Petitioner in this direct review proceeding challenges an order of the Interstate Commerce Commission (Commission or ICC) entered on remand from a previous decision of this court, Greyhound Corp. v. Interstate Commerce Commission, 551 F.2d 414 (D.C.Cir. 1977). The primary issue in this case is whether the Commission's continued exercise of its securities jurisdiction over Greyhound Corporation (Greyhound) fails to conform to the mandate of this court. Also involved is the validity of the Commission's imposition of a dividend restriction on Greyhound Lines, Inc. (Lines), a subsidiary of Greyhound Corporation. Because we find that the Commission has again failed to explain adequately its deviation from precedent concerning its securities jurisdiction and that there is no "good cause" justifying a dividend restriction at this time, we set aside the order of the Commission.

The Commission is empowered by the Interstate Commerce Act (the Act), 49 U.S.C. § 1 et seq. (1976)1, section 5(4),2 to treat a noncarrier holding company that acquires "control" over a carrier as a carrier subject to the reporting, accounting, and securities regulations of the Act.3 In 1963 Greyhound, with the approval of the Commission, transferred its transportation rights and properties to a subsidiary, Greyhound Lines, Inc., thereby becoming a noncarrier holding company subject to Commission regulation. Because Greyhound's principal source of income was to derive from carrier operations and closely related activities, the Commission subjected Greyhound to the accounting, reporting and securities provisions of the Act. California Parlor Car Tours Co.-Pur.-Greyhound Corp., 93 M.C.C. 392, 395 (1963). In 1970, as a condition upon Greyhound's acquisition of Armour and Company, the Commission, acting within its authority under section 5(2) of the Act,4 restricted Lines' ability to engage in certain intercompany financial transactions.5 Beginning in 1963, Greyhound actively pursued a course of diversification and in 1972 petitioned the Commission for modification of the 1963 order. Premised on the ground that Greyhound's principal source of income no longer derived from transportation and related activities, the petition sought removal of the regulation of Greyhound's securities. The Commission denied the petition in an unpublished order. California Parlor Car Tours Co.-Pur.-Greyhound Corp., No. MC-F-8531 (ICC Div. 3, Mar. 21, 1974), Joint Appendix (J.A.) at 51-52 (hereinafter 1974 Order ).

The 1974 Order stated that continued regulation of Greyhound was justified by the fact that its principal source of net income was from transportation or related activities and that the subsidiary carrier represented a large segment of the passenger surface transportation industry. Id. On petition for review, this court found that the ICC had changed the standard governing the regulation decision from a 50 percent of gross income test to something less than 50 percent of net income test without explanation. Greyhound, 551 F.2d at 417. The court also found that the Commission had deviated from the precedents established in cases involving holding companies similar to Greyhound. Id. The case was accordingly remanded to the Commission with directions to rectify or explain the deviations. Id. at 418.

Following remand, the Commission reopened the proceedings and solicited comments from interested parties.6 California Parlor Car Tours Co.-Pur.-Greyhound Corp., No. MC-F-8531 (ICC Div. 3, Aug. 12, 1977), J.A. at 55. Comments were received,7 and in October 1978 the Commission issued an order setting forth its determination that continued regulation of Greyhound was justified. California Parlor Car Tours Co.-Pur.-Greyhound Corp., 127 M.C.C. 343 (1978) (hereinafter 1978 Order ). The Commission again reopened the proceeding and, in addition, reopened an unrelated proceeding, Greyhound Corp. Securities, Finance Docket No. 25982,8 "to consider the approximate mix of section 5(2) conditions and securities regulation under the present circumstances." 1978 Order, 127 M.C.C. at 357. As an interim solution, the Commission modified its securities jurisdiction to require that Greyhound obtain prior approval only for security issuances or assumed obligations that "will significantly affect its carrier subsidiaries...." Id. In all other cases Greyhound was permitted to file "letter petitions to waive the security jurisdiction." Id.

The reopened proceedings resulted in the order that is the subject of this petition. California Parlor Car Tours Co.-Pur.-Greyhound Corp., 127 M.C.C. 605 (1979) (hereinafter 1979 Order ). The Commission reaffirmed the conclusions reached in the 1978 Order, incorporated the reasoning of that decision, adopted the interim solution with one modification,9 and imposed a further restriction-that Lines could not declare or pay any dividends in excess of 70 percent of its net income available for dividends without prior Commission approval. 1979 Order, 127 M.C.C. at 615.

