Amtrak 2015 Annual Report Download - page 39

National Railroad Passenger Corporation and Subsidiaries (Amtrak)
Notes to Consolidated Financial Statements (continued)
10. Commitments and Contingencies (continued)
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briefing before the Sixth Circuit Court of Appeals was completed on November 13, 2015. The Company
believes it is reasonably possible, but not probable, that a loss could be incurred related to this claim.
Accordingly, Amtrak has not recorded a liability related to this claim in the consolidated financial statements.
Amtrak is involved in various other litigation and arbitration proceedings in the normal course of business,
including but not limited to several distinct tort, contract and civil rights claims. The outcome of these matters
cannot be predicted with certainty. When management concludes that it is probable that a liability has been
incurred and the amount of the liability can be reasonably estimated, it is accrued through a charge to earnings.
While the ultimate amount of liability incurred in any of these lawsuits and claims is dependent on future
developments, in management’s opinion, recorded liabilities, where applicable, are adequate to cover the
future payment of such liabilities and claims. However, the final outcome of any of these lawsuits and claims
cannot be predicted with certainty, and unfavorable or unexpected outcomes could result in additional accruals
that could be significant to Amtrak’s results of operations in a particular year. Any adjustments to the recorded
liability will be reflected in earnings in the periods in which such adjustments are known.
Americans With Disabilities Act (ADA) Compliance
Under the ADA, stations in the intercity rail transportation system served by Amtrak were required to be
readily accessible to and usable by individuals with disabilities no later than July 26, 2010, 42 U.S.C. §12162
(e). This requirement applies to all components of a station used by the general public, including passenger
platforms, designated waiting areas, ticketing areas, restrooms, and in some cases, concession areas. The
Company has developed a plan to bring the station components for which it is legally responsible into ADA
compliance. This plan is regularly updated and adjusted based on new information and external factors, such
as direction the Company receives from the FRA and other government agencies. On June 9, 2015, the
Department of Justice (DOJ) provided Amtrak with a Letter of Findings and Conclusions regarding ADA
compliance at Amtrak. DOJ has indicated, both in its Letter of Findings and in its communications with
Amtrak’s counsel, that DOJ intends to work cooperatively with Amtrak to negotiate a settlement or consent
decree. Amtrak is working to obtain sufficient funding to achieve full ADA compliance of all station
components for which it is responsible under the ADA. The extent of these estimated costs and effects of
non-compliance on operations cannot be determined at this time. Further, the nature of all expenditures that
will be incurred, and the effect on operating results, have not yet been fully analyzed. Accordingly, the
accompanying financial statements do not reflect the costs of Amtrak becoming fully compliant with the
ADA. As of September 30, 2015, Amtrak has spent a total of $342.5 million on ADA-related projects.
Approximately $31.6 million and $37.2 million of the expenditures were incurred during FY2015 and
FY2014, respectively.
Positive Train Control
In 2008, Congress enacted the Rail Safety Improvement Act. The legislation included a mandate that all Class
I railroads and each railroad hosting intercity or commuter rail passenger service have PTC systems installed
and operating by December 31, 2015, provided, however, that a Class I railroad is only required to install
PTC on routes where there are five million or more gross tons of railroad traffic per year and the presence
of either passenger trains or poison by inhalation hazardous materials. The FRA rules for PTC provide for
exceptions to these PTC requirements, which are subject to FRA approval, on rail lines hosting passenger
trains on which freight traffic volumes, and the number of passenger trains operated, do not exceed limits