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National Railroad Passenger Corporation and Subsidiaries (Amtrak)
Notes to Consolidated Financial Statements (continued)
8. Fair Value Measurements
30
FASB ASC Topic 820, Fair Value Measurements and Disclosures, clarifies the definition of fair value for
financial reporting, establishes a framework for measuring fair value, and requires additional disclosures
about the use of fair value measurements. FASB ASC Topic 820 established a three-level valuation hierarchy
for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs
to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:
• Level 1 - observable market inputs that are unadjusted quoted prices for identical assets or liabilities
in active markets.
• Level 2 - other significant observable inputs (including quoted prices for similar securities, interest
rates, credit risk, etc.).
• Level 3 - significant unobservable inputs (including the Company’s own assumptions in determining
the fair value of investments).
The Company’s derivative financial instruments are valued by a third-party consultant based on prevailing
market data derived from proprietary models and are carried at fair value on the Consolidated Balance Sheets
per FASB ASC Topic 820. A financial instrument’s categorization within the valuation hierarchy is based
upon the lowest level of input that is significant to the fair value measurement. The following tables present
the Company’s derivative assets/(liabilities) measured at fair value on a recurring basis as of September 30,
2015 and 2014, by the FASB ASC Topic 820 valuation hierarchy (in thousands).
Level 1 Level 2 Level 3 Total
September 30, 2015
Interest rate swaps $ — $ (2,331) $ — $ (2,331)
September 30, 2014
Fuel derivative contracts $ — $ 872 $ — $ 872
Interest rate swaps — 481 — 481
Total $ — $ 1,353 $ — $ 1,353
The estimated fair value of Amtrak’s non-derivative financial instruments is as follows (in thousands):
September 30, 2015 September 30, 2014
Principal
Amount Fair
Value Principal
Amount Fair
Value
Mortgage obligations $ 290,727 $ 319,876 $ 324,396 $ 357,252
PEDFA 30th St. Garage Revenue Bonds 37,195 32,402 38,927 29,273
Term Loan A 108,583 108,920 125,774 118,962
Term Loan B 62,459 63,354 68,501 67,899
RRIF loan (debt component) 71,710 72,428 195,239 230,366
Equipment loans — — 4,112 4,251
Total $ 570,674 $ 596,980 $ 756,949 $ 808,003