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[quote user="jclass"] [quote user="Sam1"] The Chicago to St. Louis trains, sans the Texas Eagle, lost $15.9 million in FY12 before depreciation, interest, and adjustments.  Presumably assigning the Talgos to this corridor, whilst desirable from a rider perspective, would increase the depreciation charges and, therefore, potentially acerbate the losses. [/quote] Sam1 - This doesn't make sense to me.  Increased depreciation on the Income Statement would decrease a loss / increase a profit in a particular period.  The increase in book value on the Balance Sheet because of retiring old "fully?" depreciated equipment and adding new, "more productive" equipment on the route would be noted.  The proof of the pudding as to whether the purchase was a wise financial decision would be, in major part, the overall change in financial results in future periods.  Any decision involves weighing risk.  Isn't this so? [/quote] Depreciation is an expense that is charged to income.  All other factors being equal, an increase in depreciation would increase book expense and thereby decrease net income. Presumably the Talgos would be replacing fully or nearly fully depreciated equipment, which means that the depreciation charges would increase. If the new equipment increased marginal revenues more than the marginal depreciation expense, then net income would increase. Or in Amtrak's case decrease net loss.
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