Capitol Corridor Statistics for December, 2013

by David B. Kutrosky, Managing Director
Capitol Corridor Joint Powers Authority

Ridership on Capitol Corridor in December 2013 was 111,722, an increase of
three percent over December 2012. This was the first time in FY2014 that for a given month was higher than the ridership of its prior year
month. As a result, revenues for December 2013 were 3.5% above those of December 2012. This ridership boost is attributed to (1) the Thanksgiving
travel week extended into Sunday, December 1, and (2) strong weekend ridership [+4.9% compared to December 2012], especially during the last two
weekends of the holiday season.

On-time performance (OTP) for December 2013 was an extraordinary 98% thanks in large part to excellent dispatching by Union Pacific Railroad (UPRR) and Caltrain, plus a steady and significant drop in Amtrak mechanical delay minutes. The year-to-date system operating ratio is 50%, below the 53%
standard due to decreased ridership/revenues.

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As follow up from earlier reports, the analyses on the ridership declines indicate that there have been continued customer losses at the Placer
County, Sacramento and Davis stations, as well as on the midday trains. Weekend ridership also remains flat. To stimulate ridership at these
stations and during off-peak time periods, we have reinstituted the Senior 50% mid-week and 50% weekend travel discounts. Both discount promotions
will be monitored to determine their effectiveness. Early analysis shows that the 50% weekend discount seems to have helped boost ridership in the
second half of December 2013. Discussions are now underway with the communities of Davis and Sacramento and Placer County to address the
ridership declines in these markets.

In a parallel effort, CCJPA and Amtrak staffs are evaluating changes to the weekday and weekend operating plans to determine if cost efficiencies
and/or ridership gains can be achieved. Any changes to the operating plans 0and train schedules that are achievable and can improve service performance (ridership, revenues and cost efficiencies) will be implemented no earlier than late summer/early fall 2014.

Restated FY2013 Financial Results

In earlier monthly performance reports, it was reported that monthly fuel invoices from Amtrak were coming in up to 44% under budget. Initially
these financials were attributed to the 480-volt plug-in cabinets at the new Sacramento Valley station platforms (allowing trains to power up
without using fuel during multi-hour layovers) and the repowered, more fuel-efficient engines in the California locomotives. This, however,
proved too good to be true. After inquiries from CCJPA staff to Amtrak requesting a review of these monthly invoices, specifically to examine the
significant drop in gallons of fuel invoiced at Sacramento, Amtrak reported that the fuel pumped from the new underground fuel tank had not been
properly accounted for between January and September 2013. Amtrak submitted a restated annual invoice for FY2013 that corrected the monthly
fuel consumption and corresponding costs to Capitol Corridor. This restated invoice changes the reported financials, resulting in a reduced
system operating ratio of 49%, compared to the initial report of 52%. Going into FY2014, Amtrak has committed to frequent, regularly scheduled
meetings (no less than quarterly) to review monthly invoices and service performance results. We anticipate that these meetings will result in more informed and timely decisions for any adjustments to service to meet the contractual budget.

On a positive note, the fuel invoices from Amtrak did indicate that fuel consumption for FY2013 dropped by 111,000 gallons compared to FY2012 due to
the 480-volt power cabinets in Sacramento and the repowered California 00locomotive engines.

Funding Outlook

State/California
– Draft FY2014-15 State Budget: On January 9, 2014, the Governor
released his draft State Budget for FY2014-15, which includes $108.9
million to support the operation of the three California intercity
passenger rail (IPR) services (San Joaquin, Capitol Corridor and
Pacific Surfliner). This IPR operating budget conforms with Passenger
Rail Improvement and Investment Act (PRIIA) Section 209 Policy for
the pricing of Amtrak-operated, state-supported IPR services.

