Amtrak 2014 Annual Report Download - page 40

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National Railroad Passenger Corporation and Subsidiaries (Amtrak)
Notes to Consolidated Financial Statements (continued)
1509-1694994 32
6. Mortgages and Debt (continued)
The Company incurred interest charges on the advances classified as debt obligations of
$11.7 million and $8.6 million for the years ended September 30, 2014 and 2013, respectively,
that were capitalized and recorded in “Construction-in-progress” in the Consolidated Balance
Sheets.
Amtrak pays a 4.424% credit risk premium on all 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, 2014 and 2013, the Company had paid cumulative credit
risk premiums of $14.4 million and $11.7 million, respectively. The credit risk premium balance
at September 30, 2014 is offset in part against the debt balance and in part against the capital
lease obligation in the Consolidated Balance Sheets and is being amortized over the term of the
RRIF Loan using the effective interest method. The effective interest rate of the RRIF Loan is
4.45% and will vary over time because of the additional credit risk premium with each draw. The
balance of the credit risk premium is allocated proportionally between debt and capital lease
obligations. The amortization of the credit risk premium allocated to debt is capitalized along
with interest expense as part of “Construction-in-progress” in the Consolidated Balance Sheets.
Interest Rates
The annual weighted-average interest rates for all interest-bearing borrowings (inclusive of the
impact of any interest rate swaps) are shown below:
September 30,
2014 2013
Mortgage obligations 6.24% 6.35%
PEDFA Garage Bonds 2.39 2.39
Equipment loans 9.61 9.40
RRIF Loan 4.04 4.04
Term loans 2.97 N/A
The overall weighted-average interest rate on all interest-bearing borrowings (inclusive of the
impact of any interest rate swaps) is 4.7% and 5.2% per annum at September 30, 2014 and 2013,
respectively.