Railroad Cost-of-Capital-2003

AGENCY:

Surface Transportation Board, DoT.

ACTION:

Notice of decision.

SUMMARY:

On June 22, 2004, the Board served a decision to update its computation of the railroad industry's cost-of-capital for 2003. The composite after-tax cost-of-capital rate for 2003 is found to be 9.4%, based on a current cost-of-debt of 5.0%; a cost of common equity capital of 12.7%; and a capital structure mix comprised of 42.8% debt and 57.2% common equity. The cost-of-capital finding made in this proceeding will be used in a variety of Board proceedings.

DATES:

Effective Date: This action is effective June 28, 2004.

FOR FURTHER INFORMATION CONTACT:

Leonard J. Blistein, (202) 565-1529. (Federal Information Relay Service (FIRS) for the hearing impaired: 1 (800) 877-8339).

SUPPLEMENTARY INFORMATION:

The cost-of-capital finding in this decision may be used for a variety of regulatory purposes. The Board's decision is posted on the Board's Web site, www.stb.dot.gov. In addition, copies of the decision may be purchased from ASAP Document Solutions by calling 301-577-2600 or by e-mailing asapdoc@verizon.net.

Environmental and Energy Considerations

This action will not significantly affect either the quality of the human environment or the conservation of energy resources.

Regulatory Flexibility Analysis

Pursuant to 5 U.S.C. 605(b), we conclude that our action in this proceeding will not have a significant economic impact on a substantial number of small entities. The purpose and effect of this action are to update the annual railroad industry cost-of-capital finding by the Board. No new reporting or other regulatory requirements are imposed, directly or indirectly, on small entities.

Authority: 49 U.S.C. 10704(a).