"'4 .:'

Exhibit 78 . J.une 6 , 1961

Witness A.e .porter.

CALIFORNIA PUBLIC UTILITIES COMM!SSIN

TRANSPORTATION DIVISION ~ ,

ENGINEERING ECONOMICS - PASSENGER SECTION

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* * *

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BRANCH APPUCATION No. 400571Amd.) EXHlSIT No.: 78 WrFNESS: A. C. ?ORTER DATE: JUNE 6, 1~61 COMMISSIONER: MITC:iElL EXAMINER: THOMPSON

SEPARATION AND ALLOCATION PROCEDURES

EQR WESTERN GREYHOUND , LINES , (A DIVISION OF. THE GREYHOUND CORPORATION)

* * * * *

.

San Francisco, California May 17"" 1961

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1

TABLE OF CONTENTS

Page Foreword .

Section 1 - General Discussion

Account 3200 - Passenger Revenue 6

Accoun t 4152 - Servicing Revenue Equipment-Wa shing

Ac count 4531 - Public Liability and Property Damage

Investment, Reserve and Depreciation, Expense,

Account 3210 - Special Bus Revenue (Ch~rter) 8

Account 3400 - Expr ess Revenue 9

Bus Mile Expens es ... 11

Tr affic Characteristics . . 12

Operating Zones and Zone Grouping . 12

Motor Coaches and Motor Coach Grouping.. 14

Equivalent Passenger Mi1e Al1ocation Method 16

Account 4143 - Revenue Equipment - Accident Repair 30

Accoun t 4151 - Servicing Revenue Equipment -Lubrication. 32

and Clean ing 33

Account 4211 - Supervision of Transportation 35

Account 4220 - Dri vers I Wages . 37

Account 4230 - Fu e1 for Revenue Equipment 39

Acc ount 4262 - B~idge , Tunne1 & Ferry To11s 40

Account 4308 - Stat i on Expenses 43

Account 4311 - Station Salaries 44

Ac count 4331 - Commi ss ions Paid 48

Account 4340 - Inter1ine Commissions Paid 49

Ac count 4350 - Interline Commissions Earned 49

Station Overheads. . . . . . . . . . . . . .. ~O

Account 4410 - Salaries and Expenses, Traffic Solicitation 52

Account 4440 Tickets and Baggage Checks 53

Account 4470 - Advertising . . . ... 55

Self Insurer 57

Account 4600 - Administrative and General Expense 59

Land and Structures 61

Account 5310 - Equipment Rents - Debit 62

Account 5350 - Equipment Rents - Credit . 62

**********

TABLE OF CONTENTS

Section 11 - Procedures

Page

Account 3000 - Operating Revenues . . . .

66 Account 4100

-Equipment Maintenance and Garage Expense 75

Account 4200 - Transportation Expense 83

92Account 4300

-Station Expense .

Account 4400 -

Traffic and Advertising Expense. 99

Account 4500

-Insurance and Safety Expense 104

Account 4600 -

Administrative and General Expense 112

Account 5000 - Depreciation Expense 113

Account 5200 - Operating Taxes & Licenses 121

Account 5300 - Operating Rents - Net. 129

Account 1100 - Material and Supplies . . 135 Account 1200

-Investment . . . 113 & 136

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Glossary , . . . . . . . . . . . . . . . . . 137

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List of Illustrations

Operating Divisions - The Greyhound Corporation 5 Operating Divis ions - Wes tern Greyhound Lines . . 13 Chart A - Length of Ride - Bus Miles Per 1000 Passenger Miles 22 Passenger Toll Trips . . . . . . . . . . . 42 Figure 1 - General Procedures For Allocating California

Station Salaries - Account 4311. 47 General Separation and Allocation Procedure . . . . . . 65

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List of Tables

1 System and California Average Cost Per Bus Mile Maintenance of Equipment - Zone Group 1 . . . . . 17

11 Procedure for Distributing and Allocating Maintenance of Equipment Expense to Zone Groups . . . . . . .. 18

111 Equivalent Bus Mile Percents - California Operations Zone Group l. . . . . . . .. ....... 19

IV Equivalent Passenger Mile Percents - California Operations - Zone Group 1. . . . . 20

V Mainline Zone Groups . . . . . .. ....... 23 VI Local Zone Groups ......... . . .. 27 VII Motor Coach Groups . . . . . . . . . . . . 29 VIII System and California Average Cost Per Bus Mile

Drivers' Wages - Zone Group 1. . . . . .. 38

FOREWORQ

Western Greyhound Lines, a division of The Greyhound

Corporation~, is engaged in furnishing intrastate and interstate passenger and express motor coach transportation services

in 11 Western States* and Canada. The intrastate services are

subject to the jurisdiction of the several state regulatory bodies and the interstate services are subject to the jurisdiction of the Interstate Cornmerce Commission . Two distinct types of service are rendered by the company; these

are intercity-mainline and local-interurban services. The

former i5 generally termed mainline service and the latter local

service. The mainline service is involved in the common

transportation of both intrastate and interstate traffic,

whereas the local service is almost exclusively devoted to

intrastate transportation in certain metropolitan areas of

California, Oregon, and Washington. In terms of bus miles

operated, the mainline service represents ninety percent of

the company ' s operation. It follows then that the major portion of the company's facilities are used in common for

both intrastate a~d interstate traffic. Similarly, the major portion of the company's expenses are incurred in providing

these joint services. Therefore, a uniform method of separation between intrastate and interstate traffic is

essential so that revenues, expenses, taxes and investment

~ See map, Page ~ . * Arizona, California, Idaho, Nevada, New Mexico, Montana,

Oregon, Texas, U~h, Washington and Wyoming.

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subject to the respective types of traffic may be determined. This manual is the product of a joint effort made over the past two years by the staff of the California Public Utilities

Commission, Transportation Division, Engineering Economics

Branch, and the management of Western Greyhound Lines to

develop fair and equitable separation and allocation

procedures acceptable to both parties. The procedures

contained in this manual, although specifically designed for

Western Greyhound's operation in California, are considered to

be generally appropriate for any intercity motor coach

operation under any jurisdiction. In certain cases, further analyses and studies may be required in order to adapt the

procedures to such additional separations.

The long established primary principIes upon which

this manual is based are those of "actual use" or "relative

use"*. An attempt has been made to minimize "relative use"

and maximize "actual use" separations. This objective is best realized by the practically direct separation of local

operations from system operations, which represents the ideal

allocation. However, due to practical considerations, certain

"short cuts" are occasionally used where it can be demonstrated

that they produce essentially the same results that would be

obtained by more thorough and time-consuming processes thus

balancing the ideal allocation with the practical. The

procedures outli~ed represent, in the judgment of those

Unite~ States Supr eme Court, Smith V. 111inoi5, Bell* I~lf20Qne Cq.~ 282 U.S . 133 (1930).

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preparing the manual, as near an ideal allocation' as present

data and methods permite However, it should not be construed

that this manual is the final answer to all motor coach

allocation problems; on the contrary, it is to be expected

that improved techniques will develop as new data and testing

procedures are devised. Most of the fundamental procedures

used in this manual were developed by the staff of the

Commission and presented in hearing$ before the Commission in Application No. 38019 of Pacific Greyhound Lines, a predecessor

of Western Greyhound Lines. Numerous improvements of those

procedures have been incorporated herein especially in the use

of data processing equipment and special study techniques. No

exposition is made for the many pathways explored, given

careful consideration and ultimately discarded for lack of

practicability or validity.

The procedures developed have been tested for

practicable application against two historical periods of

company operations. The first test was made for the year

ended March 31, 1960, and the second for the year ended

September 30, 1960. Fortunately, changes in traffic patterns

made these two periods sufficiently dissimilar to afford a

reasonable test as to whether results produced by the

procedures accurately reflect the change in results that can

be predicated by informed judgment. This manual has been prepared in two sections.

Section 1 deals with an explanation of the approach to and

solution of allocation problems involved in the major accounts. It is not intended to be a complete dissertation on technique

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but, rather, a brief outline of the approach used. Section 11

sets forth in detail the procedures used for each individual

account and is intended to be first, a working outline for the

use of those thoroughly familiar with the special studies and

techniques employed and, second, a general outline for those

wishing to further explore the bases used for allocating each

account.

For convenience, a glossary of terms as they are

especially used herein is included at the end of the manual.

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;

Mannoba /Nsnr ( ....)- ro .... LASKA

(

--.;,;;.!....;;;;;;;;;;;;;;;;;;;;;=;;;;;;~----~-----".. :\ot ":\O" fR[O(lICKS8U~~ - Eastern Greyhound Lmes Southern Greyhound Unes --- Western Greyhound Unes -----. New Mexico Transportation Greyhound Unes of Canada ----- Crown Coach Co. _ . --- Southeastern Stages Kerrville Bus Company

Central Greyhound Unes Southern Kansas Greyhound Unes Eastern Canadian Greyhound Unes

=#= Only one coupon requ ired between El Paso and lake Charles via either Fort Worth or San Antonio. CONNECTING CARRIERS

1. B. C. Coach Unes 14. Northern Transportation Co. 27. Citizen Auto Stage Ca. 2. Orange Belt Unes 15. Harmony Short Unes 28. Boise Wnnemueea Slages 3. Oklahoma Transportation Co. 16, l as VegasTonopahReno Stage Unes 29. Twin FallsWells-Nevada Slage 4. Colonial Coach Unes 17, Provincial Transport Co. 30. Canadian Coacllways. Ud. 5. Gray Coach Unes. ltd. 18. Saskalchewan Transportalion Ca. 31. Northern Stages. Ud. 6. Canyon Transportation Co. 19. S.M.T. (Eastern) Ud. 32. Carlsbad Cavern Coaehes 7. Intermountain Transportation Co. 20. Northea stern Missouri Unes 33. Alaska Motor Coaches 8. Jack Rabbit Unes 21. T.N.M. & O. Coaches 34. Gray Une 9. Jefferson Transportation Co. 22. Triangle Transportation Co, 35. Pacfic Stage Unes

10. Sun Valley Bus Unes 23. Vermonl Transit Co. 36. Harbar Unes 11. Lemeli n Bus Unes 24. Redd ing'lakev iew Slages 37. Gulf Coast Motor Une 12. Quebec Cenlral Transportation Co. 25. Yosemite Transportation System 38. Abbott Bus Unes 13. NavaHop Tours 26. Manitoba Motor Transit 39. Northwestern Sl age Une

f'S SONOU ,' O ~ ...."' ..... ,l LE..~~

Thc sole pur p

I NSElU (A)-TO ALASKA

(

The sole purpose of this map is to indicate the points bf'!twecn which individual ticket coupons should be pro vided whcn passengers are roulcd via the companies shown hereon . It does nal show 3111 avaitab le rou t ings. Rt'erence must be madc to tar i!!s for authority to route traHic via eith.! r these a l' a thel' r autes .

