Piedmont crossing Catawba River near Spencer, NC

Amtrak System Overview and Update

Stephen Gardner Vice President, Policy and Development SCORT 2011 Annual Meeting, Charlotte, NC September 2011

The Amtrak System

Cascades California corridors Long distance routes connect major hubs and corridor services Chicago Hub Northeast Corridor (NEC) 1

Amtrak at a Glance – Ridership and Revenue

Ridership, July YTD

Long Distance, 3.79m, 15% Acela, 2.86m, 11%

Ticket Revenue, July YTD

Long Distance, $398.24m, 25% Acela, $415.96m, 27% NE Regional, 6.31m, 25% State Corridors, 12.26m, 49% State Corridors, $353.79m, 22% • State corridors – nearly half of Amtrak’s ridership NE Regional, $414.73m, 26% • NEC – over half of Amtrak ticket revenue, majority of capital funding • Long distance – fewer riders, longer trips, majority of Federal operating support • All business lines rely on Shared Costs – stations, mechanical, systems

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On track for 30 million riders in FY11

• FY08: Economic peak; low unemployment; high gas prices • FY11: Slower economy; higher unemployment; lower gas prices • Hurricane Irene, Midwest floods, Pacific Northwest mudslides have lowered summer ridership and revenue

32.0

30.0

28.0

26.0

24.0

22.0

20.0

FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 Forecast Riders 3

Continued Growth in Ridership & Revenue

• Ridership, revenue gains across all segments

Ridership, FY11 vs. FY10 July YTD (10 mos) 14.0

12.0

10.0

8.0

6.0

4.0

2.0

0.0

+5.5%

8.7

9.2

+6.9%

11.5

12.3

+2.0%

3.7

3.8

NEC State Corridors FY10 YTD FY11 YTD Long Distance Ticket Revenue, FY11 vs. FY10 July YTD (10 mos) $900 $800 $700 $600 $500 $400 $300 $200 $100 $ +9.8%

$756.3

$830.7

NEC +9.9%

$322.0

$353.8

+7.1%

$371.7

$398.2

State Corridors FY10 YTD FY11 YTD Long Distance 4

State Corridor Ridership & Revenue Highlights

Top Ten YTD Ridership Gains

Piedmont* Lynchburg Service +50% +30% Newport News Service Blue Water Illini/Saluki (Chi-Carbondale) Hoosier State +21% +21% +19% +11% Empire Service Downeaster Wolverines Adirondack +9% +9% +9% +8% * Reflects introduction of additional Piedmont frequency

Top Ten YTD Revenue Gains

Piedmont* Lynchburg Service +72% +31% Blue Water Newport News Service Missouri River Runner Wolverines +23% +18% +17% +16% Illini/Saluki (Chi-Carbondale) San Joaquin Capitol Corridor Pacific Surfliner +15% +13% +11% +11%

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Operating Costs

• On NEC and State Corridors, operating costs holding to prior year levels despite rider and revenue growth • On Long Distance trains, facing increased costs

Direct and Shared Costs, FY11 vs. FY10 May YTD (8 months)

(millions)

$750

$674.8

$711.3

$537.8

$536.2

$515.5

$517.3

$500 $250 $ NEC Spine State Corridors Long Distance FY10 YTD FY11 YTD

8 months of cost data currently available due to transition to new accounting system

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FY10 Operating Results

• Federal support for both Long Distance and State Supported operating expense ($ millions)

FY10 Financial Performance of Routes – Final Audited

Passenger and Other Revenue State Revenue

NEC Spine

$920.7

920.7

+

State Supported Routes

+

Long Distance Routes

=

National Train Service

$405.1

174.3

579.4

$1,811.7

174.3

1,986.0

Direct Labor Other Direct Costs Total Direct Costs Contribution After Direct Costs 88.8

269.2

358.0

562.7

124.9

318.0

442.8

136.6

(165.4) 461.2

990.9

1,452.1

533.9

Shared Costs Subtotal Direct and Shared Costs Core Contribution (Loss) 1 425.9

784.0

$136.7

322.8

765.6

($186.2) ($527.3) 1. Excludes interest, depreciation, and OPEB’s. Ties to audited data available on Amtrak website.

