Amtrak 2013 Annual Report Download - page 104

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National Railroad Passenger Corporation and Subsidiaries (Amtrak)
Notes to Consolidated Financial Statements (continued)
1411-1359280 65
13. Postretirement Employee Benefits (continued)
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 715, Compensation –
Retirement Benefits. Amtrak’ s accumulated pension benefit obligation for its other benefits is
reduced by $57.6 million and $97.3 million for the fiscal years ended September 30, 2013 and
2012, respectively, for this prescription drug benefit.
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 five percent of the participant’ s salary, subject
to applicable limitations. Amtrak’ s expenses under this plan were $10.9 million and
$10.3 million for the fiscal years ended September 30, 2013 and 2012, 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.
14. Subsequent Events
Term Loan
On November 27, 2013, the Company entered into a $130.0 million credit facility with a major
financial institution. On June 19, 2014, the Company converted the $130.0 million credit facility
into a $200.0 million long-term loan with two financial institutions, split $130.0 million and
$70.0 million, respectively. Under the terms of the agreement for the $130.0 million portion of
the loan, the Company will incur interest at a rate of LIBOR plus 1.0%, however at the time the
loan was entered into the Company converted the rate on this portion of the loan to 2.76% with
an interest rate swap. Under the agreement for the $70.0 million portion of the loan, the
Company will incur interest at a rate of 3.36%. The Company will repay the loan in quarterly
installments beginning September 20, 2014 and continuing through June 20, 2024.