Quarterly Report on Amtrak's FY 2008 Operational Reforms Savings and Financial Performance
On November 12, 2008 as mandated by the fiscal year (FY) 2008 Consolidated Appropriations Act, we issued our quarterly report to the House and Senate Appropriations Committees on Amtrak’s savings from operational reforms and year–to–date financial performance. Amtrak achieved $30.7 million in operating reform savings through July, $5.0 million more than it originally anticipated However, we believe Amtrak will fall short of achieving its $40.3 million FY 2008 operational reform savings target. Amtrak’s operating loss for FY 2008 was $381.1 million, $93.9 million less than budget due largely to better than expected revenues, partially offset by higher than budgeted wages and fuel, power, and utility costs. We identified three near–term challenges facing Amtrak. First, an extended economic downturn could pose risks to Amtrak’s ability to meet its ridership and revenues targets. Second, Amtrak is scheduled to make $145 million retroactive wage payment in FY 2009. While this payment can be accommodated within Amtrak’s current cash balance, it is concerned that doing so would leave the company with unacceptably low reserves at the beginning of FY 2010. Third, Amtrak has yet to define a strategic direction which incorporates continuous operating improvements. Such a strategic direction would allow the company to reduce its operating costs, freeing up Federal support for Amtrak’s substantial capital needs. As directed by Congress, reports requested by the House and Senate Appropriations Committees are subject to a 15 day hold before being publicly released. In compliance with that requirement, the report was withheld from public release until November 27.