As each of you know, over the past year, there has been a great deal of controversy over the Brotherhood's financial standing. Changes have been implemented to meet the expectations of the Grand Lodge Officers, the Executive Board and that of the International Association membership. Proposed changes recommended at the September 1998 International Association meeting by President Fleming have resulted in income over expenditure in the amount of $22,000 vs. $500,000 expenditures over income, as projected.

To accomplish this task, it was necessary for the abrogation of four positions in the President's Department and an additional five positions in the Secretary-Treasurer's Department, a reduction in many of the budgets, Grand Lodge's contribution to the pension plan, as well as legal expenses and arbitration costs.

For the first time, in the Brotherhood's annual report, all of the monies are stated in U.S. dollars. On March 31, 1999, at the time of this report, the conversion rate of a Canadian dollar was $1.51 compared to a U.S. $1.00. However, on March 31, 1998, the conversion rate of a Canadian dollar was $1.42 compared to a U.S. dollar.

In accordance with Article V, Section 3, of the Grand Lodge Constitution and By-Laws, I take pride in submitting the following report reflecting the financial condition of the Brotherhood of Maintenance of Way Employes and the successes we have had while maintaining a sound financial condition in the fiscal year April 1, 1998 through March 31, 1999.

The total income for the fiscal year under review, April 1, 1998 through March 31, 1999 was $11,383,411.59, an increase of $67,791.65, or .59 percent from the previous fiscal year, April 1, 1997 through March 31, 1998. The combined income from dues and initiation fees increased $347,102.21, or 3.72 percent from the preceding fiscal year. Income from investments decreased $397,301.31, or 25.69 percent.

The net expenses for the fiscal year under review, April 1, 1998 through March 31, 1999 were $11,360,705.83, for an operating excess of $22,705.76. The net expenses for the previous fiscal year from April 1, 1997 through March 31, 1998, were $11,649,606.42, resulting in an operating deficit of $333,986.48. Income over expense increased by $356,692.24, for the period covered by this report compared to the previous fiscal year.

President Fleming and I, in this our third term, have and will continue to meet our fiduciary responsibilities and are dedicated to preserving the Brotherhood's sound financial position.

I wish to thank President Fleming, the Grand Lodge Officers, staff and employes. I would particularly like to thank Mr. John Pesta, Administrative Assistant to Secretary-Treasurer, and Mrs. Linda Cassese, the Secretary to the Secretary-Treasurer. Equally as well, I wish to thank all of the dedicated System Officers, and Subordinate Lodge Officers, who have maintained a devoted commitment to serving our members in times when budget cuts have reduced Grand Lodge employes, thus increasing everyone's workload.

COSTS ASSOCIATED WITH STRIKE ACTIVITIES

The following is a report of payments made from the Strike Fund Trust for the period April 1, 1998 through March 31, 1999. A total of $285,373.87 was paid from the Trust.

Strike benefit payments, investment management fees, accounting fees and bank service charges were the only payments made from the Strike Fund Trust. At the close of the fiscal year March 31, 1999, there was a balance of $17,664,661.94 in the Strike Fund.

Payments to members due to the Brotherhood's strike against the Consolidated Rail Corporation totaled $105,593.00 and against the Burlington Northern/Santa Fe Railroad totaled $113,046.00.

Investment management fees, accounting fees and bank service charges totaled $66,734.87.

INDEPENDENT AUDITOR'S REPORT

In our opinion, the financial statements referred to herein present fairly, in all material respects, the financial position of the Brotherhood of Maintenance of Way Employes as of March 31, 1999 and 1998 and the results of its operations for the years then ended in conformity with generally accepted accounting principles.

Landgren & Company, P.C.
Certified Public Accountants