Edit post

Edit your reply below.

Post Body
Enter your post below.
Amtrak reports operating margins, i.e. the operating results, for each identifiable line of its business, i.e. NEC, State Supported and Other Short Corridor Trains, and Long Distance Trains. In FY12 it showed an operating profit for the NEC, offset by operating losses for the Short........ and Long Distance Trains. The Consolidated Statement of Operations includes non-current items.  The biggest are depreciation and interest expense. These items, together with the large operating losses incurred by the Long Distance Trains, wiped out the NEC operating profits. As a result, in FY12 Amtrak had an consolidated loss of more than $1.2 billion on total revenues of $2.9 billion. Without access to Amtrak's books, it is impossible to know how much of the depreciation and interest expense is allocated to the NEC.  Based on what we know about Amtrak's capital expenditures over the past 10 to 20 years, it probably is fair to say that the NEC drives a substantial amount of the capital (depreciation and interest) expense.   Amtrak received a substantial chunk of ARRA funds.  Most of these were spent for capital items.  In addition, it is purchasing new locomotives for the NEC and adding more than 100 new single level cars to its long distance fleet.  Moreover, its wish list includes new trains to replace the aging Acela trains. These items will increase Amtrak's depreciation expense and, unless the company can find a way to offset the higher depreciation with increased revenues (more riders willing to pay higher fares),its financial situation could deteriorate even further. A competitive business must cover all of its costs in time, or it goes out of business.  Of course, Amtrak is not a competitive business, although it is a government sponsored commercial enterprise.
Tags (Optional)
Tags are keywords that get attached to your post. They are used to categorize your submission and make it easier to search for. To add tags to your post type a tag into the box below and click the "Add Tag" button.
Add Tag