Amtrak 2013 Annual Report Download - page 92

National Railroad Passenger Corporation and Subsidiaries (Amtrak)
Notes to Consolidated Financial Statements (continued)
1411-1359280 53
12. Environmental Matters (continued)
been recorded. However, for remaining locations, the Company has no plans or expectations to
undertake demolitions or major renovations that would require the removal of the asbestos
containing materials.
Although a liability exists for the removal of asbestos materials, sufficient information is not
available currently to estimate the liability, as the range of time over which the Company may
settle these obligations is unknown or cannot be reasonably estimated. Although the Company
believes it has appropriately recorded current and long-term reserves for known and estimable
future environmental costs, it could incur significant costs that exceed reserves or require
unanticipated cash expenditures as a result of any of the foregoing. Based upon information
currently available, the Company believes its environmental reserves are adequate to fund
remedial actions to comply with present laws and regulations, and that the ultimate liability for
these matters, if any, will not materially affect its overall financial condition, results of
operations, or liquidity. As of September 30, 2013 and 2012, the environmental reserve was
$60.5 million and $59.8 million, respectively. These reserves for estimated future environmental
costs are undiscounted and include future costs for remediation and restoration of sites as well as
any significant ongoing monitoring costs. The current portion of the reserve was $7.1 million and
$5.5 million as of September 30, 2013 and 2012, respectively, and is reported in “Accrued
expenses and other current liabilities” in the Consolidated Balance Sheets. Of the reserve,
$40.1 million and $43.3 million, included in “Right-of-way and other properties” in the
Consolidated Balance Sheets as of September 30, 2013 and 2012, respectively, relates to
estimated future capital expenditures for environmental remediation.
Amtrak has not recorded any receivables for recoveries from other parties or from insurance
recoveries; the amounts included in “Environmental Reserve” in the Consolidated Balance
Sheets reflect only Amtrak’ s estimate of its portion of the gross liability. In those instances
where Amtrak has received a buyout of third party liabilities, the amounts are recorded as credits
against capital expenses, and therefore are not viewed as receivables. The ultimate liability for
environmental remediation is difficult to determine with certainty due to, among other factors,
the number of potentially responsible parties, site-specific cost sharing arrangements, the degree
and types of contamination, potentially unidentified contamination, developing remediation
technology, and evolving statutory and regulatory standards related to environmental matters.
Amtrak’ s management and counsel believe that additional future remedial actions for known
environmental matters will not have a material adverse effect on the Company’ s results of
operations or financial condition.