On petition for review of the 1979 Order,10 Greyhound contends that the portion of the order continuing the exercise of securities jurisdiction must be set aside as contrary to the 1977 mandate of this court. In addition, Greyhound argues that imposition of a dividend restriction on Lines is an abuse of the Commission's discretion and constitutes arbitrary and capricious action. As an independent ground, Greyhound contends that the Commission's order must be set aside in its entirety because excessive delay in resolving the case violates the fifth amendment of the Constitution and the Administrative Procedure Act. Our resolution of the securities and dividend issues makes it unnecessary for us to address Greyhound's latter contention.

The order at issue here is the product of informal rule-making and accordingly must be reviewed under the "rational basis" test.11 A reviewing court, however, will accord a somewhat greater degree of scrutiny to an order that arrives at substantially the same conclusion as an order previously remanded by the same court. See Food Marketing Institute v. ICC, 587 F.2d 1285, 1289-90 (D.C.Cir. 1978). "(W)e must recognize the danger that an agency, having reached a particular result, may become so committed to that result as to resist engaging in any genuine reconsideration of the issues." Id. at 1290.

The Commission's 1978 Order analyzed the question whether Greyhound should be subject to extensive regulation by considering two issues: first, whether the holding company should be treated as a carrier under section 5(4) of the Act and subject to securities regulation; and second, if so, the extent of regulation required to protect the carrier subsidiaries.

Our 1977 decision in this very case noted that agencies are required to adhere to their own precedents or to explain any deviation. Greyhound, 551 F.2d at 416. As the Supreme Court has noted, "A settled course of behavior embodies the agency's informed judgment that, by pursuing that course, it will carry out the policies committed to it by Congress." Atchison, Topeka & Santa Fe Railway v. Wichita Board of Trade, 412 U.S. 800, 807, 93 S. Ct. 2367, 2374, 37 L. Ed. 2d 350 (1972). In its 1978 Order the Commission stated that the purpose of section 5(4) is to prevent unregulated holding companies from jeopardizing the financial stability of the transportation subsidiaries. 127 M.C.C. at 347. The ICC has traditionally used a "primary interest in transportation" test, and its adjunct "principal source of income" test, to determine whether regulation of a noncarrier holding company is justified. See, e.g., Lease Plan International Corp.-Control-National Trailer Convoy, Inc., 93 M.C.C. 203, 207 (1963); Wells Fargo Armored Service Corp.-Control-Armored Motor Service Co., Inc., 75 M.C.C. 285, 295 (1958). The use of these standards suggests a policy judgment by the Commission that not all holding companies controlling carriers should be subject to ICC securities regulation. Prior ICC decisions involving this issue indicate that imposition of burdensome securities regulation is justified only when a holding company is considered primarily in the business of transportation or primarily interested in transportation because of financial involvement with a carrier subsidiary. In its 1978 Order, however, the Commission concluded that in pursuing its statutory objective, "it is irrelevant whether the holding company is primarily involved in transportation; the impact on the transportation system is the same. It is the nature of the carrier controlled by the holding company that we should examine." Id. (emphasis added). This position marks a radical departure from Commission precedent.

Just one month before its 1978 Order in Greyhound, the Commission, considering whether United Parcel Service, Inc., should be treated as a carrier under section 5(4), stated that "(t)he board correctly relied on the 'primarily business test' .... The Commission consistently has held that when a noncarrier corporation is engaged substantially in transportation activities ... the act requires that such company be treated as a motor carrier ...." United Parcel Service, Inc. (Ohio)-Merger-United Parcel Service, Inc., (New York), 127 M.C.C. 292, 297 (1978). As recently as September 1980, the Commission reaffirmed the vitality of the "primary interest" test. In Georgia Highway Express, Inc.-Pur.-Western Transportation Co., 127 M.C.C. 721 (1980), the Commission stated that two general tests are available to determine whether imposition of securities jurisdiction on a holding company is appropriate. One of these tests was the "primary interest" test12 the Commission had declared irrelevant nearly two years earlier. Although the Commission also applied a "substantial effect on transportation" test in Georgia Highway, it is clear that the exercise of securities jurisdiction was based on the finding that the holding company, as "the alter ego of (the carrier), should be subjected to the securities requirements ... of the Interstate Commerce Act." Id. at 723.13

