1. Amtrak Presentation to the California Transportation Commission
February 19, 2009
Anne Witt, Vice President
Amtrak Strategic Partnerships

2. Today’s Discussion Amtrak’s California Partnership
New Federal Mandates
Implications of Success / Issues Moving Forward

3. Amtrak’s National System
Basic facts about Amtrak
Emphasis importance of a national system
Your background
Professional
Relevant views (corporate governance, important attributes of a well-managed corporation, etc)
Amtrak’s national system spans 21,000 route miles and serves 527 stations in 46 states

4. Amtrak Short Distance Corridors Includes 19. State-Supported and 8
Amtrak Short Distance Corridors Includes 19* State-Supported and 8* System Corridors
*3 Corridors are partially state funded

5. FY08 Ticket Revenue & Ridership Actuals

6. California: Amtrak’s Premier Partner
Approximately 70 daily intercity trains
Three State Sponsored Corridors
Four Long Distance Trains
Two Major Maintenance facilities
Los Angeles
Oakland
In Fiscal Year 08:
More than 1 in 5 Amtrak riders in California
Corridors equal 19.3% of Amtrak system ridership
11,866,636 total boardings/alightings
2,740 CA residents employed
$127,700,783 spent for goods and services
Capitol Corridor
San Joaquins
Pacific Surfliner

7. Top Ten Corridors by Ridership, FY 08
Corridor Ridership Length Change from FY07 Frequencies
NEC ,897, mi %
Surfliner 2,898, mi %
(SD-SLO)
Capitol 1,693, mi %
(SJ-Sacramento)
Keystone 1,183, mi %
Empire , mi %
San Joaquin , mi %
Cascades , mi %
Hiawatha , mi %
Chicago-St. Louis , mi %
Downeaster , mi % #2 #3 #6
Source – SEP 07 End of FY Ridership & Revenue Report (Jim Sundman)
Green highlight indicates corridor is also one of the ten fastest-growing corridors

8. Ten Fastest Growing Corridors, FY 08
Corridor Ridership Length Change from FY07 Frequencies
Downeaster , mi %
Piedmont , mi %
Kansas City- 151, mi %
St. Louis
Hiawatha 749, mi %
Albany-Toronto 354, mi %
Hoosier State 31, mi %
Keystone ,183, mi %
Chicago-Quincy 202, mi %
Chicago-Carbondale , mi %
Heartland Flyer , mi %
Source – SEP 07 End of FY Ridership & Revenue Report (Jim Sundman)
This is a healthy cross-section of service types, frequencies, regions, and services

9. Amtrak State Supported Services – Revenue From States
Legislation authorizes States to buy service from Amtrak
States Pay Amtrak through combination of:
State Supported Train Passenger Revenue
Ticket sales
Food
Baggage charges
State Support Payments
Gap between Direct Costs and Revenue
FY 08
Total State Supported Passenger Ticket Revenue: $233.8 million*
Total State Support Payments: $165 million
Average Fare Box Recovery Ratio for States in FY 08: 57%**
*Includes fully and/or partially state supported routes
**Measured as Passenger Related Revenue/Direct Costs

10. Amtrak California Corridors – FY 08

11. State Supported Services – Costs Billed to States
Direct Costs billed:
Direct Incremental Costs
Eliminated if trains eliminated
e.g. host railroad payments, T&E and OBS crews, fuel, most mechanical cost, dedicated route stations
Other Direct Costs
Costs shared with other trains/routes
“directly shared” e.g. shared stations, mechanical overhead, insurance, yard ops, marketing and advertising,
“indirectly shared” e.g. police and security, environmental and safety, crew management
Costs not currently billed to States:
Amtrak owned infrastructure fixed maintenance (capital)
Capital charges for equipment
System overhead (indirect office rent, data center, etc.)
Interest
Depreciation

