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Amtrak Electric motors financed!
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<p>The locomotives will be capitalized in <i>locomotives</i> under <i>Property and Equipment</i>. The capitalized amount will include the cost of the equipment. less any discounts, as well as transportation and insurance costs, until Amtrak accepts delivery of the locomotives. Training costs and interest costs will also be capitalized. It appears that Amtrak will own the locomotives, at least initially, given the loan from the FRA, but it may subsequently organize a sale and leaseback.</p> <p>The maintenance facility probably will be capitalized in <i>Right-of-way and other properties</i>. The cost of constructing it, i.e. labor, materials, and overheads, along with make ready training costs and interest associated with the construction will be capitalized.</p> <p>The time frames and costs appear reasonable, but one would need a lot more detail than Amtrak makes available to draw a final conclusion. </p> <p>"Amtrak projects that improved ticket revenue from more reliable locomotives can fund the debt service payments to repay this loan." This strikes me as a bit of a stretch. I would like to see the methodologies that Amtrak used to make this projection. As a rule, going out more than a couple of years on a revenue projection is dicey at best. </p>
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