Amtrak 2014 Annual Report Download - page 50

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National Railroad Passenger Corporation and Subsidiaries (Amtrak)
Notes to Consolidated Financial Statements (continued)
1509-1694994 42
10. Commitments and Contingencies (continued)
Company had taken delivery of 21 locomotives, and final delivery of the remaining locomotives
is expected by the end of FY2016. On September 12, 2014, the Company entered into a 15 year
contract with the same contractor to provide materials and engineering technical support for the
new electric locomotives. The Company will pay the contractor $7.1 million per year plus a
variable amount based on total mileage of the fleet each year.
Insurance Claims
Amtrak maintains various insurance policies to cover its liability to employees and other parties
for injury or damage resulting from accidents and to cover Amtrak’ s loss resulting from damage
to Amtrak property. The insurance policies contain large deductibles; losses within the
deductibles are self-insured by Amtrak.
The Amtrak Reform and Accountability Act of 1997 limits the amount railroad passengers may
recover from a single accident to an aggregate of $200.0 million. Since non-passenger liability is
not so limited and there is a need to insure in the event of multiple occurrences, Amtrak
purchases excess liability insurance limits beyond this statutory cap. See Note 13 for information
regarding a derailment that occurred subsequent to September 30, 2014.
Amtrak operates a majority of its passenger rail service on tracks owned by freight railroads.
Amtrak indemnifies these railroads for certain liabilities that arise as a result of its operations on
freight tracks. Its indemnity generally applies to bodily injury and property damage claims made
by its employees, passengers, and third parties struck by its trains, and for damage to its
equipment. The freight railroads generally indemnify Amtrak for bodily injury and property
damage claims made by freight railroad employees and third parties, and for damage to freight
railroad equipment, lading, and property.
Amtrak holds insurance policies to insure against catastrophic events. As of September 30, 2014,
Amtrak has submitted insurance claims related to losses occasioned following Sandy totaling
$1.1 billion, of which $125.0 million has been received by the Company to date. Of this amount,
$30.0 million was received during FY2014 and $95.0 million was received subsequent to fiscal
year-end. Of the amount received to date, $62.8 million has been recognized in the Consolidated
Statement of Operations for FY2014 as a reduction of “Other” expenses, consisting of
$30.0 million allocated to business interruption and $32.8 million related to costs incurred as of
September 30, 2014. No amounts were recorded in the Consolidated Statement of Operations for
FY2013. The amount received in FY2015 in excess of the amount recognized in the