The importance of reasoned decisionmaking in an agency action cannot be over-emphasized. When an agency such as the ICC is vested with discretion to impose restrictions on an entity's freedom to conduct its business, the agency must exercise that discretion in a well-reasoned, consistent, and evenhanded manner. See Greater Boston Television Corp. v. FCC, 444 F.2d 841 (D.C.Cir. 1970), cert. denied, 403 U.S. 923, 91 S. Ct. 2229, 29 L. Ed. 2d 701 (1971). The Commission cannot endorse the "primary interest" test in September, declare it irrelevant in October of the same year, and remain faithful to these principles. These diametrically opposed statements, made only one month apart, are not reconciled by the Commission; indeed, the Commission does not even attempt a reconciliation but instead insists that it is "not singling out Greyhound for regulation under different standards than those applied to other carriers. The criteria developed over the years have been used." 1978 Order, 127 M.C.C. at 352.

Having stated in the 1978 Order that an inquiry into the primary interest of the holding company was irrelevant, the Commission proceeded to list criteria that it did consider relevant to the regulatory decision. Such criteria were said to include the holding company's principal source of income, the extent of the holding company's investment in the carrier subsidiary, the percent of the holding company's consolidated gross assets derived from noncarrier activities, the extent to which the holding company's activities are unrelated to transportation, and the size and nature of the carrier and its influence on national transportation. 1978 Order, 127 M.C.C. at 350. All but the last of these criteria relate directly to the holding company and the extent that its income, investments, assets and activities are derived from or related to the carrier subsidiary. Although the ICC stated that it is "the nature of the carrier" that should be examined, 1978 Order, 127 M.C.C. at 347, it did not explain how the listed criteria aid that examination.

The Commission instead relied on only one of the listed criteria-the size and nature of the carrier and its influence on national transportation-as justification for the imposition of securities jurisdiction over Greyhound. Noting that the loss of services of a large carrier would disrupt the national transportation system, the Commission summarily concluded: "Lines is the largest member of the bus industry. Some regulation of its noncarrier holding company is necessary to protect the carrier subsidiary." 1978 Order, 127 M.C.C. at 351 (emphasis added). We do not dispute the fact that the carrier's position in the industry is an important factor to be considered. When it is the only factor applied, however, the Commission is obligated to provide more than a mere conclusion. One searches the 1978 Order in vain for an adequate explanation of why this criterion alone justifies the imposition of the Commission's securities jurisdiction.

The Commission did not find that Lines is sui generis in the industry,14 nor did it rely on any other factual distinctions that might warrant novel treatment in this case. Instead, the Commission stated "whether or not we believe Lines is sui generis, its impact on the industry is so great that its actions, and those of its parent, must be scrutinized to the extent directed by Congress." 1978 Order, 127 M.C.C. at 352.

The Commission insisted that its shift to a "substantial effect on transportation" test was neither abrupt nor unexplained. Two administrative cases were cited in support of this proposition. In Illinois Central Gulf Railroad-Acquisition-Gulf, Mobile & Ohio Railroad, 338 I.C.C. 805 (1971), the Commission did, it is true, impose securities jurisdiction based on the effect on transportation; in so doing, however, it relied on another decision, the rationale of which the Commission, at least arguably, subsequently repudiated. In International Utilities of the U.S., Inc.-Control-Pacific Intermountain Express Co., 116 M.C.C. 66 (1971), the Commission imposed its securities jurisdiction based on the fact that the holding company would "have an influence upon the national transportation which is immediate in effect and wide in scope." International Utilities, 116 M.C.C. at 81. As noted by petitioner, however, the Commission suspended its securities jurisdiction over International Utilities in 1972. Brief for Petitioner at 25-26. The unpublished suspension order does not provide the reasoning behind the decision, International Utilities of the U.S., Inc.-Control-Pacific Intermountain Express Co., No. MC-F-10795 (ICC Div. 3, June 7, 1972), J.A. at 167, nor does the Commission offer any explanation or even comment on the case in its brief. We find that, absent any explanation, the Commission's reliance on the reasoning in an order that has not been in effect since 1972 is misplaced.

