Rail Passengers Association Critique of Amtrak's Cost Accounting

[PJS1]

MidlandMike

 If LD trains are discontinued their fixed costs including equipment will continue as well as labor protection costs to the laid off employees.  

All costs are variable in the long run. 

 

If the long-distance trains were discontinued, most of the expenses associated with them would disappear in time.  This would include the variable costs, mixed costs, and fixed costs.  The variable costs would go straight-a-way; the fixed costs could take a while.  The variable and fixed portion of the mixed costs would follow the variable and fixed patterns. 

 

Because of severance payments, as well as one-off discontinuance expenses, Amtrak’s expenses could spike immediately after discontinuance of the long-distance trains.  But it would be a temporary phenonium.  Eventually they would go away.

 

Most of the long-distance equipment is leased.  Under a worse case scenario, the lease expenses would only disappear as the leases expired.  However, they may have a termination clause, in which case Amtrak probably would have to pay a termination penalty, which would cause its lease expenes to spike momentarily, but then they would disappear.  

 

Amtrak would have to bring in a top-flight consulting firm to show them how to discontinue the long-distance trains.  Relying on its staff or federal bureaucrats to craft a suitable discontinuance outcome would be useless.  Government employees don’t know how to wring the waste out of a commercial enterprise.  And Amtrak is a commercial enterprise albeit it a failed one. 

 

Most large corporations periodically terminate a segment of their business.  It usually is one that does not fit the corporation’s mission and financial requirements.  A business that discontinues a segment of its operations, especially one that is losing money, will saving most of the expense associated with the discontinued segment over time.  One need look no further than GE for an example. 

[BaltACD]

When it comes to accounting costs - everybody is right and everybody is wrong.

Everybody wants to account for costs THEIR way to prove THEIR points.

[MidlandMike]

VOLKER LANDWEHR

 

 

MidlandMike

Rather than ignore facts, Mr. Selden brings up the facts that many such as yourself seem to want to ignore, that is that the NEC is very expensive piece of infrastructure to maintain. The total economics overwhelm any profit from "above the rails" operation. So you "don't care much about the necessary investments into the NEC." That does not negate the fact that those capital costs are part of the costs needed to keep it running. The NEC is no more of an economic success than any other of Amtrak's product lines.

 

 

I think you can only compare the "above the rail" costs. Amtraks owns a large part of the NEC and is responsible for investment into and maintenance of that part of the line. The LD trains don't even pay the costs they cause to their hosts.

Looking at the "above the rail" costs LD trains make a loss, NEC trains a profit. That Mr. Selden seems to ignore when he writes: Why any enterprise would try to eliminate its largest, most efficient and most successful division is a mystery. And:

The supreme irony of Amtrak’s effort is that if it succeeds, all that traffic, free cash flow, return on invested capital and growth opportunity will be lost. Worse, its annual loss, and “need” for federal subsidy to sustain what remains, will grow by more than $400 million annually (according to Amtrak), pushing the total loss and subsidy up by that amount to a figure approaching $2 billion annually.

I do not understand the following: How can free cash flow get lost when LD-trains make a loss? How can Amtrak's dept rise when the $500 million loss of the LD trains disappears?

The maintenance and investment costs are the price Amtrak has to pay for owning the ROW. On the other hand it allows Amtrak and others to run around 40 trains per direction daily in some sections instead of one pair on host railroads.

I don't know if subsidies for the NEC network are unfair when trucks and cars don't pay for the complete damage to roads they cause, or airline use an infrastructure provided at least in part by the government.

I don't care in the sense that I accept the investment cost and that I think they are better used in the NEC than elsewhere in the system.

Passenger-miles, load factor, and market share alone don't tell anything about the profitability.
Regards, Volker

 

 

It's obvious that Mr. Selden would not agree with your statement: "I think you can only compare the 'above the rail' costs."  The government has to subsidize both Amtrak's operating costs and capital costs at 100 cents on the dollar.

