PROPOSED REPORT Service Pipe Line Co. report to the Attorney General of the United States for the calendar year 1952 (civil action No. 14060) Line 1. Latest final valuation made by the ICC. 2. Add: Value of additions and betterments to common-carrier property made after date of such latest final valuation, valued for the year in which completed.. 4. Less: Appropriate deductions for physical depreciation and retirements.. 6. Less: Value of common-carrier facilities acquired through investment of excess earnings... 7. Valuation used as earnings basis.. 8. 7 percent of that valuation... 9. Earnings derived from transportation or other common-carrier services: Line 45, schedule No. 302, annual peport P.. Surplus adjustments: Add or deduct: Schedule Line No. 1 Credits from retired carrier property. No. 360 360 7 Miscellaneous credits. $160, 709, 500 15,979, 440 176,688,940 2,846, 596 173,842, 344 353,067 173,489,277 12, 144, 249 11,357, 982 $459 18,063 4,228 490, 689 476,395 10,881,587 1,262,662 10, 280, 378 Total earnings available for distribution to stockholders. 10. Earnings less than 7 percent of valuation carried forward for next succeeding 3 years as provided in subpar. III (d)-(line 8 less line 9) .. Payments to all stockholders.. 12. Earned and permitted to be paid this year but invested in common-carrier facilities in- 1. ICC valuation at Dec. 31, 1950. EXPLANATORY NOTES 2. Additions and betterments at 1951 period prices.. Plus: Prorata of 1952 additions of property.. 3. Sum of above items. 4. 1951 retirements. Prorata of 1952 retirements at 1950 period prices and depreciated to Dec. 5. Valuation using consent decree or plan II-A methods. 6. Excess earnings invested in carrier property (shown for first time in 1950 report). 7. Earnings base using consent decree or plan II-A basis. Using ICC methods the valuation for earnings base is $170,709,300 or $2,799,977 less... 8. Seven percent of earnings base (consent decree). By comparison 7 percent of ICC earnings base is $11,949,651. 9. This is a figure of net income. It includes all income such as dividends, interest received, etc. It includes all charges to income such as interest paid, amortization of funded debt, etc. It is what is transferred to earned surplus... Earnings after all credits and charges to income and surplus... 13. Includes income transferred to surplus less dividends less net surplus adjustments. Mr. JOHN HANSBURY, Acting Director, Bureau of Valuation, Interstate Commerce Commission, Washington, D. C. APRIL 2, 1953. DEAR MR. HANSBURY: Confirming our conversation about reporting original cost on BV 588 Forms, it seems that we might save your Accounting Section a considerable amount of work, and at the same time not cause the carriers any additional reporting cost. As an example, BV Form 646, Summary of Original Cost of Pipeline Property, includes information prepared by our company and I am confident by most of the others. Our present reporting shows only current year additions and retirements by States and class of property, but we actually keep balances at the beginning and end of the year and make adjustments after your Accounting Section has completed its report so that we can stay in balance with the Bureau. I would like to suggest a form of reporting by the carrier as part of its 588 report information, as shown by the attached example. It could well eliminate the preparation of BV Form 646 by your office. The carrier's report would show the balance at the end of the year before adjustments by the Accounting Section. Then, as the carriers are called in on their annual valuation work, and agree with your accounting adjustments, they would have available the new or adjusted year-end cost as a start for their next year's report. We also suggest eliminating cents on the report and reporting to the nearest dollar, as this apparently causes a considerable amount of detail adjusting. If this proposed reporting meets with your approval, it would be well to try to get it into effect for the year 1952 reports and that could be done if we could get the information to the carriers during the month of May so that summaries could be completed by June 30 I assume you would be willing to furnish photostats of your December 31, 1951, balances on proper request so that each carrier could start 1952 with the adjusted beginning balance. There are also attached samples of reconciliation statements which apparently are not prepared in a uniform manner by all carriers. If this form meets with your approval, I would like to recommend the adoption of sheet No. 1 and eliminate the reconciliation shown as sheet No. 2. Sheet No. 2 reconciles the difference in account 1 balances for the beginning and ending of the current year. Sheet No. 2 does not serve any useful purpose to the carrier, and unless it is needed by your Accounting Section, it could be eliminated. I will appreciate your views on the proposals and also your suggestions as to how the information could be passed on to the carriers; that is, as a Bureau of Valuation request, or as a suggestion from our committee. Yours very truly, |