To:	Chicago Transit Authority Board
From:	Dennis Anosike, Chief Financial Officer
Re:	Financial Results for May 2008
Date:	July 24, 2008


CTA’s financial results show a deficit for the month of May
 of $3.5 million and $10.0 million for the year to date.  
The primary drivers of the deficit for the month and year 
are higher labor and fuel expense. By contrast, fare revenue 
continues to exceed budget due to higher ridership and a 
higher average fare. However, this increase is not enough 
to fully offset the higher expenses. Looking forward, higher 
energy prices are adding increasing pressure on the operating 
budget. The current price of diesel fuel, if maintained at 
the current levels, could drive a $25.0 million overage in 
fuel expense.  The year to date May producer price index was 
8.7% over 2007 and the consumer price index measured 
inflation at 4.5%. Unemployment rate in Chicago inched up to 
5.9% compared to 5.4% in May 2007.

CTA continues to closely monitor key economic indicators to 
forecast impacts on CTA costs and revenues. Management has 
put a business plan together to bring the budget in line due 
to the budgetary impacts from higher energy prices and 
service levels. Several cost cutting actions are being 
implemented by the business units to improve efficiencies 
and reduce costs. All operating departments have been given 
monthly overtime targets and hiring plans are being 
implemented to drive labor cost down. 

Sales tax for the RTA region equaled $170.9 million for March 
2008. This is $1.8 million less than budget and $0.3 million 
more than the prior year. Sales tax distributed to CTA from 
the formula equaled $68.5 million and was more than budget by 
$0.5 million, but was $0.1 million less than prior year.  CTA 
received its first payment of the real estate transfer tax 
(RETT) in May. The first RETT payment was $2.7 million, which 
was well below the average monthly budgeted amount of 
$7.0 million.

Ridership for the month of May was 45.6 million and was 
3.0 million more than budget. Ridership for the year was 
211.2 million and was 6.5 million more than budget and 
8.1 million or 4.0% higher than prior year. Average weekday 
ridership was higher than May 2007 by 3.7%.  Saturday 
ridership for the month was higher than prior year by 11.7%.  
Sunday ridership for the month was 6.4% higher than prior year.   
The average weekday, Saturday and Sunday ridership for the year 
exceeded prior year by 3.1%, 6.3% and 4.4%, respectively, due 
to strong ridership on the bus system. Ridership taken with 
passes was 0.6% lower for the month primarily due to lower 
reduced fare riders as a result of the seniors ride free 
program. Pass ridership was 2.8% higher for the year to date.  

Bus ridership for the month of May was 29.0 million. This was 
2.3 million or 8.7% more than budget and was 1.3 million or 
4.6% more than May 2007.  Rail ridership for May was 
16.6 million and was 0.7 million or 4.4% more than budget and 
was 0.1 million or 0.7% more than prior year.  For the year 
to date, bus ridership was 133.1 million and was 5.9 million 
or 4.6% more than budget and was 6.7 million or 5.3% more than 
prior year. Rail ridership was 78.1 million and was over 
budget by 0.6 million or 0.8% and was higher than prior year 
by 1.4 million or 1.8%.  

Public Funding Required for Operations for the month was 
$54.9 million, $3.5 million more than budget resulting in a 
$3.5 million budget deficit for the month. For the year to 
date, public funding was $276.9 million and was $10.0 million 
more than budget. 

Recovery Ratio, which measures the percentage of operating 
expenses CTA funds from internally generated revenues, was 
47.47% for the month and was unfavorable by 0.85 percentage 
points primarily due to higher operating expenses than 
budgeted.  For the year to date, recovery ratio was 46.47% 
and was 0.58 percentage points less than budget.

Operating Expenses for the month equaled $100.6 million and 
were $5.6 million more than budget. For the year, operating 
expenses were $497.6 million and were $15.3 million or 3.2% 
more than budget.  The current month unfavorable variance is 
primarily a result of higher labor, material, fuel and other 
expenses.

Labor Expense was $71.2 million for the month of May and 
$366.1 million for the year. This was $1.4 million more than 
budget for the month and was $14.3 million higher for the year 
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 May, Bus and Rail STO 
labor was $2.7 million and $1.2 million over budget, 
respectively.
 
Material Expense was $7.7 million for the month and was over 
budget by $0.9 million or 12.6%.  For the year to date, 
material expense was $34.3 million and was $0.6 million or 
1.6% less than budget due to capitalizing parts issued for 
the rail fleet that qualify as associated capital maintenance 
items under FTA guidelines.  Compared to prior year, material 
expense is $0.7 million or 1.9% lower primarily due to the 
2008 material capitalization.  

Fuel for Revenue Equipment was $7.8 million for the month and 
$34.9 million for the year. This exceeded budget for the month 
by $2.2 million and $7.1 million for the year primarily due 
to higher fuel prices than budgeted.  The cost per gallon for 
the month was $4.12. The budget assumed an average price of 
$2.60 per gallon. The buses achieved higher fuel efficiency 
due to receipt of more New Flyer hybrid buses. Miles per gallon 
were 3.28 compared to budget mpg of 2.82.

Electric Power for Revenue Equipment was $2.0 million for the 
month and $13.6 million for the year.  Power expense was 
$0.5 million less than budget for the month and was $0.7 million 
less than budget for the year to date.  

Provision for Injuries and Damages Expense was $2.3 million for 
the month and $11.7 million year to date and is on par with 
budget. 

Purchase of Security Services was $2.4 million for the month 
and was $0.4 million less than budget. Year to date security 
expense is $12.1 million and was $1.9 million less than budget.

Other Expenses equaled $7.2 million for the month and were 
$1.9 million more than budget. The current month reflects 
timing differences between actual and budget for equipment 
and facilities maintenance expenses. Year to date other 
expenses were $24.9 million and were $2.9 million less than 
budget due to lower equipment maintenance, other services and 
non capital grant expenses and due to capitalization of 
elevator/escalator rehabilitation and track structure 
improvements.

System-Generated Revenue was $45.7 million for the month and 
$220.7 million for the year to date. This was $2.0 million 
more than budget for the month and was $5.2 million more than 
budget for the year principally due to higher fare and pass 
revenues.
    
Fare Revenue was $40.0 million for the month and was 
$3.3 million more than budget primarily due to higher 
ridership.  The average fare for the month was $0.88 per ride 
and was $0.02 more than budget. Year to date fare revenue was 
$189.4 million and was $9.4 million more than budget due to 
higher ridership and a higher average fare.  Compared to prior 
year, fare revenue is $4.5 million higher for the year. 

Reduced Fare Reimbursements were $2.6 million for the month 
and $13.5 million for the year. This was on par with budget.
 
Advertising, Charter and Concessions Revenue equaled 
$2.2 million in May and was on par with budget. Year to date 
revenue for this category was $11.3 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 
$2.5 million for the year. This was $0.6 million less than 
budget for the month and $2.5 million less than budget for 
the year due to a lower cash balance and lower interest rates.  

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 $0.6 million for the month and 
$4.1 million for the year. This was $0.7 million less than 
budget for the month and was $2.1 million less for the year 
due to lower than budgeted revenue from rental properties 
and non capital grant revenues.