You say: "I do not understand the following: How can free cash flow get lost when LD-trains make a loss? How can Amtrak's dept rise when the $500 million loss of the LD trains disappears?"

If LD trains are discontinued their fixed costs including equipment will continue as well as labor protection costs to the laid off employees.  The main thing that will not continue is the ticket revenue.  The $500 million loss will balloon (according to Amtrak).

The LD trains run on track that carry enough freight to pay their infrastructure cost.  The NEC does not capture in ticket revenue anywhere near the cost to renew their infrastructure.

I have no problem with the government spending on NEC infrastructure as a public investment.  Mr. Selden might, or might not, have overcompensated NEC total costs to counter other's arguements that only show operating costs to favor corridor trains, nevertheless it shows that the total costs for each of the three Amtrak business units (LD, Corridor, NEC) are somewhat comparable, and that you can't use an economic arguement to eliminate any one of them.

[Overmod]

Thanks, Balt.  I have a suspicion that the noise 'Charlie' is hearing is no more than Level 2, and perhaps that many of them are lower, especially those proceeding east out of Global where attention could have been paid to them.  The question is whether any level of clearly audible flat wheel 'ought' to be permitted on nominal high-speed rail; I would argue that even Class 1 involves more track damage 'than it's worth' even if a system for assessing higher surcharge for 'whoever it was that flatted the wheels' could be implemented and administered fairly.

As with much highway deterioration, 'safe to move' doesn't mean safe against damaging the 'road' ...

[BaltACD]

Overmod

 

charlie hebdo

You should hear the flat spots galore on various UP freights in west suburban Chicago. 

Yes, but I do still remember the noise that freights made in the late '60s and '70s even on nominally high-speed ROWs, and by contrast how quiet even loaded coal trains are now (even on lines where significant railhead plastic flow occurs within a year, as is the case on the ex-Southern line through Germantown and Collierville).

I wonder if it would be practical to continue the existing (ex-Reading) freight route 'in parallel' with the Corridor, diverting flatwheel cars (or unit/block moves with flat wheels) off the high-speed track?  And providing 'rapid response' access to wheel machining or reprofiling at common interchange locations?

That is the purpose for carriers installing WILD Detectors (Wheel Impact Load Detector).  In the CSX implementation, there are 4 grades of defect. The first two levels do not require actions from the crew - they develop a history starting point for the car(s) detected.  The Level 3 activation requires the car be continued to destingation at not exceeding 30 MPH - Car Dept. at destination is to inspect the car and change out the offending wheel set(s) as necessary.  The Level 4 activation requires the train to STOP upon notification and for the Conductor to inspect the wheel(s) indicated, and if deemed safe to move, move the car(s) to the nearest set out location and set the cars out for further Car Department actions.

[Overmod]

charlie hebdo

You should hear the flat spots galore on various UP freights in west suburban Chicago.

Yes, but I do still remember the noise that freights made in the late '60s and '70s even on nominally high-speed ROWs, and by contrast how quiet even loaded coal trains are now (even on lines where significant railhead plastic flow occurs within a year, as is the case on the ex-Southern line through Germantown and Collierville).

I wonder if it would be practical to continue the existing (ex-Reading) freight route 'in parallel' with the Corridor, diverting flatwheel cars (or unit/block moves with flat wheels) off the high-speed track?  And providing 'rapid response' access to wheel machining or reprofiling at common interchange locations?

[charlie hebdo]

Overmod

I would also note that car types and the general state of car and wheel maintenance are now much better

You should hear the flat spots galore on various UP freights in west suburban Chicago.

[Overmod]

VOLKER LANDWEHR

I think you can only compare the "above the rail" costs. Amtraks owns a large part of the NEC and is responsible for investment into and maintenance of that part of the line. The LD trains don't even pay the costs they cause to their hosts. Looking at the "above the rail" costs LD trains make a loss, NEC trains a profit.  ... How can free cash flow get lost when LD-trains make a loss? How can Amtrak's debt rise when the $500 million loss of the LD trains disappears? The maintenance and investment costs are the price Amtrak has to pay for owning the ROW. On the other hand it allows Amtrak and others to run around 40 trains per direction daily in some sections instead of one pair on host railroads.