The ticke t fol'm of the company t hat first cardes the passenger is to be used . A scparate caupon i5 required lo r caeh eo m pa ny shown 01'1 this map. see c gcnd . In selling transportation to points al' over connc e tin g carders nol sho wn on this map. a n additional coupon i5 required lor each connecting carrier ove r which passenger is routcd. Points at which t"h e passenge r requires s topover s are lo b t: indieated on the r everse side ol the p r ape l' company's coupon .

Thi s ma!> is nol drawn to scale

LIT HO. IN U. S . A. 5

ACCOUNT 3200 - PASSENG~~ REVENUE

The total system p ~6senge~ r evenue .f Wester n Grey_

hound Lines is represented by the value of a11 tickets honcred

throughout the sy5tem; it i5 determined for any 5pecific period

of time by summarizing all of the ticket sales applicable te

transportation provided during that periodo Passenger revenue

is regularly developed for statistical zones. These data are

used as the basis for the revenue for a state or individual

operation. In developing passenger revenue by zones, the

average revenue per passenger mile for a particular zone is

applied to the total passenger miles traveled in that zone for

any given period of time. This developed zone revenue is then

corrected to the actual revenue by a small adjustment factor. The average revenue per passenger mile and the passenger miles

are developed in the following manner:

A revenue factor (average fare per passenger mile) for an individual zone is determined by analyzing a11 the

tickets honored on the zone for periodic three-day test checks.

Portions of the through fares for tickets used in interzone

transfer travel are prorated to the zones involved on a mileage

basis; for combination fare tickets, the effect of differences

in fare structures are restricted to the portions of the trip

where they apply. In rating a zone, the prorated fares are

combined with fares of intra-zone riders for the test periods;

the total zone revenue thus obtained i5 then divided by the

passenger miles traveled in the zone during the test periods

and the result is the revenue per passenger mile. Between

test periods, this average fare per passenger mile for each

zone is adjusted according to the fluctuations in the average

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length of ride by adding or subtracting an experimentally

determined revenue factor for each two-mile inc~ement in the

variation of the average length of ride. The total mainline

passenger revenue for the various sta tes is determined for

any specified period by developing the zone revenue earned in

a state for every zone operating in that state for the periodo

The total mainline intrastate revenue is then developed zone

by zone by applying the relationships that existed during the

test periods.

Zone passenger miles are tabulated from drivers'

daily trip reports. The passenger miles related to each

driver's report are calculated by extending the number of

through passengers by the driver's division route mile s and

the number of intermediate passengers by an average distance

of travel determined by the periodic checks; these checks are

a150 used to determine the percentage distribution by sta tes

of the total passenger miles traveled in interstate zones and,

similarly, the sta te intrastate passenger miles in each zone.

For the various local or suburban operations,

periodic testsof the average fare per pas5enger are made by

analyzing the ticket lift for three-day periods. This

average fare is then applied to the total passenger count for

a given period determined from drivers' daily records of the

number of passengers carried. The passengers are summarized by

weekdays, Saturdays, and Sundays; each category has its own

average fare per passenger. Passenger miles for local

operations are developed from these passenger statistics and

average lengths of ride determined from periodic samples.

O 0 O

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ACCOUNT 3210 - SPECIAL BUS REVENUE (CHARTER) Special bus revenue for a given period, applicable

to individual state and intrastate operations, is developed

from regular special studies. These special studies involve

an analysis of revenue earned by the various operations

during selected months of the periodo (As an example, for the year ended September 30, 1960, the months of November 1959, May 1960, and July 1960, were analyzed.) From this analysis the revenue earned in a particular state from intra

state charter trips is developed and becomes intrastate char

ter revenue. A further analysis is mada to determine what

portion of the revenue earned from intersta te charter trips

is assignable to that particular state. The intrastate to

tal is added to the interstate total for the state and the

result is the state total charter revenue. These totals are

then related to the system revenue for the test months to

obta in percentage factors to apply to recorded revenue for

state total revenue and state intrastate revenue. For va

lidity, current factors are compared to factors used for

previous periods. Bus mile, passenger and passenger mile

statistics pertaining to special bus operdtions are developed

from the same test months.

For allocation purposes, the revenues and expenses

pertaining to charter are assigned to a special mainline zone

group concerned exclusively with charter operdtions. Even

though about lOr of the miles operated in charter service are

run by buses which ordinarily are used in local operations,

the mileage costs of operating these buses and the investment

and depreciation expense attached to them are allocated to

the charter zone group. O O O - ~

ACCOUNT 3400 - EXPRESS REVENUE

The total amount of express revenue earned by

Western Greyhound Lines during a specific period of time is

determined by tabuldting the individual charges shown on all

of the bus ills used during the periodo The charges shown

on busbills used for interline shipments are allocated to

Western Greyhound Lines and the connecting carriers on a

mileage basis.

The allocation of express revenue among the various

states in which Western Greyhound Lines operates is based on

percentages which are determined by periodic checks of all

busbills handled throughout the system. The express revenue

analysis made for the test period includes a suromary of all

intrastate revenues by states and a distribution on a mileage

basis of the revenues earned on all interstate shipments to

the states involved. The total express revenue earned in any

state during the test period is the suro of the intrastate and

allocated interstate revenues. Using the totals thus ob

tained, the percentage of system revenue that is earned in

each state is calculated; also, for each state, the per

centage of system revenue that is represented by its intra

state revenue is calculated. These percentages are then used

in allocating system express revenue to any state both on a

total or an intrastate basis.

A remarkable degree of consistency has been

observed when comparing percentages developed in different

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test periods even when these periods varied considerab1y in

duration of time. For example, a three-day check made in the

Spring of 1960 produced essentially the same results as one

made for the entire month of October 1959.

Approximate1y three percent of system express

revenue is earned by local operations. There are, of course,

certain expenses attached to the handling of express which

must follow any allocation of express revenue. In order to

simplify the a11ocation procedures, no express revenue or

offsetting expenses are charged to local operations. This

procedure has the effect of understating the net income of

local operations; such understatement is considered negligible

in view of the fact that analyses show that the cost of

handling an express shipment is approximately the same as the

average revenue received per local shipment. This method does

not impair the accuracy of total intrastate and state results

of operations due to the fact that local express revenues and

expenses are assigned to applicab1e mainline intrastate

operations.

Q Q e

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BUS MILE EXPENSES

More than 60 percent of Western Greyhound's ex

penses are directly related to bus miles operated. Through

the media of company records or special studies the major part of these expenses can be identified with the operation

of particular buses or routes. It is, therefore, not too

difficult to isolate bus mile expenses to the various s ta tes

even th ough the operational routes in the case of mainline

operations may cross several state borders. Since all local

operations of the company occur entirely within pa rticular

states, they are easily separable to the various states in

volved. The main allocation problem arises wh en expenses

pertaining to mainline operations must be allocated to the

intrastate and interstate traffic that is handled in c ommon

by those operations within or into a given sta te. (From a practical standpoint, this same problem does not exist on

local operations due to the fact that these operations are

in excess of 99 percent intrastate and,therefore, are con

sider~d for allocation purposes to be 100 percent intrastate. No appreciable distortion results from this procedure as both

revenues and expenses are treated in the same manner.) If there were no differences in the characteristics of intra

state and interstate traffic, the actual use of common bus

miles could be based on the passenger miles ,of each type of

traffic. However, research in the matter of r elative use of

bus miles by intrastate and in t erstate traffic reveals very

definite differences in load fa ctor characteristics. The

assembled data show very clearly that on the overall the

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number of bus miles required to produce 1,000 passenger miles

is greater for short-ride passengers than for long-ride

passengers indicating a lower average load factor for the

short-ride than for the long-ride passenger. Statistics for

the State of California show that the average ride of inter

sta te mainline passengers is about three times as long as the

average ride of intrastate passengers. These facts lead to

the conclusion that the allocation of ex) enses should be made on the basis of relative use rather than actual use. A dis

cussion of the method of providing for this relative use,as

well as differences in bus mile costs resulting from assign

ment of different types of motor coaches to the various serv

ices, follows.

The 6peration of Western Greyhound Lines is divided

into units known as divisions. (See Map - Page 13). These divisions are set up primarily for operating purposes with

very few statistics usable for allocation purposes maintained

by divisions. The company's smallest unit of operation is

the bus tripe The next largest unit is the zone, which is a

collection of all the through and turnback bus trips of a

given natu~e, (e.g., general service, express service, etc.) operating between two termini on the system. For example,

all of the express bus trips operated between San Francisco

and Los Angeles via the San Joaquin Valley route are known as

the Zone 155 operation. General statistics are maintained

for sorne 160 operating zones and ar e develo ped or discussed

elsewhere in the reporto After a careful analysis made by

Commission engineers and company personnel, the operating

zones have been formed into homogeneous groupings to

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SAN F

s S. F. MARIN 1} S. F. PENINSULA LOCAL OP ERA TIONS IN DIVISION 5

WESTERN GREYHOUND

LINES

OPERATING DIVISIONS

, I /I , (/ -------~/,~ .

