Form 61a200(L2) - Report Of Property And Business Factors Form

INSTRUCTIONS

FOR

SCHEDULE L2

DEFINITION OF FACTORS

(1) Ground Property (Real and Personal): Original cost of all nonmobile operating property, both real and personal (including capital-

ized leased property) except that listed in 2, 3, 4, 5, 6, 7, 8, 9, 10 and 11.

(2) Construction in Progress–Real: Cost of real property under construction.

(3) Construction in Progress–Personal: Cost of personal property under construction.

(4) Construction in Progress–Manufacturing Machinery: Cost of manufacturing machinery under construction.

(5) Materials and Supplies: Cost of materials, supplies, fuel and merchandise inventories.

(6) Spare Parts, Assemblies and Engines: Cost of spare parts, aircraft assemblies and engines.

(7) Operating Leased Property–Real: Reported market value of operating leased real property from Schedule N, Column (I).

(8) Operating Leased Property–Personal: Reported market value of operating leased personal property from Schedule N, Column (I).

(9) Operating Leased Property–Motor Vehicles: Reported market value of operating leased motor vehicles from Schedule N, Column (I).

(10) IRB Property–Real: Original cost of all operating real property purchased under industrial revenue bonds (IRB).

(11) IRB Property–Personal: Original cost of all operating personal property purchased under industrial revenue bonds (IRB)

(12) Gross Book Value: Sum of factors 1, 2, 3, 4, 5, 6, 7, 8, 9, 10 and 11.

(13) Depreciation: Depreciation attributable to the property in factor 12 as of December 31.

(14) Net Book Value: Gross book value less depreciation (factor 12 minus factor 13).

NOTES REGARDING THE FACTORS

An equating adjustment shall be applied to the property factors only. It shall be based upon the original cost of the

aircraft plus the cost of improvements and modifications. As a future option, the Kentucky Revenue Cabinet may

utilize market derived aircraft values to determine the equating adjustment.

The arrivals and departures factor shall include all performed scheduled and nonscheduled arrivals and departures

associated with interchange flights, connecting flights, overhaul, maintenance, flight testing and training.

No adjustments shall be allowed to this factor.

The operating flight miles shall include all performed scheduled and nonscheduled service miles from civilian,

government and military passenger, freight, express and mail service. A written explanation regarding the compu-

tation of the Kentucky miles shall be required. The Kentucky and system flight miles shall exclude nontaxable

nonallocated fly-over miles for nonoriginating and nonterminating flights. A written explanation shall be required

from the company regarding the method and computation of this factor.

The total time factor shall include all revenue and nonrevenue hours in flight and on the ground including hours

associated with interchange flights, overhaul, maintenance, flight testing and training. No "time caps" shall be

applied to ground time. The maximum number of hours associated with any given aircraft shall not exceed 8,760

hours of total time. Foreign time shall be included in the total system time factor. The Kentucky and system total

time shall exclude nontaxable nonallocated fly-over time for nonoriginating and nonterminating flights. A written

explanation shall be required from the company regarding the method and computation of this factor.

The total revenue ton miles factor shall include all performed scheduled and nonscheduled service miles, tons and

revenues from civilian, government and military passenger, freight, express and mail service. A written explanation

shall be required from the company regarding the method and computation of this factor. Also, a written explana-

tion shall be required regarding the determination and allocation of revenues and miles between states.

The tons enplaned and deplaned factor shall include all passengers, freight, express and mail tons loaded and

unloaded from scheduled and nonscheduled flights for twelve months ending December 31. All tons shall be reported

including civilian, government and military passengers, freight, express and mail. Passengers should be converted

to tons based upon the industry standard of 200 pounds per person. The Kentucky enplane and deplaned tonnage

shall exclude certain interchange and transshipped tons as specified by the Revenue Cabinet. A written explanation

shall be required from the company regarding any exclusions claimed and the method used to derive the factors.

Form 61a200(L2) - Report Of Property And Business Factors Form - State Of Kentucky Page 2

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