The absence of any explanation of the supposed logical connection between the actions of the holding company and the resulting effect on the carrier subsidiaries is disturbing. If the Commission could support the inference, which is implicit in the use of the "size and nature of the carrier" criterion, that the actions of a holding company are more likely to affect a carrier whose impact on national transportation is substantial than a carrier with little or no impact, we feel it would have done so. The Commission's new emphasis on the effect on national transportation also implies that a carrier with a substantial impact is in greater need of protection than other carriers. It is not unreasonable, however, to arrive at the opposite conclusion-that a carrier that commands a top position in its industry needs less protection than a smaller, less successful competitor.

We need not speculate further on the rationale behind the Commission's change of standards. "Whatever the ground for the departure from prior norms ... it must be clearly set forth so that the reviewing court may understand the basis of the agency's action and so may judge the consistency of that action with the agency's mandate." Atchison, Topeka & Santa Fe, 412 U.S. at 808, 93 S.Ct. at 2375. The Commission has failed to follow this fundamental principle of administrative law.

The Commission enumerates four factors that, when applied to Greyhound, purportedly justify the extent of regulation: the importance of the carrier to the parent company, Greyhound's past record of corporate abuses, the threat created by other subsidiaries competing for parent company financial resources, and the position of the bus industry in general. 1978 Order, 127 M.C.C. at 353-56. Although the Commission points to these factors as relevant in determining the extent of regulation, it concludes, "(c)onsidering all of these factors, we find the retention of our 5(4) jurisdiction over Greyhound is justified." Id. at 356. It is unclear from the order whether the factors noted above relate to the decision to regulate or only to the extent of that regulation. Accordingly, we will also examine these factors to ascertain whether they might provide an independent basis for continuation of securities regulation in this case.

Broad generalizations about the state of the industry or the potential threats posed by other subsidiaries and parent actions, either taken alone or in conjunction with other factors, cannot justify the imposition of onerous regulatory burdens. These factors apply with equal force to all companies in the surface passenger industry and all parent/subsidiary relationships. Any reliance on such factors must be accompanied by a reasoned analysis of their relation to Greyhound and their relevance to the securities regulation decision. If continued regulation of Greyhound's securities is justified in this case, it must be based on a reasoned analysis of the two other factors presented by the Commission.

The Commission does not rely, as indeed it cannot, on the "importance of the carrier to the parent." This factor appears to be the "primary interest" test swathed in new clothing. As our 1977 decision implied, under the "primary interest" test or "principal source of income" test, Greyhound would escape the ICC's securities jurisdiction. See Greyhound, 551 F.2d at 417.

We are thus left with the past improper behavior rationale for continued jurisdiction. The Commission places great emphasis on Greyhound's prior behavior as justification for the continued regulation. The behavior at issue, however, occurred between 1965 and 1969. 1978 Order, 127 M.C.C. at 353-54. There is no indication or suggestion that Greyhound has engaged in improper conduct or questionable practices since that time. Moreover, in 1970 the Commission restricted certain financial transactions between Lines and Greyhound in order to monitor the activities that had led to the 1965-69 abuses. See Greyhound Corp. Securities, 336 I.C.C. 575, 583 (1970). The Commission did not find in the 1978 Order, and does not now suggest, that the 1970 restrictions have been ineffective. We conclude that, absent additional facts, reliance on the 1965-69 behavior of Greyhound is unreasonable.

In sum, we find that the Commission has failed to explain adequately its rejection of the primary interest test and subsequent adoption of the "substantial effect on transportation" test as the sole criterion for continuing the exercise of securities jurisdiction over Greyhound. We can only conclude that the portion of the Commission's order continuing securities regulation must be set aside.

In addition to continuing its securities jurisdiction over Greyhound, the Commission imposed a restriction on the ability of Lines to declare or pay any dividends in excess of 70 percent of its net income available for dividends. 1979 Order, 127 M.C.C. at 614. The restriction was imposed under section 5(2) of the Act as a condition to the continuation of the Commission's 1963 approval of Greyhound's control of Lines. Id.