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I

8AJJ,

I I

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------__ I---__ I

-----------I --

1 2 I , AlBUQUERQUE

LAS CRUCES

-- ---

,EL PASO

LITHO IN U . S A13

facilita te the processing of the data necessary to allocate

bus mile expenses generated by the various zone operations.

Eighteen mainline and ten local zone groups were established

based on the follawing criteria:

l. General service area,

2. Characteristics of service (e.g.~ interstate, intrastate, local),

3. Drivers' wages in cents per bus mile,

4. Load factors,

5. Equipment used.

About 1,500 motor coaches of various ages and types

are used by the company; they also have been classified into

homogeneous groups to facilitate allocation procedures. The

follo vdng criteria were used to establish motor coach groups:

l. Year model,

2. Type (e.g., transit, mainline, scenicruiser), 3. Maintenance cost,

4. Fuel consumption,

5. Miles operated per year.

In establishing the zone groups and bus group~ no

particular criterion was given preferential weight bu~ rathe~

all were considered for overall effect. A completelisting of

zones and zone grou0s and motor coaches and motor coach groups

is set forth on Pages 23-29.

Once established, the zone groups and bus groups

provide a ready means of determining, for a particular period,

the bus miles operated by the several bus groups over the

various zone operations contained in the zone groups. As

discussed elsewhere in the report, each driver turns in a

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trip r eport at t he end of each of his runs. Directly or

indirectly, this r eport contains, amo ng other t hings, the

bus operated, t he bus miles operated and the origin and des

tina t ion of the dr i ver's tripa From this informat i on, the

bus miles by bus group by zone group by state may be deter

mi ned. It would be impr actical to analyze all of the drivers!

trips fo r saya year pe riod a nd , therefore, s orn e contro l l ed

sampling procedure must be used. For the year ended

September 30, 1960, sample s were taken for the month of

November 1959 and Se ptember 1960. The complete samp le t o

ta led about 125,000 driver trips which is about 12 pe rcent

of the total fo r the year. Using data processing proc edures ,

the sample was reduced to a perc entage s pread of bus miles by

bus groups for each zone group fo r both system and California

operations. The rsult is shown in Column 7 of Table 1,

Page 17. To explai n further~ Column 7 indicates that 1.5

pe rcent of the system bus miles for Zone Group 1 were oper

ated by equipment assigned to Bus Group 1, 14.8 percent by

Bus Group 2 , etc. The lower ha lf of the same column indicate s

that of t he bus mi les ope rated in California 2.0 percent were

operatad by Bus Group 19 17.1 percent by Bus Group 2, etc.

Once t he relationship of the bus miles operated by

t he various bus groups in Zone Group 1 has been es t ablished,

the avera ge per mile cost f or a particular account is deter

mined . This is done by re lat ing the actual cost per bus mile

f or the ye ar to the percentage spread by bus type. As an

example , thi s process i s shown in Ta ble 1 for Account s 4141

ana 4142, Equipment Ma intena nce Expe Lse. As developed in

Column 8, tlle average maintenance expense fer al l bus miles operated in Zone Group 1 is 3.60~. Similarly, t he bus ~~les

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op erated in Ca lifornia average 3.644. Data processing pro

cedures are used to complete this process for each of the 28

zone groups. The average system and California bus mile costs

are then applied to the actual zone group bus miles for the

year as shown in Table 11, page 18. This calculation pro

duces the maintenance expense for each zone group as shown

in Column 4, Table 11. Because the bu s mile distribution

sample is not perfeet, the expense distributed to the zone

groups does not balance exactly to the ledger, being in

error by about 2.6 percent. The distributed Californi a

expense in Column 7 is corrected by the factor 1.02612 to

produce Column 8 which then becomes comparable to the total

system expense of $5,076,987 as recorded on the company's 1edger and stands as the maintenance expense for operating

zone groups within the State of California; the remaining step

in the procedur e is to allocate the California expense t o the

intrastate and interstate traffie of each zone gro~p. At

t his point, it beeomes necessary to aceount for the previously

discussed differenees in traffic charaeteristie s . This is

done by developing the equivalent passenger mile percents

sho\vn in Column 9 of Table 11. The follovving diseussion of

the method of developing these equivalent passenger mile

percentages pertain to mainline operations only, since the

California local zone groups are considered to be . 100 pereent

intrastate.

From zone statisties for the year ended September 3q 1960, the bus miles per 1,OOO.passengermiles and the average

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- - -

TABLE 1

ACCCUl\JTS h141 & 4142 - lVIAINTENANCE OF EQUIPiviENT

SYSTEi'V AND CALIFORl'JIA AV.c;RAGE COST PER BUS 1VIILE

ZONE GROUP 1 - YEAR ENDED SEPTEMBER JO, 1960

:A/C l4J., 42:

:Maintenance

:Expense Per .. ..

Bus : Bus i~ri1e :Nov. 1959: :Sep. 1960:

:Group:Year Ended Samp1e Samp1e ; No. : 9-30-60 IvriJ.e s Niles - 71 ) (2) (3) ( ),'"

Syste:n1 4.42~ 6,517 1.8% 11,405 1.2% 1.5% Summary 2 4.73 4,910 1.4 270,,470 28 0 2 14.8 of the 3 4,,16 9,744 2.8 8~306 0 0 9 1.9 Line 4 By

~ :; 3.16 2,531 0~7 7,432 0.8 0,8 Line 6 2.72 66 Products 7 3. 80 10,152 2.9 58,214 6.1 4.5 of 8 2.76 30,401 80 6 75,983 7.9 8.3 Columns 9 2.10 61,784 17.5 102,900 10.7 14.1 (2) & (7 ) le 4.92 77,717 22.0 13,290 1.4 1107

11 3.84 149,185 42.3 313,126 32.5 37.2 J.2 0.56 98 ,388 10e3 ~

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Tote,l S:fste!T:., 352,941 100.0% 959,580 100.0% 100.0% J.6oi California

--r-4.. 42~ 5,160 2.2% 10,714 1. 7% 2.0%

r , 4073 3,492 1.5 206,691 32.7 17.1 Summary )

~

4.16 7) 215 3.1 352 0~1 1.6 oi: the 4- Line 5 3. 16 2,531 1.1 7,401 1.2 1. 2 By 6 2.72 Line 7 3.80 7,h18 3.2 45,796 7.3 5.3 Products 8 2.76 20,535 8.9 52,986 8,, 4 8.7 of 9 2.10 43,535 18.9 43,453 6,,9 12.9 Co J.umns

10 4.92 47,513 20.7 7,571 12 n.o (2) & (7)")5300 8 -:n 3.84 92,648 40.4 193 J 973 ~ o .......

12 0.56 61., 055 9.7 ..J.~9 Total California 230,,047 100.0% 629, 992 100.0% 100,,0% .}.!6)~

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11

ACOOUNTS 4141 ANO 4142 - MAINTENANCE OF EQUIPMENT YEAR ENOEO SEPTEMBER 30, 1960

SYSTEM - CALIFO RNI A - CALIFORNIA INTRASTATE

ro

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0-u0::0 ::o ~ -i l> l> ::! -u OC z ID

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CAL IFO RNI A SYSTEM CAL IFORN IA IN TRASTA TE

WE IGHTED WEIGHTED CAL IFORN I A AV ERAGE Bus MILES AV ERAGE Bus MI LES ADJUS T To INTRASTATE

MAI NTENANCE OPERATED OISTRIBUTED MAINTENANCE OP ERA TED OI STRIBUTED LEDGER EQU IV ALEN T ALL OCATED ZON E EXP ENSE FOR YEAR ENDED MAINT ENANC E PASSENGE R MAINT ENA NCE GROUP

EXP ENSE FOR YEAR ENDED MA INTENANCE COL . (7)ZONE GROU P SEP .30,1960 EXPENSE ZO NE GROUP SEP .30 , 1960 EXP ENSE X 1. 02612* MIL E PERCENT EXPENSE

(1) (2 ) (3) (4 ) (5) (6) (7) (8 ) (9) ( 10 )

1 3 .60, 10 ,806 ,763 $ 389-,04 3 .64, 6, 989 ,642 $ 254 , 42~ $ 26 1, 000 ~ .1% $ 1~ , 800 2 2.83 3 , ~9 , 502 94,50 2 .83 3 ,339 '{)12 94 , 50 9 ' 000 .6 ,000 3 3 .31 4 , 5, 17~ 161,368 3 . '22 2,376 , 2 76 ,535 7 , 500 27 .6 21,700

g 4 4.41 1, 596 ,69 70 ,414 4 } 773 ,240 33 ,791 34 ,700 23 .6 8 ,200r3.61 16 ,459 ,034 594, 171 3 . 1 16 ,459 ,034 594 , 17 1 609 ,700 87 .3 532 ,300

3 .43 3 ,1 % ,070 107 ,910 3 .21 11 ,23 1 ,860 360, 543 -

3 . 15 2, 171, 277 68 ,39') 2 .49 324 ,315 8 ,075 8,300 0 .9 100 9 3 .81 7 ,408 ,261 282 ,2~ 3 . 50 3 ,249 ,300 113 ,726 116,700 22 .9 26 ,700

10 2,49 1, 049 83 ,9 3.41 2,413 ,380 82 ,296 84- ,400 91 '2 77 ,0003 . ~711 2 . 3 2 ,633 ,514 74, 528 2.87 1,689 ,970 48,502 49,800 67 .3 33 ,500 12 3 .61 6 ,415 ,1 51 2~1, 587 3 .61 6,415,1 51 237 ,600 23 1, 20023 1, 8~ 97 . 13 3 .47 7 ,609 ,618 2 4 ,054 3 .23 119 , 1 123 ,000 22 . 28 ,000~ , 709 , 27 14 4.1 2 21, 041, 468 866 ,908 4 . 14 ,620 , 77 274 , 104 281,300 20 .2 56 ,800 15 3 .60 8,511, 419 306 ,41 1 3 .60 8 ,511,419 306 ,411 314,400 93 .6 294,300 16 2.84- 730 ,862 - - - 20 ,~

