[Federal Register Volume 82, Number 77 (Monday, April 24, 2017)]
[Notices]
[Pages 18947-18948]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-08236]
=======================================================================
-----------------------------------------------------------------------
SURFACE TRANSPORTATION BOARD
[Docket No. EP 720 (Sub-No. 1)]
Revisions to Railroad Annual Report Form R-1 and Quarterly
Operating Reports
AGENCY: Surface Transportation Board.
ACTION: Notice of modifications to annual and quarterly reporting
forms.
-----------------------------------------------------------------------
SUMMARY: The Surface Transportation Board (STB or Board) is revising
certain schedules in the Annual Report for Class I railroads (R-1 or
Form R-1) and quarterly operating reports. These revisions are needed
to correct certain accounting and reporting changes the Board enacted
in 2016 and to better meet accounting and reporting requirements and
industry needs.
DATES: This decision is effective on May 24, 2017. These modifications
will apply beginning with the annual R-1 reports for the year ending
December 31, 2017, and the quarterly operating reports for the second
calendar quarter of 2017.
FOR FURTHER INFORMATION CONTACT: Pedro Ramirez at (202) 245-0333.
Assistance for the hearing impaired is available through the Federal
Information Relay Service (FIRS) at 1-800-877-8339.
SUPPLEMENTARY INFORMATION: The Board is authorized, under 49 U.S.C.
11142, to prescribe a uniform accounting system for rail carriers
subject to its jurisdiction and, under 49 U.S.C. 11161, to maintain
cost accounting rules for rail carriers.\1\ Sections 11142 and 11161
both require the Board to conform its accounting rules to generally
accepted accounting principles (GAAP) ``[t]o the maximum extent
practicable.'' The Board's accounting rules, known as the Uniform
System of Accounts (USOA), are set forth in the Board's regulations at
49 CFR part 1201--subpart A. The USOA is used by the Class I railroads
\2\ to provide the Board an annual report, known as the Form R-1
report, and quarterly operating reports that contain information about
their finances and operating statistics. 49 CFR 1241.11, 1243.1, and
1243.2.
---------------------------------------------------------------------------
\1\ The Board has economic oversight of railroads, 49 U.S.C.
10101-11908, and prescribes a uniform accounting system for rail
carriers to use for regulatory purposes, 49 U.S.C. 11141-43, 11161-
64; 49 CFR parts 1200-1201. In addition, pursuant to its authority
at 49 U.S.C. 11145, the Board requires Class I railroads to submit
quarterly and annual reports containing financial and operating
statistics, including employment and traffic data. 49 CFR 1241-1246,
1248.
\2\ The Board designates three classes of freight railroads
based upon their operating revenues, for three consecutive years, in
1991 dollars, using the following scale: Class I--$250 million or
more; Class II--less than $250 million but more than $20 million;
and Class III--$20 million or less. These operating revenue
thresholds are adjusted annually for inflation. 49 CFR part 1201, 1-
1. Adjusted for inflation based on 2015 data, Class I carriers have
annual carrier operating revenues of $457,913,998 or more; Class II
carriers have annual carrier operating revenues of less than
$457,913,998 but more than $36,633,120; and Class III carriers have
annual carrier operating revenues of $36,633,120 or less. Today,
there are seven Class I carriers.
---------------------------------------------------------------------------
Discussion
In Accounting & Reporting of Business Combinations, Security
Investments, Comprehensive Income, Derivative Instruments & Hedging
Activities, EP 720 (STB served Apr. 6, 2016), the Board adopted rules
that updated the accounting and reporting requirements under the USOA
for Class I railroads to reflect accounting standard updates to GAAP.
As relevant here, the Board amended the USOA by adding new general
instructions and accounts to recognize changes in the fair value of
certain security investments, items of other comprehensive income,
derivative instruments, and hedging activities. Additionally,
corresponding changes were made to the Form R-1. Id. at 3-7. However,
no corresponding changes were made to the related quarterly reports.
To avoid confusion, ensure proper reporting, and promote uniformity
with the USOA, the Board has determined that certain technical and
formatting modifications to the Form R-1 and the quarterly reports are
necessary. These minor changes, which are detailed below, are not
substantive and fall into one of the following categories: (1)
Correcting the Form R-1 to fully implement the changes in accounting
and reporting requirements already made through notice and comment
rulemaking in Docket No. EP 720; (2) applying the accounting and
reporting changes in Docket No. EP 720 to the quarterly reports; and
(3) making minor clarifications, formatting, and grammatical changes.
Accordingly, for good cause shown, the Board finds that notice and
comment on these revisions are unnecessary. See 5 U.S.C. 553(b)(3)(B).
The specific changes are explained below.
Comprehensive Income. The Form R-1 Schedule 210 A (Consolidated
Statements of Comprehensive Income) adopted in Docket No. EP 720
included two unnecessary columns: ``Freight-related revenues &
expenses'' and ``Passenger-related revenue & expenses.'' Because the
information in these two columns is not used in the calculation of
comprehensive income and other comprehensive income, these columns will
be eliminated in Schedule 210 A.
Results of Operations. In Docket No. EP 720, a single line for
``Earnings per share, basic and diluted'' in Form R-1 Schedule 210
(Results of Operations) was added. However, basic and diluted earnings
per share are two separate calculations and must be reported
individually. Therefore, the revised Form R-1 Schedule 210 adopted here
will display these items in two lines: Basic Earnings Per Share and
Diluted Earnings Per Share.
Quarterly Reports. Although the Board did not address quarterly
operating reports in Docket No. EP 720, the items reported in the
quarterly operating reports, Condensed Balance Sheet (CBS) and
Revenues, Expenses, and Income (RE&I), should correspond with the Form
R-1 reports and be kept in conformity with the USOA for Class I
railroads.
