oversight

Intercity Passenger Rail: Amtrak's Financial Crisis Threatens Continued Viability

Published by the Government Accountability Office on 1997-04-23.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                    United States General Accounting Office

GAO                 Testimony
                    Before the Committee on Finance, U.S. Senate




For Release
on Delivery
Expected at
                    INTERCITY PASSENGER
10:00 a.m. EDT
Wednesday           RAIL
April 23, 1997



                    Amtrak’s Financial Crisis
                    Threatens Continued
                    Viability
                    Statement of Phyllis F. Scheinberg,
                    Associate Director, Transportation Issues,
                    Resources, Community, and Economic
                    Development Division




GAO/T-RCED-97-147
    Mr. Chairman and Members of the Committee:

    We appreciate the opportunity to testify today on Amtrak and the future of
    intercity passenger rail in the United States. As you know, over the last
    several years, we have testified before the Congress and issued a number
    of reports on Amtrak’s financial condition, its Strategic Business Plan, and
    the status of the Northeast Corridor.1 We are continuing to monitor
    Amtrak’s progress as it attempts to address its financial problems and free
    itself from federal operating subsidies by 2002.

    Our statement today presents preliminary information from our ongoing
    work looking at Amtrak’s progress in achieving this operating
    self-sufficiency. In particular, we are updating information from our July
    1996 and February 1995 reports on Amtrak’s financial condition and
    progress toward self-sufficiency; commenting on Amtrak’s need for, and
    use of, capital funds; and discussing some of the factors that will play a
    role in Amtrak’s future viability. In summary, our ongoing work shows the
    following:

•   Amtrak’s financial condition is still very precarious and heavily dependent
    on federal operating and capital funds. We previously reported that
    Amtrak’s financial condition had deteriorated steadily since 1990 and that
    Amtrak was unlikely to overcome its financial problems without
    significant increases in passenger revenues and/or subsidies from federal,
    state, and local governments. In response to its deteriorating financial
    condition, Amtrak in 1995 and 1996 developed strategic business plans
    designed to increase revenues and reduce cost growth. However, we have
    found that in the past 2 years, passenger revenues, adjusted for inflation,
    have generally declined, and in fiscal year 1996, the gap between operating
    deficits and federal operating subsidies began to grow again to levels
    exceeding those of fiscal year 1994, when the continuation of Amtrak’s
    nationwide passenger rail service was severely threatened. At the end of
    fiscal year 1996, the gap between the operating deficit and federal
    operating subsidies was $82 million.




    1
     Intercity Passenger Rail: The Financial Viability of Amtrak Continues to Be Threatened
    (GAO/T-RCED-97-94, Mar. 13, 1997); Amtrak’s Strategic Business Plan: Progress to Date
    (GAO/RCED-96-187, July 24, 1996); Northeast Rail Corridor: Information on Users, Funding Sources,
    and Expenditures (GAO/RCED-96-144, June 27, 1996); Amtrak: Early Progress Made in Implementing
    Strategic and Business Plan, but Obstacles Remain (GAO/T-RCED-95-227, June 16, 1995); Intercity
    Passenger Rail: Financial and Operating Conditions Threaten Amtrak’s Long-Term Viability
    (GAO/RCED-95-71, Feb. 6, 1995). The Northeast Corridor is the area between Washington, D.C., and
    Boston, Massachusetts.



    Page 1                                                                       GAO/T-RCED-97-147
             •   Capital investment continues to play a critical role in supporting Amtrak’s
                 business plans and ultimately in maintaining Amtrak’s viability. Such
                 investment will not only help Amtrak retain revenues by improving the
                 quality of its service but will be important in facilitating the revenue
                 growth predicted in the business plans. In both 1995 and 1996, we reported
                 that Amtrak faced significant capital investment needs to, among other
                 things, bring its equipment and facilities systemwide and its tracks in the
                 Northeast Corridor into a state of good repair and to introduce high-speed
                 rail service (at speeds of up to 150 miles per hour) between Washington
                 and Boston. Amtrak will need billions of dollars in capital investment for
                 these and other projects.