3 . 57 4 ,254 , 576 151 , 3 . 58 3 ,825, 548 136,955 140, 500 27 .3 38 ,400 ; 3 .91 7 , 552,14~ 4 .07 2 J 5 , ~9.5 221.400 87 .4 1 96 '~00TOTAL MAINLI NE 122 ,274 ,43 ~~~:~~t 71 : ~ :~ $2 , 590 , 97 $2 ,658 ,300 $1.75 . 00 51 3 .7g, 1, 2i2,034 $ 46 ,694 - , $ $ - % $

"-' , 00352 3 0 1 ~ ' 511 - - - - 53 3 .86 72 ,038 2 ,025 3 .86 726 ,038 28 , 025 28 ,800 100 .0 28 ,800 54 4.62 1,616,427 74 67 4.62 1,616,427 74 , 67~ 76 ,600 100 .0 76 ,600,4 .29 2,m ,822 111, 01 4 .29 2 ,587,822 111 ,01 11 3 ,900 100 .0 113 , 900~g 3 .46 4 , 5.8,394 167, 616 3 .46 4 ,844 ,394 167 ,616 172 ,000 100.0 172 ,000

2.79 2 ,~ 7,200 2.79 258 ,~ 7,200 7,400 100 .0 7 ,400~ 1,166, 44,225 1,166 , 44 ,225 45 ,400 100.0 45 ,4003 '9 3 ' 9 3 . 3 6~0 , 28 1, 24 ,1 40 3 . 3 630 ,281 24 ,140 24 ,800 100 .0 24 ,800g6 3 . 93 ~ 5, 559. 15, 1 ~2 3 .91 3~. 508 13,861 14,200 100 .0 14, 200 TOTAL LOCAL 13, 11, 009 $ 523 ,7 2 12,1 ,413 $ 470,764 $ 483 ,1 00 $ 483 ,1 00 TOTAL SYSTEM 135,885,444 $4 ,947 ,728 84- ,1 84- ,280 $3 ,06 1, 461 tl.Jf!-1 ,400 $2 ,239 ,600 TOTAL LEDG ER $5 , 076 ,987 I~

~ ~

(/) -(/)

length of ride of each passenger is determined fo r al1 o the

72 mainline zones operated in California; a graphical plot of

this data is shown on Chart A, Page 22. Al so shown on the

chart is a weighted curve determined from the general equation b

Y=aX + c. The San Francisco office of the Service Bureau

Corporation* was retained by IJestern Greyhound Lines to assist

the Commission staff in developing a reliable equation to

represent the data. The purpose of the curve is to determine

the relative number of bus miles needed to serve 1,000

passenger miles for various given lengths of ride. Again using

Zone Group 1 as an example, the bus miles assignable to inter

state and intrastate traffic from zone group statistics and

Chart A are developed as set forth in the following table:

---_ ._-

Zone Group I - California Operations Only TABLE III

T~e of Passenger Item : Intrast8.te: Interst ate,: Total Zon~

(1) (2) (3) (1) Average Length of Ride - Miles 199 698 369 (2) Bus Yles Per 1,000 Passenger

Miles - Chart A 40.2 33.3 36.3

(3) Actual B12S Miles Per 1,000 Passenger Miles - 35.3 Year Ended 9-30-60 I I (4) Relative Bus Miles Per 1,000 IPassenger Miles 39.1 32.4 35.3 iL' (2) l2.:) IJ.ne x 36.3

I (5) Actual Passenger Miles (000) I Year Ended 9-30-60 91,967 110,62l 202,588 I

I(6) Equivalent Bus I~les IYear Ended 9-30-60 ],595,910 3,584,120 7,180,030 I Line (4) x Line (5) I I

(7) Equivalent Bus Miles-Percent 21% 49.9% 100.0% J * A subsidiary of International Business Machines 1 Ine .

.. 19

The 50.1 percent shown on Line 7 of Table 111 i s

applied to Zone Group 1, and allocates to California intrastate

traffic $130,800 of the $261,000 total California expense.

The relative expense per passenger mile for the two types of

traffic then becomes:

For intrastate: $130,800 = 0.142 ~/Psgr. mile91,967,000 For interstate: $130,200 118 ~/p 9 mile110,621,000 = . ~ s r. Comparing the results shows the expense al10cated

per passenger mile for intrastate to be 20.3 percent higher

than for interstate. Of course, this also is the relationship

of the figures 40.2 and 33.3 from Chart A and shown on

Table 111.

In actual practice it becomes more convenient to

calculate equivalent passenger miles. Using length of ride,

passenger miles and Chart A, the calculation for Zone Group 1

is developed as set forth in the following table~

TABLE IV :Chart A Equivalent :Adjustment:Passenger Mile Percents

Percent Factor -Unadjusted Ad,justed 40 .2 Intrastat e 91,967 45.4% 50.3% 50.1%x 3b.3 = 33.3 =Interstate 110,621 54.6% x 50.1% 49.9% 36.3 I

Total Zone 202,588 100.0% 100.4% 100.0% J._~-_._--. ~_._----

The foregoing procedures are followed for each o

the rnainline 'Zone groups operating in California and~ with

- 20

the minor exceptions as

used for the fo11owing

and 4142:

Account 4160

Account 4220

Account 4230

Account 4240

Account 5021

Account 5211

Account 5212

Account 5220

Account 5232

Account 1221

Account 2521

noted in the fo11owing text, are

accounts in addition to Accounts 4141

- Tires and Tubes - Revenue Equipment

- 0river~f Wages and Bonuses

- Fuel for Revenue Equipment

- Oil for Revenue Equipment

- Depreciation of Revenue Equipment

- State, City Tax - Fuel

- Federal Excise Tax - Fuel and Oil

- Vehicle License and Registration Fees

- Personal Property Ta xes - Buses

- Investment - Revenue Equipment

- Reserve - Revenue Equipment

o e o

- 21

-------------- ------

eHA RT A

180 ~---'--------'---'-----'-------'--IIr------rI------'-I -'--1 ~I --, WESTERN GREYHOUND LINES 170~--~-----+-----r----~----+-- -

CALIFORNIA ZONE OPERATIONS 160 I----o--r\_--+ __f--_ +--_-I_ __+_- Y E A R E N oEo S E P T E M B E R 3 oI I 96 o-

150 ~--~-----+----_r----1_----+_----r_--~----_+----_+----_r----+_--~

140~---4----_+----~----4_----+_----~--_4----_+----_+----~----+_--~

~ 130 ~---4----_+----~----4_----+_----~--_4----_+----_+----~----+_--~ w -'

120~--~-----+----_r----1_----+_----r_--~----_+----_+----_r----+_--~ Q:: W C>

~ ~

1I0~---j----_+----_+----~----+_----~----~--~----_+----~----4_--~ c:[

~

CL

100~--_4----_+----_+----~----+_----~--~~--~----_+----~----4_--~ o :z c:[

~ 90~--~~--_+-----+----_r----+_----r_--~~--_+----_+----_r----+_--~ o :x: 1

80~~_4----_+-----+----~----+_----r_--~r_--_+----_+----~----+_--~ Q:: W CL

\ o ~

:=1

~ ::::>

ce

70 ~4__4~--_+-----+----~----+_----r_--~~--_+----_+----~----+_--~

\: :" WElGHTEO CURVE EQUATIO. 6o ~----\-r-l\ . ~..o--+-----~---4-----+-----+----~~ y = 2 2 I X - 05 16 +2 5 _ 8 -

" x - AVERAGE LENGTH OF RIDE o o, o o o o FOR ALL ZONE PASSENGERS_

5o~---o4-~",---t.o,-"----+-'oro-o --t-----+--o -r-----r----1 y _ B U S M I LES oPE R A TE D PE R -

: o o~:.... o o 0 0 1,000 PASSENGER MILES _, 40r-----t---..r+--~-+1--~~oH_~~+_--~rL-O --_r----+_~.o_+----_r----~ -~T:o:-r_-t--~/--+-~o~_J~Uo

30~---4----_+----~----4_----+_----~--~~--_+----_+----_r----+_--____j

20~---4----_+----~----4_----+_----~--~----_+----_+----~----+_--~

10~---4----_+----~----4_----+_----r_--_4----_+-----_+----~----+_--~

O~--~----~----~----~----~----~--~~--~----~----~----~--~ o 50 100 150 200 250

LENGTH OF 300 350

R I D E 400

MIL E S 450 500 550 600

WKC CALIFORNIA PUBLIC UTllITIES COMMISSION - 22

TRANSPORTAT ION DIVISION - APR IL 5,196 1

Table V Sheet l of 4

MAINLINE ZONE GROUPS

Zone Group l San Diego-Los Angeles-Seattle

.' Zone 102 San Diego-Los Angeles-Seattle (Express) , I lone 105 Los Angeles-Portland-Seattle

lone Group 2 Los Angeles-Sacramento-Redding

lone 107 Los Angeles-Redding

lone 111 Los Angeles-Sacramento (Express)

Zone 113 Los Angeles-Sacramento

lone Group 3 San Francisco-Portland-Seattle

Zone 116 San Francisco-Seattle (Express)

lone 118 San Francisco-Portland-Seattl e

lone 120 San Francisco-Klamath Falls

lone Group 4 San Francisco-Southwest ., t. IZone 140 San Francisco-Bakersfield (

lone 141 Barstow-Albuquerque

lone Group 5 San Francisco-Los Angeles-San Diego

lone 142 San Francisco-Los Angeles-San Diego (Coast Express) "

lone 146 San Francisco-Los Angeles (Coast) J lone 149 San Francisco-Los Angeles (Coast Ltd. Surcharge

Service)l one 155 San Francisco-Los Angeles (Valley Express) lone 159 San Francisco-Los Angeles (Valley) .