Accordingly, the quarterly CBS report will be revised to include a
line for the reporting of account 799, Accumulated
[[Page 18948]]
Other Comprehensive Income. Additionally, the quarterly RE&I report
will be revised to include four new lines for the reporting of Net
Income attributable to non-controlling interest, Net Income
attributable to reporting railroad, Basic Earnings Per Share, and
Diluted Earnings Per Share. These additional lines, which track
information required on the Form R-1, provide a place to report the
data collected on a quarterly basis and maintain uniformity with annual
reporting requirements in the USOA.
Other Minor Changes. The Board will also revise Form R-1 reporting
schedules and quarterly operating reports to make minor clarifications,
formatting changes, and grammatical corrections. Some of the changes
are the result of previous updates to the USOA, in which accounts were
either established, eliminated, or changed. Revisions include updating
schedule titles, cross-checks, page numbering, layout, and
parenthetical references for specific line items with current USOA
accounts. These revisions will ensure proper reporting of data
collected. Below are some of the notable revisions:
Form R-1 Schedule 210 A, Consolidated Statement of
Comprehensive Income: References to certain line items that improperly
instruct how to calculate Comprehensive Income, Other Comprehensive
Income, and Comprehensive Income Attributable to Reporting Railroads
will be removed.
Form R-1 Schedule 245, Working Capital: This schedule will
be updated to reflect a line numbering change that occurred among other
changes in Schedule 200.
Form R-1 Schedule 510, Separation of Debtholdings Between
Road Property and Equipment: The sources for Lines 1 through 8 will be
updated to show the line numbering change in Schedule 200, and the
sources for Lines 16, 17, and 21 will be modified to properly show
total road property and equipment debt and total interest.
Form R-1 Schedule 342, Accumulated Depreciation--
Improvements to Road and Equipment Leased from Others: Instructions 2
and 3 will be amended to instruct users to refer to the notes and
remarks section for Schedule 342 and no longer specifically to page
number 39.
These and other minor changes (except for non-substantive
formatting changes) are highlighted and annotated in appendices
attached to the Board's served decision.
In sum, the modifications discussed in this notice will correct
certain accounting and reporting changes the Board enacted in 2016 and
provide clarification and improve usability of the Form R-1 and
quarterly operating reports to better meet accounting and reporting
requirements and industry needs. Appendix A to the Board's served
decision includes annotated copies of the revised Form R-1 Table of
Contents, schedules 210A and 510, and the impacted pages of schedules
200, 210, 245, and 342. Appendix B to the Board's served decision
includes annotated copies of the revised CBS and RE&I quarterly
reports. The served decision is available on the Board's Web site at
www.stb.gov. The revised forms in their entirety will be posted on the
Board's Web site at https://www.stb.gov/stb/industry/econ_reports.html.
Regulatory Flexibility Act Statement
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612,
generally requires a description and analysis of new rules that would
have a significant economic impact on a substantial number of small
entities. In drafting a rule, an agency is required to: (1) Assess the
effect that its regulation will have on small entities; (2) analyze
effective alternatives that may minimize a regulation's impact; and (3)
make the analysis available for public comment. 5 U.S.C. 601-604. Under
section 605(b), an agency is not required to perform an initial or
final regulatory flexibility analysis if it certifies that the proposed
or final rules will not have a ``significant impact on a substantial
number of small entities.''
Because the goal of the RFA is to reduce the cost to small entities
of complying with federal regulations, the RFA requires an agency to
perform a regulatory flexibility analysis of small entity impacts only
when a rule directly regulates those entities. In other words, the
impact must be a direct impact on small entities ``whose conduct is
circumscribed or mandated'' by the proposed rule. White Eagle Coop.
Ass'n v. Conner, 553 F.3d 467, 478, 480 (7th Cir. 2009).
The reporting requirements modified here will not have a
significant economic impact upon a substantial number of small entities
within the meaning of the RFA. The reporting requirements will apply
only to Class I rail carriers. 49 CFR 1241.1. Accordingly, there will
be no impact on small railroads (small entities).\3\ Therefore, the
Board certifies under 5 U.S.C. 605(b) that these modifications will not
have a significant economic impact on a substantial number of small
entities within the meaning of the RFA. A copy of this decision will be
served upon the Chief Counsel for Advocacy, Office of Advocacy, U.S.
Small Business Administration, Washington, DC 20416.
---------------------------------------------------------------------------
\3\ Effective June 30, 2016, for the purpose of RFA analysis for
rail carriers subject to the Board's jurisdiction, the Board defines
a ``small business'' as a Class III rail carrier under 49 CFR
1201.1-1. See Small Entity Size Standards Under the Regulatory
Flexibility Act, EP 719 (STB served June 30, 2016) (with Board
Member Begeman dissenting).
---------------------------------------------------------------------------
Authority: 49 U.S.C. 11142 and 11164.
It is ordered:
1. The modifications set forth in this decision are adopted and
will be effective beginning with the annual R-1 reports for the year
ending December 31, 2017, and the quarterly operating reports for the
second calendar quarter of 2017. Notice of the modifications adopted
here will be published in the Federal Register.
2. A copy of this decision will be served upon the Chief Counsel
for Advocacy, Office of Advocacy, U.S. Small Business Administration.
3. This decision is effective on May 24, 2017.
Decided: April 19, 2017.
By the Board, Board Members Begeman, Elliott, and Miller.
Jeffrey Herzig,
Clearance Clerk.
[FR Doc. 2017-08236 Filed 4-21-17; 8:45 am]
BILLING CODE 4915-01-P