             •   It will be difficult for Amtrak to achieve operating self-sufficiency by 2002
                 given the environment within which it operates. First, Amtrak is relying
                 heavily on capital investment to support its business plans, which envision
                 a significant increase in capital funding support—possibly from a
                 dedicated funding source, such as the Intercity Passenger Rail Trust Fund
                 that would be established by S. 436. Second, Amtrak is also relying greatly
                 on revenue growth and cost containment to achieve its goal of eliminating
                 federal operating support. The economic and competitive environment
                 within which Amtrak operates may limit revenue growth, and Amtrak will
                 continue to find it difficult to take those actions (such as route and service
                 adjustments) necessary to reduce costs.


                 Amtrak was created by the Rail Passenger Service Act of 1970 to operate
Background       and revitalize intercity passenger rail service. Prior to its creation, intercity
                 passenger rail service was provided by private railroads, which had
                 continually lost money, especially after World War II. The Congress gave
                 Amtrak specific goals, including providing modern, efficient intercity
                 passenger service; helping to alleviate the overcrowding of airports,
                 airways, and highways; and giving Americans an alternative to
                 automobiles and airplanes to meet their transportation needs. Through
                 fiscal year 1997, the federal government has invested over $19 billion in
                 Amtrak. (App. I shows the federal appropriations for Amtrak since fiscal
                 year 1988.)

                 In response to continually growing losses and a widening gap between
                 operating deficits and federal operating subsidies, Amtrak developed its
                 Strategic Business Plan. This plan (which has been revised several times)
                 was designed to increase revenues and control cost growth and, at the
                 same time, eliminate Amtrak’s need for federal operating subsidies by



                 Page 2                                                         GAO/T-RCED-97-147
                     2002. Amtrak also restructured its organization into strategic business
                     units: the Northeast Corridor Unit, which is responsible for operations on
                     the East Coast between Virginia and Vermont; Amtrak West, for operations
                     on the West Coast; and the Intercity Unit, for all other service, including
                     most long-distance, cross-country trains.


                     Amtrak is still in a financial crisis despite the fact that its financial
Amtrak Is Still in   performance (as measured by net losses)2 has improved over the last 2
Financial Crisis     years. At the end of fiscal year 1994, Amtrak’s net loss was about $1.1
                     billion (in 1996 dollars). This loss was $873 million if the one-time charge
                     of $255 million—taken in fiscal year 1994 for accounting changes,
                     restructuring costs, and other items—is excluded.3 By the end of fiscal
                     year 1996, this loss had declined to about $764 million. However, the
                     relative gap between total revenues and expenses has not significantly
                     closed, and passenger revenues (adjusted for inflation)—which Amtrak
                     has been relying on to help close the gap—have generally declined over
                     the past several years (see apps. II and III).

                     More importantly, the gap between operating deficits4 and federal
                     operating subsidies has again begun to grow. Amtrak continues to be
                     heavily dependent on federal operating subsidies to make ends meet.
                     Although operating deficits have declined, they have not gone down at the
                     same rate as federal operating subsidies (see app. IV). At the end of fiscal
                     year 1994, the gap between Amtrak’s operating deficit and federal
                     operating subsidies was $75 million. At the end of fiscal year 1996, the gap
                     had increased to $82 million. Over this same time, federal operating
                     subsidies went from $502.2 million to $405 million.5

                     Amtrak’s continuing financial crisis can be seen in other measures as well.
                     In February 1995, we reported that Amtrak’s working capital—the
                     difference between current assets and current liabilities—declined
                     between fiscal year 1987 and fiscal year 1994. Although Amtrak’s working

                     2
                      As used here, net loss is calculated as total revenues minus total expenses. Unless otherwise noted,
                     information on financial performance and condition was provided by Amtrak and was not
                     independently verified.
                     3
                      Amounts stated in 1996 dollars.
                     4
                      As used here, operating deficit is the same as net loss except that noncash items (such as
                     depreciation) and the one-time charge taken in fiscal year 1994 are excluded from total expenses.
                     5
                      Amounts include excess railroad retirement payments. Amtrak is required to participate in the
                     railroad retirement and unemployment systems. Each participating railroad pays a portion of the costs
                     for all retirement and unemployment benefits in the industry. Amtrak’s payments exceed its specific
                     retirement and unemployment costs.