,

J

.

"

I I

l'

Zone 162 San Francisco-Tulare

l one Group 6 Portland-Seatt1e-Vancouver, B.C. .. F l' h .. ' .1 tio ::' '7 C?

O lone 275 Seattle-Vancouver '

lone 277 Seatt1e-Bel1ingham t t. ; \,.." '1- p t' I

o lone 281 Seattle-Port1and I lone 284 Seattle-Olympia

P lone 2a8 Seattle-Port Angeles ~....l ! e':,

- 23 / '

Table V Sheet 2 o 4

MAINLINE ZONE GROUPS

Zone Group 7 Washington-Idaho-Montana Mainline ? r/- Zone 121 The Oa11es-Spokane ~ ~;:

1 lone 170 Seatt1e-Butte I T,

Zene 172 Seattle-Spokane J Zone 180 Portland-Salt Lake City Zone 184 Twin Fal1s-Pocatello

f Zone 291 Spokane-Wallace

P Zone 293 Seattle- t ewiston r ,

Zone 296 Wenatchee-International Boundary

>' Zone 297 Spokane-Trail

, 1 1'1P Zone 299 Spokane-Creston v .

p Zone 301 Spokane-Portland .. -// . " - 1", .r.- " < Zone 303 Spokane-Umatilla-Portland

;o Zone 304 Spokane-Pendleton H... -, ,"

! Zone 308 El1ensburg-George I \..c ,.

P Zone 310 Sa1t Lake City-Idaho Fa11s-Ashton

Zone 315 Deer Lodge~Helena-Ashtonr f I J ,.;.,; - )

ZOAe Group 8 Oregon Mainline

Zone 130 Port1and-Klamath Fal1s-Reno ., Zone 321 Port1and-Seaside

Zone 323 Port1and-Astoria (Columb i a River)

Zone 324 Port1and-St. Helens

Zone 326 Portland-Seaside-Astoria (Sunset Highway)

Zone 329 Corva11is-Newport

Zone 331 Port1and-Myrtle Point

~ Zone 332 Portland-Eugene-Reedsport ~ Zone 334 Portland-Salem

lone 336 Port1and-Eugene-Cottage Grove

Zone 338 Crescent City-Medford

Zone 339 Klamath Falls-Medford

Zone Group 9 San Francisco-Reno-Rock Springs, Wyoming

Zone 190 San Francisco-Rock Springs

/( Zone 200 San Francisco- l.:Vinnemucca-Wells

'" Zone 202 San Francisco-Reno

Zone Group 10 San Francisco-Sacramento Area l' Zone 204 San Francisco-Reno-Squaw Va11ey

Zone 206 San Francisco-Nevada CityZone 351 Sacramento-Placervi11e Zone 353 San Francisco-Tahoe-Reno lone 354 San Francisco-Sacramento (Express)

'. Zone 358 San Francisco-Sacramento (Local)

Zone 361 San Francisco-Oroville-Reno

- , 24

Table V Sheet 3 of 4

MAINLINE ZONE GROUPS

Zone Group 11 Redwood Empire

Zone 133 San Francisco-Portland (Redwood)

Zone 135 San Francisco-Eureka

Zone Group 12 Other California Mainline

Zone 136 San Francisco-Willits

" Zone 137 San Francisce-Ukiah (Express) ,

~ .1

-.

Zone 151 San Jose-'3'a1inas . _, ," Zone 152 Los Angeles-Santa Barbara

S Zone 371 San Francisco-Santa Rosa ~

Zone 379 San Francisco-Fort Bragg

Zone 381 Santa Rosa-Monte Rie

.

I

Table V Sheet 4 of 4

MAINLINE ZONE GROUPS

Zone Grou:Q 14 Los Angeles-San Diego-Southwest /'1 Zone 230 Los Angeles-Albuquerque ') \ ~ :;/'1 Zone 240 San Diego-Albuquerque (Exp~e.s. )

,\.-, Zone 242 San Diego-Flagstaff /'. Zone 250 Los Angeles-El Paso

Zone 2.60 San Diego-El Paso r ,. Zone 262 Los Angeles-Tucson (Express)

Zone GrouQ 15 Los Angeles-South V

'v

V v

~ ,

Zone V\'

\ \ \'1.'

Zone y \( ',,

>/

, '-,

"

~

' .......

>( " Zone

Zone 465 Los Angeles-Calexico

Zone 471 Santa Monica-Palm Springs /. ,.>o',c , Zone 474 Los Angeles-San Diego (Express)

Zone 479 Los Angeles-Port of Entry (Express)

Zone 482 Los Angeles-San Diego

Zone 491 Los Angeles-San Diego (Inland)

-4.~-4 L oY" Z ,,'-' (l r J - ~ r\ 11 .!':. , ~ L .... . J . GrouQ 16 Arizona Miscellaneous

--/ 1_" Zone 495 Phoenix-Tucson '( , Zone 498 Tucson-Douglas

Group 17 Guaranteed and Special Operations SI' ~. .... {., .._1"' r -r

.E ~, "'01 ..: ('-I"t-,.I Zone 501 Guaranteed Operations-SouthernZone 509 Escorted Tours Zone 511 Harrahs Club Zone 512 Growers Farm Labor Zone 513 MilitaryZone 514 Nevada LodgeZone 515 Snow SpecialsZone 517 Carson City-Nugget Club Zone 519 Ot her /"

.S' Y I Ctl. /- No \. I ',....'-I"'l...? 1--1, ,.. j, ' ' Group 18 Charter Operations

/

7 J

Military and Government Migrant Labor Rail 5ubstitution School Contracts Extended Tours Etc.

Pacific Company

- 26

Table VI Sheet 1 of 2

LOC-\L ZONE GkOUPS

d Zone 618 Seatt1e-Everett ~ Zone 622 Seattle-Auburn ~ Zone 627 Seatt1e-Tacoma

Zone 636 Port1and~Forest Grove

Zone 645 Port1and-McMinnville

ZOD&~~O~D 53 East Bay :.~ Zone 650 San Francisco-Vallejo-Napa

y Zone 654 San Francisco-Vallejo (Express)

? Zone 656 Oakland-Va1lejo

Table VI Sheet 2 of 2

Zone GrouuLJ=ong Beach

E.. Zone 900 Long Bea eh-Santa .iloniea

Zon~Gro~Q 58 San Die99.

F E

Zone Zone

906 San Diego-Mexican Border 922 Niland-Calexico

1.;. Zone 926 San Diego-;iramar

zonLrou\) 59 iAi li tary ~ Zone 944 Fort Ord Army Base

~ Zone 948 Travis Air Force Base-San Francisco Airport

u Zone 969 Oakland-Bay Meadows \,,, Zone 971 San Francisco-Bay i. ieadows e Zone 976 San Bernardino-San Ysidro

o O 1).

- 28

--

---

TABLE VII

MOTOR COACH GROUPS

-GrOup .. .. No. :Year Mode1L_Coach ~ode.L Seats : Uni ts (l L. 1 1947 GMC - PD 3751 37 106 2 1948 GMC - PD 3751 37 52 3 1942 GMC - PO 4151 37 & 41 163 4 1947 ACF - LC. 41 37 5 1951, 1952 GMC - PD 4103 37 & 39 161 6 1954 GMC - PD 4103 41 3 7 1953, 1954 GMC - PD 4104 39 193 8 1957 GMC - PD 4104 39 74 9 1958 GMC - PD 4104 38 125

10 1954, 1955 GMC - PD 4501 43 15@ 11 1956 GMC - PO 4501 43 73 12 1960 GMC - PD 4104 38 76

SUBTOTAL (2 ) 1,176

51 1940, 1941 GMC - TD 4502 45 39 52 1945 GMC - TD 4506 45 59 53 1951 GMC - TDM 5103 49 & 53 37 54 1952 GMC - TOM 4509 41 3 55 1954 m'lC - TDivl 4515 41 15 56 1955 GMC - TOM 4515 45 15 57 1954 GMC - TOM 4801 50 75 58 1957 MACK - C - 49 51 30 59 1947 Gj\.1C - PO 3751 37 7 60 1948 GMC - PO 3751 37 23 61 1948 GMC - PO 4151 41 55

SUBTOTAL (3 ) 358 TOTAL 1,534

Units owned by Western Gr eyhound Lines - March 31, 1960. Primari1y used in Main1ine Service.~l Primari1y used in Local Service.

- 29

ACCOUNT 4143 - REVENUE EQUIPMENT. ACCIDENT REPAIR There are no accident repair cost statistics which

would show how much expense of this nature is incurred in the

different divisions. There are, however, data available by

division of buses damaged. Analysis indicates no reliable

correlation between public liability and property damage

expense and number of buses damaged in a particular division.

For example, in Division 5 during the year 1954*, there were

11 buses damaged per million miles and th e cost for PL & PD

was 1.784 cents per mile. In Division 2 during the same

period, 1.6 buses were damaged per million miles and the PL

& PD expense was .766 cents per mile. These data show that buses damaged for like amounts of bus miles were 6.9 times

greater in Division 5 than in Division 2 but the ratio of PL

& PD costs per mile between the two divisions was only 2.3 to l. This indicates, as might be expected, that the frequency

of accidents is much greater in Division 5 due to its metro

politan area location than in Division 2, but that the

severity is greater in the latter due to the higher average

operating speeds encountered in desert service.

It would seem logical that the greater the damage

occurring to a bus in an accident, the greater the PL & PD

expense that would resulto Wh ile for a particular accident

it would not be possible to estimate accurately the PL & PD expense from just the amount of bus repair expense that resulted, it is believed that the two expenses are roughly

*This may seem to be remote information; however, it was the last ycar available in which all outstanding claims had been settled.

