9 National Railroad Passenger Corporation (Amtrak) - Mining Group

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2

Fy Ending

Sept 30, 1998

Fy Ending

Sept 30, 1998

Current AssetsCash and equivalents 274.7 4

Temporary cash investments 409.7 6

Account receivable, net 88.7 1

Mtaerials and supplies 91.6 1Other current assets 3.4 0

Total current assets 868.1 12

Property, plant and equipment 9456.4 129

Less: Accumulated depreciation -3106.9 -43Net property, plant and equipment 6349.5 87

Other assets and deffered charges 87.6 1

Total assets 7305.2 100

Balance Sheet (Values in Million of USD)

Fy Ending

Sept 30, 1998

Fy Ending

Sept 30, 1998

Current liabilities

Accounts payable 270.8 4

Accrued expenses and other current liabilities 186.7 3

Deffered ticket revenue 61.4 1

Current maturities of LT debt and capital-lease obligations 102.2 1

Total current liabilities 621.1 9

LT debt and capital lease obligations

Capital lease obligations 1213.1 17

Equipment and other debt 322.5 4

1535.6 21

Other liabilities and deffere d credit

Deferred federal payments 457 6Casuality reserves 136.2 2

Postretirement employee-benefits obligation 118.4 2

Environmental reserve 35.4 0

Advances from railroads and commuter agencies 20.6 0

Other 1.5 0

769.1 11

Total liabilities 2925.8 40

CapitalizationPreffered stock 10939.7 150

Common stock 93.9 1

Other paid-in capital 6471.3 89

Accumulated comprehensive loss -1 3125.4 -180

4379.5 60

Total liabilities and capitalization 7305.3 100

Balance Sheet (Val ues in Million of USD)



3

1994 1995 1996 1997 1998

Revenues

Passenger-related and other 1152 1177 1213 1341 1392

Commuter 184 213 234 242 260

Reimbursable 77 107 108 91 91Federal payments 542

Total revenues 1413 1497 1555 1674 2285

Expenses

Salaries, wage and benefits 1330 1241 1236 1299 1448

Train operations 358 321 321 365 356

Facility and office related 153 172 181 187 190

Maintenance-of-way goods and services 45 73 59 46 52

Advertising and sales 91 90 109 98 102Interest 185 144 149 160 181

Depreciation and amortization 245 230 238 242 294

Other 83 34 25 39 15

One-time charges/(gains) -244

Total expenses 2246 2305 2318 2436 2638

Operating income/(loss) -833 -808 -763 -762 -353

Exclude federal payments and related interest 577

Operating loss restated -833 -808 -763 -762 -930

Federal grantsFederal operating grant 352 392 285 223 202

Excess railroad retirement taxes 150 150 120 142 142

Federal capital - interest 42

Federal capital - progressive overhaul and other 36 37 82

Total federal grants 502 542 441 444 426

Net loss -331 -266 -322 -318 -504

Fiscal Year Ending Sept. 30

Income Statement ( Values in Millions of USD)

1994 1995 1996 1997 1998

Revenues

Passenger-related and other 82 79 78 80 61

Commuter 13 14 15 14 11

Reimbursable 5 7 7 5 4Federal payments 24

Total revenues 100 100 100 100 100

Expenses

Salaries, wage and benefits 94 83 79 78 63

Train operations 25 21 21 22 16

Facility and office related 11 11 12 11 8

Maintenance-of-way goods and services 3 5 4 3 2

Advertising and sales 6 6 7 6 4Interest 13 10 10 10 8

Depreciation and amortization 17 15 15 14 13

Other 6 2 2 2 1

One-time charges/(gains) -17

Total expenses 159 154 149 146 115

Operating income/(loss) -59 -54 -49 -46 -15

Exclude federal payments and related interest 25

Operating loss restated -59 -54 -49 -46 -41

Federal grantsFederal operating grant 25 26 18 13 9

Excess railroad retirement taxes 11 10 8 8 6

Federal capital - interest 3

Federal capital - progressive overhaul and other 2 2 4

Total federal grants 36 36 28 27 19

Net loss -23 -18 -21 -19 -22

Income Statement (Values in Millions of USD)

Fiscal Year Ending Sept. 30



!"#$%&'()

