The following information shall be provided for major transactions, and for carriers shall conform to the Board's Uniform System of Accounts, 49 CFR part 1201:

(a) Pro forma balance sheet (exhibit 16). Where the transaction involves a proceeding other than a control, a pro forma balance sheet statement giving effect to the proposed transaction commencing for the first year of the Impact Analysis in exhibit 12. The data shall be presented in columnar form showing:

(1) In the first column, the balance sheet of transferee on a corporate entity basis,

(2) In the second column, a balance sheet of transferor, on a corporate entity basis,

(3) In the third column, pro forma adjustments and eliminations; and

(4) In the fourth column, transferee's balance sheet giving effect to consumation of the proposed transaction.4

Each adjustment and elimination shall be properly footnoted and fully explained. A pro forma balance sheet shall be submitted for the number of years following consummation necessary to effect the operating plan.

(b) Pro forma income statement (exhibit 17). Where the transaction involves a proceeding other than a control, submit a pro forma income statement showing transferee's estimate of revenues, expenses, and net income for at least each of the 3 years following consummation of the transaction.5 The pro forma data shall be presented in columnar form, showing

(1) in the first column, transferee's actual income statement on a corporate entity basis for the year indicated in the impact analysis in exhibit 12;

(2) in the second column, a similar income statement for the transferor;

(3) in the third column, forecasted adjustments to the combined revenues, expenses, and net income to reflect increases or decreases anticipated under the unified operations, and

(4) in the fourth column, a compilation of the first three columns into a pro forma income statement.6

The adjustments are to be supported by a statement explaining the basis used in determining the estimated changes in revenues, expenses, and net income appearing in the third column. Additionally, if the major financial advantages to be derived from the proposed transaction will not occur within 3 years after consummation, then applicant shall furnish additional information to reflect the number of years within which the financial advantages will be realized. The basis for all such data furnished shall be fully explained and supported.

(c) Sources and application of funds (exhibit 18). Transferor's and transferee's statement of sources and application of funds for the current year, and a forecast7 of sources and application of funds for each carrier (if a merger or consolidation, the surviving or resulting corporation) for the year following consummation of the proposed transaction, and the years necessary to effectuate the operating plan.8 The form and content of these statements should be constructed in accordance with the schedule: “Statement of Changes in Financial Position” required in the most recently filed Annual Report R-1 for Class I railroads.

(d) Property encumbrance (exhibit 19). If any of the property covered by the application is encumbered and applicant has agreed to assume obligation or liability in respect thereof, submit:

(1) A description of the property encumbered.

(2) Amount of encumbrance and full description thereof, including maturity, interest rate, and other terms and conditions.

(3) Amount of encumbrance assumed or to be assumed by applicant.

(e) The Board will incorporate by reference the current balance sheets and income statements of Class I railroads which are on file with the Board. Class II and Class III railroads, and non-carrier entities shall submit balance sheets (exhibit 20) and income statements (exhibit 21) covering a period ending within 6 months before the application is filed.

[47 FR 9844, Mar. 8, 1982. Redesignated at 47 FR 49592, Nov. 1, 1982, and amended at 58 FR 63104, Nov. 30, 1993; 62 FR 9717, Mar. 4, 1997; 64 FR 53269, Oct. 1, 1999]