-30

proportional. That is to say, when the cost of PL & PD is $3,000 per collision the cost of repairing a damaged bus is approximately 3 times as great as when the cost of PL & PD is only $1,000 per collision.

One statistic that is available and becomes useful

in designing the allocation procedure for this account is

that of accident repair expense by type of coach. This allows

an expedient method of determining repair cost applicable to

local and mainline operations. Ihis is done by making a

special analysis of company records and in the case of local

operations final allocations t~ zone groups can be made on

the basis of bus miles.

For main1ine operations the allocation is based on

Account 4531, Public Liability and Property Damage Expense.

In the absence of any sound statistical evidence this method

is based on the informed judgment of the Commission staff and company personnel.

e o 0

-31

ACCOUNT 4151 - SERVICING REVENUE EQUIPMENT - LUBRICATION

All of the various types of motor coaches

operated by Western Gr~hound Lines are on the same mileage

schedule for lubrication service. Ihe current schedule is

lubrication service for each bus at 2,500 mile intervals.

Investigation into the cost of lubricating the various types

revealed that no appreciable difference in cost per

lubrication exists between the most luxurious type of coach

such as the Scenicruiser model and the more simplified

type such as the local transito For these reasons an

equitable allocation of lubrication expense can be made on

the basis of bus miles with equivalent passenger miles used

to allocate intrastate mainline expenses from total state

mainline expense.

o 0 e

- 32

ACCOUNT 4152 - SERVICING RgVENUE EQUIPMENT WASHING ANO CLEANING

The majority of the expense incurred in this account results from the routine washing and cleaning of

buses for appearance purposes in their daily operation.

The remainder constitutes expense of thorough cleaning,

deodorizing, and disinfecting of bus interiors plus

periodic steam cleaning of motors and chassis.

A study of methods of properly allocating the

expenses of this account was made in 1953 by the Stanford Research Institute of Menlo Park, California. The results

of this study show that washing and cleaning tends to

increase per bus mile as the round trip mileage of buses

decreases. This difference is more clearly evident when

comparisons are made between local and mainline operations

than when comparisons are made between different mainline

operations. The comparisons made between different mainline

operations give no clear answer to variation in expense due

to the fact that it is difficult to determine the expense

incident to "sweepouts" and window washings of buses making

long continuous trips.

In the final analysis, a reasonable allocation

procedure is to develop the expense for local operations

separately from mainline operations and then allocate each

of these to the respective state and intrastate operations

on the basis of bus miles. This procedure may ha ve a

tendency to understate to a minor degree the expense for

- 33

intrastate mainline operations but the practical application

of the method is judged to outweigh this minor distortion. Based on a special analysis, the local bus miles are assigned

2Y times the expense of a mainline bus mile to accomplish

the allocation of system expense to local transit buses and

mainline buses.

- 34

ACCOUNT 4211 - SUPERVISION OF TRANSPORTATION

Supervision expense by operating divisions is

readily available from records maintained by the company and

when related to recorded division bus miles produce expense

per bus mile by division. From this process, an average cost

per mile for California mainline and local operations can

be determined which reasonably reflects operations therein

even though certain California divisions share division

territory with other states. (See Map, Page 13.) Divisions operating entirely or partially in California are 1, 2, 3,

4, 5, 6 and 7; Division 5 comprises the major local operations in and around the San Francisco Bay Area. As can be seen

from the division map, the mainline operations in California

are conducted for the most part in Divisions 3, 4, and 6.

After considering all factors, the weighted average expense

per bus mile for these divisions is concluded to be the

average expense for all California mainline bus miles. The

allocation to California intrastate is accomplished on the

basis of the relation of intrastate mainline equivalent

passenger miles to total California mainline passenger miles.

For local operations, the expense per mile for

Division 5 is used for those operations primarily of a

transit or commute nature with certain other local operations

(Military and San Jose Express) being assigned the cost per bus mile developed for Division 4 which is the highest cost

mainline division operating in California.

I11ustrating from the summary developed for the

year ended September 30, 1960, the expense for California

- 35

is developed in the following manner:

Account 4211 Division No. 4/BM

1 0.99~

2 0.47

3 0.92) Weighted average ) of these three 4 (1) 1.07~ divisions used for

California main6 0.89) line bus miles. 7 1.06

8 1.30

5 (2) 2.96

(1) Used for Zone Group 59 and Zone 870. (2) Used for all California local operations except those

in Footnote (1).

- 36

ACCOUNT 4220 - DRIVERS ' WAGES

Account 4220 is essentially treated in the s am e

manner as other bus mile expenses; this method is discussed

under Bus Mile EXRenses beginning on Page 11. However, the

development of the average cost for each zone group is

accomplished in a di f ferent manner t han is shown in Table 1,

Page 17. Unlike bus mile expenses such as maintenance of

~quipment9 drivers' wages are determined by the ope rating

characteristics of iones rather than operating character

istics of zones and types of motor coaches operated. It

becomes necessary, therefore, te establish the relative

drivers' wa ges by zones and translate this to average ce st

by zone group to complete the equivalent passenger mile

allocation procedure. A comp lete study of dr ivers' wages by

zones was completed for the month of October 1959; studies

show that October is a reliable month to establish the

re pr esentative va riation which obtains between zones for

drivers' wages for a full year periodo Ana lyses also produce

posi tive evidence that this relativity does not ch ange even

though drivers' I:'iage rate s change fr om period to period i this

f act obviates the necessity of frequent drivers' wage chec ks

which are costly and time consuming to accomplish. (From time to time, special checks must be made to adjust the expense for zones which undergo operational changes affecting

drivers' wages.) Once the relative zone cost per bus mile is

established, it is a simp le step to prod uce average cast for

System and Cal ifornia zone group bus miles. Continuing

-37

9 with Zone Group I as an examp1e, the bus mi1e expense for the

group is developed in the following manner and takes the place

of the 3.60 and 3.64 cents per bus mile shown in Table 11,

Page 18.

TABLE VIII

Account 4220 - Drivers' Wages S:;tstem and California Averaqe Cost Per Bus Mile

Zone GrouQ I - Year Ended SeQtember 30. 1960

. ... .. . . vveightedfri vers' Wages': Bus Miles Operated: Dollar :Average Crivers'

Zone :Per Bus Mi le: Year Ended No. : la/59 Check: Seot 30 1960

: Amount : Wage Expense: (ifx( 3) : F 0'1' Zon~ Grouo

(1 ) (2 ) (3) (4 ) (5 ) System 102 12.910

6~~OUUI-4230_=-f~g1-F08 REVEN~E EQU1M\lg~I The treatment of fue1 expense for motor coaches i5

similar to that out1ined for Account5 4141 and 4142 with the

exception that a correction factor i5 ap~ lied to the distri

buted California fue1 expense which accrues as in Column 8 of

Table 119 Page 18. The correction is based on the fact that due to it5 oil production, California enjoys a favorable position in the fuel market. In order to reflect this ad

vantage in the fuel expense allocated to California and

California intrastate operations, the adjusted di5tributed expense for each zone group operating in California is

corrected by a factor dependent upon the extent of its

California operation. This factor reflects the follo wing

procedure for zone groups operating in California:

l. Mainline zone groups operating primarily in

California service (2, 5, la, 12, 15 i 17, 18) based on average California price per gallon,

2. ~ainline zone groups operating primarily in

California inter5tate service (1, 3, 4, 8, 9, 11, 13, 14) based on average of California price per gallon and price per gallon outside California,

3. Local zone groups operating in San Francisco Bay

Area (53, 54, 55, 56, 59, 60) - San Francisco price per gallon,

4. Local Zone Group 57-Los Angeles price per gallon,

5. Local Zone Group 58-San Diego price per gallon.

Q O O

- 39

ACCOUNT 4262 - BRIDGE, TUNNEL & FERRY TOLLS For mainline operations, system tolls expense is

developed by zones frorn scheduled bus trips through toll

crossings. Frorn this developmen~ tolls paid in California

may be separated, at which point, it becomes necessary to

determine the amount of tolls paid in California that should

be allocated to the California total operation. It would

be sound reasoning to conclude that sorne of the toll expense

in California should be assigned to other states, if the

theory "the expense is for the good of the whole trip" is

adopted. It would also be reasonable to allocate sorne of

the toll expense in other states to California operations.

If a San Francisco-Chicago trip is considered, a portion of

the toll paid in San Francisco would be allocated to all

st ates between Cal i fornia and 111inois, inclusive. The

size of this account does not justify the analysis necessary to allocate on this basis and therefore an alternative method

is used that allocates toll expense only to passengers riding

in California on zones involving toll expenses. All tolls

paid in California are considered applicable to the California

operations only and are therefore applicable to California

passengers only. Since California interstate and intrastate

passengers regardless of length of ride, pay the sarne ex t ra

fare when their trip involves a toll crossing, this method

amounts to a revenue offset which is reasonable and fair

since the extra revenue paid is included in California total

passenger revenue. For intrastate, a reasonable allocation can

- 40

be made on the basis of intrastate passengers as a percent of

California total passengers for toll zones involved. In

doing this, the assumption is made that the percent of

California passengers making a toll crossing on the zones

involved is the same for both intrastate and interstate.

\fuile the assumption is not entirely correct, it is believed

that the error introduced is negligible and results in a slight

overstatement of California intrastate expenses. (See diagram - page 42). The amount of this overstatement in view of the size of the account is deemed to make no

appreciable distortion in the over-all results of the

California intrastate operation.

Special studies are made to determine tolls

applicab1e to local operations.

- 41

Examp1e of a bus trip subject to a toll which serves through three states from San Francisco to a desti

nation outside Western Greyhound Line's territory and the

13 tYres of passengers (arrows) who might use this service. Passengers 1, 4, 5, 7 are related to toll expense. However,

passengers 1, 4, 5, 7, 10, 11, 12, 13 will be used to allocate

to intrastate. This method wou1d give correct results if: 10 11 + 12 + 13

=1 + 10 4 + 5 + 7 + 11 + 12 + 13

WESTERN GREYHOUND LINES

Fran

CALIFORNIA I

San I B U S I cisC9

STATE # 2 TRI P

STATE # 3 Z O N E

h-Intra* I I I 4-Inter* I

I I 5-Inter* I I I ! I

2-Intra ..

