To:	Chicago Transit Authority Board

From:	Dennis Anosike, Chief Financial Officer

Re:	Financial Results for April 2008

Date:	June 11, 2008

CTA’s financial results show a deficit for the month of April
of $2.8 million and $6.5 million for the year to date.  The 
deficit drivers for the month and year are higher labor and 
fuel expense. Higher fuel prices are driving ridership growth 
which in turn is driving higher fare revenue. However, this 
increase in fare revenue is not enough to fully offset the 
higher expenses, partially due to the greater usage of pass 
media. Every $0.10 change in the price per gallon of fuel 
increases expense by $2.4 million. Fuel prices are now at 
$4.53 per gallon which alone could increase operating expenses 
by as much as $25.0 million over budget levels. As such, CTA 
is amending its 2008 operating budget to offset this negative 
impact.  Management has implemented a business plan to bring 
the budget in line including issuance of monthly overtime 
targets to all departments and implementation of hiring plans 
to drive favorable labor variances. Operating departments have 
also been given targets for reductions in contractual services 
spending. 

Sales tax for the RTA region equaled $109.3 million for the 
first two months of 2008. This is $6.2 million less than 
budget, but is $0.7 million more than the prior year. Sales 
tax distributed to CTA from the formula equaled $44.2 million 
and was less than budget by $1.4 million, but was 
$0.3 million more than prior year.  

Ridership for the month of April was 45.0 million and was 
2.3 million more than budget. Ridership for the year was 
165.6 million and was 3.5 million more than budget and was 
6.7 million or 4.2% higher than prior year. Average weekday 
ridership was higher than April 2007 by 8.8%.  Saturday 
ridership for the month was higher than prior year by 8.3%.  
Sunday ridership for the month was 10.2% higher than prior year.   
The average weekday, Saturday and Sunday ridership for the year 
exceeded prior year by 3.0%, 4.2% and 3.7%, respectively, due 
to strong ridership on the bus system. Ridership taken with 
passes was 6.5% higher for the month and 3.7% higher for the 
year to date.  

Bus ridership for the month of April was 28.5 million. This 
was 1.9 million or 7.0% more than budget and was 3.2 million 
or 12.8% more than April 2007.  Rail ridership for April was 
16.5 million and was 0.5 million or 2.9% more than budget and 
was 1.3 million or 8.9% more than prior year.  For the year to 
date, bus ridership was 104.0 million and was 3.6 million or 
3.6% more than budget and was 5.4 million or 5.5% more than 
prior year. Rail ridership was 61.5 million and was below 
budget by 0.1 million or 0.1%, but was higher than prior year 
by 1.3 million or 2.1%.  

Public Funding Required for Operations for the month was 
$54.8 million, $2.8 million more than budget, resulting in a 
deficit for the month. For the year to date, public funding 
was $221.9 million and was $6.5 million more than budget. 

Recovery Ratio, which measures the percentage of operating 
expenses CTA funds from internally generated revenues, was 
47.63% for the month and was unfavorable by 1.10 percentage 
points primarily due to higher operating expenses than budgeted.  
For the year to date, recovery ratio was 46.22% and was 
0.52 percentage points less than budget.

Operating Expenses for the month equaled $100.5 million and 
were $3.6 million more than budget. For the year, operating 
expenses were $396.9 million and were $9.7 million or 2.5% more 
than budget.  The current month unfavorable variance is 
primarily a result of higher labor and fuel expenses.

Labor Expense was $75.4 million for the month of April and 
$294.9 million for the year. This was $5.6 million more than 
budget for the month and was $12.8 million higher for the first 
four months due to overtime required for snow removal, 
maintenance of the fleet and track, an increase in service and 
the delayed implementation of the nonrevenue fleet maintenance 
by the City fleet department.  For the month of April, Bus and 
Rail STO labor was $4.4 million and $1.0 million over budget, 
respectively, bus maintenance was $1.6 million higher and 
facilities maintenance was $0.6 million higher. The STO overage 
is due in part to manpower shortages which have been driving 
overtime expense to meet the schedule.  

Material Expense was $5.8 million for the month and was under 
budget by $1.4 million or 19.3% due to capitalizing parts 
issued for the rail fleet that qualify as associated capital 
maintenance items under FTA guidelines.  For the year to date, 
material expense was $26.6 million and was $1.4 million or 
5.1% less than budget. 

Fuel for Revenue Equipment was $7.2 million for the month and 
$27.1 million for the year. This exceeded budget for the month 
by $1.6 million and $4.8 million for the year primarily due to 
higher fuel prices than budgeted.  The cost per gallon for the 
month was $3.56. The budget assumed an average price of $2.60 
per gallon. 

Electric Power for Revenue Equipment was $3.6 million for the 
month and $11.6 million for the year.  Power expense was 
$0.2 million more than budget for the month and was 
$0.2 million less than budget for the year to date.  

Provision for Injuries and Damages Expense was $2.3 million 
for  the month and $9.3 million year to date and is on par 
with budget. 

Purchase of Security Services was $2.6 million for the month 
and was $0.3 million less than budget. Year to date security 
expense is $9.8 million and was $1.5 million less than budget.

Other Expenses equaled $3.7 million for the month and were 
$2.1 million less than budget due to capitalization of 
elevator/escalator rehabilitation and track structure 
improvements and the delay in outsourcing of the nonrevenue 
fleet to the city.  Year to date other expenses were 
$17.7 million and were $4.8 million less than budget due to 
lower equipment maintenance, other services and non capital 
grant expenses.

System-Generated Revenue was $45.7 million for the month and 
$175.0 million for the year to date. This was $0.8 million more 
than budget for the month and was $3.2 million more than budget 
for the year principally due to higher fare and pass revenues.
    
Fare Revenue was $39.3 million for the month and was 
$1.6 million more than budget primarily due to higher 
ridership.  The average fare for the month was $0.87 per ride 
and was $0.01 less than budget. Year to date fare revenue was 
$149.3 million and was $6.1 million more than budget due to 
higher ridership and a higher average fare.  Compared to prior 
year, fare revenue is $4.1 million higher for the year. 

Reduced Fare Reimbursements were $2.8 million for the month and 
$10.8 million for the year. This was on par with budget.
 
Advertising, Charter and Concessions Revenue equaled 
$2.1 million in April and was $0.1 million less than budget. 
Year to date revenue for this category was $9.1 million and was 
$0.3 million more than budget due to higher revenue than 
budgeted from contracted transit services.
 
Investment Income was $0.3 million for the month and 
$2.1 million for the year. This was $0.7 million less than 
budget for the month and $1.8 million less than budget for the 
year due to a lower cash balance and lower interest rates.  Due 
to a lack of sufficient and or timely revenues, the state of 
Illinois is delaying its payments to CTA and RTA.

Statutory Required Contributions were $0.0 million for the month 
and $0.0 for the year to date and were on par with budget.  

All Other Revenue was $1.2 million for the month and $3.6 million 
for the year. This was on par with budget for the month and was 
$1.4 million less for the year due to lower than budgeted revenue 
from rental properties and non capital grant revenues.