70
 

STATEMENT OF EARNED SURPLUS—UNAPPROPRIATED—FOR
 

1940                            1941                             1942

Credit balance at beginning of year..................................       3170,777,952.50            3178,079,442.84          3174,468,421.11

Credits:

Credit balance transferred from income...............................      3 11,265,084.18             3 26,245,561.80            349,082,182.48

Credits from retired road and equipment..............................                34,510.82                     155,441.26                   51,972.14

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

Donations........................................................                  9,546.50                       14,407.29                   15,891.64

Miscellaneous credits (Note C)......................................               372,631.48                     796,580.64                 705,063.23

Total credits................................................      3 11,681,772.98              3 31,339,971.40         3 49,855,109.49

Debits:

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

Dividend appropriations of surplus...................................                —                                 —                   3    6,447,393.95

Surplus appropriated for Investment in physical property...............       3       112,626.29             3       53,193.18                    97,958.38

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

Debits from redred road and equipment (Note E).....................            3,255,377.70                  3,185,105.75               3,532,832.69

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

Miscellaneous debits (Note F).......................................              995,055.80                31,695,351.76             12,639,140.84

Total debits.....................*............................       3   4,380,282.64             3 34,950,993.13          3 22,717,325.86

Credit balance at end of year........................................      3178,079,442.84             3174,468,421.11          3201,606,204.74
 

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

Note B—Beginning January 1, 1942, this account included in current income.

Note C—The year 1945 includes 31,290,871.25 and year 1946 Includes 3910,948.75 representing excess over cost of principal amount of this
Company's Refunding and Improvement Mortgage Bonds reacquired. The year 1946 includes 3509,273.21 representing profit from sale of Hotel
Chatham, New York, N. Y. The year 1947 includes 32,038,593.75 net profit on 39,509,000 par value mortgage bonds reacquired. The year 1948
includes 31,701,054.96 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 1940 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 325,000 are charged to income and amounts in excess are amortized.
 

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 connection 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 are not operated by the Company under lease and the equity of The New York Central Railroad Company in the
net income of such companies, in each of the years 1940 to 1949 were:

dividends received            equity of THE N. Y. C.  R. R. CO.

from subsidiaries              in net income of subsidiaries

Year

1940....................................................         32,386,912                                   32,551,333

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

1949....................................................           2,508,436                                     6,149,753
 

TOTAL..............................................       327,237,869                                 342,399,936
 

* Restated

Note C—Prior to January 1, 1942, similar items included in profit and loss account.

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

Note E—Beginning with the year 1935, rates for depreciation were changed to conform with the composite rates approved by the Interstate
Commerce Commission for the New York Central under Docket No. 15,100, which for the year 1949 were: Steam locomotives, 3.38%; Other loco¬
motives, 3.67%; Freight-train cars, 3.17%; Passenger-train cars, 3.03%; Floating equipment, 2.78%; Work equipment, 3.49%; and Miscellaneous
equipment, 15.39%.