6-Inter

7-Inter*

3-Intra

-

-

..

8-Inter

10-Intra .. 9-Inter

ll-Inter

12-Inter

~TO~1POlnt l3-Inter

* Tariff Fare Inc1udes To11 Charge.

- 42

ACCOUNT 4300 - STATION EXPENSE

SPECIAL NOTE

A general discussion of the procedures deve10ped

for the allocation of station expenses is contained in this

section. Included are explanations of the methods used for

the following accounts:

l. Account 4311 - Station Salaries

2. Account 4331 - Commissions Paid

3. Account 4340 - Interline Commissions-Paid 4. Account 4350 - Interline Commissions-Earned

5. Various - Station Overheads More comprehensive explanations of the methods

used for the various accounts are contained in a separate

vOlume, which is devoted exclusively to station expense

alloca tion and in which is included the deta iled studies

and statistical data used in developing station expense

alloca tion procedures.

-43

ACCOUNT 4311 - STATION SALARIES

The basic premise used in developing the allocation

procedures for station expense, including station salaries,

is that all of the expenses applicable to the intrastate

operations of a particular state are incurred entirely

within that state. This conclusion follows consideration

of the fact that an intrastate passenger by definition, is

one whose trip is consummated without crossing a stateline

and he therefore never has occasion to use any station

facilities located outside of the .state in which he travels.

Inasmuch as all of Greyhound's station facilities

are available to both intrastate and interstate passengers,

the problem presented in developing the intrastate station

expense for any single sta te is a matter of determining what

portion of all the station expenses in that state pertain

to intrastate operations.

For the State of California. ticket selling time

studies were made at most of the company operated stations

with particular attention given to the larger facilities at

San Francisco, Los Angeles. Sacramento and San Diego. Through

these studies, the relative length of time required to sell

various types of tickets was determined. These findings were

then applied to a special analysis of the 570,000 ticket sales

which had been made for all California stations for the month

of May 1959; May is considered a typical month as it represents

a transition period between the seasonal variations evidenced

by the heavy summer vacation travel and the comparatively

light volume of business in the winter months.

- 44 ._-------

The allocation of baggage clerks' wages presents

a two-fold problem; first, a separation between baggage and

express handling and, second, an allocation of both categories

to intrastate and interstate service. Activities in the

baggage departments of California stations W2re carefully

observed by members of the Commission's staff and lengthy

discussions were held with terminal managers and working

personnel in arriving at a means of separating baggage clerks'

wages between baggage and express handling. Special allocation

studies were then made for both baggage and express handling.

In connection with the problem of allocating

baggage handling expense, thousands of departing passengers

were interviewed at the major stations concerning the origins of their trips, their destinations, and how many bags they

had checked. The results of this survey were combined with

those obtained from several special checks made by the company.

Analysis of these studies, taken either collectively or in

dividually, devaloped the fact that the number of station bag

handlings incurred by the average passenger are directly

related to the distance of his trip. It was therefore

concluded that the proper method for allocating baggage

handling expense is on the basis of passenger miles.

The allocation of express handling expense is

based on percentages developed from an analysis of the

relative number of intrastate and interstate bus bilIs

handled at company aperated stations during a representative

test periodo

- 45

Station salaries, other than those for ticket

clerks and baggage-express clerks, or employees whose

functions are close1y re1ated thereto, are classified as over

head expenses and are allocated in the rnanner out1ined for

this type of account as discussed under Station Overheads.

Figure 1, following, schernatica11y presents the

procedures for a110cating Account 4311.

- 46

TICKET CLERKS TELEPHONE ANO

INFORMATION CLERKS

SPECIJ STUDY I

MAINlINE LOCAL

SPECIAL STUOY 100% INTRA

1 JINTERI

GENERAL PROCEDURE FOR ALLOCATING CALlF

BAGGAGE - EXPRESS CLERKS

MAINlINE BAGGAGE

I SfECIAL STUOY NON E TO LOCAL

ACCOUN ~ STATlON 5

(CALIFORNIA

TRAVEL 8UREAU

MAINlINE EXPRESS

PSGR. MILES PIECE HANOllNGS

1 IltHRA] t INTER1

1 II-N T R A I 1IN T E-RJ [

ACCOUNl CAlIfO INTRAS

woC

,ALlFORNIA STATION SALARIES (ACCOUNT 4311)

~ OUNT 4311 ON SALARIES ORNIA STATIQNS)

TERMINAL ADMINISTRATlON

CASHIERS STENOS : TICKET OFF ICE CLERKS

:! SPECIAL STUDY

SPECIAL STUDY NONE T9 LOCAL

COUNT 43J I :AlI FORN lA NTRASTATE

1

MA1NlI~E LOCAL

PASSE,NGERS 100% INTRA

r INTRAI INTERI

FIGURE I

CUSTODIAL EMPLOYEES

- 47 - CALIFORNIA PUBlIC UTILlTIES CO MM IS SI ON TRANSPORTATION DIVISION - MAR22,I 96 1

ACCOUNT 4331 - COMNITSSIONS PAID

An appreciable volume of passenger ticket sales,

express forwarded and received, and charter trip promotions

are handled by non-salaried agents of Greyhourid who operate

on a commission basis. The compensation paid these agents

is generally ten percent of the revenue that they se cure for

the company through their sales efforts.

The percent of California intrastate passenger

revenue that is subject to commission is determined by an analysis of the revenue and ticket sales for a typical month.

For the test month, the portions of both mainline and local

intrastate revenues that are subject to a commission ar e ascertained. The percentages thus obtained are then used in

estimating passenger revenue commission expense.

The portions of intrastate express and charter

revenues subject to commission expense are determined in a similar manner except that the selection of test periods is

not limites by the seasonal variations that occur for

passenger ticket sales.

-~-

ACCOUNT 4340 - INTERLINE cOr"MISSIONS PAID 6CCOUNT 4350 - INTER~):NE-Ca.i\i .ITSS I ON~i....EARED

Western Greyhound Lines as a division of The

Greyhound Corporation handles passengers to and from points

located in other Greyhound divisions in addition to inter

changing passengers with other carriers on through con

structive fare arrangements. Interline tickets are both sold

and honored by Western. A commission is charged other

divisions and foreign carriers on the amounts of fares for

travel over their lines on tickets sold in Western territory.

Account 4300, Station Expense, is credited with these

commis s ions earned. The number of intrastate interline

tickets sold in California is so negligible that none of the

commissions earned in California are allocated to intrastate

service; any minor distortion therefrom is further lessened

in light of the fact that the full amount of interline

commissions paid and earned is charged to interstate service.

The commission expense to Western for ticket s sold

by other divisions or other carriers and honored on Western's

lines i5 prorated to California on a trunk-line, raute-mile

basis. Again, since an insigni f icant amaunt of this expense

pe rtains to California intrastate service, all of t he

California expense is charged to interstate service.

e o n

-49

STATION OVERHEADS

Various expenses of operating stations are of an

overhead nature, that is, they are not chargeable to a

particular function for which the actual use can be readily

measured. These expenses are incurred on behalf of all the

passengers who use company operated stations. The number of

passengers of each category who use an individual station is

reasonably indicated by the number of tickets sold to each

type of passenger. It has been observed that long distance

riders avail themselves of station facilities to a greater

extent than do the passengers who make comparatively short

trips. Therefore, weightings reflecting this rela t ive usage

have been applied to the various types of passengers. After

determining the total number of units of use for each type of

service at the individual stations, the amounts of overhead

expense chargeable to local service, intrastate mainline and

interstate service are calculated. The percentage relation

ships between the amounts of intrastate mainline and interstate

expense obtained in this manner were found to closely

approximate the percentage distribution of the Califo~nia main

line passengers carried during the period for which the analysis

of station ticket sales was made.

The allocation of station overhead expenses is made

to local services using the test percentages applicable to the

individual stations and the remainder is charged on a sta te

basis to mainline intrastate and interstate operations on

the basis of the number of passengers carried in each clas s of

traffic.

- 50

The f o11owing accounts are included in the s tation

overhead group:

Account No.

4311

4311 4311

4315 4319 5011 5231 5232 5322 5.362

5372 3601 (1) 3609

(1) Category 2.

Description

Expenses

Terminal Managers, Assistant Managers and Agents

Janitors, Redcaps and Porters Cashiers, stenographers and Ticket Office Clerks

Light, heat, power and water Repairs, Buildings and Equip~ent Station DepreciationReal Estate Taxes ( Station) Personal Property Taxes (Station)Station Rent (Dr.) Station Rent (Cr.)

Income

Station Renta1 Income Revenue from parcel lockers Other station revenue

- 51

ACCOUNT 4410 - SALARIES AND EXPENSES. TRAFFIC S.Q11fillT10N

Employees whose salaries are included in this

account are sales managers, assistant sales managers, regional

sales managers, district sales representatives, and clerks and

stenographers.

The major portion of the effort of these employees is devoted to activities concerning commission and tour agencies.

District representatives act as auditors and keep track of

ticket and express sales, sometimes select sites for agenci e s

and sign contracts for agency operations. Other functions of

their positions are the solicitation and promotion of charter

and package express business~ They are also responsible for

placing signs and advertising material in company stations.

The net tangible results of the efforts of these

employeesare difficult to determine as are the relative

amounts of their time that should be assigned to their

various f unctions. These salaries and expenses are therefore

considered to be related to the over-all operation and are

al l oc ated to the different services in particular areas on

the basis of passenger miles which is judged to be the most equitable measure of the employees' activities.

- 52

ACCOUNT ltlt40 - 'rICK8'rS_.AND BAGGApE gliS:cK, There are three main types of tickets in general

use oy /vestern Gl'eyhound.

