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[quote]QUOTE: Originally posted by MichaelSol I don't think you understand your question. Railway operating income and railway operating expenses are the components of the operating ratio, not "net income." Net income includes taxes, and income from non-rail operations which aren't necessarily relevant to the operating efficiency of the railroad. In fact, I would suggest to you they are not, if that is what you are really interested in. And, are you interested in net income ICC, or net income SEC (generally accepted accounting principles)? They are different. [/quote] I do understand the difference between operating revenue and net income, and the operating ratio arrived at by comparing operating revenue against operating expenses. It ain't rocket science. I covered Fortune 500 businesses as a journalist., and have studied hundreds of 10Ks and 10Qs, including railroads'. Net income is also relevant because that's profit, and that's why businesses can continue to exist. Discontinued operations, interest, accounting changes, charges, etc., can turn a positive operating income (pre-tax figure after operating expenses are substracted from operating revenue) into a net loss -- sustained losses lead to Chap. 11. Also, net income growth or loss can trend with an increase or decrease in operating ratio, as it did with UP's recent 3Q statement (O/R increased from 80 percent to 86.4; net income down 36 percent). So, yes, I do understand my question. It was and remains quite simple: What was the operating ratio for the three railroads in 1967, and what was their net income? SEC figures are more applicable, in my opinion, because they would be the more relevant to a stockholder. [quote]QUOTE: GN's average operating ratios for the years 1957-1959 averaged 76.8%. By 1967, GN's operating ratio had fallen to 81.79%. NP's operating ratio for 1967 was 96%, and was 90% in 1966. Milwaukee had an operating ratio of 80% in 1967, down from 78% in 1966. These figures weren't flukes. In 1961, NP's operating ratio was 95%. GN and Milwaukee were 79%. But, the slide had been rapid for NP. As recently as 1958, NP had been able to report a 78% operating ratio. Interstate Highway construction had begun in 1957. [/quote] Thanks, Michael. Those O/R's are exactly what I was asking for. I can see what you mean now by the association between the Interstate and NP's O/R.
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