Amtrak has 1 billion in bank they aren’t spending

From Southwest Chief/NM rail passengers collation.

That’s the link/proof that Chao is working with Amtrak management. Looks like they are actively trying to sabotage the subsidy request.

US senate link. Remarks are around 01:21 mark.
https://www.appropriations.senate.g...quest-for-the-us-department-of-transportation

A screen shot of a Facebook post. Sounds legit to me.

Watch the video then.... 01:21:31 mark in response to senator Murphy.

Amtrak is about a $5 Billion annual turnover company. $1 Billion is about 2.5 month working capital. Goes to show that Elaine Chou as expected is an idiot trying to see how many more there are in Congress. I suspect she will be disappointed in her search for dates.

Indeed. A billion in cash sounds like a lot in the bank, until you put it in perspective. Then it’s more like “So?”

Also the summer construction season is kicking off soon. You might have to stock pile supplies, but a contractor get pay when they are working.

Where did it come from? Is this just from the last fiscal year? Are Amtrak’s costs/loses not as much as they state? Are the LDT’s not as big a money pits as made out to be? Is the NEC cash postive? It opens up a lot of questions about Amtrak’s lack of transparency.

My question is: why would Amtrak need the subsidy if there's that extra money? I'm asking not from a legal or policy standpoint, but rather from a financial one.

It would be similar to a person saying "I have a good job where the pay allows me to support myself and live comfortably, but I still need government assistance".

LookingGlassTie said:

My question is: why would Amtrak need the subsidy if there's that extra money? I'm asking not from a legal or policy standpoint, but rather from a financial one.

It would be similar to a person saying "I have a good job where the pay allows me to support myself and live comfortably, but I still need government assistance".

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As an accountant, there is a big difference between having cash on hand and the profitability of a company. This is most likely a timing issue as stated above, Money built up to spend on Capital Improvements.

I have seen companies with millions in cash declare bankruptcy and companies with very little cash be profitable. It is all in how a company is run and set up.

Jim

LookingGlassTie said:

My question is: why would Amtrak need the subsidy if there's that extra money? I'm asking not from a legal or policy standpoint, but rather from a financial one.

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Well as it was mentioned above. One Billion is only 2.5 months of operations. People who travel on Amtrak during peak season (summer). Have purchased there tickets, and have payed for them in advance. The summer construction season start soon, you pay as you go, not upfront for any contractor. You do pay for Supplies early, as there is a longer lead time. Have cash on hand before a peak travel period would be normal. Not have cash on hand entering a peak business period would be a problem.

If your are try to use math/numbers to discredit Amtrak, then highlighting the cash on hand would be a way to do it.

After the fiscal year auditing the book as what left, were and when it was spent would be a way to question a subsidy.

Doesn't anyone remember the video last year from California where CEO Anderson plainly stated Amtrak was hoarding money for equipment purchases? He said to the California rail group LAST year.

Just-Thinking-51 said:

If your are try to use math/numbers to discredit Amtrak, then highlighting the cash on hand would be a way to do it.

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I think you missed a “...would NOT be a way...”

There are very good reasons to have this amount of cash on hand, and the fact that it’s there bears no relation to needing a government subsidy. Cash flows into and out of the organization at all times.

Let’s say you bring home $4,000 a month in your paycheck. Does the fact that you have $10,000 in the bank means you can quit your job and stop getting paid? Of course not.

Amtrakfflyer said:

Where did it come from?

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All income sources. Subsidy money, state payments, people buying tickets, etc.

Amtrakfflyer said:

Are Amtrak’s costs/loses not as much as they state? Are the LDT’s not as big a money pits as made out to be? Is the NEC cash postive?

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. Cash on hand tells us absolutely nothing about the answers to these questions.

Amtrakfflyer said:

It opens up a lot of questions about Amtrak’s lack of transparency.

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No it doesn’t. It does open up questions about financial literacy, though.

Yeah, realistically one reaches a state (after working for many years) where one can quit ones job possibly after adding more zeroes behind that one and then some, or something like that, depending of course on ones cash burn rate, current age and life expectancy. Still one does not generally donate ones pension and social security to others, since they were part of the overall financial management plan.