                     Page 3                                                                          GAO/T-RCED-97-147
capital position improved in fiscal year 1995, it declined again in fiscal year
1996 to a $195 million deficit (see app. V). This decline reflects an increase
in accounts payable, short-term debt, and capital lease obligations, among
other items. A continued decline in working capital jeopardizes Amtrak’s
ability to pay immediate expenses. Amtrak’s debt levels have also
increased significantly (see app. VI). Between fiscal years 1993 and 1996,
Amtrak’s debt and capital lease obligations increased about
$460 million—from about $527 million to about $987 million (in 1996
dollars). According to Amtrak, this increase was to finance the delivery of
new locomotives and Superliner and Viewliner cars—a total of 28
locomotives and 245 cars delivered between fiscal years 1994 and 1996.
These debt levels do not include an additional $1 billion expected to be
incurred to finance 18 high-speed trainsets due to begin arriving in fiscal
year 1999 and related maintenance facilities for the Northeast Corridor (at
about $800 million) and the acquisition of 98 new locomotives (at about
$250 million).

It is important to note that Amtrak’s increased debt levels could limit the
use of federal operating support to cover future operating deficits. As
Amtrak’s debt levels have increased, the interest expenses that Amtrak has
incurred on this debt have also increased signficantly (see app. VII). In
fact, over the last 4 years, interest expenses have about tripled—from
about $20.6 million in fiscal year 1993 to about $60.2 million in fiscal year
1996. This increase has absorbed more of the federal operating subsidies
each year because Amtrak pays interest from federal operating assistance
and principal from federal capital grants. Between fiscal year 1993 and
fiscal year 1996, the percentage of federal operating subsidies used to pay
interest expenses has increased from about 6 to about 21 percent. As
Amtrak assumes more debt to acquire equipment, the interest payments
are likely to continue to consume an increasing portion of the federal
operating subsidies.




Page 4                                                       GAO/T-RCED-97-147
                       Implementing the strategic business plans appears to have helped
Implementation of      Amtrak’s financial performance—as evidenced by the reduction in net
Strategic Business     losses between fiscal year 1994 and fiscal year 1996 (from about
Plans Has Improved     $873 million to about $764 million).6 As we reported in July 1996, about
                       $170 million in cost reductions came in fiscal year 1995 by reducing some
Financial              routes and services, cutting management positions, and raising fares.
Performance, but Net   Amtrak projected that these actions would reduce future net losses by
                       about $315 million annually once they were in place. The net loss was
Loss Targets Have      reduced in fiscal year 1996 as total revenues increased more than total
Been Missed            expenses did. In contrast, Amtrak estimates that its net loss in fiscal year
                       1996 would have been about $1.1 billion if no actions had been taken to
                       address its financial crisis in 1994.

                       Although the strategic business plans have helped reduce the net losses,
                       targets for these losses have often been missed. For example, Amtrak’s
                       plans for fiscal years 1995 and 1996 included actions to reduce the net
                       losses by $195 million—from about $834 million in 1994 (in current year
                       dollars) to $639 million in fiscal year 1996. This reduction was to be
                       accomplished, in part, by increasing revenues by $191 million while
                       holding expenses at about the 1994 level. However, the actual net losses
                       for this period totaled about $1.572 billion, or about $127 million more
                       than the $1.445 billion Amtrak had planned. This difference was primarily
                       due to the severe winter weather in fiscal year 1996—a contingency that
                       Amtrak had not planned for and one that added about $29 million to
                       expenses—and the unsuccessful implementation of various elements of
                       the fiscal year 1996 business plan. For example, many of the productivity
                       improvements (such as reducing the size of train crews) that Amtrak had
                       planned in fiscal year 1996 were not achieved. As a result, cost savings fell
                       short of Amtrak’s $108 million target by about $60 million.

                       For fiscal year 1997, as a result of higher than anticipated losses and an
                       expected accounting adjustment, Amtrak planned for a net loss of
                       $726 million. However, after the first quarter of operations, revenues were
                       below target, and although expenses were lower than expected, the
                       operating deficit was almost $4 million more than planned for that quarter.
                       Through February 1997, the operating deficit had increased to $8.5 million
                       more than planned. Furthermore, the fiscal year 1997 financial results will
                       be affected by the postponement of route and service adjustments planned
                       for November 1996. Amtrak estimates that postponing these adjustments
                       will bring a net revenue reduction of $6.9 million and a net cost increase of

                       6
                        As mentioned, the net loss for fiscal year 1994 excludes the one-time charge of $255 million (in 1996
                       dollars). Amounts are stated in 1996 dollars.