12. Major Drivers of Operating Expenses
Labor
Presidential Emergency Board Ruling
Average 28% wage increase
7 years’ back pay
Fuel
Expired Hedging Agreements
Market volatility versus demand-based variations
Security
New concerns and requirements
Initial growth versus steady-state operations
On-Time Performance
Affects costs: fuel, overtime, accommodations
Affects revenue & ridership

13. Workforce: Continued Productivity Focus
Employee headcount
Fiscal Year
Double-digit ridership growth absorbed within current workforce
- Controlled Management Ratio
- Technology Applications
Internet Sales
Point of Sale/Fare Collection
- Work Methods
Reliability Centered Maintenance
Source: workforce endstrength – D-1 also A-1.5

14. Amtrak Financial Transparency: Long-term and Growing Issue
Financial systems are complete and accurate
But designed for other applications/purposes
Required to capture all costs in “zero-sum” manner
Change in one place affects all other numbers
Not policy-driven
Financial systems do not meet State pricing needs
Backward-looking: FY 07 results just completed
Based on national network and then allocated to routes
Unsuited for forecasting, multi-year contracts, future service scenarios
Requires protracted, iterative (frustrating) negotiations

15. 2008 PASSENGER RAIL INVESTMENT & IMPROVEMENT ACT
Recognized Need for Improved Model:
TITLE II – AMTRAK REFORM AND OPERATIONAL IMPROVEMENTS
Sec. 201 National Railroad Passenger Transportation System. (a) The national system is defined as: the segment of the continuous NEC between Boston and Washington DC; other high-speed corridors designated by the Secretary but only after regularly scheduled intercity service has been established; long distance routes for more than 750 miles operated by Amtrak on the date of enactment hereof; short distance corridors of not more than 750 miles operated by Amtrak or another rail carrier that receives funds under Sec. 301 (State Capital Grants).
(b) and (d) Amtrak is authorized to contract with a State, regional or local authority, or another person to operate a route not included in the national system, and to discontinue it on the failure of financial support from such entity.
(c) Amtrak is also authorized to continue to develop non-high-speed intercity service.
(e) Amtrak’s mission shall be to provide high quality service that is trip-time competitive with other intercity travel options, and its goals shall include providing complementary intercity transportation in times of national disaster.
Sec. 209 State-Supported Routes. Within two years of the date of enactment, Amtrak shall, in consultation with the Secretary and Governors of affected States, establish a standardized methodology for allocating capital and operating costs between Amtrak and the States supporting Amtrak services.
If such a methodology is not adopted and implemented within 5 years of date of enactment, the STB shall determine and require the implementation of same.

16. New State Pricing Tool

17. New Federal Mandates: Passenger Rail Investment and Improvement Act (PRIIA)
Gives “lead” on passenger rail growth to States
State Matching Capital Grant Programs (Total FY09-13 Authorizations)
Capital Assistance For Intercity Passenger Rail ($1.9 Billion)
High-speed Rail Corridors ($1.5 Billion)
Rail Corridor Congestion Grants ($325 Million)
Requirements
State rail plans
Standardized methodology for allocating capital and operating costs of all corridor trains among states and Amtrak
(adopt by Oct 2010 and implement by Oct 2013 or STB does)

18. New Federal Mandates: Passenger Rail Investment and Improvement Act
“Next Generation Corridor Equipment Pool Committee” ($5 million FY10)
Includes states, Amtrak and FRA, other stakeholders
Standardized/Interoperable types of corridor equipment
(California Surfliner III as bi-level standard)
Determine specifications, procurement, ownership, etc.
Other miscellaneous requirements
New Metrics and Measures
OTP enforceable by Surface Transportation Board
Studies re service restoration including Pioneer, Sunset, North Coast Hiawatha

19. A New Federal Mandate: Economic Recovery Act (Stimulus)
$8 billion appropriation for three new Capital Grant Programs
Capital Assistance For Intercity Passenger Rail
High-speed Rail Corridors
Rail Corridor Congestion Grants
100% Grant – no match
Specific Priority to High Speed Rail
State Rail Plans waived
Federal DOT Schedule:
60 days: Submit plan to Congress
120 days: Issue draft regulations for each program
Grants “remain available” through September 30, 2012