I think that when Mr. Selden discusses free cash flow and ROI, he's specifically referring to the above-the-line situation.

One perhaps sensible thing to consider is, with the advent of mandatory PTC, returning substantial amounts of freight traffic to the ex-PRR (and perhaps the New Haven as well).  That would at least allow a substantial part of the MOW to be spread across known actually-profitable traffic.  Yes, it's a pity we threw out the freight electrification, and the Atglen and Susquehanna, etc., and did a host of wrongsizing changes both south and east of NYC.  But the thought is there, and the cobbled-up alternatives used for freight in that region of the Northeast could benefit from the capacity.  I would also note that car types and the general state of car and wheel maintenance are now much better for use on high-speed track than at the time of the original cutoff.

[Anonymous]

MidlandMike

Rather than ignore facts, Mr. Selden brings up the facts that many such as yourself seem to want to ignore, that is that the NEC is very expensive piece of infrastructure to maintain. The total economics overwhelm any profit from "above the rails" operation. So you "don't care much about the necessary investments into the NEC." That does not negate the fact that those capital costs are part of the costs needed to keep it running. The NEC is no more of an economic success than any other of Amtrak's product lines.

I think you can only compare the "above the rail" costs. Amtraks owns a large part of the NEC and is responsible for investment into and maintenance of that part of the line. The LD trains don't even pay the costs they cause to their hosts.

Looking at the "above the rail" costs LD trains make a loss, NEC trains a profit. That Mr. Selden seems to ignore when he writes: Why any enterprise would try to eliminate its largest, most efficient and most successful division is a mystery. And:

The supreme irony of Amtrak’s effort is that if it succeeds, all that traffic, free cash flow, return on invested capital and growth opportunity will be lost. Worse, its annual loss, and “need” for federal subsidy to sustain what remains, will grow by more than $400 million annually (according to Amtrak), pushing the total loss and subsidy up by that amount to a figure approaching $2 billion annually.

I do not understand the following: How can free cash flow get lost when LD-trains make a loss? How can Amtrak's dept rise when the $500 million loss of the LD trains disappears?

The maintenance and investment costs are the price Amtrak has to pay for owning the ROW. On the other hand it allows Amtrak and others to run around 40 trains per direction daily in some sections instead of one pair on host railroads.

I don't know if subsidies for the NEC network are unfair when trucks and cars don't pay for the complete damage to roads they cause, or airline use an infrastructure provided at least in part by the government.

I don't care in the sense that I accept the investment cost and that I think they are better used in the NEC than elsewhere in the system.

Passenger-miles, load factor, and market share alone don't tell anything about the profitability.
Regards, Volker

 

[PJS1]

CMStPnP

 I am not 100% sure but I think the performance of Milwaukee to Chicago corridor is now even better than LA to San Diego or approaching it. 

In 2017 the Hiawatha’s had an operating profit of $600,000 or approximately 1 cent per passenger mile on total revenues of $23.9 million.  The Pacific Surfliners, which run mostly between Santa Barbara and San Diego, with a couple of trains between San Luis Obispo and San Diego, had an operating loss of $22.1 million or 8.1 cents per passenger mile on total revenues of $104.8 million.  Amtrak only posts the financial and operating results for the whole route. 

 

The Hiawatha’s had an operating loss of $4.7 million or approximately 7 cents per passenger mile on ticket revenues of $18.6 million.  The Pacific Surfliners had an operating loss of $50 million or approximately 19.2 cents per passenger mile on ticket revenues of $76.9 million.   

 

The Hiawatha’s were on-time at their end-points an average of 95 percent.  The percentage of on-time arrivals for the Pacific Surfliner at the end-points was 68.7 percent. 