Greyhound's challenge to this condition rests on three grounds: first, it contends that the Commission's order failed to show "good cause" for modification of the 1963 order as required by section 5(10) of the Act;15 second, it argues that the criteria applied and the timing of the imposition of the restriction deviate from Commission precedent without adequate explanation; and, finally, it submits that the Commission has shown absolutely no justification for the restriction. We feel that the two latter contentions are inextricably intertwined with the section 5(10) claim. Accordingly, our discussion will be limited to the meaning of the "good cause" requirement and whether "good cause" existed at the time the 1979 Order was entered.

The 1979 Order does not contain a discussion of or citation to any provision of the Act that confers authority on the ICC to modify the 1963 control order. In its brief, the Commission avers that its power to modify or correct any of its orders is very broad and is in fact unlimited. Sections 17(7) and 16(6) of the Act are cited in support of this assertion.16 Brief for Respondent ICC at 33-34. Although these provisions do confer wide discretion on the ICC, we need not explore the limitations on the exercise of discretion under those sections. We are faced with a statute that contains a provision granting wide discretion and a provision expressly limiting discretion in specific circumstances. We believe that the only reasonable interpretation of the statute requires that when the specified circumstances occur, the more restrictive of the two provisions must apply. Accordingly, when orders previously entered under section 5(2) are to be modified or supplemented, section 5(10), which expressly limits the Commission's normally wide discretion to cases where "good cause" exists,17 is the applicable provision.

It is axiomatic that all words and provisions of a statute are presumed to have meaning and are to be given effect. Wilderness Society v. Morton, 479 F.2d 842, 856 (D.C.Cir.), cert. denied, 411 U.S. 917, 93 S. Ct. 1550, 36 L. Ed. 2d 309 (1973). In determining the meaning of the "good cause" requirement, we are persuaded that the language of the statute requires some event or change in circumstances which necessitates a supplementation or modification of a section 5(2) order before the Commission is authorized to act. See Chesapeake & Ohio Railway v. United States, 571 F.2d 1190, 1204 (D.C.Cir. 1977) (MacKinnon, J., dissenting).18 Accordingly, we find that the existence of "good cause" is a jurisdictional prerequisite to the Commission's authority to supplement or modify a section 5(2) order.

We now turn to the question of whether the agency has shown "good cause" to exist in this case. The fact that the Commission did not make an explicit finding of "good cause" is not itself a sufficient reason to set aside the order. "Although agency action must be set forth with sufficient clarity so that courts do not have to guess at the underlying theories relied on, this Court has recognized judicial indulgence toward administrative action to the extent of affirming an order when an agency's path, though convoluted, can be discerned." Midwestern Gas Transmission Co. v. Federal Energy Regulatory Commission, 589 F.2d 603, 615 (D.C.Cir. 1978) (per curiam) (footnotes omitted). If the Commission has articulated reasons that rise to the level of "good cause" for modifying its prior order, its decision should be affirmed. Given the facts and circumstances presented in this case, however, we are unable to find that any of the reasons given by the Commission in support of imposing the dividend restriction at this time constitute "good cause."

The Commission's decision appears to be based on two factors: that the relaxation of its securities jurisdiction over Greyhound in 1978 dictates a need for additional safeguards and that "the cash-generating capability of Lines ... represent(s) a fertile area for potential abuse." 1979 Order, 127 M.C.C. at 613. In its brief before this court, the Commission also asserts that its avowed objective-"to reach a regulatory solution that would provide better monitoring and protection of Lines' financial stability, while intruding as little as possible on Greyhound's business transactions"-is sufficient in itself to constitute "good cause." Brief for Respondent ICC at 33.

Before turning to these factors, we note that in its brief and at oral argument the Commission contended that Greyhound's prior behavior justified the dividend restriction. See Brief for Respondent ICC at 37-38. A careful reading of the 1979 Order, however, suggests that this consideration played little, if any, role in the decision. The only direct reference to Greyhound's prior behavior appears immediately following the Commission's adoption and incorporation of the 1978 Order.

In view of the unhealthy impact which certain of Greyhound's previous financial transactions have had upon Lines, and the fact that Lines holds a unique and significant position in the passenger bus transportation industry, we believe that the public interest would best be served by some form of continued Commission monitoring of the financial relationship between Greyhound and Lines.

