In 1942, redemption premiums paid in the refinancing of the long-term debt of the company, together with the net unamortized premiums on the securities retired, resulted in a non-recurring reduction in Federal income taxes of approximately $620,000. The major portion of the refinancing charges was charged directly to earned surplus in 1942, with the balance of such expenses being charged to earned surplus in 1943. If the income account in 1942 had been charged with a portion of the refinancing charges equal to the non-recurring tax reduction (as was done in a comparable situation in 1945 involving losses on sales of properties, as shown above), the reported net income of $2,335.737 would have been reduced to an estimated $1,715.737.

NOTE-The redemption in June, 1949, of the outstanding 34% sinking fund debentures due 1956 resulted in the elimination of the necessity to reserve from net income amounts related to the sinking fund requirements on such debentures. Accordingly, since June, 1949, the only order of the Public Service Commission of the State of New York requiring a reservation of net income is that issued in connection with the company's outstanding Series G bonds due 1958. Pursuant to such order, the company is required to appropriate from net income to a special appropriated earned surplus account for acquisition of new utility plant or of bonds an amount of not less than $525,437 per year.