Amtrak 2014 Annual Report Download - page 49

Download and view the complete annual report

Please find page 49 of the 2014 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 72

  • 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

National Railroad Passenger Corporation and Subsidiaries (Amtrak)
Notes to Consolidated Financial Statements (continued)
1509-1694994 41
10. 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, 2014, would have a material effect on
its financial position or the results of operations.
Commitments
Amtrak has various purchase commitments related to capital improvements pertaining 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 on September 7, 2010. The Company makes 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, 2014, the
Company has incurred $95.2 million in project related costs. As of September 30, 2014, the
Company had not taken delivery of any of the cars. Deliveries began in FY2015 and final
delivery of all cars is expected by April 2017.
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 this 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, 2014, the Company has incurred $394.9 million in project costs of which
$325.4 million have been funded by the RRIF Loan (see Note 6). As of September 30, 2014, the