Amtrak, a Marx Brothers revival

[Twin Star Rocket]

So says Railway Age. Can't post the blasted link on this discussion board!

You'll have to search for it. Worth reading.

 

[cpotisch]

So says Railway Age. Can't post the blasted link on this discussion board!

You'll have to search for it. Worth reading.

Can't post the link? What's the issue you're having?

 

[Twin Star Rocket]

I use the link icon, paste the web address, and nothing. It just hangs up when I select OK or CANCEL.

 

[cpotisch]

I use the link icon, paste the web address, and nothing. It just hangs up when I select OK or CANCEL.

You have to type out the text you want to embed the link into, then highlight it, and embed the link using the link tool. The text should then be blue and underlined. If that doesnt work, give up on embedding it and just paste the link into in your post.

 

[trainman74]

Good grief, here's the link:

Amtrak: A Marx Brothers Revival

 

[Manny T]

People might want to read this in connection with the foregoing:

railwayage.com/passenger/the-folly-of-discarding-long-distance-passenger-trains/?RAchannel=home

Love the Marx Brothers!

 

[GBNorman]

Here is a link to the column appearing in Railway Age noted by Member Twin Star:

https://www.railwayage.com/passenger/amtrak-a-marx-brothers-revival

Fair Use:

As Amtrak does not use Generally Accepted Accounting Principles (GAAP), its financial reports are suspected as dodgy. Amtrak asserts its long-distance trains lose $500 million annually, yet they utilize infrastructure owned, maintained and renewed by host freight railroads to whom Amtrak pays relatively low user fees. Foggy is how Amtrak assigns joint and common costs among its diverse lines of business.

Sorry, but to state, especially by a Railway Age Contributing Editor, that Amtrak Financial Statements do not comply with GAAP, is simply mistaken. Following is a link to FY17 Amtrak Financial Statements. Go to the Auditor's Opinion Letter and note the mention of GAAP (unable to quote; copy protected).

https://www.amtrak.com/content/dam/projects/dotcom/english/public/documents/corporate/financial/Amtrak-Audited-Consolidated-Financial-Statements-FY2017.pdf

Now where advocates, such as Mr. Selden in his earlier RA column, is that Amtrak's Responsibility Accounting system does not fairly allocate overhead costs tilting them unfavorably against the LD's Responsibility Locations (RESLOC in Amtrakese) is a matter addressed by Internal Audit, which reports to the Inspector General.

 

[ehbowen]

Another good one (found linked to the article quoted above) from Railway Age: "No way to run a passenger railroad" by Andrew Selden of URPA.

Excerpt:

What does a deflated balloon look like? That is becoming an apt metaphor for travel on an Amtrak interregional train. The regime of CEO Richard Anderson is eliminating services and amenities as fast as they can think up items to ditch.

These services and amenities include station agents, meals in a dining car, dining cars altogether (no real dining car service is now available on the City of New Orleans, Silver Star, Lakeshore Limited and Capitol Limited), checked baggage at most stations, newspapers in the sleepers, usable connections to other trains, on-board service staff positions, printed timetables, Superliner railcars (a slowly growing number of them are rotting away at Beech Grove, Amtrak’s central maintenance facility), and—in the case of the Southwest Chief—the entire train altogether, between somewhere in western Kansas and Albuquerque, in favor of a bus.

This is no way to run a railroad....

 

[KmH]

Here is a link to the column appearing in Railway Age noted by Member Twin Star:

https://www.railwayage.com/passenger/amtrak-a-marx-brothers-revival

Fair Use:

As Amtrak does not use Generally Accepted Accounting Principles (GAAP), its financial reports are suspected as dodgy. Amtrak asserts its long-distance trains lose $500 million annually, yet they utilize infrastructure owned, maintained and renewed by host freight railroads to whom Amtrak pays relatively low user fees. Foggy is how Amtrak assigns joint and common costs among its diverse lines of business.

Sorry, but to state, especially by a Railway Age Contributing Editor, that Amtrak Financial Statements do not comply with GAAP, is simply mistaken. Following is a link to FY17 Amtrak Financial Statements. Go to the Auditor's Opinion Letter and note the mention of GAAP (unable to quote; copy protected).

https://www.amtrak.com/content/dam/projects/dotcom/english/public/documents/corporate/financial/Amtrak-Audited-Consolidated-Financial-Statements-FY2017.pdf

Sorry, but E&Y does not have a stellar reputation.

https://en.wikipedia.org/wiki/Ernst_%26_Young#Accounting_scandals

 

[jis]

But E&Y has a better reputation on matters financial than the Contributing Editor of Railway Age who has repeatedly shown that he has no clue what GAAP is and he has also some weird ideas about what depreciation is. All this notwithstanding the stellar reputation of Wikipedia as the font of knowledge about reputations of course. [emoji57]

 

[Green Maned Lion]

GAAP actually allows a lot of leeway in where losses are shown. GAAP is generally designed to allow investors and stakeholders that are not directly involved in running the company to ascertain its overall financial health.

No company I know of uses GAAP for internal reports or deciding long term strategy. For example, NIFO (next in first out) is honestly the only valid way a company can look at its inventory and calculate its profit- that is, profit is money received minus the cost of replacing the inventory. That will give you the actual amount of excess that can be distributed to overhead and shareholders equity. It is also not acceptable under GAAP or IRS reporting for that matter.

Amtraks financials are about par in their accuracy of painting a financial picture. There are all kinds of accounting choices one can make under GAAP that increases or decreases apparent profit. You can use it to, for instance, make underinvestment in physical plant and/or R&D look like an increase in profit. (See: CSX). Amtrak as far as I can tell, is not actually trying to sandbag the long distance trains so much as trying desperately to hide the fact that its supposed great success story (the NEC) is a money pit.

What GAAP requires is that whatever costs there are show up on the balance sheet. Their sandbagging is inherently the result of adhereing to GAAP- the costs have to show up somewhere, so they show up in the LD trains.