 

The average load factor for the Hiawatha’s was 37 percent vs. 30 percent for the Pacific Surfliner. 

[MidlandMike]

VOLKER LANDWEHR

 

 

MidlandMike

My recollection of the article was Mr Selden was saying that Amtrak did not disclose segment load factors between stations.

 

 

Here a quote from the above linked article: Amtrak has output and load factor data for its three divisions, but goes to great lengths to conceal it, and appears not to use it.

He might have meant between station but he said differently.

If one measures business success at passenger-miles LD-trains are the largest Amtrak business division. If it qualifies as most successful with a loss of almost $500 million I boubt.

When you have an overall (average) load factor there are section with smaller or larger ones. The load factor and passenger-miles are similar to the operating ratio, seen alone they don't tell much.

That the NEC needs Amtrak's investment is naturally when one owns the line. The LD-trains are "lucky" that they run on host railroads paying only a small fee and the host all remaining investments and maintenance costs.

So I don't care much about the necessary investments into the NEC. As long as the NEC provides a profit it seems worthwhile to me.

My judgement of the article hasn't changed, very biased and ignoring facts.

There might be a number of reasons to keep the LD-trains but economical success is not one of them. So passenger rail advocats should better concentrate on those more political reasons.
Regards, Volker

 

 

Rather than ignore facts, Mr. Selden brings up the facts that many such as yourself seem to want to ignore, that is that the NEC is very expensive piece of infrastructure to maintain.  The total economics overwhelm any profit from "above the rails" operation.  So you "don't care much about the necessary investments into the NEC."  That does not negate the fact that those capital costs are part of the costs needed to keep it running.  The NEC is no more of an economic success than any other of Amtrak's product lines.

[CMStPnP]

MidlandMike

You seem to also only use selected facts of operating revenue, and ignoring the money pit that is the NEC, which was covered in the article.

So yourself and Volker should redirect to the Milwaukee to Chicago corridor.   Canadian Pacific owns the rail line, signaling and dispatching for 60% of the line with the other 40% METRA owned and dispatched.     As WisDOT has added train frequencies the fare box has increasingly picked up and covered the avoidable costs.   I am not a betting man when it comes to Amtrak but it would be interesting to see how much the additional three frequencies WisDOT tends to add will increase the financial picture more for the corridor over time.

I am not 100% sure but I think the performance of Milwaukee to Chicago corridor is now even better than LA to San Diego or approaching it.    Not sure as I do not keep up with Amtrak comparison stats.

[A McIntosh]

While there are significant costs associated with the NEC, some strong points remain with it:

1. Amtrak controls the dispatching of most of this line. As a result, on time performance is quite better than the LD trains, excluding Amtrak equipment failures.

2. The NEC is the most visible of the Amtrak system, serving the nation's capitol, the media and financial center in New York, and the corporate and university centers in and near Boston.

 Another fact that I have noticed is that the two LD trains that come the closest to breaking even are Auto Train and the Palmetto. There maybe some lessons to be learned from these two.

[Anonymous]

MidlandMike

My recollection of the article was Mr Selden was saying that Amtrak did not disclose segment load factors between stations.

Here a quote from the above linked article: Amtrak has output and load factor data for its three divisions, but goes to great lengths to conceal it, and appears not to use it.

He might have meant between station but he said differently.

If one measures business success at passenger-miles LD-trains are the largest Amtrak business division. If it qualifies as most successful with a loss of almost $500 million I boubt.

When you have an overall (average) load factor there are section with smaller or larger ones. The load factor and passenger-miles are similar to the operating ratio, seen alone they don't tell much.

That the NEC needs Amtrak's investment is naturally when one owns the line. The LD-trains are "lucky" that they run on host railroads paying only a small fee and the host all remaining investments and maintenance costs.

So I don't care much about the necessary investments into the NEC. As long as the NEC provides a profit it seems worthwhile to me.

My judgement of the article hasn't changed, very biased and ignoring facts.

