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1981  ANNUAL  FINANCIAL  REPORT 

Chicago-O'Hare  International  Airport 


City  of  Chicago,  Illinois 
Jane  M.  Byrne,  Mayor 

Anthony  N.  Fratto,  City  Comptroller 

Department  of  Aviation 


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3  5556  030  762090 


CHICAGO-0 *  HARE  INTERNATIONAL  AIRPORT 


FINANCIAL  STATEMENTS 


YEARS  ENDED  DECEMBER  31,  1981  AND  1980 


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CHICAGO-O'HARE  INTERNATIONAL  AIRPORT 


FINANCIAL  STATEMENTS 


ACCOUNTANTS'  REPORT 

FINANCIAL  STATEMENTS 

EXHIBIT  A   -  BALANCE  SHEETS 

EXHIBIT  B   -  STATEMENTS  OF  CHANGES  IN  CONTRIBUTED  CAPITAL 
EXHIBIT  C   -  STATEMENTS  OF  CHANGES  IN  RETAINED  EARNINGS 
EXHIBIT  D   -  STATEMENTS  OF  REVENUES  AND  EXPENSES 
EXHIBIT  E   -  STATEMENTS  OF  CHANGES  IN  FINANCIAL  POSITION 
NOTES  TO  FINANCIAL  STATEMENTS 


ACCOUNTANTS'  REPORT 


Bernstein 
and 
Bank,  Ltd. 

Certified 

Public 

Accountants 


6677  No. 

Lincoln 

Avenue 

Chicago, 

Illinois 

60645 


The  Honorable  Mayor  and  Members 

of  the  City  Council  of  the 

City  of  Chicago 
Chicago,  Illinois 

We  have  examined  the  balance  sheet  of  Chicago-O'Hare  Inter- 
national Airport  as  of  December  31,  1981,  and  the  related  statements  of 
changes  in  contributed  capital,  changes  in  retained  earnings,  revenues 
and  expenses,  and  changes  in  financial  position  for  the  year  then  ended. 
Our  examination  was  made  in  accordance  with  generally  accepted  auditing 
standards  and,  accordingly,  included  such  tests  of  the  accounting  records 
and  such  other  auditing  procedures  as  we  considered  necessary  in  the 
circumstances.  The  financial  statements  of  Chicago-O'Hare  International 
Airport  for  the  year  ended  December  31,  1980,  were  examined  by  other 
auditors  whose  opinion,  dated  May  8,  1981,  on  those  statements  was 
qualified  as  to  the  effects  on  the  financial  statements  of  the  failure  to 
comply  with  certain  provisions  of  the  Revenue  Bond  Ordinance. 


As  discussed  in  Note  1  to  the  financial  statements,  expendi- 
312  tures  are  made  from  operating  revenues  for  capital  improvements,  which  is 
286  4755     not  Permitted  under  the  Revenue  Bond  Ordinance. 

In  our  opinion,  except  for  the  effects  on  the  financial  state- 
ments of  not  complying  with  certain  provisions  of  the  Revenue  Bond 
Member  Ordinance  as  discussed  in  the  preceding  paragraph,  the  1981  finan- 
National  cial  statements  referred  to  above  present  fairly  the  financial  position 
CPA  Group  of  Chicago-O'Hare  International  Airport  as  of  December  31,  1981,  and  the 
results  of  its  operations  and  the  changes  in  its  financial  position,  and 
Member  the  changes  in  its  contributed  capital  and  retained  earnings  for  the  year 
Firms  in  then  ended,  in  conformity  with  generally  accepted  accounting  principles 
Principal  and  the  provisions  of  the  Revenue  Bond  Ordinance  applied  on  a  basis 
C^ies       consistent  with  that  of  the  preceding  year. 


