EXHIBIT VI

Seat-mile and passenger-mile operating expenses-intercity common carriers of passengers, 1959

1 Includes ICC accounts: "Maintenance of equipment," "Transportation-rail line,"
"Miscellaneous operations," and "Net rents other than joint facility."

? Includes CAB account groups: "Flying operations" and "Direct maintenance."
All of "General services" and "Administration" are classified as indirect.

3 Includes ICC account groups: "Equipment maintenance and garage expense,"
"Transportation expense," " "Insurance and safety expense," "Rents," and gas and oil
excise taxes transfered from "Tax account."

Includes ICC account groups: "Station expense," "Traffic and advertising expense,"
"Administrative and general expense," and "Depreciation of nonoperating property."
Includes "Depreciation" and "Retirement," accounts 330 and 331.

"Fixed charges and contingent interest" allocated to passenger service by train-miles.
7 Estimated on the basis that expenses equal revenues. The method understates or
overstates these expenses depending on the extent to which revenues do or don't cover
costs. This method of estimating expenses for property traffic jointly incurred with

passenger service has been used by the Civil Aeronautics Board in regulatory proceed-
ings. In the above case bus and air passenger charter expenses have also been included
in this estimate, leaving only estimated expenses of line-haul passenger service.
Includes $20,677,000 capital gains from sale of aircraft.
Passenger carrying car-miles only.

10 Scheduled passenger service only.

11 Includes only bus-miles in regular route intercity passenger service.

Sources: Rail and bus. Interstate Commerce Commission, Transport Statistics in the
United States, 1959; airline, Civil Aeronautics Board, Quarterly Reports of Air Carrier
Financial Statistics, December 1959, and Monthly Report of Air Carrier Traffic Sta-
tistics for December 1959. Also Air Transport Association, Comparative Statement of
Air Carrier Income and Expenses, Year of 1959.

Note on distribution of expenses.-The above distribution of expenses is not an accurate reflection of fixed and variable costs. It is based on the account groups used by regulatory agencies and differs from carrier to carrier. A much more accurate distribution from "Passengers and Profits," by Transportation Facts, Inc., appears below. The detailed accounts of each carrier (for 1955) were reclassified on a uniform basis for this purpose.

Note on estimate of profits.-Due to lack of comparable data for rate bases and the wide disparity of capital turnover, rates of return on investment could not be used for a meaningful intermodal comparison. The chosen operating ratio, 93 percent after taxes and charges, is illustrative only. It has been used as a test by several regulators and is comparable to the earnings of the better managed air and bus lines in good years.

EXHIBIT VII (PT. 1)

Private auto operating expense per mile and passenger-mile

4 Basis for depreciation: 10-year average life.

Reflects low first cost of contract purchase and average use in excess of 5 to 10 years varying with agency. AAA increases depreciation 1.8 cents per mile for annual operation over 18,000 miles.

Sources: American Automobile Association, annual pamphlet "Your Driving Costs," prepared by Runzheimer & Co., Chicago, Ill., based on 1960 Chevrolet Bel-Air V-8 sedan.

Bureau of Public Roads, staff study presented before highway research board Jan. 9-13, 1961. This is a revision of an article in Public Roads, June 1951. Data is for actual average life (10 years) experience of Big 3 4-door sedan.

General Services Administration, Annual Motor Vehicle Report Fiscal Year 1959. These costs are for Government-owned sedans operated in fleets under a variety of annual mileages.

Wall Street Journal, article of Aug. 23, 1960, comparing operating expenses of compact and full-size autos. Illustrations based on 1960 Ford Falcon and full-size Ford V-8.

EXHIBIT VII (PT. 2)

Private airplane operating expense of selected airplanes used for intercity

1 These prices include "standard" equipment. Due to wide variety of optional equipment many aircraft cost more or less than these prices.

These aircraft have a total of 4 seats and are costed here without professional pilots. This assumes that business users will have necessary pilot training.

Includes reserve for engine overhaul and pilot's overnight expenses.

Most recent FAA survey shows annual average hours of use to be less than 300.

Source: Basic data furnished by National Business Aircraft Association.

EXHIBIT VIII

Corporate financial results, common carriers of passengers, 1940–59