The Governor’s draft budget identifies $300 million in proceeds from
Cap and Trade Auction revenues for the Rail Modernization Program:
$250 million to support the development of the Initial Operating
Segment (IOS) of the California High Speed Train (HST) system between
the San Fernando Valley and Merced and $50 million for projects that
connect public rail transit services with the HST system. Details of
the Rail Modernization Program and the allocation and appropriation
of the Cap and Trade Revenues are expected to be fully vetted during
this year’s legislative session.

– Select Committee on Passenger Rail (Senate and Assembly): Progress
continues in the Senate under the leadership of State Senator
Hannah-Beth Jackson’s office to develop a Select Committee on
Passenger Rail. Similar efforts are underway in the Assembly to
develop a similar select committee. The purpose of these select
committees is to garner support within the legislature to increase
investment in the state’s passenger rail system.

Federal Surface Transportation Reauthorization

It is unclear how Congress will address the expiration and subsequent reauthorization of the federal Passenger Rail Improvement and Investment
Act of 2008, which expired on October 16, 2013. This act covers Amtrak authorization and the current railroad safety programs, including Positive
Train Control (PTC). APTA has recently adopted a program for the federal investment in a national intercity passenger rail network that includes
state-sponsored IPR routes, the Amtrak system and planned high/higher speed train services. This program presents principles that will then be
referenced into APTA’s documents supporting the upcoming surface transportation authorization efforts of MAP-21, thereby helping to establish a federally-funded Rail Title. CCJPA staff continues to work with AASHTO and other interested agencies to prepare and advance principles similar to those adopted by APTA.

Customer Service Program Upgrades
• Bicycle Access Plan: A launch of the on-board element of the Plan is set
for Spring 2014 now that all the cab cars have been modified for added bike
storage and the remaining five modified cab cars are going through PTC
equipment installation. Capitol Corridor has been able to double bicycle
capacity on select trains with heavy bike use by adding a second car with
expanded bike storage (a baggage/bike car). This enhanced storage has been
made possible through the collaboration of the CCJPA and Caltrans, whereby
Capitol Corridor receives one baggage/bike car from the San Joaquin fleet
in exchange for one regular coach car from the Capitol Corridor fleet.

At-station elements of the Plan are proceeding with a deployment during 2014 of at-station facilities (eLockers and/or folding bicycle rental
programs).

Safety Initiatives

• On-board installation of Positive Train Control (PTC) Equipment:
Installation of the PTC equipment on the state-owned equipment is
proceeding. All California owned locomotives have been equipped (final
commissioning to begin once all radio antennas are received and installed)
and installation on cab cars is underway (~70% complete).

• Safety Fences: With the recent allocation of nearly $1 million by the
CCJPA Board in fall 2013, UPRR is proceeding with an expedited program of
safety fence installations along sections of the route in 2014 where
incidents of unauthorized trespassing and vandalism have been reported
(West Sacramento, Davis, Solano County).

• Employee/Passenger Injuries: The Capitol Corridor had a very safe first
quarter of FY2014 with only one reported Amtrak employee injury and two
passenger injuries, which were relatively similar to the first quarter of
FY2013. Unfortunately, during this same period, there were four trespasser
fatalities, compared to three in the prior year quarter.

Marketing Updates
• The CCJPA has taken immediate action to address ridership declines with
the launch of the 50% online fare discount for weekend travel and the
popular Senior 50% discount for mid-week travel. Future promotions may be
developed and released pending the results of actions to address other
underperforming markets: Placer County and the Davis and Sacramento
stations.

Outlook: The end of the first quarter in FY2014 shows some good tidings on the Capitol Corridor. Positive ridership and revenue results for December 2013 helped keep the loss in year-to-date ridership and revenues to -3% each. The Capitol Corridor is still the third busiest service in the Amtrak system, as well as the most reliable with a 96% OTP. This strong 0erformance has helped us maintain high customer satisfaction scores and retain a solid ridership base. Concurrently, we continue to work with our operating and funding partners to complete pre-development work for the service expansion projects (involving San Jose/Salinas, Placer County), and to develop advocacy strategies to secure capital grant funds to construct these service expansion projects.

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