(1) Roll tickets - preprinted destinations These are used for trips entirely

within Western's System. They are mostly

intrastate tickets although there are an

appreciable number used for interstate trips.

(S.F.-Reno and S.F.-Portland are examples.) (2) Open form tickets - origin, destination b1ank

These are used for various destinations

to which the vo1ume ofpassengers is insuf

fi~ient to warrant carrying a supply of roll

tickets. While these are used largely f or

interstate and interline trips a considerable

number are used in intrastate services.

(3) 20-ride commutation tickets - tear off Used in local commute service.

In general, baggage checks are all of the same type

with a few of the most-used having pre-printed destinations.

No problem i5 encountered in allocating baggage check expenses

as the expense is not applicable to local operations and for

mainline operations is allocable on the basis of passenger

miles as developed for baggage clerks' wages under Account

4311.

-53 ..

------"- - ---

For the allocation of ticket printing expense, a

special study of the cost of printing tickets applicable to

the local operations was made for the year ended March 3l t 1960. After the removal of local operations ticket expense,

the remainder, which is applicable to mainline operations,

lends itse1f readily to an analysis based on number of

tickets used (passengers) and comp1exities of ticket (passenger miles).

An analysis, made by the Commissio~ staff and

company personnel of the cost of printing various types of

mainline tickets and of the number used, indicated that the

relative cost could be reasonably based on the number used and

the distance traveled weighted equally. Further analysis

revealed that after removal of the cost of local operations

tickets from Account 4440, the remaining e~ense applied 75

percent to tickets and 25 percent to baggage checks. Using

50-50 weight for passengers and passenger miles on the 75 per

cent for tickets and 100 percent passenger mile weight en the

25 percent fer baggage checks, produces a weight of 37~ percent for passengers and 62~ percent for passenger miles. In order

~o account for the duplicate state passenger count, the

passenger weighting was reduced on a judgment basis to 35 percent and the passenger mile weighting raised to 65 percent.

- 54

ACCOUNT 4470 - ADVEF.TISING

The advertising expense of all Greyhound companies

is billed to The Greyhound Corporation. The expenses of the

individual companies are added to that incurred by the

corporation on behalf of the whole system a~d the resulting

total expense is reapportioned to the varlous companies on

the basis of revenues earned.

Western Greyhound does not have an advertising

department. The company sales managers ge nerally handle any

matters relating t o advertising which requi r e the attention

of company representatives. The actual arrangements for

radio 2nd television time, etc., are handled by advertising

agencies.

It is evident that the effort spe nt in securing

increased passenger business is directed toward people who

do not ordinarily travel by Greyhound, that is, to those who

have never used the service or to those whose use of it has

be en very infrequent. Anyone who has used Greyhound serv ice

to any great extent is urllikely to be influenced by advertising

o~e way or another with the possible exception of tour

adverti sing or the suggestion of visiting specific places or

attending speclal events. However, the contribution to

passenger and revenue statistics made by passengers t hr ough

r egular .r iding habi t 5 (commute tr lps, particu lar 1 y) i s not a reflection of the incurrence of advertising expense. Even

though a regular or commute rider was originally influenced

to try GreyhouGd service as the r esult of insti t utional

adverti sing, whether he continues this use depends entirely

uron his personal experience with the service (e.g., frequenc y - S5

comf or t, speed, cost, etc.). On ce a rider has weighed t hese factors and compared them with those experienced on other

mean s of transportation, he draws conclusions about the

desirability of bus service and advertising is not likely to

change those conclusions unless, of course, marked and specifie

improvements in service are announced through advertising media.

The only aecurate determination of the effectiveness

of advertising in connection with a specific type of serviee

should be made by knowing how much less business would have

been done by the service had there been no adver t isiqg , or

conversely, how much more with advertising.

This differential seems impossible to determine in

connection wi th mainline service and occasional local ri ding.

It is unl ikely , however, that the volume of peak hour commute

riQers wo uld have been measurably less for any period of time had the comp any no t engaged in advertising (partic ula rly since almost no advertising is specifically directed to them).

The product that Greyhound advertises for sale is

bus seat miles and the measure of sales is passenger miles.

The sales res ulting from advertising are the passenger mi les

r epr esenting certain occasional riders who are usua lly

of t he long haul type. It appears, therefore, that an

equitable allocation of advertising exp en se, and th e one

followed in this manual, should be made on a passenger mile

basis with the judgment provision that all passenger miles r epre senting regular and commute riders be given half weight.

o O O

- 56

ACCOUNT 4531 - PUBLIC LIABILITY ANO PROPERTY OANlAGE - SELF INSURER

Western Greyhound Lines provides its own insurance

for public liability and property damage with the exception that

certain policies are carried with insurance companies to cover

excess liability which might arise from individual accidents

of asevere nature.

The allocation procedure for Account 4531 is handled

in a manner similar to that for Account 421l~ Supervision of

Transportation. Expense and bus mile records are available

by divisions and the use of these provides relative bus mile

costs for California mainline and local operations. Again as

for Account 4211 the average cost per bus mile for California

mainline operations is judged to be the weighted average cost per bus mile for Oivisions 3, 4 and 6. The allocation to

California intrastate mainline is based on equivalent passenger

miles. For California local operations the expense per bus

mile for Oivision 5 is used for Zone Groups 54 9 55, 56 and

57 except Zone 870 (San Francisco-San Jose Express); the expense per mile for Oivision 4 is used for the remaining California

local operations.

It is of interest to note that public liability and

property damage expense for any current period is comprised

of payments actually made for claims during the period as we l l

as estimates made by company personnel of the probable liability

- 57

that will be assumed by the company for claims yet unsettled;

it usually requires as much as six years to settle all claims

for a given period, at which time, the actual cost of public

liability and property damage for the period is finally

determined.

- 58

- - ------------------------------

Considerable research time was spent by the Commission

staff in an attempt to establish a relationship between the

various 4600 subaccounts and the numerous operating statistics

and expenses. The only reasonable correlation found was between

employees' welfare expense (about 50 percent of the 4600 group) and wages and salaries spread throughout the several expense

groups in Accounts 4100 to 4500, inclusive. The other functions

covered by the 4600 accounts are management, administration,

and general accounting with the related expens es of maintaining

a general office in San Francisco; these functions are affected

by or affect the sundry activities of the entire operation oi

the company. For the most part, these activities may be

reasonably measured by the expenses comprising the 4100 to 4500

groups of accounts. It is evident upon examination of the 4100

to 4500 groups that wages and salaries account for the major portion of the recorded totals in those groups. Although a

determination can be made concerning the employees' welfare

expenses applicable to wages and salaries paid, studies made

reveal that no significant difference results if welfare expenses

are related to account total s rather than just to the wages and salaries contained in the accounts; the latter method affords

the advantage of eliminating a considerable amount of detail

with its attendant time-consuming analysis.

- 59

The accounts in the 4600 series are therefore prorated

to the various op er a tions on the basis of the distribution of

the expenses for the 4100 to4500 accounts.

- 60

INVESTMENT, RESERVE ANO DEPRECIATION EXPENSE-LAND AND STRUCTURES

The investments in land and the investments,

reserves and depreciation expense as s ociated with the oper

ating properties of the company are maintained on the ledgers

by location and type of facility. These facilities fa11 into

three categories :

1 - Stations

2 - Garages

3 - General Office

Following the general procedure for a110cation of

station expenses, the investment, etc. for stations operated

in California are separated by locations and treated in the

same manner as station overhead expenses.

Garage facilities are considered to be overheads

to Accounts 4140 and 4150 and general off ice property as an

overhead to Account 4600.

The various accounts containing land and structures

investment, reserve and depreciation expense are:

Account 1201 - Land and Land Rights

Account 1211 - Structures-Investment

Account 2511 - Structures-Depreciation Reserve

Account 5011 - Depreciation of Structures

Account 1271 - Improvements to Leaseh01d PropertyInvestment

Account 2571 - Improvements to Leaseh01d PropertyDepreciation Reserve

Account 5071 - Depreciation on Improvements to Leasehold Property

Account 1291 - Unfinished Construction (where applicable to any of the aboye accounts)

o O ~ -61

ACCOUNT 5310 - EQUIPMENT RENTS - DEBIT ACCOtJNT'5350 - EQUIPMENT-RENTS-:-EREoIT- . .. _-_..- -------

These two accounts represent the rentals paid and the

rentals received for the leasing of equipment between Western

Greyhound and other Greyhound divisions and between Western

Greyhound and certain non-affiliated carriers. The rentals are

generally based on the cost per bus mile for the fixed expenses

connected with ownership of equipment and include a return on

the investment in the equipment. Because of Western's

geographical position in the Greyhound system, buses owned

by Western log more miles outside Western territory than buses

owned by companies other than Western l~g in Western territory. Te illustrate, Western will start one of its buses from San

Francisco bound for Chicago and operate it to Rock Springs,

Wyoming, the limit of Western territory. At that point Central

Southwestern Greyhound would assume operation of the bus to

Chicago, thereby providing through service without changing

equipment. (See map - Page 5). In the same manner, Central initiates westbound Chicago-San Francisco trips with Cen ~ral

owned equipment. Western would operate that equipment from Rack

Springs to San Francisco. Subtracting the Central equi pment bus

miles in Western territory (Rock Springs to San Francisco) from the Western equipment bus miles in Central territory (Rock Springs to Chicago) produces what are known as excess miles, these being in favor of Western. The total of situations such

as the above example, but not necessarily confined to the San

Francisco-Chicago operation, pr~duce excess miles which are in

- 62

favor of Western Greyhound for any given periodo (For the year ended September 30, 1960, Western's excess miles to t a1ed

2,767,170). This situation resu1ts in the fact that Western owns an excess of equipment over that nceded to opera te only

those bus miles providing service in Western territory.

For purposes of allocation, no adjustment is made for this excess of eq