Amtrak 2015 Annual Report Download - page 52

Download and view the complete annual report

Please find page 52 of the 2015 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 61

  • 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

National Railroad Passenger Corporation and Subsidiaries (Amtrak)
Notes to Consolidated Financial Statements (continued)
12. Postretirement Employee Benefits (continued)
50
Assumed health care cost trend rates have a significant effect on the amounts reported for the other defined
benefit post retirement plans. A one-percentage-point change in assumed health care cost trend rates would
have the following effects on the Other Benefits plans (in thousands):
1%
Increase 1%
Decrease
Effect on total of service and interest cost component $ 16,285 $ (10,735)
Effect on postretirement benefit obligation 57,486 (52,156)
Prescription Drug Benefits
On December 8, 2003, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (the
Medicare Act) was signed into law. The Medicare Act introduced a prescription drug benefit under Medicare
(Medicare Part D) as well as a federal subsidy to sponsors of retiree health care benefit plans that provide a
benefit that is at least actuarially equivalent to Medicare Part D. Amtrak elected to record an estimate of the
effects of the Medicare Act in accounting for its postretirement benefit plans and provide disclosures required
by ASC Topic 715, Compensation - Retirement Benefits. Amtrak’s accumulated pension benefit obligation
for its other benefits is reduced by $1.9 million and $112.7 million for FY2015 and FY2014, respectively,
for this prescription drug benefit. The significant lower reduction in FY2015 when compared to FY2014 is
attributable to the March 18, 2015 amendment which modified the Company’s postretirement medical benefit
program.
401(k) Savings Plan
Amtrak provides a 401(k) savings plan for nonunion employees. Under the plan, Amtrak matches a portion
of employee contributions up to seven percent of the participant’s salary, subject to applicable limitations.
Prior to July 1, 2015, the maximum employer contribution was five percent. Amtrak’s expenses under this
plan were $13.8 million and $11.4 million for FY2015 and FY2014, respectively.
Additionally, Amtrak provides a 401(k) saving plan for union employees. Amtrak does not match any portion
of the employee contributions under this plan.
13. Subsequent Events
The FAST Act
On December 4, 2015, the President signed as Public Law 114-94, the Fixing America’s Surface
Transportation Act. See Note 2.
Revolving Credit Facility
On July 26, 2016, Amtrak entered into a Credit Agreement with three lenders for a $100 million unsecured
revolving facility. Borrowings under the facility will be used to enhance Amtrak’s liquidity. The facility will
expire on July 26, 2021. Borrowings under the facility have an interest rate based on the interest rate option
selected by Amtrak. The Company may select (a) the base rate option, which is a variable rate equal to the
highest of (i) the Federal Funds Open Rate plus 0.5%, (ii) the Prime Rate, and (iii) the Daily LIBOR Rate