Conrail's Profitability: Framework for Analysis

When the Consolidated Rail Corporation (Conrail) began operations in April 1976, financial projections made by the United States Railway Association (USRA) assumed that the $2.026 billion appropriated for Federal loans and purchases of stock would be all of the Federal financial assistance that the railroad would need. USRA's Final System Plan (FSP), prepared as a basis for Federal funding decisions, forecast that the railroad would become profitable in 1979. Information about Conrail's current operations were compared with the forecasts developed when Federal funding decisions were being made; experience to date was compared with FSP projections of: output and inflation in the economy as a whole; tonnage carried by Conrail; total Conrail revenues, expenses, and deficits; and Conrail freight revenues and expenses per ton.