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CHICAGO-O'HARE  INTERNATIONAL  AIRPORT 

STATEMENTS  OF  REVENUES  AND  EXPENSES 

YEARS  ENDED  DECEMBER  31,  1981  AND  1980 


1981 


Operating  Revenues 
Flight  Fees 
Rent,  Concessions  and  Other 

Total  Operating  Revenues 

Operating  Expenses 
Salaries  and  Wages 

Provision  for  Depreciation  and  Amortization 
Repairs  and  Maintenance,  Including  Expenditures 

from  Reserve  Maintenance  Account 
Other  Operating  Expenses 

Total  Operating  Expenses 

Total  Operating  Income 

Nonoperating  Income  (Expense) 
Interest  Earned  on  Investments 
Discount,  Net  of  Premiums  on  Revenue 

Bonds  Retired 
Interest  Incurred  on  Revenue  Bonds 


$41,463,349  $45,610,247 
47,750,769   48,648,829 

89,214,118   94,259,076 


33,390,667   28,083,324 
11,484,209   11,412,860 


11,255,147   13,551,402 
23,275,370   22,999,584 


79,405,393   76,047,170 
9,808,725   18,211,906 


12,289,166    7,038,214 

156,027       26,106 
(3,729,422)   (4,687,497) 


Net  Nonoperating  Income 
Revenues  in  Excess  of  Expenses 


2,376,823 


$18,524,496  $20,588,729 


The  accompanying  notes  to  financial  statements  are 
an  integral  part  of  these  statements. 


CHICAGO-O'HARE  INTERNATIONAL  AIRPORT 

STATEMENTS  OF  CHANGES  IN  FINANCIAL  POSITION 

YEARS  ENDED  DECEMBER  31,  1981  AND  1980 


EXHIBIT  E 


1981 


1980 


Sources  of  Working  Capital 
From  Operations 

Revenues  in  Excess  of  Expenses 

Add  (Deduct)  Items  Not  Affecting  Working  Capital 
Provision  for  Depreciation  and  Amortization 
Amortization  of  Deferred  Revenue 
Total  From  Operations 
Airline  Contributions  for  Fixed  Assets 
Decrease  in  Net  Restricted  Assets 
Grant  Proceeds  Received  for  Prior  Years 

Capital  Expenditures 
City  of  Chicago  Net  Contributions  for  Fixed  Assets 

Total  Sources  of  Working  Capital 


$18,524,496  $20,588,729 


11,484,209 
(48,697) 

29,960,008 
860,003 


698,595 
5,454,909 


11,412,860 
(48,697) 

31,952,892 
328,282 
667,686 


3,951,994 


36,973,515   36,900,854 


Uses  of  Working  Capital 

Acquisition  of  Fixed  Assets 
Decrease  in  Long-Term  Liabilities 
Increase  in  Net  Restricted  Assets 

Total  Uses  of  Working  Capital 

Increase  in  Working  Capital 


10,666,622  5,717,550 
17,751,000  22,190,000 
7,104,226  - 


35,521,848   27,907,550 
$  1,451,667  $  8,993,304 


Changes  in  Components  of  Working  Capital 
Increase  (Decrease)  in  Current  Assets 
Cash 

U.S.  Government  Securities 
Accounts  Receivable,  Net 
Due  from  Other  City  of  Chicago  Funds 
Prepaid  Expenses  and  Deposits 
Due  from  Restricted  Funds 


$  3,393,709  $(2,495,366) 


343,481 

296,010 

511,411 

36,969 

(222,730) 


12,462,300 
(3,255,732) 
(633,901) 
134,940 
247,154 


4,358,850    6,459,395 


Increase  (Decrease)  in  Current  Liabilities 
Current  Portion  of  Revenue  Bonds  Payable 
Accounts  Payable 

Due  to  Other  City  of  Chicago  Funds 
Due  to  Restricted  Funds 


318,000  300,000 

337,954  28,928 

2,251,229  (2,764,293) 

-  (98,544) 


Increase  in  Working  Capital 


2,907,183   (2,533,909) 
$  1,451,667  $  8,993,304 


The  accompanying  notes  to  financial  statements  are 
an  integral  part  of  these  statements. 


CHICAGO-O'HARE  INTERNATIONAL  AIRPORT 

NOTES  TO  FINANCIAL  STATEMENTS 

YEARS  ENDED  DECEMBER  31,  1981  AND  1980 


Note  1  -  Summary  of  Significant  Accounting  Policies 

Basis  of  Accounting 

The  financial  statements  have  been  prepared  on  the  accrual  basis  of 
accounting,  accounted  for  as  an  enterprise  fund  of  the  City  of  Chicago  and  con- 
forming with  the  reporting  requirements  set  forth  in  National  Council  of  Govern- 
mental Accounting  (NCGA)  Statements  1  and  2. 

