Amtrak 2013 Annual Report Download - page 85

Download and view the complete annual report

Please find page 85 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 46
11. Commitments and Contingencies
Financial Assistance
Amtrak receives significant financial assistance from the Federal Government in the form of
grants and entitlements. The right to these resources is generally conditioned upon compliance
with terms and conditions of the grant agreements and applicable federal regulations, including
the expenditure of the resources for eligible purposes. Substantially all grants are subject to
financial and compliance audits by the grantors. Any disallowances because of these audits
become a liability of the Company. The Company does not believe that the liabilities that may
result from such audits for periods through September 30, 2013, would have a material effect on
its financial position or the results of operations.
Commitments
Amtrak has various purchase commitments related to capital improvements incident to the
ordinary conduct of business. In addition, Amtrak has entered into various agreements with
states, cities, and other local transportation authorities and private companies pursuant to which
Amtrak is required to fund various railroad facility and infrastructure improvements, and to fund
the remanufacture and supply of railroad passenger equipment. Such commitments are not in
excess of expected requirements and are not reasonably likely to result in performance penalties
or payments that would have a material adverse effect on the Company’ s liquidity.
On August 3, 2010, the Company entered into a four-year contract with a contractor to purchase
130 new long-distance single level cars. The base price of the contract is $298.1 million. The
Company issued a Notice to Proceed (“NTP”) on September 7, 2010. The Company will make
payments to the contractor pursuant to an approved payment schedule upon the contractor’ s
successful completion of certain tasks (milestones) during the contract. As of September 30,
2013, the Company has incurred $92.8 million in project related costs.
On September 28, 2010, the Company entered into a six-year contract with a contractor to
purchase 70 new electric locomotives. The base price of the contract is $466.3 million. The
Company will make payments to the contractor pursuant to an approved payment schedule upon
the contractor’ s successful completion of certain tasks (milestones) during the contract. As of
September 30, 2013, the Company has incurred $299.8 million in project costs of which
$264.7 million have been funded by the RRIF Loan (see Note 7). Subsequent to September 30,
2013, the Company has taken delivery of 23 locomotives, and final delivery of all locomotives is
expected by fiscal year 2016. On September 12, 2014, the Company entered into a 15 year