separate operating entity of the air carrier and for the overall, or system, operations of the air carrier. The indicated items following "Net Income After Special Items" shall be reported on only the income statement filed for the air carrier's system.

(c) Data reported on this schedule shall conform with the instructions pertaining to profit and loss classifications within this Uniform System of Accounts and Reports.

(d) Data reported in the "12-Monthsto-Date" column shall represent for each individual item the sum of amounts reported in the "Quarter" column for the current and next previous three quarters.

(e) "Unappropriated Retained Earnings-Beginning of Period" shall be the sum of the balances of "Unappropriated Retained Earnings" and "Net IncomeYear to Date" reported on the balance sheet as at the close of the corresponding quarter of the previous year, in the case of the "12-Months-to-Date" column, and as at the close of the previous quarter, in the case of the "Quarter" column.

(f) "Unappropriated Retained Earnings-End of Period" shall be, in the cases of both the "12-Months to Date" and "Quarter" columns, the sum of the balances of "Unappropriated Retained Earnings" and "Net Income-Year to Date" reported on the balance sheet as at the close of the current quarter.

Schedule P-2-Notes to Income
Statement

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

(b) Separate sets of this schedule shall be filed for each separate operating entity and for the overall or system operations of the air carrier.

(c) All substantive matters which may influence materially interpretations or conclusions in regard to the earnings position of the air carrier which are not clearly identified in the body of the income statement shall be completely and clearly stated in this schedule and cross-referenced to the affected profit and loss account.

(d) Each air carrier shall include on this schedule a description of each interruption in air transport operations, the aggregate effect of which is ten (10) percent or more of the scheduled revenue plane-miles which, except for the interruption, would have been operated during the month or either of two consecutive months affected. The informa

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