Amtrak 2013 Annual Report Download - page 77

Download and view the complete annual report

Please find page 77 of the 2013 Amtrak annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 107

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107

National Railroad Passenger Corporation and Subsidiaries (Amtrak)
Notes to Consolidated Financial Statements (continued)
1411-1359280 38
7. Mortgages and Debt (continued)
On November 2, 2012 Amtrak also entered into an interest rate swap agreement to manage the
interest cost and risk associated with the 2012 PEDFA Garage Bond. The notional principal
amount of the swap agreement coincides with the outstanding bond obligation at the end of every
month. The termination date is November 1, 2019, with an option to extend to November 1,
2032, if Amtrak delivers a notice of exercise prior to October 29, 2019. Under the agreement,
Amtrak pays a fixed rate of 1.58% and receives a variable one month LIBOR rate on the
outstanding notional principal amount. As a result, the interest rate swap agreement effectively
changes the bond’ s floating rate to a fixed rate of 2.39%.
Amtrak recorded capital expenditures for $35.0 million related to the construction of the parking
garage in “Right-of-Way and other properties” in the Consolidated Balance Sheets as of
September 30, 2013 and 2012.
Railroad Rehabilitation and Improvement Financing Loan (“RRIF” Loan)
On June 21, 2011, the Company entered into a $562.9 million RRIF Loan financing agreement
with the FRA and a related Master Lease Agreement with Wells Fargo Bank Northwest (“Owner
Trustee”), to finance the purchase of 70 new electric locomotives, related spare parts, and
improvements to existing maintenance facilities to service the new locomotives. The Owner
Trustee’ s role in the Master Lease Agreement is as a trustee for the benefit of the FRA. Amtrak
will satisfy the FRA advances via quarterly lease payments under the Master Lease Agreement.
The first payment occurred on September 15, 2014. Payments will continue, on a quarterly basis,
for a full 25-year period at an amount sufficient to fully pay interest and amortize principal over
the term.
For the years ended September 30, 2013 and 2012, the Company received new advances under
the RRIF Loan of $110.1 million and $89.4 million, respectively. As of September 30, 2013 and
2012, the outstanding balance under the RRIF Loan was $277.7 million and $159.5 million,
respectively. Advances bear interest at an interest rate of 4.04% per annum. The Company
incurred interest charges on the advances of $8.6 million and $4.8 million for the year ended
September 30, 2013 and 2012, respectively, that were capitalized and recorded in “Railroad
rehabilitation and improvement financing loan” in the Consolidated Balance Sheets. Amtrak
pays a 4.424% credit risk premium on amounts advanced under the RRIF Loan program. The
credit risk premium may be returned by the FRA to Amtrak after the repayment of the RRIF
Loan. As of September 30, 2013 and 2012, the Company had paid cumulative credit risk
premiums of $11.7 million and $6.8 million, respectively, which is included in “Deferred