There might be a number of reasons to keep the LD-trains but economical success is not one of them. So passenger rail advocats should better concentrate on those more political reasons.
Regards, Volker

 

[MidlandMike]

VOLKER LANDWEHR

 

 

MidlandMike

You seem to also only use selected facts of operating revenue, and ignoring the money pit that is the NEC, which was covered in the article.

 

 

In his Railway Age opinion Mr. Seldon claims that LD trains is Amtrak's largest and most successful business (Amtrak will shut down its largest and most commercially successful business). And he claims that "Amtrak has output and load factor data for its three divisions, but goes to great lengths to conceal it, and appears not to use it".

I think my table, gathered from one Amtrak source, shows his above claims as wrong.

From the same Amtrak source a few more numbers:

....................................NEC........State supported......LD

Revenue per available......$0.36..........$0.17..............$0.12
Seat-mile

Cost per available............$0.22..........$0.19...............$0.23
Seat-mile

Profit/Loss per.................$0.14..........$0.02...............$0.11
Available seat-mile

Profit/Loss per..................$0.24.........$0.05...............$0.19
passenger-mile

The profit/loss per passenger-miles was calculated using the load factor.

I think the numbers show why Amtrak invests into the NEC. Only there it brings profit.
Regards, Volker

 

 

My recollection of the article was Mr Selden was saying that Amtrak did not disclose segment load factors between stations. where NEC trains ran full/SFO from NYP to Phily, and then way less than half full south of there.  As far as your figures go, again you are only showing operating profit/loss, and not the tens of billion$ needed for NEC maintenance/upgrade.

[Anonymous]

MidlandMike

You seem to also only use selected facts of operating revenue, and ignoring the money pit that is the NEC, which was covered in the article.

In his Railway Age opinion Mr. Seldon claims that LD trains is Amtrak's largest and most successful business (Amtrak will shut down its largest and most commercially successful business). And he claims that "Amtrak has output and load factor data for its three divisions, but goes to great lengths to conceal it, and appears not to use it".

I think my table, gathered from one Amtrak source, shows his above claims as wrong.

From the same Amtrak source a few more numbers:

....................................NEC........State supported......LD

Revenue per available......$0.36..........$0.17..............$0.12
Seat-mile

Cost per available............$0.22..........$0.19...............$0.23
Seat-mile

Profit/Loss per.................$0.14..........$0.02...............$0.11
Available seat-mile

Profit/Loss per..................$0.24.........$0.05...............$0.19
passenger-mile

The profit/loss per passenger-miles was calculated using the load factor.

I think the numbers show why Amtrak invests into the NEC. Only there it brings profit.
Regards, Volker

 

[MidlandMike]

VOLKER LANDWEHR

I said it already elsewhere. This opinion is just another very biased article ignoring the economical facts or only uses those selected ones that fit the opinion.

Here is some information from "Amtrak Five Year Service Line Plans Base (FY 2018) + Five Year Strategic Plan (FY 2019–2023)":

Business Unit…Ridership……..Pass.Miles…..Load Factor…..Ticket  Revenue

NEC……………12.04 million…….1.984 bn………57%.............$1.238 bn

State supported.15.01 million……..1.920 bn…….40%..............$0.502 bn

Long-distance…..4.70 million……..2.626 bn……..59%.............$0.504 bn

The LD trains loose $0.19 per passenger-mile

Regards, Volker

 

You seem to also only use selected facts of operating revenue, and ignoring the money pit that is the NEC, which was covered in the article.

[Anonymous]

I said it already elsewhere. This opinion is just another very biased article ignoring the economical facts or only uses those selected ones that fit the opinion.