1,110.6

2,562.7

($576.7)

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FY10 Capital Spending

• $698.0M in FY10 capital spending • Majority of capital spending on NEC, with remainder on shared assets used by multiple services Systems (timekeeping, dispatching), station improvements eTicketing, call centers, QuikTrak, eCommerce, WiFi, Yield Management

FY10 Capital Spending - Millions

Trans, Mktg, $32.0 $16.9

Police, Enviro, $11.1 $6.7

Other, $12.1 Finance, Procurement, Real Estate SAM program, hardware, IT security, IT, $121.8 Eng, $368.1 Bridges/Culvert/Tunnels, Stations, Signals, Catenary, Track, Interlockings, ADA, Life Safety Equipment overhauls, Mechanical facilities Mech, $129.3

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Customer Satisfaction (CSI)

• Customer satisfaction on State-Supported trains is high and in many cases improving • Always opportunities for improvement (Commercial Partner Satisfaction Program)

Selected CSI Measures for State Corridor Trains - % Very Satisfied FY11 vs. FY10 July YTD (10 mos) 100%

85.0% 85.0% 84.0% 85.0%

80%

76.0% 77.0% 74.0% 75.0%

60% 40% 20% 0% Overall CSI Overall Cleanliness of Train FY10 YTD Friendliness of Conductors FY11 YTD Overall Experience in Café Car 9

On-Time Performance (OTP)

• Gains in NEC, flat for other State Corridors, declines in Long Distance

Endpoint On Time Performance, FY11 vs. FY10 July YTD (10 months) 100% 80%

80.0% 83.9% 77.9% 81.6% 81.0% 78.9% 75.6% 65.1%

60% 40% 20% 0% Acela Regional FY10 YTD State Corridors FY11 YTD Long Distance 10

2012 Funding & Budget

• FY11 Continuing Resolution provided $1.474 billion for Amtrak – $562m operating (roughly equal to FY10) – $649m capital ($89m cut from FY10) – $263m debt service (roughly equal to FY10) • Amtrak requested $2.2 billion in FY12 – $616m operating (PRIIA-authorized) – $1.325b capital (PRIIA-authorized plus $50m for NEC Gateway) – $271m debt service (PRIIA authorized $290m) • End of ARRA funding means a larger reduction in capital than apparent • House Transportation, Housing, and Urban Development Subcommittee – Operating -- $227m (Cannot be used for operating costs of State-supported routes) – Capital -- $627.954m

– Debt service -- $271m (not to exceed) • Senate markup not yet scheduled • Appropriators must live within FY12 caps on discretionary spending, or face sequestration • “Super Committee” process could further reduce FY12 spending • But sequestration from failure of process to result in $1.2T in savings will not occur until FY13

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Congressional Update

• Transportation is on the agenda for September • September 14 Senate Commerce Committee Hearing • FAA authorization expires mid-September • Surface bill expires end of September • Administration’s proposed American Jobs Act • Super Committee and Debt Package

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Commercial Partner Satisfaction Program (CPSP)

• The 2010 Partner Satisfaction Survey revealed that Amtrak needs to improve serving partner wants, needs and expectations • Partner Focus Areas – Contracts & service pricing – Operating problems response – Reporting accuracy and timeliness – Communications – Efficient business processes – Technology solutions – Customer / Market research • Partner’s Customer Focus Areas – OTP – Cleanliness – Comfort – Temperature – Service quality – Food & Beverage – Schedule/fares

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Rebuilding the Relationship: Commercial Partner Satisfaction Program

