tion and communication equipment and miscellaneous flight equipment required for installation in ordinary operation. Airframe units leased from others for more than 90 days shall be reported in an additional subsection. Also, a notation shall be made by license number for airframe units of the air carrier returned after lease to others for more than 90 days. Airframe units obtained through interchange lease arrangements shall not be so reported.

(c) Dates for acquisition of individual airframes and groups of aircraft engines shall indicate the day, month and year. Dates for all other flight equipment shall indicate the month and year of acquisition. The number of aircraft engines and propellers acquired shall be indicated in column 5 "Number of Units Acquired."

(d) Report shall be made in the quarter in which flight equipment is actually acquired irrespective of whether the cost thereof is reflected in the property and equipment accounts during the current quarter or a subsequent quarter. If the cost data are not reflected in the current quarter, a footnote to that effect shall accompany the report of acquisition. The costs shall be reported during the quarter in which determined, and the equipment to which related shall be listed again in this schedule with complete information and shall be identified as being the same equipment reported at the earlier date.

(e) Column 2, "Date Placed in Transport Service," shall relate to airframes only and shall be the date on which each airframe was or will be placed in regular service by the reporting entity. If this date is not known at the time of submission of the report, an estimated date bearing the notation "estimate" shall be provided with the exact date shown by footnote on a subsequent schedule B-7 (b) in which the airframe is reidentified by license number, type of aircraft and date acquired.

(f) Column 8, "Maximum Continuous Horsepower/Pounds Thrust" shall reflect, as appropriate, the maximum continuous horsepower rating or pounds of maximum continuous static thrust for each type of aircraft engine acquired. (See section 03 for definition as applied in this system of accounts and reports.)

(g) Column 9, "Aircraft Engines per Airframe" shall reflect the number of aircraft engines for which each acquired airframe is designed.

66-031-67--15

(h) Column 10, "Maximum Seat Capacity" shall reflect the number of passenger seats installed in each airframe acquired. When the configuration of airframes provides sleeping accommodations, the passenger capacity shall be shown in terms of a sleeper version and a non-sleeper version. When airframes are designed for multiple adjustable seating configurations, the maximum number of seats for which designed shall be reported. When the seating configuration of airframes is modified subsequent to original acquisition, the revised passenger capacity of each airframe shall be reported in the quarter in which modified and referenced to identify original capacity reported.

(i) Column 11, "Cost" shall agree in totals for each property classification with the corresponding cost of additions reported in schedule B-5 column 3, "Additions."

(j) Column 12, "Estimated Value of Overhaul Acquired" shall reflect the value of the remaining unexpired overhaul hours with respect to each airframe or aircraft engine, before relicensing is required, at the date of acquisition.

(k) Column 13, "Estimated Cost of Full Overhaul" shall reflect the entire cost of overhaul for each airframe and aircraft engine on either a periodic or phase overhaul basis. In the latter case, this column shall include the cost of all operations which would encompass a full overhaul. (See sec. 5-4(f) for definition of "overhaul".)

(1) Column 14, "Reserve for Depreciation" shall include the amount of such reserve applicable to property and equipment transferred from nontransport divisions.

(m) Column 15, "Estimated Residual Value" shall reflect in dollars the residual value assigned to the equipment acquired exclusive of any amount reported in columns 12 and 13.

(n) Column 16, "Estimated Depreciable Life (mos.)" shall reflect the estimated depreciable life of each airframe and each group of aircraft engines in months (e.g., 144).

NOTE: The reporting requirements contained herein have been approved by the Bureau of the Budget in accordance with the Federal Reports Act of 1942. Schedule B-8-Property and Equipment Retired

(a) This schedule shall be filed by all route air carriers.

(b) The indicated data shall be reported for the sale or retirement of each airframe, each type of aircraft engine (stating the number of units retired) and, to the extent retired along with airframes and engines, in aggregates by accounts, for operating property and equipment included in accounts 1603 through 1608 and nonoperating property and equipment included in accounts 1703 through 1708. Disposition of properties in accounts 1603 through 1608 and 1703 through 1708 not related to airframe and aircraft engine retirements shall be reported in a separate group for each account. Ground property and equipment disposed of shall be reported in aggregate for all accounts, with subdivisions between operating and nonoperating property and equipment. Airframe units leased from others for a period of more than 90 days shall be reported, upon return to the lessor, in a separate subsection of this schedule. In addition a notation shall be made by license number and name of lessee of airframe units leased to others for a period of more than 90 days. Airframe units leased under interchange arrangements shall not be so reported.