Here is some information from "Amtrak Five Year Service Line Plans Base (FY 2018) + Five Year Strategic Plan (FY 2019–2023)":

Business Unit…Ridership……..Pass.Miles…..Load Factor…..Ticket  Revenue

NEC……………12.04 million…….1.984 bn………57%.............$1.238 bn

State supported.15.01 million……..1.920 bn…….40%..............$0.502 bn

Long-distance…..4.70 million……..2.626 bn……..59%.............$0.504 bn

The LD trains loose $0.19 per passenger-mile

Regards, Volker

[blue streak 1]

Here is a railway age editorial about what may happen if LD trains eliminated !

 

https://www.railwayage.com/passenger/intercity/unintended-consequences/?RAchannel=commuterregional 

 

[PJS1]

alphas

PJS1:

As an accountant for 20 years before I made a career switch, I'm curious as to how AMTRAK handles depreciation.      Is there anything you can tell me on that subject? 

Amtrak follows the appropriate FASB standards codification for depreciation.

Property, plant, and equipment is grouped by asset class and depreciated on a straight-line basis using a composite amortization rate.   

Computer equipment and software are depreciated individually. 

Properties held under capital lease and leasehold improvements are depreciated over the shorter of their estimated useful lives or the terms of the lease.

Locomotives, passenger cars and related equipment are depreciation over useful lives ranging up to 40 years.  Right-of-way and other property (excluding land) are depreciated over periods ranging up to 105 years.   

You can find more details regarding Amtrak's depreciation practices in the annual audited Financial Statements. 

Interesting.  I worked in HR for 12 years as a compensation and benefits guru, as well as an OD Specialist, before getting my accounting degree and switching to accounting.  I worked for large corporations; I never practiced public accounting, but I loved it, and I still do, although I have been retired for more than 12 years.  

 

[alphas]

PJS1:

As an accountant for 20 years before I made a career switch, I'm curious as to how AMTRAK handles depreciation.      Is there anything you can tell me on that subject?

[PJS1]

V.Payne

All types of engineers and MBA degree holders plan manufacturing or production operations.  An engineering analysis will have to be employed for Amtrak anyway as they assign a large amount of their costs. 

In the large company that I worked for cost and allocation studies were perfromed by teams.  The participants included engineers, accountants, financial analysts, IT specialists, and not infrequently consultants from a major consulting firm.

Amtrak has been accused of over reliance on allocations as opposed to the direct assigment of costs.  What many have not noticed, it appears, the company is constructively addressing the issue. 

According to an Amtrak IG reported dated July 28, 2016, by 2015 Amtrak was able to increase the direct assignment of business costs by product line to 55 percent, which was a marked improvement over 2013. 

This is a clear example of why anyone wanting to perform a study of Amtrak's current accounting policies, procedures, and practices needs to have access to the company's books.  Now!   

[V.Payne]

There is big difference in financial analysis of production costs and accounting in my view of industry. All types of engineers and MBA degree holders plan manufacturing or production operations. I have done several to plot out variable cost curves with respect to some variable. An engineering analysis will have to be employed for Amtrak anyway as they assign a large amount of their costs. I can think of other examples where an outside group does a "tear apart" of a car or phone to create a cost to build number for stock traders to figure out profit per unit.

[PJS1]

Overmod

 Let me rephrase slightly: 'a recapitulation of what's important, and why Amtrak uses the accounting conventions Chilson claimed it does, and why those he claims are better should be used in analysis.' 

Without access to Amtrak's books, as well as its Accounting Policies and Procedures Manual, plus at least the CFO and Chief Accountant, Chilson's claims about Amtrak's accounting conventions (practices) cannot be verified.  

No self-respecting auditor or consultant, irrespective of where they are located, would offer an opinion on Amtrak's accounting policies, procedures, and practices w/o access to the sources stated in the preceding paragraph.

If a CPA in any state opined on the validity of a company’s accounting policies, procedures, and practices without access to the primary records – books – as well as key accounting personnel, he or she would be disciplined by the State Board of Public Accountancy in a heartbeat and probably would lose their license.    

I read most of Chilson’s report.  There is nothing in it to suggest that Chilson was granted access to Amtrak’s books or key finance and accounting personnel. 

