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Bankrkuptcies, Profits, Subsidies, expectations.

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"The subsidy in Germany is about $8B a year, but that is mostly for Regio and S-Bahn.  The IC and ICE trains generate cash - apparently even after paying DB Netz..." What is the source of this information?    For FY10 the notes to the DG's Consolidated Financial Statements (CFS) show the income results for the following segments:  Long Distance, Regional,Urban, Arriva, DB Schenker, Logistics, Track, Stations, DB Services and Subsidiaries. Long Distance (IC and ICS?) showed a profit of 160 million Euros before interest and taxes. The operating profit after adjustments was 117 million Euros.  Earnings Before Interest, Taxes, and Depreciation was 481 million Euros, which means that somewhere along the line long distance operations received a substantial credit.  The nature of the credit is not shown.     Included in the revenues for the long distance trains is 177 million Euros of internal revenues. The notes to the financial statements don't make clear what makes up these internal revenues. If they are backed out of the operating results for the long distance services, they would have shown an operating loss of 17 million Euros.    Several years ago, for one of our discussions, I looked up the results for the TGV.  Included in the operating results for the TGV were station restaurant operations.  The restaurants appeared to have healthy returns. Including these returns in the operating results for the TGV may be an acceptable accounting practice in France, but it would not be acceptable in the United States.  Once should be cautious when assessing and comparing the financial statements of European countries with the United States.  The Europeans have different accounting standards that we have in the United States. DB had consolidated depreciation charges and impairment loses of 2.9 billion Euros.  Net interest charges were 826 million Euros, bringing the total for these three items to 3.7 billion Euros.  The allocation of these items is not shown.  Presumably some of it is worn by the long distance operations.  That being the case, even if one discounts the internal revenues, which are not shown as transfers, the amount of depreciation, impairment loses, interest, and income taxes would probably have wiped out the EBITD results for the long distance operations.  The Consolidated Statement of Cash Flows, arguably the most important financial statement in the deck, does not show any transfers from a government source. Without having access to the complete financials for the long distance trains, including the property ledgers, as well as the allocation of fixed charge formulas, it would be impossible for someone just reading the financial statements to know whether the long distance trains actually made money in an accounting sense.
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