(c) Retirements shall be listed in the numerical sequence of the property and equipment account to which related.

(d) All dates shall include the day, the month and the year of each transaction.

(e) Column 7, "Cost" shall agree in totals for each account with the corresponding cost of property and equipment retired and as reported in schedule B-5, column 4, "Retirements".

or

(f) Column 10, "Realization" shall reflect the proceeds from disposition, including any insurance proceeds amounts covered by a self-insurance reserve established in accordance with section 2-13(c).

(g) Column 12, "Gain or Loss" shall, in aggregate for retirements of all property and equipment together with gain or loss on sale of securities, agree with amounts reflected by the air carrier on schedule P-3 in profit and loss subaccounts 81.1 Capital Gains and LossesOperating Property and 81.2 Capital Gains and Losses-Other.

(h) Column 13, "Disposition", shall reflect the name of the person or organization to which airframes and aircraft engines are sold or a notation as to the nature of the retirement and the account to which any depreciated cost

has been charged if not sold. Items included in accounts 1603 through 1608, and 1703 through 1708, sold as a part of airframe or aircraft engine sales transactions, shall also be identified by the name of the buyer. Other sales of items included in these accounts shall be reported in a separate group in aggregate for each property account affected, while all ground property dispositions shall be reported in a single aggregate and need not be identified by names of the buyers.

Schedule B-8(a)-Flight Equipment Capital Gains Invested or Deposited for Reinvestment in Flight Equipment (a) This schedule shall be filed by each carrier which desires to establish that it is entitled to the benefits of Section 406(d) of the Act and which has reinvested or intends to reinvest gains derived from the sale or other disposition of flight equipment pursuant to Part 235 of the Economic Regulations.

(b) Column 1, "Description of Flight Equipment Retired" shall identify the various items of flight equipment retired including the applicable account number.

(c) Column 2, "Date of Sale or Other Disposition" shall include the day, the month and the year on which each item was sold or otherwise disposed of within the meaning of § 235.1(b) of Part 235.

(d) Column 8, "Net Amount of Gain” shall reflect the net of column 5 minus columns 6 and 7; an entry shall be made transferring an amount equal to the amount in column 8 from account 2940 Unappropriated Retained Earnings to account 2930 Appropriations of Retained Earnings. If an initial measurement of gain is subject to adjustment to reflect losses which result upon collection of installment sales or in converting proceeds to cash, the adjustment should be reported at the time the loss is determined. Upon the investment of gains in flight equipment, an equivalent amount may be returned to account 2940 Unappropriated Retained Earnings.

(e) Column 9, "Disposition" shall reflect the name of the person or organization to which the flight equipment is sold or a notation as to the nature of the disposition if not sold.

(f) Columns 10 and 11 shall reflect the date and amount of each gain deposited in a re-equipment fund for reinvestment in flight equipment. Such deposits shall be recorded in account 1550 Special Funds-Other.

(g) Column 12 shall identify the assets in the fund and shall indicate the location of the fund if not in immediate physical possession of the air carrier. Schedule B-9-Inventory of Flight Equipment Spare Parts and Assemblies

(a) This schedule shall be filed by all route air carriers.

(b) The indicated data shall be reported separately for each class of airframe parts, aircraft engine parts and other flight equipment parts, by types of airframes or aircraft engines to which applicable, or as "interchangeable" when applicable to more than one aircraft or engine type and shall be reported separately for expendable parts and rotable parts and assemblies. Expendable parts and rotable parts shall be separately grouped, subtotaled in columns 2 through 8, and identified in column 1 by asset account number.

(c) Column 2, "Inventory at End of Period" shall reflect the book balance for each class of parts and assemblies reflected in column 1 as at the close of the 12-month period for which report is being made and shall agree, in aggregate for expendable parts and rotable parts separately, with the respective balances reflected for such asset classifications in the current schedule B-1 Balance Sheet.

(d) Column 3, "Inventory Subject to Loss Provisions," shall reflect for each class of flight equipment expendable parts reflected in column 1 the predetermined level of inventory against which a reserve for loss in value is being accrued.

(e) Column 4, "Balance Beginning of Period," shall reflect the balance of accumulated valuation reserve provisions existing for each classification reflected in column 1 as at the beginning of the 12-month period for which report is being made and shall agree with the balances shown in column 7, Balance End of Period, on the next previous report.