4

No. Cost Aggregate CostHigh-speed locomotives 15 7,161,300 107,419,500

Train sets 20 32,129,050 642,581,000

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Lessee

Equipment Lease Payments

Equity investors put up $53.6

million (20% of equipment value)in exchange for lease payments

after debt service

Owner Trustee

Wilmington Trust

Lenders advance $214.3

million (80% of equipment

value) in exchange for

first claim on leasepayments on locomotives

and trains ets

Equity Investor

BNY Capital Funding, LLC

LenderExport Development

Corporation (EDC) of

Canada

BNY Capital Funding LLC's Proposed Leveraged-Lease Strcuture

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13

Amount

1999 June ….

Dec $200,102

2000 June $3,761,228

Dec $7,965,652

2001 June $10,022,594

Dec $10,316,948

2002 June $8,617,634

Dec $10,360,645

2003 June $9,828,570

Dec $10,367,985

2004 June $8,607,823

Dec $10,418,573

2005 June $9,683,063

Dec $10,435,186

2006 June $8,580,151

Dec $11,599,993

2007 June $7,338,339

Dec $11,468,211

2008 June $9,475,208

Dec $15,792,709

2009 June $7,765,741Dec $20,224,322

2010 June $5,067,035

Dec $15,872,556

2011 June $4,121,823

Dec $22,807,129

2012 June $3,336,587

Dec $23,645,133

2013 June $2,662,913

Dec $24,055,367

2014 June $1,957,919

Dec $20,017,608

2015 June $6,067,613

Dec $6,287,652

2016 June $12,292,315Dec $21,394,788

2017 June $6,551,924

Dec $18,107,167

2018 June $8,612,133

Dec $13,469,295

2019 June $8,864,543

Dec $6,654,238

2020 June $2,035,748

Dec $1

BNY Capital Funding LLC's Proposed

Lease-Payment Schedule (in Dollars)

Date Due

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19



20

Discount rate 6.75%

Tax rate 0.00%

After-tax interest rate 6.75%

0 1 2 3 4 5 6 7 8 9 10

Lease payments (0.20) (3.76) (7.97) (10.02) (10.32) (8.62) (10.36) (9.83) (10.37) (8.61)

Tax shield on lease payments 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

After-tax lease payments (0.20) (3.76) (7.97) (10.02) (10.32) (8.62) (10.36) (9.83) (10.37) (8.61)

Residual valueTotal cash flows (0.20) (3.76) (7.97) (10.02) (10.32) (8.62) (10.36) (9.83) (10.37) (8.61)

Discounted flows @ K D (0.19) (3.52) (7.21) (8.78) (8.74) (7.06) (8.21) (7.54) (7.69) (6.18)

11 12 13 14 15 16 17 18 19 20

Lease payments (10.42) (9.68) (10.44) (8.58) (11.60) (7.34) (11.47) (9.48) (15.79) (7.77)



Residual value

Total cash flows (10.42) (9.68) (10.44) (8.58) (11.60) (7.34) (11.47) (9.48) (15.79) (7.77)


21 22 23 24 25 26 27 28 29 30

Lease payments (20.22) (5.07) (15.87) (4.12) (22.81) (3.34) (23.65) (2.66) (24.06) (1.96)

Tax shield on lease payments 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00After-tax lease payments (20.22) (5.07) (15.87) (4.12) (22.81) (3.34) (23.65) (2.66) (24.06) (1.96)

Residual value

Total cash flows (20.22) (5.07) (15.87) (4.12) (22.81) (3.34) (23.65) (2.66) (24.06) (1.96)


Time Period 31 32 33 34 35 36 37 38 39 40

Lease payments (20.02) (6.07) (6.29) (12.29) (21.39) (6.55) (18.11) (8.61) (13.47) (8.86)



Residual value

Total cash flows (20.02) (6.07) (6.29) (12.29) (21.39) (6.55) (18.11) (8.61) (13.47) (8.86)


Time Period 41 42 43 44 45 46 47 48 49 50Lease payments (6.65) (2.04) (0.00)

Tax shield on lease payments 0.00 0.00 0.00

After-tax lease payments (6.65) (2.04) (0.00)

Residual value

Total cash flows (6.65) (2.04) (0.00) 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Discounted flows @ K D (1.71) (0.50) (0.00) 0.00 0.00 0 .00 0.00 0 .00 0.00 0 .00

NPV of Lease Alternative (220.26)

Cash Flow Analysis of Lease Alternative (in Million Dollars)



22

Discount rate 6.75%

Tax rate 0.00%


Useful life of equipment 25

0 1 2 3 4 5 6 7 8 9 10 Sums

Debt 267.90

Purchase of equipment (267.90)

Principal repay ment (3.26) ( 3.37) ( 3.49) (3.60) ( 3.72) ( 3.85) ( 3.98) (4.1 1) ( 4.25) (4.40)

