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11/7/2001



Rail News: Rail Industry Trends

Classification can hinge on railroads' consolidated financial reports, STB rules


Surface Transportation Board Nov. 7 ruled that affiliated railroads with integrated U.S. operations must be combined to determine whether the railroad system — through financial reporting — would be classified a Class I, II or III.


STB officials believe consolidated financial reporting would enable the board to gather more meaningful and accurate information on the largest U.S. rail systems.


Meanwhile, STB declined to consider increasing the annual revenue threshold for Class I status — which requires a railroad to file quarterly and annual reports — from $250 million to $500 million.


Board members also claim STB doesn't intend to re-impose reporting requirements on Class II and III railroads that were relieved of those requirements in the 1980s. And the board wouldn't reclassify Class II and III railroads simply because those roads have corporate relationships with other railroads.


But STB officials believe that when a group of commonly controlled railroads operates as a single, integrated rail system, that integration should be recognized for classification purposes.











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