(f) Column 5, "Provisions During Period," shall reflect for each classification shown in column 1 the net provisions to valuation reserves against flight equipment parts and assemblies during the 12month period for which report is being made, net of adjustments for inventory declines. The amounts reported in this column for expendable parts shall agree with the amounts reported in account 73 for the same 12-month period.

(g) Column 6, "Retirements During Period," shall reflect for each classification shown in column 1 the portion of accumulated valuation reserve provisions for flight equipment parts and assemblies absorbed in abandonment or other retirements of parts and assemblies during the 12-month period for which report is being made.

(h) Column 7, "Balance End of Period," shall reflect the balance of accumulated valuation reserve provisions for each classification shown in column 1, existing as at the close of the 12-month period for which report is being made and shall agree, in aggregate for expendable and rotable parts, separately, with the respective current balances reflected for such asset classifications in schedule B-1 Balance Sheet.

(i) Column 8, "Cost Less Valuation Reserves," shall reflect the differences between columns 2 and 7.

Schedule B-10-Developmental and
Preoperating Costs

(a) This schedule shall be filed by all route air carriers.

(b) Separate copies of this schedule shall be filed for projects directly applicable to each separate operating entity of the air carrier and for the air carrier as a whole covering projects which are applicable in common to all transport operating entities.

(c) Column 1 shall reflect an identification and complete description of each project for which costs are deferred in balance sheet account 1830. The description shall include the CAB Docket number in cases of projects involving a proceeding before the Civil Aeronautics Board.

(d) Explanation of the amounts included in column 3 shall disclose the general characteristics of the amounts deferred during the current quarter for each project, for example, the cost of regulatory proceedings; the cost of pilot, mechanic and ground crew training; special engineering; aircraft development flights; publicity flights; and route familiarization flights.

(e) Column 6, "Unamortized Balance-End of Quarter" shall in total agree, when aggregated for the air carrier as a whole, with the corresponding balance of account 1830 shown in schedule B-1-Balance Sheet.

(f) Column 7, "Development Costs Charged to Account 89" shall reflect costs incurred in projects which do not

contribute to or protect air transportation services of the air carrier. Schedule B-41-—Investments Held by, or for the Account of, Respondent

(a) This schedule shall be filed by all route air carriers.

(b) The data in this schedule shall be grouped as between investments held in the name of the air carrier and investments held in the name of others for the account of the air carrier. Each group shall be separately subtotaled by investments in associated companies and by investments in other than associated companies.

(c) Column 1 shall reflect the name of each associated company, and each other issuer of securities held by the air carrier.

(d) Column 4, "Book Cost", in total, for investments held in the name of the air carrier, shall agree with corresponding amounts reflected in accounts 1510 and 1530 in schedule B-1 Balance Sheet.

(e) Column 5, "Number of Shares or Debt Principal Amount" shall reflect the number of shares of stock or the principal amount of bonds or notes held by the air carrier, for each class of security reported in column 2.

Schedule B-42-Accounts 1410 ShortTerm Prepayments, 1550 Special Funds-Other, 1820 Long-Term Prepayments, 1880 Other Intangibles, 1890 Other Deferred Charges, 2390 Other Deferred Credits

(a) This schedule shall be filed by all route air carriers.

(b) The data in this schedule shall be grouped and subtotaled for each indicated balance sheet account in numerical order and shall identify the nature and amount of each item included in each such balance sheet account as at the close of the current accounting period.

Schedule B-43-Inventory of Airframes and Aircraft Engines

(a) This schedule shall be filed by all route air carriers.

(b) A single set of this schedule shall be filed for the overall corporate or other legal entity comprising the air carrier.

(c) The indicated data shall be reported for each individual airframe, identified by type, model, and design of cabin as to use for passengers exclusively, cargo exclusively, or both pas

sengers and cargo in combination. Data pertaining to aircraft engines may be reported on a group basis by type of engine and type of aircraft to which related.

(d) Data in this schedule shall be grouped and subtotaled as between data pertaining to airframes and data pertaining to aircraft engines.

(e) The data to be reported shall inIclude owned and rented airframes and aircraft engines currently in operation or in conversion. The data shall be grouped separately as to owned or leased operating equipment. Totals for owned operating equipment shall agree with property and equipment accounts 1601 Airframes; 1611 Reserve for Depreciation-Airframes; 1602 Aircraft Engines; 1612 Reserve for Depreciation-Aircraft Engines; and 1629 Flight Equipment Airworthiness Reserves. The airworthiness liabilities for rented equipment included in accounts 2190 Other Current Liabilities and 2290 Other Noncurrent Liabilities shall be shown in column 13. Data pertaining to nonoperating airframes and aircraft engines shall be reported in a group below the data for operating equipment.