Restricted  Assets 

The  authorizing  Revenue  Bond  Ordinance  requires  that  during  the  period 
in  which  bonds  are  outstanding  the  City  of  Chicago  will  maintain  trust  accounts 
for  the  proceeds  from  the  sale  of  bonds  and  certain  allocations  of  "Net  Revenues" 
as  defined.  The  assets  of  the  trust  accounts  may  be  used  only  for  the  specific 
purpose  of  each  trust. 

The  Revenue  Bond  Ordinance  requires  that  all  revenues,  in  each  year, 
shall  first  be  allocated  to  pay  the  operation  and  maintenance  expenses  of  the 
airport,  but  not  in  excess  of  the  amount  budgeted  by  the  City  of  Chicago  for  such 
purposes.  The  Revenue  Bond  Ordinance  requires  the  remaining  available  "Net 
Revenues"  shall  then  be  allocated  in  the  following  order  of  priority: 

a)  Revenue  Bond  Interest  -  an  amount  equal  to  interest  payable  in  the 
current  year. 

b)  Debt  Service  Reserve  -  an  amount  necessary  to  maintain  the  balance 
of  this  reserve  at  an  amount  equal  to  two  years '  interest  require- 
ments on  all  bonds  outstanding. 

c)  Revenue  Bond  Retirement  Reserve  -  an  amount  necessary  for  the 
required  minimum  payments. 

d)  Reserve  Maintenance  Account  -  an  annual  payment  of  $1,160,000  to  the 
Reserve  Maintenance  Account  until  $4,833,334  is  accumulated.  In 
addition,  interest  earned  on  the  Reserve  Balance  is  retained  in  this 
account . 

e)  Emergency  Reserve  -  an  amount  equal  to  the  sum  of  the  annual  pro- 
visions for  depreciation  and  amortization  of  fixed  and  other  assets 
acquired  with  City  of  Chicago  money  and  interest  on  the  City  of 
Chicago  money  invested  in  fixed  and  other  assets  of  the  Airport. 

Any  amount  of  "Net  Revenues"  not  considered  deferred  income  (which  is 
used  to  reduce  future  flight  fees),  as  defined  by  the  Revenue  Bond  Ordinance,  and 
in  excess  of  the  required  allocations  above  shall  be  allocated  to  the  Revenue  Bond 
Retirement  Reserve. 


CHICAGO-O'HARE  INTERNATIONAL  AIRPORT 

NOTES  TO  FINANCIAL  STATEMENTS 

YEARS  ENDED  DECEMBER  31,  1981  AND  1980 


Note  1  -  Summary  of  Significant  Accounting  Policies  -  Continued 

Investments 

Investments  consist  of  U.S.  Treasury  Bills  and  Treasury  Notes,  which  are 
carried  at  cost.  Interest  is  accrued  only  on  those  securities  having  stated 
interest  rates,  i.e.,  U.S.  Treasury  Notes.  The  aggregate  cost  and  market  value  at 
December  31,  1981  and  1980,  are  as  follows: 

Cost Market 

1981        1980        1981        1980 


Unrestricted  $18,751,272  $18,407,791  $18,817,678  $18,567,654 

Restricted  64,082,858   56,615,820   64,535,090   57,047,950 

Totals  $82,834,130  $75,023,611  $83,352,768  $75,615,604 

Fixed  Assets 

All  assets  are  recorded  at  cost.  Land  includes  the  cost  of  earthwork 
and  landscaping.  Assets  are  acquired  with  Revenue  Bond  proceeds  and  the  following 
three  other  sources: 

a.  City  of  Chicago,  including  capitalized  interest  of  $171,672  in 
1981  and  $333,154  in  1980  for  the  use  of  City  of  Chicago  money. 
Interest  is  capitalized  from  the  commencement  of  the  improvement  or 
construction  activity  through  completion. 

