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[quote user="blue streak 1"]   <blockquote> <div><img src="/TRCCS/Themes/trc/images/icon-quote.gif" /> Sam1:</div> <div>   The Hiawatha services may have been threatened by political pressure, but as is often the case, the public loses interest in the political pressure.  It is still running.  And it is losing nearly $40 million per year before interest and depreciation.  <div style="clear:both;"></div> </div> </blockquote>   Sam1:  You and I are evidently reading from different play books and reports. I rechecked the September 2010 FY performance  reports for the Hiawatha and it said operating costs losses were $12.2 M and before capital costs losses were $13.8M. The 4 months of FY 2011 report showed fully allocated gains of $0.1M. Now I am wondering about the wide difference of Full FY 2010 and 4 Months of FY 2011. Also we have no idea of the equipment depreciation costs and maybe terminal depreciations which should increase totally allocated costs. Help me with my confusion?? [/quote] You are correct.  I misread the number.  The loss in FY10 is $13.8 million.   Most analysts only pay attention to full year numbers.  Accordingly, I would not pay much attention to the numbers for the first four months of FY11.  Quarterly numbers can fluctuate wildly due to weather, seasonal economic conditions, etc.   As an accounting manager I had a tough time convincing many of our executives and managers to pay attention to the bigger picture, i.e. changes in quarterly numbers from year to year but more importantly numbers for a year.  They had a tendency to jump on monthly and quarterly numbers. Amtrak does not allocate interest and depreciation by train route.  They claim that doing so would be unfair inasmuch as they have sold most of their equipment and leased it back. They claim that they are working on a realistic allocation model, but they have not been able to come up with one.   The primary purpose of a sale/leaseback is to gain a financial advantage for the lease holder, i.e. Amtrak. Why Amtrak's sale/leasebacks are not advantageous is not clear.  It is possible that they did not cut a favorable deal. Most of Amtrak's interest charges and depreciation are embedded in the NEC, i.e. equipment, infrastructure, stations, etc.  I am guessing more than 75 per cent.  Thus, the NEC trains wear a higher percentage of these charges than the trains that run on the hoist railroads outside of the NEC. Accordingly, whilst interest and depreciation increase total costs, for the trains outside of the NEC, the increase would be relatively small, I believe.   The depreciation associated with the Hiawatha's would be for the equipment, which Amtrak depreciates over 40 years.  If the equipment is owned by Amtrak or leased to it, it is responsible for the allocation of the depreciation.  If the equipment is owned by the states, they wear the depreciation and probably would pass it to Amtrak in their monthly operating bill.   The depreciation associated with the hoist railroad's plant, i.e. BNSF, CSX, CN, etc.  allocable to Amtrak's operations would be included in the monthly billings to Amtrak.  It does not give us sufficient information to know the amounts.
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