Amtrak Releases Full 5-Year Business Plan

July 20, 2017

Amtrak submitted its fiscal 2018 budget request to Congress on May 31, but did not get around to publishing its full financial plan to accompany the budget request until late last week.

This is the first time that the full Amtrak numbers have been displayed under the new accounting structure established by the FAST Act of 2015 – Amtrak submitted its last plan under the old format because they could not allocate their expenses fully under the new plan by the time the FY 2017 budget was due.

Every dollar that Amtrak spends on anything other than debt service must be allocated four different ways:

  • By the asset line (service line management, train operations, equipment, infrastructure, stations, or national assets and corporate overhead);
  • By whether the expense was classified as operating or capital (and, as in mass transit, there is a huge gray area between the two called “preventative maintenance;”
  • By Amtrak service line (NEC intercity, state-supported routes, long-distance routes, commuter rail access, and ancillary services); and
  • To which of the two federal appropriations accounts the expense be should credited (Northeast Corridor, or National Network). These accounts replace the old accounts: Operating Grants, and Capital and Debt Service Grants.

Given Amtrak’s history of cost accounting problems, maybe it’s not surprising that this first full plan under the new NEC/NN system was almost 18 months late; it’s a miracle they were able to do it at all.

The financial plan indicates that on an operating basis alone, the trains Amtrak itself operates on the Northeast Corridor are projected to have a $475 million operating surplus in fiscal 2018. The state-supported routes are projected to lose $66 million, and the long-distance routes are projected to lose $589 million (expenses are 2.5 times ticket revenue).

Amtrak’s FY 2018 Operating Business Plan for the Three Types of Routes Amtrak Operates Directly
Millions of dollars.
NEC State- Long-
Intercity Supported Distance
Ticket Revenue 1,190.0 519.9 430.4
Non-Fed. Operating Payments 0.0 247.5 0.0
Other Operating Revenue 29.0 27.2 66.5
Operating Expenses -744.0 -860.8 -1,085.4
SURPLUS/DEFICIT +475.0 -66.1 -588.6

But the big thing that the financial report gives us that the original appropriations request did not is a picture of what Amtrak intends to spend on capital – because Amtrak can spend Northeast Corridor profits on capital, and because Amtrak has other sources of capital spending that do not appear in the annual appropriations request. In particular, the financial plan can give an indication as to how much Amtrak may spend on infrastructure like the Gateway Program, which is going to get significant Congressional appropriations this year in addition to Amtrak’s own spending.

The financial plan indicates that in 2018, Amtrak intends to spend $790 million on Northeast Corridor infrastructure – $268 million from the NEC’s operating surplus, and $516 million from a combination of payments from states and commuter railroads and federal appropriations.

However, the plan does not indicate how much of that $790 million Amtrak intends to put towards any particular projects that are part of the Gateway Program.

Amtrak is requesting $1.600 billion in federal grants in 2018 – the same overall amount authorized by the FAST Act of 2015. After the half-percent Federal Railroad Administration oversight and the $5 million deduction for the Northeast Corridor Commission and the $2 million for the State-Supported Route Commission are set aside, the amount remaining that Amtrak’s business plan says the railroad needs is $1.585 billion – $352 million for the Northeast Corridor account and $1.233 billion for the National Network account. The financial plan provides the first crosswalk for that request back to the old account structure – that $1.585 billion would have been split, $901 million for operating subsidies and $684 million for capital grants and debt service.

Crosswalk of Amtrak’s Federal Appropriations Request – Old Account Format vs New Account Format
New Account Format Old Account Format
901.3 Operating Subsidies
683.5 Capital and Debt Service
351.6 1,233.2 1,584.8 TOTAL
Northeast National
Corridor Network

Although the House Appropriations Committee has restored most of the money that the President’s budget proposed to cut from Amtrak subsidies, it still provides $30 million less for the NEC account and $142 million less for the National Network account than assumed in the financial plan. Those reductions, if enacted, would have to be taken out of the overall table on the previous page somewhere – whether in cuts to capital expenditures or efficiencies in operating expenses or in revenue increases or in more borrowing (it’s up to Amtrak).

At the very back of the financial plan, Amtrak printed the updated ridership forecasts and financial performance forecasts for each of its trains for each of the five years covered by the plan (FY 2017-2021) – however, it has a gigantic spreadsheet error in each table. What purports to be the operating profit/loss per rider is not – for example, the table for FY 2018 in the version that was online as of July 19, 2017 shows operating revenues for the Acela Express of $343.9 million and operating expenses of $209.9 million which yield an operating profit of $134.0 million – except that $134 million is shown in a column entitled “Contribution/(Loss) Per Rider.” But the same table shows estimated Acela Express ridership of 3.4 million, so $134 million in operating profit divided by $3.4 million would be an operating profit of about $34 per rider. We tried putting the Amtrak figures into our own spreadsheet for the long-distance trains but they came out to an per-passenger operating loss of $126 per passenger for every route, which is absurd, since in last year’s financial plan the FY 2017 long-distance per-passenger losses ranged from a $21/pax profit (Auto Train) to a $367/pax loss (Sunset Limited). We look forward to Amtrak publishing correct numbers.

JULY 26 update – Amtrak has updated the 5-year business plan with the correct route-by-route numbers – see here. See ETW‘s summary of the updated plan here.


Search Eno Transportation Weekly

Latest Issues

Happening on the Hill