Amtrak 2014 Annual Report Download - page 56

National Railroad Passenger Corporation and Subsidiaries (Amtrak)
Notes to Consolidated Financial Statements (continued)
1509-1694994 48
11. Environmental Matters
The Company is subject to extensive and complex federal and state environmental laws and
regulations that can give rise to environmental issues. As a result of its operations and acquired
properties, Amtrak is from time to time involved in administrative and judicial proceedings and
administrative inquiries related to environmental matters. Amtrak’ s policy is to accrue estimated
liabilities and capitalize such remediation costs relating to properties acquired with existing
environmental conditions, and to expense remediation costs incurred on properties for
environmental clean-up matters occurring after acquisition. The liability is periodically adjusted
based on Amtrak’ s present estimate of the costs it will incur related to these sites and/or actual
expenditures made. Some of the Company’ s real estate properties may have the presence of
environmentally-regulated wastes or materials. If these properties undergo excavations, major
renovations or are demolished, certain environmental regulations that are in place may specify
the manner in which the wastes or materials must be assessed, handled, and disposed. The
Company has identified a number of locations for which excavations and major renovations are
planned and liabilities have been recorded. However, for remaining locations, the Company has
no plans or expectations to undertake excavations, demolitions or major renovations that would
require the removal of the environmentally-regulated wastes or materials.
Although a potential liability exists for the removal or remediation of environmentally-regulated
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 at this time. 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, 2014 and 2013, the
environmental reserve was $53.1 million and $60.5 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 as of both September 30, 2014 and 2013, and is reported in
“Accrued expenses and other current liabilities” in the Consolidated Balance Sheets. Of the
reserve, $33.5 million and $40.1 million, included in “Right-of-way and other properties” in the
Consolidated Balance Sheets as of September 30, 2014 and 2013, respectively, relates to
estimated future capital expenditures for environmental remediation.