stantial reduction in the shipment of war materials,
but also to a decrease in the movement of raw ma¬
terials and finished products as a result of labor
difficulties in a number of the major industries in the
territory served by the New York Central.

Gross earnings of the Company receded moderate¬
ly from the record high reached in 1944. Net income
was $24,412,525, or $3.79 per share.

Operating Results

Total operating revenues were 8.5% lower than in
1944. The decline in freight revenues was 10.6% and
 

1   788
^   800

Z soo

3   411

S   380
208
100
 


 

|j|littH*Hii|Hi imm% \m
 


 


 

■

1
 

OEVENUES                        VHn

1 EXPENSES                        -^^Ki

mill
 


 

-   100

-   700

-   100

-    SOO

-  400

-   300

-  200

-   too
 

1936  '37    '38    "38    '40    '41    '42    '43    '44    '45
 

in passenger revenues 6.4%. Other operating reve¬
nues increased 0.85%.

The volume of freight moved, as measured by the
number of tons moved one mile, was 14.56% less than
that of 1944. The revenue per ton mile was 9.44 mills.

Passenger traffic, as measured by the number of
passengers carried one mile, was 5.44% below the
record level of 1944. Revenue per passenger mile
averaged 1.928 cents, compared with 1.948 cents in
1944. Movement of the armed forces on active duty
and in demobilization contributed greatly to passen¬
ger volume, as did also travel at reduced rates by
large numbers of service men and women on furlough
and by discharged veterans.

Railway operating expenses (not including taxes,
or other deductions and fixed charges) were higher
than in 1944 by $48,841,337, or 9.2%. The principal
reason for the rise in the year's operating expenses
was that they included $45,595,147, representing un¬
amortized expenditures for emergency facilities ac¬
quired prior to September 1, 1945. These facilities
embraced   additional   cars,   locomotives   and   other
 

equipment, as well as roadway improvements, found
necessary in the interest of national defense. Their
cost could, as provided by law, after certification by
appropriate government authority, be amortized over
a sixty-month period, or a shortened period upon
proclamation determining the end of the war emer¬
gency. Prior to September 29, 1945, amortization of
such facilities had been accrued on the books of the
Company at the rate of 20% annually from the time
of acquisition. Under date of September 29, 1945, the
President of the United States proclaimed the end of
the emergency as it affected this situation, and the
Company elected to include in its expense accounts
for the year 1945 the balance of the unamortized
cost. These emergency facilities having now been
fully depreciated, there will be no subsequent de¬
preciation charges in respect of them.

Taxes

Railway tax accruals were lower than in 1944 in the
amount of $91,949,745, or 93.5%. This abnormal de¬
crease was largely brought about by the lower rev¬
enues realized and by the accelerated amortization of
wartime expenditures referred to above. By reason of
such charges and decreased earnings, the Company
incurred no liability for income taxes for 1945 except
Canadian income tax and Federal income tax in con-
 

2   140
 


 


 


 


 


 


 

140
 

5   120
 

TAXES
 


 


 


 


 

_
 

128
 

MtUiONS OF Bl
 

■1 NET INCOME
m NET LOSS
 


 

1
 

1
 

■
 

-
 

100
80
10
40
 

28
 


 

1
 


 

1
 

1
 

|-
 

20
 

133B   '37    '38    '39
 

'40
 

'41    '42
 

'43
 

'44
 

'45
 

nection with certain lessor companies, and became
entitled further to recover, under the tax law, a cer¬
tain proportion of Federal taxes paid in previous
years. Adjustment of other over-accruals of taxes
applicable to prior years also contributed to the total
amount of reduction.

A comparison of the tax accruals for the years 1945
and 1944 follows:
 

1945
 

1944
 

U. S. and Canadian Income Taxes......     $ 3,838,925

All other taxes............      44,782,770

Total.............     $48,621,695

Readjvistment of prior years taxes......       32,778,220 Cr.

Over-accruals, prior years.........         9,420,317 Cr.

Net Tax Accruals...........     $ 6,423,158
 

$53,249,129
45,123,774

$98,372,903
 

$98,372,903
 

Decrease

$49,410,204
341,004

$49,751,208

32,778,220

9,420,317

$91,949,745