Correspondence

On June 17, as requested by the Senate Transportation Appropriations Subcommittee staff, we issued our assessment of the costs related to Amtrak’s recently settled labor negotiations and Amtrak’s ability to pay those costs. We continue to believe that for FY 2009, Amtrak needs $475 million for operations, $675 million for capital, and $266 million for debt service. We believe Amtrak’s projected cash balance of $293.2 million will be sufficient to fund Amtrak’s labor settlement costs in FY 2009 without any supplemental appropriation in FY 2009. This large projected cash balance reflects better–than–expected financial performance for the year–to–date (through April). The total cost of the settlement is estimated to be $435.6 million, $23.4 million over Amtrak’s March estimate. Since March, these estimates were revised upward to reflect the actual payout amounts of a portion of the retroactive pay for the employees of 15 of the 19 union negotiating groups, as well as for the recently agreed upon terms of the retroactive payments for the remaining 4 negotiating groups.