(f) Data pertaining to rented airframes and aircraft engines shall be listed in columns 1 through 7 and in column 13; the cost of improvements thereto shall be listed in columns 8 through 12.

Schedule B-44-Transactions With
Associated Companies

(a) This schedule shall be filed by all route air carriers.

(b) A single set of this schedule shall be filed for the overall corporate or other legal entity comprising the air carrier.

(c) The data in this schedule shall be grouped and subtotaled separately for balance sheet accounts 1250 Notes and Accounts Receivable-Associated Companies, 1510 Investments in Associated Companies, 2050 Notes and Accounts Payable-Associated Companies, and 2240 Advances from Associated Companies. (d) Column 1 shall reflect, under each affected balance sheet account, the name of each associated company.

(e) Column 2 shall reflect, for each item listed in column 1, the balance as at the close of the next previous calendar

year.

(f) Column 3 shall reflect, for each item listed in column 1, the total billings to associated companies in the case of asset accounts, or the total billings from associated companies in the case of liability accounts, during the calendar year. Billings by associated companies shall not be offset against billings to associated companies but shall each be reported separately in gross amounts billed after reflection of debit or credit adjustments to correct or otherwise modify amounts previously billed whether such adjustments originate with the billed or billing company.

(g) Column 4 shall reflect, for each item listed in column 1, adjustments resulting from restatements stemming from changes in foreign exchange rates. (h) Column 5 shall reflect, for each item listed in column 1, the amount of account settlements effected during the calendar year.

(i) Column 6 shall reflect, for each item listed in column 1, the balance as at the close of the current calendar year.

(j) Column 7 shall reflect, for each item listed in column 1, the amount of contra debits to liability accounts or contra credits to asset accounts during the calendar year which affected other balance sheet accounts.

(k) Column 8 shall reflect, for each item listed in column 1, the amount of contra debits to liability accounts or contra credits to asset accounts during the calendar year which affected profit and loss accounts. The sum of the amounts shown for each associated company account in columns 7 and 8 shall agree with the amount shown for total billings listed in column 3 for each such account.

(1) Amounts to be reported on this schedule shall include all transactions cleared through balance sheet accounts 1250, 1510, 2050, and 2240. Transactions with associated companies for transport services settled through airline clearing houses shall not be reflected in this schedule unless transferred from clearing houses for direct settlement between the air carrier and associated companies. The contra amounts to billings shall be classified in terms of their inherent characteristics as to balance sheet or profit and loss impact and the ultimate disposition to be made of such amounts without regard to any intermediate accounting which may be performed.

Schedule B-45 [Reserved] Schedule B-46-Long-Term and ShortTerm Non-Trade Debt

(a) This schedule shall be filed by all route air carriers and shall reflect information pertaining to each issue of long-term debt and short-term debt (other than trade liabilities) in excess of 5 percent of total outstanding debt.

(b) A single set of this schedule shall be filed for the overall corporate or other legal entity comprising the air carrier.

(c) Column 1 shall reflect a description of each particular issue of debt, such as "Sinking Fund Debentures", "Bank Notes", "Credit Agreement", etc. This column shall also reflect for each issue a brief description of the terms of payment and, where applicable, conversion privileges, including conversion periods, rates of conversion and the securities into which convertible.

(d) Columns 2, 3, and 4 shall reflect the date of issue, date of maturity, and the interest rate per annum, respectively.

(e) Column 5 shall reflect the amount of bonds or other evidences of debt originally issued, as distinguished from the amount authorized.

(f) Columns 6 and 7 shall reflect the balance outstanding at the end of the reporting period in accounts 2210 LongTerm Debt and 2010 Current Notes Payable on Schedule B-1, respectively.

(g) Columns 8 and 9 shall reflect the name and address of holders of more than 5 percent of the issue or $500,000, whichever is smaller, showing for each such holder the amount held as at the end of the reporting period.

Schedule B-47-Lease Obligations—
Flight Equipment

(a) This schedule shall be filed by all route air carriers and shall reflect information pertaining to each flight-equipment lease obligation with annual rental of $500,000 or 1 percent of total debt and equity capital, whichever is less, but excluding leases with annual rental of less than $100,000.

(b) A single set of this schedule shall be filed for the overall corporate or other legal entity comprising the air carrier.

(c) Column 1 shall reflect a description of each item of flight equipment under lease by the reporting carrier of the magnitude specified in paragraph (a).