20. Financial Implications for Amtrak California Partnership
FY2010 numbers provided with more understandable transparency
Support services linked to direct benefits
Line-item costs enumerated and explainable
Cannot subsidize or absorb “caps”
Quarterly reconciliations
Forecasts dependent on fuel price assumptions/economic realities
Define contingencies and/or pass-though of actuals where necessary
Final Amtrak pricing policies subject to national process
Potentially complicates individual state schedules
Costs will not go down commensurate with PEB labor rate increases
Costs will likely increase as additional components charged re PRIIA
e.g. Equipment capital charge
Concurrent with state matching fund availability

21. Implications for Amtrak California Partnership
All tools to reduce net costs will require examination
Efficiencies
Mechanical services/equipment availability
Point of sale
Automated fare collection
New food service vendor/options
Fare structures
Rail 2 Rail Impacts/Revisions
Revenue Management potential
Connection to call center/Amtrak support system
Non-passenger Revenues
e.g. Advertising
Service configurations
Schedule, consists, load factors, etc.

22. Success Implications for Amtrak California Partnership
“The best of times in the worst of times”
Expanded expectations out of line with State/Amtrak resource and staffing capabilities
New funding is capital, not operating
Requires increased revenue, ridership, and/or state support
Waiver of state rail plans opens competition for new federal funds
Current financial systems/budgeting processes currently inadequate
Equipment Capacity :
Improved maintenance, availability, reliability
Surfliner III’s status:
Utilization and load factors
in relationship to Next Generation Corridor Equipment effort in PRIIA
per State bonding issues

23. Amtrak: Committed to a Successful California Partnership
Proud of Heritage and Success
Committed to addressing Shortcomings
Financial Systems
Mechanical Operations
Open-minded in Emerging New Environment
Offering Important and Unique Advantages to State

24. California Corridor Growth: Amtrak’s Unique Added Value
Access to railroad expertise
Operations/transportation
Engineering
Mechanical
Institutional/Legal
Access to equipment/expertise/interoperability
Access to host railroads at incremental cost
Access to insurance/liability coverage
Access to IT systems support (reservations, train status, ticketing)
National visibility and voice in support of passenger rail

25. Amtrak Ridership: All-Time Highs
FY 08 ridership was 28.7 million
Up 11.1% from FY 07
Fuel Volatility
Improved On-Time Performance
Improved Customer Service/Satisfaction

26. Amtrak Revenue – Exceeding Ridership Growth
FY 08 ticket revenues were $1.734 billion
Up 14.2% from FY 07
Grew 21.8% faster than ridership
- Market pricing actions
- Revenue management
Revenue Yield Per Passenger Mile*

27. Safety: Primary Focus – now combined with Security
Injuries per 200,000 hours worked
Source: JUN 07 Perf Rept A-2.2 (2.1) also A1.5 see also JUL 07 safety report downloaded from intranet
Fiscal Year
NOTE: Based on the FRA standard of reportable injuries per 200,000 hours worked.

28. Corporate Debt: Managing within our Means
Source: Debt reduction - $3,229,539 – page A-5.5
Updated per conversation with Dan Black
Total long term debt and capital lease plus current maturities of long term debt and capital lease
Fiscal Year

29. Federal Support for Operations – Responsible Stewardship
Source: Fed spt for ops - $485B – JUN 07 Perf Rpt A-4.2 (see also A-4.2 for SEP 06)
Fiscal Year
FY 09 funded at a
“continuing resolution”
level through March
Federal government spent $400 million to support Amtrak operations in FY 08
-About $1.31 per American
-Covers about 14 percent of Amtrak’s operating expense
NOTE: Financial adjustments in FY01 included losses which should have been included in FY00.