                       Page 5                                                                           GAO/T-RCED-97-147
                      $29.2 million. Part of this increased cost will be offset by an additional
                      federal operating grant of $22.5 million made to keep these routes
                      operating. In part, as a result of these increased costs, Amtrak revised its
                      planned fiscal year 1997 net loss upward to $762 million from the
                      originally projected $726 million. However, the loss could be even greater.
                      As a result of additional unanticipated expenses and revenue shortfalls, at
                      the end of the first quarter Amtrak projected that its actual fiscal year 1997
                      year-end net loss could be about $786 million. Second quarter financial
                      results are expected to be available in May 1997.

                      Amtrak’s projected fiscal year 1997 financial results may also affect its
                      cash flow and the need to borrow money to make ends meet. For example,
                      in March 1997, Amtrak projected a cash flow deficit of about $76 million at
                      the end of fiscal year 1997—about $10 million more than planned. This
                      deficit required Amtrak to begin borrowing in March 1997 to pay its bills.
                      Moreover, the cash flow deficit may be even larger than projected if
                      Amtrak does not receive the revenues it anticipates from the sale of
                      property ($11 million) and the sale of rights to use its rights-of-way to
                      telecommunications companies ($45 million). According to Amtrak, cost
                      savings from lower electric power prices in the Northeast
                      Corridor—expected to yield $20.5 million in improved cash flow—has
                      been delayed. Amtrak’s fiscal year 1998 projected year-end cash balance is
                      also bleak. On the basis of financial results through February 1997, Amtrak
                      estimates that it may have to borrow up to $128 million next year.
                      However, Amtrak has recently testified before the Congress that it could
                      run out of cash during fiscal year 1998. Amtrak currently has short-term
                      lines of credit of $150 million.


                      Amtrak’s need for capital funds remains high. We reported in June 1996
Amtrak Continues to   that Amtrak will need billions of dollars to address its capital needs, such
Have Significant      as bringing the Northeast Corridor up to a state of good repair.7 This
Capital Investment    situation largely continues today. In May 1996, the Federal Railroad
                      Administration (FRA) and Amtrak estimated that about $2 billion would be
Needs                 needed over the next 3 to 5 years to recapitalize the south end of the
                      corridor and preserve its ability to operate in the near term at existing
                      service levels. This renovation would include making improvements in the
                      North and East river tunnels serving New York City and restoring the
                      system that provides electric power to the corridor. This system, with
                      equipment designed to last 40 to 50 years, is now between 60 and 80 years

                      7
                       See Northeast Rail Corridor: Information on Users, Funding Sources, and Expenditures, previously
                      cited.



                      Page 6                                                                       GAO/T-RCED-97-147
                      old, and, according to FRA and Amtrak, has gotten to the point that it no
                      longer allows Amtrak and others to provide reliable high-speed and
                      commuter service. FRA and Amtrak believe that this capital investment of
                      about $2 billion would help reverse the trend of adding time to published
                      schedules because of poor on-time performance. Over the next 20 years,
                      FRA and Amtrak estimate up to $6.7 billion may be needed to recapitalize
                      the corridor and make improvements targeted to respond to high-priority
                      growth opportunities.

                      A significant capital investment will be required for other projects as well.
                      For example, additional capital assistance will be required to introduce
                      high-speed rail service between New York and Boston. In 1992, the Amtrak
                      Authorization and Development Act directed that a plan be developed for
                      regularly scheduled passenger rail service between New York and Boston
                      in 3 hours or less. Currently, such trips take, on average, about 4-1/2 hours.
                      Significant rehabilitation of the existing infrastructure as well as
                      electrification of the line north of New Haven, Connecticut, will be
                      required to accomplish this goal. According to Amtrak, since fiscal year
                      1991 the federal government has invested about $900 million in the
                      high-speed rail program, and an additional $1.4 billion will be required to
                      complete the project. A significant capital investment will also be required
                      to acquire new equipment and overhaul existing equipment. Amtrak plans
                      to spend about $1.7 billion over the next 6 years for these purposes.


                      We reported in July 1996 and February 1995 on Amtrak’s need for capital
Progress Has Been     investments and some of the problems being experienced as a result. We
Slow in Addressing    noted the additional costs of maintaining an aging fleet, the backlogs and
Previously Reported   funding shortages that were plaguing Amtrak’s equipment overhaul
                      program, and the need for substantial capital improvements and
Capital Needs         modernization at maintenance and overhaul facilities. We also commented
                      on the shrinking availability of federal funds to meet new capital
                      investment needs. Our ongoing work, the results of which we expect to
                      report later this year, is looking at these issues.

