Industry Members Say Berkshire's (BRK-A) Purchase Price for BNSF Artificially Inflated Costing Base
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Berkshire Hathaway (NYSE: BRK-A)(NYSE: BRK-B) and Warren Buffett might be getting a little hot around the collar Thursday following headlines the acquisition of Burlington Northern Santa Fe (BNSF) will be the subject of a U.S. hearing.
The Surface Transportation Board (STB) said it will hold a hearing on March 22, 2012 over the $43 billion acquisition of BNSF by Berkshire "on certain costing determinations." The STB said it will look at "the effect of this price on its annual Uniform Rail Costing System (URCS) and revenue-adequacy findings for BNSF."
The Western Coal Traffic League (WCTL) and other parties are arguing BNSF's acquisition price produced an $8.1 billion write-up in the railroad's net investment base for URCS costing purposes, and decreased BNSF's 2010 annual depreciation calculations by $128 million. WCTL suggests the Board should, beginning with its 2010 findings, adjust BNSF's URCS costs by removing the $8.1 billion write-up and correspondingly adjusting the railroad's annual depreciation.
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The Surface Transportation Board (STB) said it will hold a hearing on March 22, 2012 over the $43 billion acquisition of BNSF by Berkshire "on certain costing determinations." The STB said it will look at "the effect of this price on its annual Uniform Rail Costing System (URCS) and revenue-adequacy findings for BNSF."
The Western Coal Traffic League (WCTL) and other parties are arguing BNSF's acquisition price produced an $8.1 billion write-up in the railroad's net investment base for URCS costing purposes, and decreased BNSF's 2010 annual depreciation calculations by $128 million. WCTL suggests the Board should, beginning with its 2010 findings, adjust BNSF's URCS costs by removing the $8.1 billion write-up and correspondingly adjusting the railroad's annual depreciation.
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