Interest expense (9.04) (8.93) (8.82) (8.70) (8.58) (8.45) (8.32) (8.19) (8.05) (7.91)

Interest tax shields 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00Depreciation tax shield 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Residual value

T ot al cash flows (1 2.30) (1 2.30) (1 2.30) (1 2.30) (1 2.30) (1 2.30) (1 2.30) (1 2.30) (1 2.30) (1 2.30)

Discounted flows @ K D (11.90) (11.51) (11.14) (10.77) (10.42) (10.08) (9.75) (9.43) (9.13) (8.83) (102.97)

11 12 13 14 15 16 17 18 19 20

Principal repay ment (4.55) (4.70) (4.86) (5.02) ( 5.1 9) ( 5.37) (5.55) ( 5.73) (5.93) ( 6.1 3)


Interest tax shields 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Depreciation tax shield 0.00 0.00 0.00 0.00

Residual value

T ot al cash flows (1 2.30) (1 2.30) (1 2.30) (1 2.30) (1 2.30) (1 2.30) (1 2.30) (1 2.30) (1 2.30) (1 2.30)


21 22 23 24 25 26 27 28 29 30

Principal repay ment (6.33) (6.55) (6.77) (7.00) ( 7.23) ( 7.48) (7.73) ( 7.99) (8.26) (8.54)Interest expense (5.97) (5.75) (5.53) (5.31 ) (5.07) (4.83) (4.57) (4.31 ) (4.04) (3.76)


Depreciation tax shield

Residual value

T ot al cash flows (1 2.30) (1 2.30) (1 2.30) (1 2.30) (1 2.30) (1 2.30) (1 2.30) (1 2.30) (1 2.30) (1 2.30)

Discounted flows @ K D (6.13) (5 .93) (5.73) (5 .55) (5.37) (5.19) (5.02) (4.86) (4.70) (4.55) (53.01)

31 32 33 34 35 36 37 38 39 40

Pr incipal r epay ment (8.83) (9.1 3) (9.43) (9.75 ) (1 0.08) (1 0.42) (1 0.77) (1 1.1 4) (1 1.5 1) (1 1.90)

Interest expense (3.48) (3.1 8) (2.87) (2.55) (2.22) (1 .88) (1 .53) ( 1.1 7) (0.79) (0.40)



Residual value

T ot al cash flows (1 2.30) (1 2.30) (1 2.30) (1 2.30) (1 2.30) (1 2.30) (1 2.30) (1 2.30) (1 2.30) (1 2.30)


41 42 43 44 45 46 47 48 49 50

Principal repayment

Interest expense

Interest tax shields


Residual value 40.19

Total cash flows 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 40.19

Discounted flows @ K D 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 7.64 7.64

(260.26)

Cash Flow Analysis of Borrow-and-Buy Alternative ( In Million Dollars)

NPV of Borrow-and-Buy



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No Tax Tax Rate of 38%

Lease -$220.26 million -$173.90 million

Borrow-and-buy -$260.26 million -$171.51 million



26

Discount rate 6.75%

Tax rate 38.00%


0 1 2 3 4 5 6 7 8 9 10

Lease payments (0.20) (3.76) (7.97) (10.02) (10.32) (8.62) (10.36) (9.83) (10.37) (8.61)



Residual valueTotal cash flows (0.12) (2.33) (4.94) (6.21) (6.40) (5.34) (6.42) (6.09) (6.43) (5.34)


11 12 13 14 15 16 17 18 19 20

Lease payments (10.42) (9.68) (10.44) (8.58) (11.60) (7.34) (11.47) (9.48) (15.79) (7.77)



Residual value

Total cash flows (6.46) (6.00) (6.47) (5.32) (7.19) (4.55) (7.11) (5.87) (9.79) (4.81)


21 22 23 24 25 26 27 28 29 30

Lease payments (20.22) (5.07) (15.87) (4.12) (22.81) (3.34) (23.65) (2.66) (24.06) (1.96)

Tax shield on lease payments 7.69 1.93 6.03 1.57 8.67 1.27 8.99 1.01 9.14 0.74After-tax lease payments (12.54) (3.14) (9.84) (2.56) (14.14) (2.07) (14.66) (1.65) (14.91) (1.21)

Residual value

Total cash flows (12.54) (3.14) (9.84) (2.56) (14.14) (2.07) (14.66) (1.65) (14.91) (1.21)


Time Period 31 32 33 34 35 36 37 38 39 40

Lease payments (20.02) (6.07) (6.29) (12.29) (21.39) (6.55) (18.11) (8.61) (13.47) (8.86)