                      The preliminary results of our work indicate that Amtrak has made some
                      progress in addressing capital needs, but the going has been slow, and in
                      some cases Amtrak may be facing significant future costs. For example,
                      we reported in February 1995 that about 31 percent of Amtrak’s passenger
                      car fleet was beyond its useful life—estimated at between 25 and 30
                      years—and that 23 percent of the fleet was made up of Heritage cars (cars
                      that Amtrak obtained in 1971 from other railroads) that averaged over 40



                      Page 7                                                      GAO/T-RCED-97-147
                         years old. Since we issued our report, the average age of the passenger car
                         fleet has declined from 22.4 years old (in fiscal year 1994) to 20.7 years old
                         (at the end of fiscal year 1996), and the number of Heritage cars has
                         declined from 437 to 246. This drop is significant because Heritage cars, as
                         a result of their age, were subject to frequent failures, and their downtime
                         for repair was about 3 times longer than for other types of cars. However,
                         these trends may be masking substantial future costs to maintain the fleet.
                         In October 1996, about 53 percent of the cars in Amtrak’s active fleet of
                         1,600 passenger cars averaged 20 years old or more and were at or
                         approaching the end of their useful life (see app. VIII). It is safe to assume
                         that as this equipment continues to age, it will be subject to more frequent
                         failures and require more expensive repairs.

                         Our ongoing work also shows that the portion of Amtrak’s federal capital
                         grant available to replace assets has continued to shrink.8 In
                         February 1995, we reported that an increasing portion of the capital grant
                         was being devoted to debt service, overhauls of existing equipment, and
                         legally mandated uses, such as equipment modifications and
                         environmental cleanup. In fiscal year 1994, only about $54 million of
                         Amtrak’s federal capital grant of $195 million was available to purchase
                         new equipment and meet other capital investment needs. Since we issued
                         our report, although the portion of the capital grant available to meet
                         general capital investment needs increased in fiscal years 1995 and 1996, it
                         shrank in fiscal year 1997 (see app. IX). In fiscal year 1997, only $12 million
                         of the capital grant of $223 million is expected to be available for general
                         capital needs. The rest will be devoted to debt service ($75 million),
                         overhauls of existing equipment ($110 million), or legally mandated work
                         ($26 million). It is likely that as Amtrak assumes increased debt (including
                         capital lease obligations) to acquire equipment and as the number of cars
                         in Amtrak’s fleet that exceed their useful life increases, even less of
                         Amtrak’s future capital grants will be available to meet capital investment
                         needs.


                         Amtrak’s ability to reach operating self-sufficiency by 2002 will be difficult,
Achieving Operating      given the environment within which it operates. Amtrak is relying heavily
Self-Sufficiency by      on capital investment to support its goal of eliminating federal operating
2002 Will Be Difficult   subsidies. For example, Amtrak’s draft fiscal year 1997-2002 Strategic
                         Capital Plan indicates that about 830 million dollars’ worth of actions
                         needed to close gaps in the operating budget through 2002 is directly

                         8
                          The federal capital grants referred to in this discussion exclude ones for the Northeast Corridor
                         Improvement Program (NECIP) and the high-speed rail program. In fiscal years 1994 and 1997, Amtrak
                         received $225 million and $255 million, respectively, for these programs.



                         Page 8                                                                      GAO/T-RCED-97-147
linked to capital investments. To support these actions, Amtrak anticipates
significantly increased federal capital assistance—about $750 million to
$800 million per year. In comparison, in fiscal year 1997, Amtrak received
federal capital funding of $478 million.9 Amtrak would like increased
federal capital assistance to be provided from a dedicated funding source,
such as would be provided by the bill you introduced Mr. Chairman, S. 436
(the “Intercity Passenger Rail Trust Fund Act of 1997”). That legislation
would establish a trust fund for intercity passenger rail and make available
to Amtrak, and states not receiving Amtrak service, revenue from a half
cent per gallon of the federal motor fuels tax through 2002. This trust fund
would provide funding over the next 5 years to help Amtrak address its
capital needs.