Everyone is acting like Amtrak should be like a government agency and spend the money as fast as it comes in. Living paycheck to paycheck, so to speak. Amtrak's history has numerous reasons why they should build up some cash. Also, there's a good chance that the billion is money that is obligated, but not spent, especially with construction season coming up.

Also Amtrak by statute is a "for profit" corporation, not a government agency.

And if you were to ask any of the agencies under the DoD (just to pick a random rather expensive department) how much money it has got stashed away ... well it will become clear that even government agencies do not spend money as soon as they get hold of it either. [emoji1]

There is a maxim in financial analysis known as the "acid test", which matches cash on hand and short term cash equivalent securities against Current Liabilities.

Reviewing the Sep 30, 2018 Audited Financial Statements, there is reported Cash and Equivalents of $1.6B and Current Liabilities of $1.7B. Therefore, Amtrak is within acceptable range of that maxim, which calls for a ratio of 1:1.

So I would conclude that there is no "hoarding", despite what that advocacy group is implying, beyond that necessary to make timely payment of the Corporation's financial obligations.

I believe this guy is part of RPA in Kansas, Evan Stair. He has been raising a ruckus about some of this as of late, especially with the bustitution of the Southwest Chief idea. I think I've met him before, and seems to have a lot of knowledge when it comes to LD support. But I'm not sure if he's just reading too much into these other things or if he has more inside information that's legitimate. He posts a lot about these type of things on some of the facebook groups, which is fine. I'm not sure if anyone else has worked with him in here.

That kind of advocate does no help whatever to "the cause" and only puts his ignorance on display to the internet world.

GBNorman said:

That kind of advocate does no help whatever to "the cause" and only puts his ignorance on display to the internet world.

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Agreed completely. This kind of tinfoil hattery does nothing but discredit all of us.

GBNorman said:

There is a maxim in financial analysis known as the "acid test", which matches cash on hand and short term cash equivalent securities against Current Liabilities.

Reviewing the Sep 30, 2018 Audited Financial Statements, there is reported Cash and Equivalents of $1.6B and Current Liabilities of $1.7B. Therefore, Amtrak is within acceptable range of that maxim, which calls for a ratio of 1:1.

So I would conclude that there is no "hoarding", despite what that advocacy group is implying, beyond that necessary to make timely payment of the Corporation's financial obligations.

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It wasn't an advocacy group, it was CEO Anderson himself stating it. Its the same video that got everyone in a uproar last year that Anderson was going to kill LD trains. He stated he was "hoarding" money.

Now how Amtrak "saves" money when constantly getting a hand out from the government is another subject.

Go back and reread all of the posts here. Slowly. Then think about them a bit and attempt to understand them.

$1b in cash is 2.5 months worth of operations. It sounds like a lot of money, but it really isn’t. The advocacy group that Mr. Norman spoke of is the group that is “exposing” this like it is some kind of scandal, when it’s how normal companies operate.

There is nothing to see here. Move along.

frequentflyer said:

Now how Amtrak "saves" money when constantly getting a hand out from the government is another subject.

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it is called money for equipment purchases that hasn't been paid for at this time. Amtrak also received allocations for projects that haven't been paid for or been completed.

Instead of binging on food services, raises or short term things with the "use it or lose it" attitude, he is putting the money towards things like new track equipment (there is a thread regarding the 300 million dollar purchase), payments towards CAF and other new equipment that is on the horizon...and will need funds to get it started.

Seems logical to me but I guess I remember used to complain about companies/agencies using funds just to burn them up so they could get more the following year.

jis said:

Also Amtrak by statute is a "for profit" corporation, not a government agency.

And if you were to ask any of the agencies under the DoD (just to pick a random rather expensive department) how much money it has got stashed away ... well it will become clear that even government agencies do not spend money as soon as they get hold of it either. [emoji1]

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During the recent government shutdown, my former agency had enough cash on hand to keep all of us on the job for a week after the lapse in appropriations.