1979 Order, 127 M.C.C. at 611 (footnote omitted). It is unclear whether this summary relates to the 1978 Order concerning securities jurisdiction or to the analysis of the dividend restriction that follows the reference. In light of the absence of any further direct reference19 in the 1979 Order to prior behavior, we believe the sentence is merely a summary of the reasoning contained in the 1978 Order. If the imposition of the dividend restriction was based on Greyhound's past improper conduct, the Commission has failed to make a clear statement to that effect. In any event, as we stated earlier, it is unreasonable for the Commission to rely on behavior that occurred long ago, without some showing suggesting that the improper conduct has occurred or is likely to occur again. This is particularly true where, as in this case, the Commission lifted a similar dividend restriction after the improper conduct occurred. See note 4, supra.

Nor does the relaxation of the Commission's securities jurisdiction over Greyhound constitute "good cause" for imposing a dividend restriction on Lines. The Commission has not shown that a relaxation of securities regulation of the parent company has even a remote relation to the dividends paid by a subsidiary. Indeed, the Commission itself notes with apparent approval the finding by the ICC's Bureau of Investigation and Enforcement that the authority to impose conditions under section 5(2) and the authority to regulate security issuances are not coextensive, but are separate and distinct. 1979 Order, 127 M.C.C. at 611.

The Commission's primary justification for the dividend restriction is that there is a "potential for abuse." This potential for abuse, the Commission finds, "is sufficient to justify some degree of regulation ... over the dividend cash flow from Lines to Greyhound." 1979 Order, 127 M.C.C. at 613. The Commission does not distinguish the potential for abuse it finds in the Greyhound/Lines relationship from the potential for abuse that is inherent in any parent/subsidiary relationship. It points to no facts peculiar to Greyhound or Lines suggesting that this potential is more likely to crystallize in that case than in any other. Although the Commission could have pointed to the existence of particular facts or financial conditions that might justify the imposition of additional restrictions on intercompany financial transactions, as it has done on other occasions,20 it has not done so. To accept the Commission's reasoning that a mere "potential for abuse" is sufficient to allow the reopening of section 5(2) proceedings would render the "good cause" provision of section 5(10) a nullity-a potential for abuse exists in every case.

Following the same reasoning, the Commission's general objective of reaching a balanced regulatory solution cannot satisfy the "good cause" requirement. We assume the ICC strives to reach a balanced regulatory solution in every case. Something more than a general objective applicable to all cases is required in order to give effect to the good cause provision.

The Commission has failed to make a finding that "good cause" exists for modification of the 1963 control order and has failed to provide any articulated justification that can be considered "good cause" or provide a basis for imposing a dividend restriction at this time. Accordingly, the portion of the 1979 Order imposing a dividend restriction on Lines must also be set aside.

In 1963 the Commission determined that Greyhound should be subject to securities regulation because transportation and related activities provided its principal source of gross income. In 1974 the Commission decided that the regulation should continue because Greyhound's principal source of net income was from the same type of activity. In its 1979 Order, the Commission abandoned any reliance on the principal source of income test and instead concluded that continued regulation of Greyhound's securities is justified because the carrier subsidiary has a substantial impact on national transportation. The failure to provide an adequate explanation for the change in tests applied, in terms of policy change, precedent or factual circumstances peculiar to Greyhound, is fatal to this portion of the Commission's 1979 Order.

Eight years have passed since Greyhound first requested modification of the 1963 order. The Commission has had ample time and opportunity to provide a reasoned explanation of the decision to continue the exercise of its securities jurisdiction. We find no useful purpose to be served by allowing the Commission another shot at the target. See Office of Communication of the United Church of Christ v. FCC, 425 F.2d 543, 550 (D.C.Cir. 1969). Similarly, in imposing a dividend restriction the Commission failed to meet the statutory requirement of "good cause"-whether it be change in policy, precedent or unusual factual circumstances-for modifying the 1963 control order. Accordingly, the Commission's order must be set aside in its entirety. Under the circumstances present in this case, we see no just alternative but to remand the case to the ICC with directions to release Greyhound from the Commission's securities jurisdiction. The Commission is also directed to refrain from reopening the proceedings in this case unless and until circumstances arise that, consistent with this opinion, warrant further proceedings.

It is so ordered.