Amtrak is also subject to the competitive and economic environment
within which it operates. We reported in February 1995 that competitive
pressures had limited Amtrak’s ability to increase revenues by raising
fares. Fares were constrained, in part, by lower fares on airlines and
intercity buses. From fiscal year 1994 to fiscal year 1996, Amtrak’s yield
(revenue per passenger mile) increased about 24 percent, from 15.4 cents
per passenger mile to about 19.1 cents. In comparison, between 1994 and
1995, airline yields declined slightly, intercity bus yields increased 18
percent, and the real price of unleaded regular gasoline increased a little
less than 1 percent.10 However, it appears that Amtrak’s ability to increase
revenues through fare increases has come at the expense of ridership, the
number of passenger miles, and the passenger miles per seat-mile (load
factor). Between fiscal years 1994 and 1996, all three declined.11 Such
trade-offs in the future could limit further increases in Amtrak’s yield and,
ultimately, revenue growth.

Finally, Amtrak will continue to find it difficult to take those actions
necessary to further reduce costs. These include making the route and
service adjustments necessary to save money and to collectively bargain
cost-saving productivity improvements with its employees. During fiscal
year 1995, Amtrak was successful in reducing and eliminating some routes
and services. For example, on seven routes Amtrak reduced the frequency
of service from daily to 3 or 4 times per week, and on nine other routes
various segments were eliminated. Amtrak estimates that such actions

9
 This amount includes the $255 million for NECIP and the high-speed rail program.
10
    Data for 1996 were not available for this analysis.
11
 Between fiscal years 1994 and 1996, Amtrak’s annual ridership declined from 21.2 million to
19.7 million passengers, passenger miles declined from 5.9 billion to 5.1 billion, and the load factor
declined from 49 to 46 percent. Ridership excludes commuter passengers.



Page 9                                                                             GAO/T-RCED-97-147
              saved about $54 million. Amtrak was less successful in making route and
              service adjustments planned for fiscal year 1997 and estimates that its
              failure to take these actions will increase its projected fiscal year 1997 loss
              by $13.5 million. Amtrak has also been unsuccessful in negotiating
              productivity improvements with labor unions. Such improvements were
              expected to save about $26 million in fiscal year 1995 and $19 million in
              fiscal year 1996.


              Amtrak’s financial future has been staked on the ability to eliminate
Conclusions   federal operating support by 2002 by increasing revenues, controlling
              costs, and providing customers with high-quality service. Although the
              business plans have helped reduce net losses, Amtrak continues to face
              significant challenges in accomplishing this goal, and it is likely Amtrak
              will continue to require federal financial support—both operating and
              capital—well into the future.


              Mr. Chairman, this concludes my testimony. I would be happy to respond
              to any questions that you or Members of the Committee may have.




              Page 10                                                      GAO/T-RCED-97-147
Page 11   GAO/T-RCED-97-147
Appendix I

Federal Appropriations for Amtrak, Fiscal
Years 1988-97


               1000   Dollars in Millions

                900

                800

                700

                600

                500

                400

                300

                200

                100

                  0

                         1988     1989      1990      1991    1992      1993     1994     1995      1996     1997
                         Fiscal Year

                                  Mandatory Payment

                                  NECIP Subsidy

                                  Capital Subsidy

                                  Operating Subsidy



               Notes: Mandatory payments to the Railroad Retirement Fund for fiscal years 1988 through 1990
               are estimated.

               The appropriations for fiscal year 1993 include $20 million in supplemental operating funds and
               $25 million for capital requirements. The appropriations for fiscal year 1997 include $22.5 million
               in supplemental operating funds and $60 million for the Northeast Corridor Improvement Program.

               For fiscal year 1997, an additional $80 million was appropriated to Amtrak for high-speed rail.

               Source: Amtrak




               Page 12                                                                        GAO/T-RCED-97-147
Appendix II

Revenues and Expenses, Fiscal Years
1988-96


              2700   Dollars in Millions

              2500

              2300

              2100

              1900

              1700

              1500

              1300

              1100

               900

               700

               500

                 1988          1989        1990    1991   1992   1993   1994        1995     1996

                 Fiscal Year


                                Expenses
                                Revenues



              Note: Amounts are in 1996 dollars.

              Source: Amtrak.




              Page 13                                                          GAO/T-RCED-97-147
Appendix III

Amtrak’s Passenger Revenues, Fiscal Years
1989-96


               Dollars in Millions



               1000




                800




                600




                400




                200

                   1989              1990   1991          1992   1993   1994       1995      1996

                   Fiscal Year



               Note: Amounts are in 1996 dollars.

               Source: GAO’s analysis of Amtrak’s data.




