Alaska Railroad posts $14 million profit in 2014

The Alaska Railroad Corp. (ARRC) earlier this month reported it earned $14.1 million in net income on total revenue of $167.3 million in 2014.

While net income was down by $200,000 compared with 2013's bottom line, ARRC officials indicated the freight and passenger railroad's year-end results were "remarkable" considering dramatic declines in two major freight business lines.

The year-end revenue total included operating and real estate revenue of $125.1 million and grant revenue of $42.2 million, ARRC officials said in a press release.

"Continuing decreases in export coal- and petroleum-hauling business lines became clear in the spring, but due to cost containment efforts implemented in 2012, 2013 and 2014, as well as growth in other business lines, ARRC has been able to weather the economic downturns," they said.

"Ending the year $5.5 million ahead of projections after losses in our biggest revenue lines simply shows how much hard work everyone was willing to put forward," said ARRC Chair Linda Leary.

The year 2014 also saw an uptick in ARRC's rail-barge business, which was part of the growth of North Slope oilfield exploration. Since 2010, 85 percent to 90 percent of freight hauled via Alaska Rail Marine System is oil and gas related. ARRC hauled 24,350 tons of pipe in 2012, 33,150 tons in 2013 and 39,905 tons in 2014 — a 64 percent increase in tonnage from 2012 to 2014.

Also last year, ARRC updated its strategic plan to focus on five areas: grow and diversify revenue, control costs, optimize capital investments and projects, promote safety and engage employees, and enhance stakeholder relations and economic development, said ARRC President and Chief Executive Officer Bill O'Leary.

The railroad posted the 2014 annual report on its website.

Meanwhile, late last month the Alaska House of Representatives unanimously passed legislation that would authorize ARRC to issue up to $37 million in tax-exempt bonds to help pay for implementation of a federally mandated positive train control system. The legislation now goes to the state Senate for consideration.

State law requires ARRC to get legislative approval before it issues bonds.