Residual value

Total cash flows (12.41) (3.76) (3.90) (7.62) (13.26) (4.06) (11.23) (5.34) (8.35) (5.50)


Time Period 41 42 43 44 45 46 47 48 49 50Lease payments (6.65) (2.04) (0.00)

Tax shield on lease payments 2.53 0.77 0.00

After-tax lease payments (4.13) (1.26) (0.00)

Residual value

Total cash flows (4.13) (1.26) (0.00) 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Discounted flows @ K D (1.76) (0.53) (0.00) 0.00 0.00 0 .00 0.00 0 .00 0.00 0 .00

NPV of Lease Alternative (173.90)

Cash Flow Analysis of Lease Alternative (in Million Dollars)



27

Discount rate 6.75%

Tax rate 38.00%


Useful life of equipment 25

0 1 2 3 4 5 6 7 8 9 10 Sums

Debt 267.90

Purchase of equipment (267.90)

Principal repay ment (3.26) ( 3.37) (3.49) (3.60) ( 3.72) (3.85) (3.98) (4.1 1) (4.25) (4.40)


Interest tax shields 3.44 3.39 3.35 3.31 3.26 3.21 3.16 3.11 3.06 3.00Depreciation tax shield 7.27 7.27 12.47 12.47 8.90 8.90 6.36 6.36 4.55 4.55

Residual value

Total cash flows (1.59) (1.64) 3.51 3.47 (0.14) (0.19) (2.78) (2.83) (4.70) (4.75)

Discounted flows @ K D (1.56) (1.57) 3.30 3.19 (0.13) (0.17) (2.41) (2.40) (3.90) (3.86) (9.50)

11 12 13 14 15 16 17 18 19 20

Principal repay ment (4.55) (4.70) (4.86) (5.02) ( 5.1 9) ( 5.37) (5.55) ( 5.73) (5.93) ( 6.1 3)



Depreciation tax shield 4.55 4.55 2.27 2.27

Residual value

T otal cash flows (4.81) (4.87) ( 7.21) ( 7.27) (9.60) (9.67) (9.74) (9.81) (9.88) (9.96)


21 22 23 24 25 26 27 28 29 30

Principal repay ment (6.33) (6.55) ( 6.77) (7.00) ( 7.23) ( 7.48) (7.73) ( 7.99) (8.26) (8.54)Interest ex pense (5.97) (5.75) (5.53) (5.31) (5.07) (4.83) (4.57) (4.31) (4.04) (3.76)



Residual value

Total cash flows (1 0.03) (1 0.1 2) (1 0.20) (1 0.29) (1 0.38) (1 0.47) (1 0.5 7) (1 0.66) (1 0.77) (1 0.87)


31 32 33 34 35 36 37 38 39 40

Pr incipal r epay ment (8.83) (9.1 3) (9.43) (9.75 ) (1 0.08) (1 0.42) (1 0.77) (1 1.1 4) (1 1.51 ) (1 1.90)

Interest ex pense (3.48) (3.1 8) (2.87) (2.55) (2.22) (1.88) (1.53) ( 1.1 7) (0.79) (0.40)



Residual value

Total cash flows (1 0.98) (1 1.1 0) (1 1.21 ) (1 1.33) (1 1.46) (1 1.59) (1 1.72) (1 1.86) (1 2.00) (1 2.1 5)


41 42 43 44 45 46 47 48 49 50Principal repayment

Interest expense

Interest tax shields


Residual value 40.19

Total cash flows 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 40.19

Discounted flows @ K D 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 14.27 14.27

(171.51)

Cash Flow Analysis of Borrow-and-Buy Alternative (I n Million Dollars)

NPV of Borrow-and-Buy



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29

Underlying asset value $17 Million (Present value of strike price of 126.6 million 18 ye ars from now discounted at WACC 11 .8%)Strike price $126.6 Million Purchase price os asset

Maturity 18.5 years (June 1999 to Dec 2017 )Risk-free rate 6% 5% to 6%

Volatility 25%Footnote 10 ; volatility estimate of locomotiv e and train cars

Option Vlaue (BSM) $2.97 Million



+%lB1-"% 47c

30

No Tax Tax Rate of38%

Lease -$217.29million

-$170.93million

Borrow-and-buy

-$260.26million

-$171.51million

9 National Railroad Passenger Corporation (Amtrak) - Mining Group

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Transcript of 9 National Railroad Passenger Corporation (Amtrak) - Mining Group