Amtrak Executive / Partner Meetings Partner Performance Action Teams Regional Steering Committees Executive Liaison Team Partner Satisfaction Survey

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Commercial Partner Satisfaction Program – results so far

• Pilot program in place with West Regional Steering Committee  Eliminated the “One Year Rule”  Expedite Position Grading and Classification - Now within 5 business days of request  Reduce Time from Post to Fill  Cascades: Resolved border crossing issues with second train  Capitol Corridor: Restroom odor CSI scores improved +12 points  San Joaquins: Food & beverage improvements +5 to +11 points – Coordinate Engineering at the Division Level for Station Construction and Improvements  Outreach, expanded Station Initiative Team calls, survey created – Improve Locomotive Availability by addressing spare parts inventory and delivery time lag

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PRIIA Sections – Status Update

Section Summary

301/501 Federal grants 205 207 Performance standards

Status

Over $7.4 billion awarded Debt reduction Over $114 million paid down Sep-10 to Jul-11 (Sec 205 and other sources) Completed, resulted in lawsuit from AAR 209 State support 210 212 214 Long distance NEC Competitive operators (LD) Policy developed with State Working Group and Amtrak; approved by Amtrak Board; pending concurrence with State Governors First 10 routes analyzed NEC Commission created to plan NEC; cost allocation development in process FRA issued Notice of Proposed Rulemaking (NPRM)

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PRIIA Section 209: State Support

• August 31: Amtrak Board of Directors approved the Section 209 policy jointly proposed by Amtrak management and the Section 209 State Working Group (SWG) • September 1: Amtrak Board of Directors mailed letters to States asking for their concurrence on the Section 209 Policy by September 30 • We ask your States for concurrence, and are here to answer questions to help get to concurrence • Thanks to the SWG!

David Kutrosky, CCJPA Pat Simmons, North Carolina Kevin Page, Virginia Shayne Gill, AASHTO Patricia Quinn, NNEPRA Susan Howard, North Carolina Beth Nachreiner, Wisconsin

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Selected Developments Here in the Southern Region

• Southeast High Speed Rail Corridor (SEHSR) – North Carolina, Virginia, South Carolina and Georgia – Nearing completion of Tier 2 environmental impact, Petersburg-Raleigh • Georgia – Multiple corridor planning grants • North Carolina – 3 rd Piedmont round trip scheduled to start late 2013 • Virginia: Next Stop Norfolk – One-seat ride from Norfolk to Boston – Estimated start date 2013 – DRPT, Amtrak, CSX, NS, City of Norfolk

Lynchburg Inaugural Train

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Strategic Asset Management - SAM

• Company-wide, multiyear program to revamp business processes throughout organization, integrate to an enterprise solution (SAP) • Release 1a went live in June 2011 – due to transition, some delays in processing APT and generating invoices Example: Accounting Processes Example: Inventory Management Example: Purchasing Example: Time Processing Example: Securing Materials Financial Activities & Functions  Annual Budget Activities Materials Activities & Functions  Project Planning Activities Procurement Activities & Functions Human Capital Management Activities & Functions Mechanical Engineering Transportation Example: Planning Capital Projects against Functional Assets  Reporting & Analysis Activities Example: Cost Capturing

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Safety and Regulatory Developments

• Positive Train Control (PTC) proposed rule – Late August: Proposed FRA rule extending deadline for determining TIH (toxic inhalation hazard) routes to 2014 – Currently 1,500+ miles of host railroad with passenger only, no TIH • Passenger Hours of Service (HOS) final rule – August: final rule issued restricting HOS for intercity and commuter train employees – Train schedules run through biomathematical model to assess risk of fatigue, establish sufficient rest periods - Type 1: 4AM-8PM shifts-less risk; Type 2: 8PM-4AM shifts-more risk – Too soon to determine effects on Amtrak services - Corridor service mostly Type 1, but shared corridor/LD resources could be Type 2

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Questions?

Crescent crossing the James River at Lynchburg

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