b.  Grant  proceeds  from  State  and  Federal  governmental  agencies.  The 
Grant  proceeds  are  recognized  only  as  received.  Expenditures  are 
initially  paid  for  by  the  City  of  Chicago  and  are  transferred  to 
the  State  and  Federal  contributed  capital  category  upon  receipt  of 
the  grant  proceeds.  As  of  December  31,  1981,  a  maximum  of  approxi- 
mately $29,990,000  may  be  realized  in  future  periods  from  such 
grants. 

c.  Public  utility,  concessionaire  and  airlines  by  direct  reimbursements 
of  amounts  expended  directly  and  indirectly  from  operating  revenues. 
The  Revenue  Bond  Ordinance  does  not  allow  the  expenditure  of  operat- 
ing revenues  for  capital  improvements.  However,  the  airlines' 
representative  has  agreed  to  substantially  all  of  these  expendi- 
tures, which  totaled  $4,351,710  in  1981  and  $1,437,273  in  1980. 
Using  operating  revenues  for  this  purpose  has  the  effect  of  increas- 
ing flight  fees. 

Depreciation  and  Amortization 

The  provision  for  depreciation  is  provided  on  a  straight-line  basis  and 
begins  in  the  year  following  the  year  of  acquisition  or  completion.  The  estimated 
useful  lives  of  significant  fixed  asset  categories  are  as  follows : 

Water  Drainage  and  Sewer  System  20-50  Years 
Runways,  Aprons,  Tunnels, 

Taxiways  and  Paved  Roads  30  Years 

Buildings  and  Hangars  25  Years 

Electrical  System  15-20  Years 

Other  10-30  Years 


CHICAGO-O'HARE  INTERNATIONAL  AIRPORT 

NOTES  TO  FINANCIAL  STATEMENTS 

YEARS  ENDED  DECEMBER  31,  1981  AND  1980 


Note  1  -  Summary  of  Significant  Accounting  Policies  -  Continued 

Depreciation  and  Amortization  -  Continued 

Deferred  engineering  costs  were  amortized  on  a  straight-line  basis  over 
25  years,  which  ended  December  31,  1980. 

Note  2  -  Revenue  Bonds 

General 

The  Chicago-O'Hare  International  Airport  Revenue  Bonds  were  issued  under 
the  authority  of  an  ordinance  adopted  December  29,  1958,  and  subsequent  supple- 
mental ordinances.  The  Bonds,  which  were  issued  to  provide  monies  for  the  initial 
construction  and  subsequent  improvements  of  the  Airport  and  its  facilities,  had  a 
total  face  value  of  $232,000,000. 


The  Revenue  Bonds  payable  at  December  31, 
the  following: 


1981  and  1980  are  comprised  of 


1981 


1980 


4-3/4%  Series  of  1959 
4-3/4%  Series  A  of  1961 
4-1/4%  Series  B  of  1961 
4-1/2%  Series  of  1967 
5%  Series  of  1968 
6.80%  Series  of  1970 
6%  Series  of  1972 


Less  -  Current  Maturities 
Totals 


$  18,205,000  $  27,203,000 


3,783,000 
425,000 
915,000 

4,416,000 
25,275,000 

4,125,000 

57,144,000 
6,354,000 


5,677,000 
736,000 
1,289,000 
5,817,000 
29,085,000 
4,770,000 

74,577,000 

6,036,000 


$  50,790,000  $  68,541,000 


Minimum  bond  retirements  for  future  years  are  as  follows : 


1982 
1983 
1984 
1985 
1986 
1987  through  1995 


$  6,354,000 
6,685,000 
7,042,000 
7,366,000 
7,673,000 
22,024,000 


Total 


$57,144,000 


CHICAGO-O'HARE  INTERNATIONAL  AIRPORT 

NOTES  TO  FINANCIAL  STATEMENTS 

YEARS  ENDED  DECEMBER  31,  1981  AND  1980 


Note  2  -  Revenue  Bonds  -  Continued 

Retirement 


Revenue  Bonds  are  to  be  retired  as  rapidly  as  practicable  through 
amounts  allocated  to  the  Revenue  Bond  Retirement  Reserve.  Bonds  may  be  purchased 
or  called  at  prices  ranging  from  104.5%  to  100%  of  principal  amount  plus  accrued 
interest. 