               Page 14                                                         GAO/T-RCED-97-147
Appendix IV

Amtrak’s Federal Operating Subsidy and
Mandatory Payment Compared to the
Operating Deficit, Fiscal Years 1988-96

               600   Dollars in Millions
               575
               550
               525
               500
               475
               450
               425
               400
               375
               350
               325
               300
               275
               250

                 1988          1989        1990       1991        1992         1993    1994        1995     1996

                 Fiscal Year

                               Operating Deficit
                               Federal Operating Subsidy & Mandatory Payment



               Notes: Amtrak’s operating deficit was calculated as total revenues minus total expenses,
               excluding noncash expenses such as depreciation.

               Amounts are in current year dollars.

               Source: GAO’s analysis of Amtrak’s data.




               Page 15                                                                        GAO/T-RCED-97-147
Appendix V

Amtrak’s Working Capital Surplus/Deficit,
Fiscal Years 1987-96


               Dollars in Millions
               125     113           112
               100                           84
                75
                50
                                                     27
                25
                  0
                -25
                -50
                                                               -36
                -75
               -100                                                     -67

               -125                                                               -100
               -150
               -175                                                                                  -149
               -200
               -225                                                                                           -195

               -250                                                                         -227

                         1987         1988    1989    1990    1991      1992      1993     1994      1995     1996
                         Fiscal Year



               Notes: Working capital is the difference between current assets and current liabilities.

               Amounts are in current year dollars. In 1996 dollars, working capital declined from $149 million in
               fiscal year 1987 to a deficit of $195 million in fiscal year 1996.

               Source: GAO’s analysis of Amtrak’s data.




               Page 16                                                                         GAO/T-RCED-97-147
Appendix VI

Amtrak’s Outstanding Debt/Capital Lease
Obligations, Fiscal Years 1987-96


              1000   Dollars in Millions

               900

               800

               700

               600

               500

               400

               300

               200

               100

                 0

                        1987     1988      1989    1990    1991   1992   1993   1994   1995   1996
                        Fiscal Year



              Note: Amounts are in current year dollars.

              Source: Amtrak.




              Page 17                                                              GAO/T-RCED-97-147
Appendix VII

Amtrak’s Interest Expense, Fiscal Years
1987-96


                    Dollars in Millions
               70


               60


               50


               40


               30


               20


               10


                0

                      1987       1988     1989     1990     1991   1992   1993   1994      1995    1996
                      Fiscal Year



               Note: Amounts are in current year dollars.

               Source: Amtrak.




               Page 18                                                                  GAO/T-RCED-97-147
Appendix VIII

Average Age of Amtrak’s Car Fleet, October
1996


                                                                     6%
                                                                     Horizon (7.1 years)

                                                                     Superliner II (1.5 years)

                                                                     3%
                                                                     Turboliner (21.0 years)

                                                                     1%
                                                                     Capitoliner (29.8 years)

                                                                     2%
                                                                     Viewliners (0.9 years)


                                    • •

                          • 11%
                                              28% •                  Amfleet I (20.9 years)
                          •

                          •

                                                  14% •              Heritage Passenger (43.0 years)
                              16%
                                •
                                          12% •                      Baggage/Autocarrier (39.7 years)




                                                                     Superliner I (16.7 years)

                                                                     8%
                                                                     Amfleet II (14.7 years)




                Notes: The data exclude mail-handling cars and road railers.

                The age of the baggage and autocarrier cars is a weighted average.

                Source: GAO’s analysis of Amtrak’s data.




                Page 19                                                                       GAO/T-RCED-97-147
Appendix IX

Commitments of Amtrak’s Federal Capital
Funds, Fiscal Years 1989-97


              240   Dollars in Millions

              220

              200

              180

              160

              140

              120

              100

               80

               60

               40

               20

                0

                      1989       1990      1991      1992    1993      1994     1995      1996      1997
                      Fiscal Year


                                Available For Other Uses

                                Previous Commitments

                                Legal Mandates

                                Capital Overhauls



              Notes: The amount “available for other uses” is that portion of the capital grant not already
              committed for specific requirements at the beginning of the fiscal year. This figure does not
              include capital grants for the Northeast Corridor Improvement Program.

              Amounts for fiscal year 1997 are estimated.

              Source: GAO’s analysis of Amtrak’s data.




(343886)      Page 20                                                                        GAO/T-RCED-97-147
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