To:	Chicago Transit Authority Board

From:	Dennis Anosike
	Senior Vice President Finance/Treasurer
 
Re:	Financial Results for February 2007

Date:	April 24, 2007

February financial results continued to show signs of weakness as ridership and 
revenues were below budget and prior year. Operating expenses were $2.2 million 
higher than budget due to overtime and increased material requirements to maintain the 
aging fleet and infrastructure. System generated revenues fell short of the budget 
projections by $2.9 million due to lower ridership. As a result of the higher expenses and 
lower revenues, CTA’s financial results showed a deficit of $5.1 million for the month 
and $8.7 million for the year to date. Ridership for the month of February was 35.7 
million and was 6.8% lower than budget and was 1.9 million trips or 5.1% lower than 
prior year. 

The budget assumes new transit funding of $110.0 million to enable CTA to 
balance the budget and improve pension plan funding. Each month that this new 
funding is not made available will result in a $9.2 million revenue shortfall.

Ridership for the month of February was negatively impacted by the severe cold 
weather experienced in the Region. Weekday, Saturday and Sunday ridership was 
4.7%, 5.9% and 9.6% lower than February last year. Ridership taken with passes was 
up 0.4% from February 2006, while full fare, reduced fare and transfer trips were all 
lower.  

Bus ridership for the month of February was 22.0 million. This was 1.3 million or 5.6% 
lower than budget and 1.1 million or 4.7% lower than February 2006.  Rail ridership for 
February was 13.7 million and was 1.3 million or 8.6% less than budget and 0.6 million 
or 4.4% less than prior year.  For the first two months of 2007, bus ridership was 46.5 
million and was 0.8 million or 1.6% less than budget, but was 0.2 million or 0.4% more 
than prior year. Rail ridership was 28.9 million and was below budget and prior year by 
2.1 million or 6.8% and 0.4 million or 1.3%, respectively.  

Public Funding Required for Operations for the month of February was $54.0 million 
and was $5.1 million more than budget resulting in a budget deficit for the month. For 
the first two months of 2007, CTA has a budget deficit of $8.7 million. 

Recovery Ratio, which measures the percentage of operating expenses CTA funds from 
internally generated revenues, was 44.9% for the month of February; this was below 
budget by 4.45 percentage points primarily due to the lower revenues. For the first two 
months of 2007, the recovery ratio was 45.3% and was 4.11 percentage points lower 
than budget.

Operating Expenses for the month and year to date period exceeded budget as labor, 
material and fuel requirements all exceeded levels established in the budget. Operating 
expenses were $92.8 million for the month of February and $190.9 million for the year 
to date period. This was $2.2 million or 2.4% higher than budget for the month and was 
$2.4 million or 1.3% higher for the year to date period. 

Labor Expense was $68.2 million for the month of February and $143.2 million for the 
first two months of 2007. This exceeded budget by $1.0 million or 1.5% for the month 
and $3.6 million or 2.6% for the first two months of 2007 due to overtime needed for 
track, signal and structure repairs, and maintenance of the aged fleet. Over 1,100 buses 
or 52.0% of the total bus fleet now exceeds its useful life of 12 years. Of the 1,100 
buses, 721 or 34% of the fleet were acquired in 1991 making them over 15 years old. 
The rail fleet is operating 336 cars or 28.2% of the fleet that was acquired in the 70’s. 
These cars are well beyond their useful life of 25 years. 

Material Expense was $7.3 million for the month and was over budget by $1.0 million or 
15.5%. For the two month period material expense was $14.0 million and was $1.0 
million more than budget. Compared to prior year, material expense is $2.8 million 
higher. The higher material expense is primarily due to maintenance required for the rail 
fleet. In particular, axle assemblies and wheel replacements on the 2600 series rail cars 
are currently being replaced. 

Fuel for Revenue Equipment was $5.7 million for the month and $11.3 million for the 
two month period. This exceeded budget for the month by $0.9 million and the year to 
date period by $1.3 million primarily due to higher fuel prices. The gross average price 
paid per gallon for the month was $2.35. The fuel swap increased the average price by 
$0.56 bringing the net cost per gallon to $2.91. The fuel swap should turn around in the 
third quarter of 2007. The budget assumed an average price of $2.50 per gallon.

Electric Power for Revenue Equipment is estimated at $2.3 million for the month using 
the budget for February as Exelon/Com Ed is still having trouble getting the February 
bills out with the rate adjustment.  

Provision for Injuries and Damages Expense was $2.1 million for the month and $4.2 
million year to date and was on par with budget. 

Purchase of Security Services was $2.7 million for the month and was below budget by 
$0.3 million due to timing differences. Year to date security expense is $5.3 million and 
was $0.6 million lower than budget.

Other Expenses equaled $4.5 million for the month and was $0.4 million lower than 
budget for the month. Year to date other expenses were $7.4 million and were $2.9 
million lower than budget due timing differences for utilities, advertising, training and 
contract services. 

System-Generated Revenue was $38.8 million for the month and $80.8 million for the 
year to date. This was $2.9 million and $6.3 million, respectively, lower than budget due 
to lower fare, other revenue, and investment income.
    
Fare Revenue was $32.5 million for the month and was below budget by $2.7 million 
due to lower ridership and a lower average fare. The average fare for the month was 
$0.91 per ride and was $0.03 lower than budget as more customers transitioned from 
cash on bus and farecards on rail to passes and Chicago cards. Year to date fare 
revenue was $4.0 million lower than budget. Compared to prior year, fare revenue is 
$2.4 million lower for the month and $0.3 million lower for the year to date. 

Reduced Fare Reimbursements were $2.8 million for the month of February and $5.7 
million for the year to date.  This was $0.2 million more than budget. 

Advertising, Charter and Concessions Revenue equaled $2.3 million for the month of 
February and was $0.2 million more than budget. Year to date revenue for this category 
was $2.6 million and was $1.4 million lower than budget as the new contract for 
advertising revenues for platforms and vehicles was not approved until mid February. 
The contract with the prior vendor expired on December 31, 2006.
 
Investment Income was $0.7 million for the month and $1.4 million for the year to date. 
This was $0.3 million less than budget for the month and $0.6 million lower for the two 
month period due to a lower cash balance.

Statutory Required Contributions were $0.0 million and were on par with budget. 

All Other Revenue was $0.6 million for the month and $1.2 million for the year to date. 
This was under budget by $0.3 million for the month and $0.4 million for the year to date 
due to timing differences in non capital grant revenue.

Non STO full-time employees were capped by the Board at 5,302. As of February 28, 
CTA was under the cap by 203 employees. 
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