By Andrew Selden, Guest Commentator; November 12, 2021
Amtrak released its September 2021 Monthly Report, which functions as a proxy/preliminary/summary annual report pending release (whenever they get around to it) of an actual final Annual Report some months hence. This is an overview of key data from the monthly report. The monthly report omits even preliminary full financial statements, making genuine financial analysis impossible until the annual report is published.
The fiscal year ending September 30, 2021 was marred by the impacts of the ongoing COVID epidemic. For about half the year, short corridors remained cut back substantially, and management slashed the long distance/inter-regional trains, its biggest and most prosperous business segment, by 57% for the first half of the year despite its strong, early recovery from epidemic impacts.
Total ticket receipts were down 28% on the year, and the regional corridors were actually up 3% over FY’20, itself a COVID-impacted year.
Total revenues fell 15% to $1.93 billion, while total costs (excluding “capital” spending ‒ see below) fell only 3% to $2.96 billion. Salaries (of non-union employees) rose 13% (why?) and casualty claims rose 31%, to note a couple of curious line items. Amtrak’s favorite category ‒ “adjusted” “operating” earnings (“adjusted” means they messed with the numbers, and “operating” means they omitted NEC and other fixed facility costs, and depreciation, among others) ‒ fell by 31% to a loss of $1.03 billion. The actual, full, loss on continuing operations increased 16% to $1.96 billion. That is about half the total loss on the year.
Oddly, for a year where the business mostly fell apart, Amtrak’s “capital” spending (the category where they hide NEC upkeep, and account for spending on new capital assets like the costly new Acela II trains) rose 14% to $2.2 billion. The footnote on this line points to (i) “planning and asset development” costs rising 543% (!) to $507.4 million; (ii) spending on new Siemens “Brightline-style” trains for regional corridors; (iii) scaled down spending on the costly Acela II trains; and (iv) various other costs.
If you wonder what “planning and asset development” spending Amtrak was doing to the tune of a half-billion dollars in a financially-disastrous year where the Company lost about $2 billion, it is spending on real estate acquisition and early engineering planning for the new “Gateway” tunnel boondoggle where Amtrak is building shiny new twin tunnels under the Hudson River into New York City for the benefit mainly of New Jersey Transit’s local commuter trains.
An honest and full assessment of Amtrak’s financial accomplishments through the Covid epidemic shows pretty clearly that, on the whole, Covid was good for Amtrak. Their total revenues ‒ tickets, real estate, food and beverage, subsidies, and, in 2021, special epidemic relief grants (i.e., free money from Uncle Sam) ‒ in FY’19 totaled some $5.45 billion, in FY’20 (7 months of COVID impact) it was about the same, but in FY’21 it came to $7.87 billion. It is up to management to limit costs to have it all balance out. But that leaves all advocates and other interested parties with a burning question: What exactly is it that nearly $8 billion in revenue is not “enough” for, when total non-capital costs were under $3 billion? Where did that excess $5 billion go?
System ridership fell again in all three divisions: the NEC was down 1.7 million to 4.4 million (of which about 75% is classified as commuter, and 25% intercity); regional corridors fell 2.5 million to 5.5 million (yes ‒ 25% more passengers than in the NEC, Amtrak’s smallest division); and inter-regional fell a half million to 2.2 million (about double the NEC’s intercity ridership).
The best way to view these ridership numbers is that long distance/inter-regional is back up to about half its pre-COVID norm, while the NEC is down to about one fourth its pre-COVID level. Empty seats abound in the NEC and regional corridors, but growth in the long distance/inter-regional trains is being suppressed by Amtrak, by running artificially-shortened consists that prevent ridership growth.
The most important single measure of performance is output, or, “How much passenger transport did Amtrak produce?” That is measured by passenger miles, and once again, as it always does, the long distance/inter-regional category far out-performed the other divisions, and again came out on top by a wide margin as Amtrak’s largest business. Long distance/inter-regional trains brought in 1.295 billion, regional corridors did 0.810 billion, and the NEC 0.754 billion.
The Empire Builder once again was Amtrak’s strongest single train (this year, except for Auto Train, which did a hair better by staying on daily operations when everything else was slashed to tri-weekly), with 221 thousand customers, 168 million passenger-miles, and $38.4 million in revenue.