D.C. TRANSIT SYSTEM, INC., RATE OF RETURN ON GROSS OPERATING REVENUES

! Includes commission-directed credit of $1,360,765 from court-ordered reserve.

Note: Net losses for January and February 1969 are $358,000 compared to $526,000 loss for first 2 months of 1968. Bad weather almost always makes these months loss periods for D.C. Transit, but company appears to be recovering somewhat from 1968 slump. New labor contract in October 1969 will affect operating costs, so it is difficult to project year-end loss or gain.

D.C. TRANSIT SYSTEM, INC., HISTORY OF RETAINED EARNINGS, AUG. 15, 1956-DEC. 31, 1968

2 Adjustment of franchise tax-prior years-$112,585. Adjustment for refund of penalty-District of Columbia motor fuel taxes-$76,344. Adjustment for additional tax assessments-prior years ($58,368).

3 Adjustment of reserve for moving and relocating $169,000. Adjustment of depreciation of 4th St. shops-($613,661). Adjustment of reserve for salvage and equipment ($36,551).

Adjustment for remainder of reserve for moving and relocation-$83,305. Adjustment of Federal income tax due for 1960-$67,065.

Adjustment due to merger of D.C. Transit (District of Columbia) with D.C. Transit of Maryland ($26,346). Adjustment due to special court-ordered reserve ($500,000).

The 1964 entry includes profit on sale of former Grace St. shop building. The 1965 entry gives effect to a reversal of this profit, in the amount of $546,246, upon the purchase default.

7 Includes $1,360,765 credited to operating income from the special court-ordered reserve.

• Adjustment of tax treatment on reserve for track removal (per WMATC Order No. 621) (District of Columbia income tax expense).

After giving effect to $457,228 schoolfare subsidy for last 4 months of 1968.

10 Riders' fund established by Order No. 773 on Dec. 26, 1968-$141,674.

1 Rate of return on gross operating revenues. Commission currently sets fair return at 5.2 percent.

Net reduction

in retained earnings

$1,170, 530

276, 574 256, 050 1,715, 787

SUBSIDIES AND TAX EXEMPTIONS RECEIVED BY D.C. TRANSIT AND WMA TRANSIT

Note: Under the new school-fare subsidy law, D.C. Transit has received $457,228 for the last 4 months of 1968 and WMA has received $10,345.

Additional Note: For first 3 months of 1969, school-fare subsidy totaled $493,416.

RETIREMENT OF PROPERTIES

D.C. Transit has, during its existence retired several parcels of real estate and land from operations and has converted many of them into services of a nonoperating nature. Five such properties have been established as subsidiaries of D. C. Transit with the Company holding 100% of the outstanding stock. The five subsidiaries are as follows:

(1) M Street Estates, Inc.-Organized August 18, 1963, to hold title to the former M Street Shops, 3222 M Street, N. W.

(2) L Street Estates, Inc.-Organized August 19, 1963, to hold title to the former Navy Yard Carhouse, 8th and M Streets, S. E.

(3) Georgia Avenue Estates, Inc.-Organized April 15, 1964, to hold title to former Central Garage, Georgia Avenue and V Street, N. W.

(4) 4th Street Estates, Inc.-Organized April 15, 1964, to hold title to the former Northeast Carhouse, 4th and T Sreets, N. E.

(5) 3600, Incorporated-Organized to hold title to former headquarters at 3600 M Street, N. W.

These five properties were written off the Company's books at their depreciated original costs, and the stock exchanged therefor, recorded in the like amount on the Company ledger.

The chart below shows the book value of the properties at date of retirement and the fair market value of these same properties as determined by WMATC at November 30, 1966, the value being based on the values assigned to the land and buildings by the D. C. tax assessor (effect was given to the fact that assessments on these properties are 75% of fair market value on land and 65% on buildings):

One other property not being used in the mass transit operations, is the former Grace Street Shop building. The Grace Street Shop is not being used for any purpose at the moment, and is available for sale or lease. Below is the book value at 11/30/66 of the land and building compared with fair market value at same date:

Grace Street Shops:

Book value, Nov. 30, 1966.

Fair market value, Nov. 30, 1966.......

$24, 568. 50

520, 800.00