To:	Chicago Transit Authority Board

From:	Dennis Anosike, Chief Financial Officer

Re:	Financial Results for December 2007

Date:	December 12, 2007


CTA finished the year with a balanced budget as lower 
operating expenses offset lower revenues. For the month of 
December, CTA’s financial results show a surplus of 
$5.5 million.  The surplus for the month is primarily due to 
an increase in public funding and higher revenues. Ridership 
for the month of December was 37.8 million and was 2.8 million 
or 6.9% less than budget.  

Sales tax for the RTA region equaled $616.6 million through 
October 2007. This is $7.1 million more than budget and 
$5.3 million more than the prior year. Sales tax distributed 
to CTA from the formula equaled $247.9 million and was higher 
than budget and prior year by $6.4 million and $4.2 million, 
respectively.  These excess sales tax revenues do not accrue 
to CTA, but rather to RTA’s fund balance.

Ridership for the month of December was 37.8 million and was 
2.8 million less than budget. Ridership for the year was 
499.5 million and was 6.4 million less than budget but was 
4.7 million or 1.0% higher than prior year. Average weekday 
ridership was lower than December 2006 by 1.0% due to lower 
rail ridership.  Saturday and Sunday ridership for the month 
was lower than prior year by 1.8% and 3.0%, respectively, due 
to lower rail ridership.  For the full year of 2007, average 
weekday ridership was 0.6% higher and average Saturday and 
Sunday ridership was 1.1% and 1.9% higher due to strong 
ridership on the bus system. Ridership taken with passes was 
2.0% lower for the month and 5.6% higher for the year.  

Bus ridership for the month of December was 24.1 million. 
This was 1.4 million or 5.3% less than budget and was 
0.3 million or 1.2% more than December 2006.  Rail ridership 
for December was 13.7 million and was 1.4 million or 9.4% less 
than budget and was 0.8 million or 5.3% less than prior year.  
For the year to date, bus ridership was 309.3 million and was 
7.7 million or 2.6% more than budget and was 10.8 million or 
3.6% more than prior year. Rail ridership was 190.3 million and 
was below budget and prior year by 14.1 million or 6.9% and 
5.0 million or 2.5%, respectively.  

Public Funding Required for Operations for the month was 
$40.2 million resulting in a $5.5 million budget surplus for 
the month. For the year, public funding was $548.2 million 
and was on par with budget. 

Recovery Ratio, which measures the percentage of operating 
expenses CTA funds from internally generated revenues, was 
59.19% for the month and was favorable by 6.91 percentage 
points primarily due to higher revenue.  For the year, recovery 
ratio was 53.09% and was 0.49 percentage points lower than 
budget.

Operating Expenses for the month equaled $90.8 million and 
were $1.5 million more than budget. For the year, operating 
expenses were $1.1 billion and were $6.8 million or 0.6% less 
than budget.  The favorable variance is primarily a result of 
lower labor expenses.

Labor Expense was $54.8 million for the month of December and 
$784.8 million for the year. This was below budget for the 
month by $8.8 million and was $33.9 million lower for the year 
due to vacancies and lower funding for pension and retiree 
healthcare than anticipated in the budget.

Material Expense was $8.1 million for the month and was over 
budget by $1.5 million or 22.1%. For the year to date, material 
expense was $84.2 million and was $6.3 million or 8.1% more 
than budget. Compared to prior year, material expense is 
$1.0 million or 1.2% higher.  The higher material expense is 
primarily due to bus and rail fleet maintenance required due 
to delays in the quarter and mid life overhauls and replacement 
of vehicles exceeding their useful life. In particular, axle 
and wheel assemblies on the 2600 series rail cars and brakes 
and brake calipers are currently being replaced.  Material for 
rail operations is $8.9 million more than budget for the year. 

Fuel for Revenue Equipment was $5.2 million for the month and 
$71.2 million for the year. This exceeded budget for the month 
by $0.2 million and the year by $9.9 million primarily due to 
higher miles and fuel prices.  The gross average price paid per 
gallon for the month was $3.16. The fuel swap decreased the 
average price by $0.46 bringing the net cost per gallon to 
$2.69. The budget assumed an average price of $2.50 per gallon. 
For the year, CTA’s net average cost per gallon averaged $2.82, 
$0.32 more than budget.

Electric Power for Revenue Equipment was $2.8 million for the 
month and $28.1 million for the year. Power expense was 
$0.4 million less than budget for the month, but was $0.1 million 
more than budget for the year.  The year to date unfavorable 
variance is primarily due to the cold weather.  

Provision for Injuries and Damages Expense was $2.1 million for 
the month and $25.0 million year to date and is on par with 
budget. 

Purchase of Security Services was $3.0 million for the month 
and was on par with budget. Year to date security expense is 
$31.4 million and was $4.0 million less than budget.

Other Expenses equaled $14.9 million for the month and were 
$9.0 million higher than budget. Other expenses for the full 
year were $69.5 million and were $14.7 million more than budget 
due to higher equipment and facilities maintenance expenses and 
lower overhead charged to capital.

System-Generated Revenue was $50.6 million for the month and 
$545.9 million for the year. This was $7.0 million more than 
budget for the month, but were $6.8 million less than budget 
for the year principally due to lower fare, advertising, and 
investment income.
    
Fare Revenue was $35.2 million for the month and was 
$1.0 million more than budget primarily due to higher average 
fare offset by lower ridership.  The average fare for the month 
was $0.93 per ride and was $0.05 more than budget. Year to date 
fare revenue was $457.3 million and was $11.0 million lower 
than budget due to a lower average fare and lower ridership.  
Compared to prior year, fare revenue is $5.0 million lower for 
the year. 

Reduced Fare Reimbursements were $2.9 million for the month and 
$33.3 million for the year to date period. This was $0.3 million 
more than budget for the month and $1.3 million higher than 
budget for the year due to higher ridership and the Governor 
advancing the 2008 appropriation. 

Advertising, Charter and Concessions Revenue equaled 
$1.8 million in December and was $0.2 million less than budget. 
Year to date revenue for this category was $23.2 million and was 
$1.8 million lower than budget as the new contract for 
advertising revenues for platforms and vehicles was not approved 
until mid-January. The contract with the prior vendor expired on 
December 31, 2006.
 
Investment Income was $1.8 million for the month and 
$10.5 million for the year to date. This was $0.8 million more 
than budget for the month and $1.6 million less than budget for 
the year due to a lower cash balance.

Statutory Required Contributions were $3.0 million for the month 
and $5.0 for the year to date and were on par with budget.  

All Other Revenue was $5.9 million for the month and 
$16.7 million for the year to date. This was $5.0 million more 
than budget for the month and was $6.4 million more for the year 
to date period due to higher revenue from rentals, scrap sales, 
non capital grant expenditure reimbursements and a one-time rate 
settlement with Com Ed.

Non STO full-time employees were capped by the Board at 5,302. 
Subsequently President Huberman eliminated 75 positions in June 
and July reducing the 2007 budgeted positions to 5,227 positions. 
As of December 31, 2007 CTA was under the cap by 121 employees.