BTW, the report is not about Amtrak's conformity with GAAP.  It addresses Amtrak's management or cost accounting procedures - allocations - for individual train routes.  The title should cause a reader to pause:  Amtrak's Route Accounting: Fataly Flawed, Misleading, and Wrong.  If it is fataly flawed, it probably is misleading and wrong. A first year accountant with a large accounting firm would know not to stick a redundant title on a work product. 

But it is a free country, and people can believe what they want to believe.  I respect that.  It is helpful if people know the difference between a belief and evidence-based findings. 

[Overmod]

PJS1

You missed a key point! Without access to Amtrak's books, an outsider does not know what accounting policies, procedures and practices Amtrak uses.

Let me rephrase slightly: 'a recapitulation of what's important, and why Amtrak uses the accounting conventions Chilson claimed it does, and why those he claims are better should be used in analysis.'

I am well aware of the situation regarding Amtrak information and the various reasons it will be difficult to acquire.  That does not mean that any discussion of Chilson's paper should end abruptly with 'he's not an accountant and doesn't know what Amtrak actually uses'.  All we need to discuss is ... in Texas-permissible GAAP, if necessary ... what Chilson says and whether it's a better approach IN THEORY for the Amtrak situations the RPA is taking a stand about.

[CMStPnP]

PJS1

I respect your views on railroad dispatching, which is where I assume you spent most of your career.   You should stick to what you know.  Clearly, you are out of your depth when it comes to accounting and finance.  I would never comment on the appropriateness of dispatching.  I never worked at it; I don't know anything about it other than what I have read here or elsewhere. 

Don't make presumptions.   I was told on this website I didn't know anything about Economics or Accounting.    Which I still get a good chuckle over.   

[CMStPnP]

PJS1

Amtrak may be using dodgy accounting.  But there is no indication that they are doing so.  So, I am comfortable with their reporting because I don't have access to their books.  I don't have a basis for raising a question about the propriety of their cost accounting methodologies.  

I would disagree on this to an extent.   You can tell from their PR releases and other snippets whatever system they are using is inadequate.     So for example their reports to WisDOT on Food Service.   I don't need to review their books to see what is going on there, I just need to ride the train and observe and then read Amtraks Press Release on the cost breakdown of the service.    Which I believe amounted to 300-400k per year for the whole corridor excluding LD trains before the food service was dropped.    I can then ride the train and see they have someone in Amtrak uniform being paid to push a cart where the most expensive food item on it sells for $5-6 but which most of the food items are candy bars, M&M's and cans of soda.     Then put together reasonably in my head they are paying someone a living salary to push a damn cart on a 1.5 hour run that if they sold out the cart each time.........probably would not cover their salary and benefits at Amtrak.     So you can use that type of deduction to realize that lets say Amtrak is using GAAP........they have real idiots as managers.

However my guess is the managers do not have the specific cost break downs available at their fingertips because it is difficult for me to believe anyone on the face of the Earth is that stupid to try and run a onboard food service that way.   I think the rail passenger association might be doing something similar.

[PJS1]

BaltACD

 PJS1 Key point:  Without access to Amtrak’s books, an outsider has little idea of how it accounts for its financial transactions.  Or its cost accounting procedures.  You don’t have that access.  Neither do I. And neither does your daughter.

And therefore all those numbers are in question. 

 

Not to a trained accountant or financial analyst.  Their response is simple.  I don't know, and I cannot know unless the organization opens its books to me.  Often times the best answer is:  I don't know.  

 

Amtrak may be using dodgy accounting.  But there is no indication that they are doing so.  So, I am comfortable with their reporting because I don't have access to their books.  I don't have a basis for raising a question about the propriety of their cost accounting methodologies.  

[BaltACD]

PJS1

Key point:  Without access to Amtrak’s books, an outsider has little idea of how it accounts for its financial transactions.  Or its cost accounting procedures.  You don’t have that access.  Neither do I. And neither does your daughter.

And therefore all those numbers are in question.