72
 

NOTES APPLYING TO TEN-YEAR INCOME ACCOUNT
 

Note A—The Company makes provision for taxes by accruals of monthly charges against income on the basis of best estimates .available as
to the amounts ultimately to be paid. As taxes are paid, adjustments are made to reflect in the income account the difference between accruals
previously made and the amounts actually paid. The figures include accruals made in connecrion with Railroad Retirement and Unemployment
Insurance acts.

Note B—Dividends received from subsidiaries (companies of which The New York Central Railroad Company owns more than 50% of the
capital stock) whose properties arc not operated by the Company under lease and the equity of The New York Central Raih-oad Company in the
net income of such companies, in each of the years 1939 to 1948 were:

equity of the N. Y. C. R. R. CO.

in net income of subsidiaries
Year

1939....................................................         $1,698,944                                    $2,102,587

1940....................................................           2,386,912                                      2,551,333

1941....................................................            3,391,404                                      4,262,092

1942....................................................            3,154,144                                      3,759,891

1943....................................................            2,550,247                                      3,224,171

1944....................................................            2,830,670                                      4,074,144

1945....................................................            1,735,936*                                    3,153,311

1946....................................................           1,518,944                                      4,231,563

1947....................................................           3,021,804*                                    4,856,606

1948....................................................           4,139,372                                      6,137,072
 

TOTAL..............................................        $26,428,377                                  $38,352,770

* Restated
 

STATEMENT OF EARNED SURPLUS—UNAPPROPRIATED—FOR

1939                           1940                             1941

Credit balance at beginning of year..................................     $172,310,113.27          $170,777,952.50             $178,079,442.84

Credits:

Credit balance transferred from income...............................     $   4,509,235.64         $ 11,265,084.18              $ 26,245,561.80

Credits from retired road and equipment..............................               21,664.34                    34,510.82                      155,441.26

Delayed income credits (Note B)....................................               —                               ~                             4,127,980.41

Donations........................................................               10,995.58                      9,546.50                       14,407.29

Miscellaneous credits (Note C)......................................             466,569.77                  372,631.48                      796,580.64

Total credits................................................     $    5,008,465.33          $ 11,681,772.98             $ 31,339,971.40

Debits:

Debit balance transferred from income...............................               —                               —                                  —

Dividend appropriations of surplus...................................               —                              —                                  —

Surplus appropriated for investment in physical property...............     $        23,998.05           $       112,626.29              $       53,193.18

Debt discount extinguished through surplus (Note D)..................               —                               17,222.85                       17,342.44

Debits from retired road and equipment (Note E).....................          5,437,031.62               3,255,377.70                  3,185,105.75

Miscellaneous appropriations of surplus................................               —                              —                                  —

Miscellaneous debits (Note F).......................................           1,079,596.43                  995,055.80                 31,695,351.76

Total debits.................................................     $   6,540,626.10          $   4,380,282.64             $ 34,950,993.13

Credit balance at end or year........................................     $170,777,952.50         $178,079,442.84             $174,468,421.11
 

Note A—Prior to January 1, 1943, designated as profit and loss.

Note B—Beginning January I, 1942, this account included in current income.

Note C—The year 1945 includes $1,290,871.25 and year 1946 includes $910,948.75 representing excess over cost of principal amount of this
Company's Refunding and Improvement Mortgage Bonds reacquired. The year 1946 includes $509,273.21 representing profit from sale of Hotel
Chatham, New York, N. Y. The year 1947 includes $2,038,593.75 net profit on $9,509,000 par value mortgage bonds reacquired. The year 1948
includes $1,701,054.96 transferred from Earned Surplus—Appropriated, adjusting accruals made prior to year 1929 in connection with buildings in
Grand Central Terminal area, New York.

Note D—Represents unamortized discount, commission and expense on funded debt. During the period 1939 to 1942, inclusive, this Com¬
pany's policy was to charge to profit and loss the total of items of debt discount, commission and expense, when incurred. Effective in 1943,
amounts less than $25,000 are charged to income and amounts in excess are amortized.