The  cost  of  bonds  purchased  or  called  amounted  to  $168,179,797  from 
issuance  through  1981  excluding  premiums  paid.  Premiums  paid  on  Bonds  purchased 
or  called,  which  amounted  to  $1,963,886  from  issuance  through  1981,  are  charged  to 
Airport  operations  in  the  year  of  purchase.  Discounts  on  Bonds  purchased,  which 
amounted  to  $6,676,203  from  issuance  through  1981,  are  credited  to  Airport  opera- 
tions in  the  year  of  purchase  and  are  retained  in  the  Bond  Retirement  Reserve. 

Revenue  Bond  Ordinance  -  "Net  Revenues"  as  Defined 
and  Allocation  of  "Net  Revenues" 


The  Revenue  Bond  Ordinance  provides  that  certain  items  be  accounted 
for  as  reductions  or  increases  to  Revenues  in  Excess  of  Expenses.  In  1981  a 
provision  for  doubtful  accounts  of  $612,075  in  excess  of  the  recorded  provision  is 
necessary  in  determining  "Net  Revenues"  to  meet  the  requirements  of  the  Revenue 
Bond  Ordinance.  "Net  Revenues"  as  defined  by  the  Revenue  Bond  Ordinance  is 
determined  as  follows : 

1981         1980 


Revenues  in  Excess  of  Expenses  $18,524,496   $20,588,729 

Add  (Deduct)  Adjustments  to  Reflect  Ordinance 
Basis  of  Accounting 

Application  of  Deferred  Income  from  Preceding 

Year  as  Reduction  of  Flight  Fees  26,601,267   17,259,265 

Provision  for  Depreciation  and  Amortization  11,484,209   11,412,860 

Interest  on  Revenue  Bonds  3,729,422    4,687,497 

Grant  Proceeds  Received  for  Prior  Years  Capital 

Expenditures  698,595 

Expenditures  from  Reserve  Maintenance  Account  332,132       60,062 

Interest  Earned  on  Investments,  Restricted  (7,802,385)   (4,327,676) 

Expenditures  of  Operating  Revenues  for 

Capital  Improvements  (4,351,710)   (1,437,273) 

Additional  Provision  for  Doubtful  Accounts  (612,075) 

Discount  on  Revenue  Bonds  Retired  (175,377)    (199,856) 

"Net  Revenues"  as  Defined  in 

Revenue  Bond  Ordinance  $48,428,574  $48,043,608 


CHICAGO-O'HARE  INTERNATIONAL  AIRPORT 

NOTES  TO  FINANCIAL  STATEMENTS 

YEARS  ENDED  DECEMBER  31,  1981  AND  1980 


Note  2  -  Revenue  Bonds  -  Continued 


Revenue  Bond  Ordinance  -  "Net  Revenues"  as  Defined 
and  Allocation  of  "Net  Revenues"  -  Continu 


As  previously  stated  in  Note  1,  the  Revenue  Bond  Ordinance  requires  the 
"Net  Revenues"  to  be  allocated  as  follows: 

Amount 


1981 


1980 


"Net  Revenues"  as  Defined  in  Revenue  Bond  Ordinance 

Revenue  Bond  Interest 

Debt  Service  Reserve 

Revenue  Bond  Retirement  Reserve 

Reserve  Maintenance  Account 

Emergency  Reserve 

Deferred  Income  Which  is  Used  to  Reduce  Future 
Flight  Fees 


$48,428,574  $48,043,608 
3,729,422    4,687,497 


6,036,000 


1,456,725 


5,736,000 
1,160,000 
1,118,049 


27,807,556   26,601,267 
39,029,703   39,302,813 


$  9,398,871  $  8,740,795 


Totals 

Balance  to  be  Allocated  to  Revenue 
Bond  Retirement  Reserve 

Note  3  -  Leasing  Arrangements  with  Tenants 

Leasing  operations  consist  of  the  leasing  of  most  of  the  airport's  land, 
buildings  and  terminal  space  to  airlines  and  other  tenants.  The  operating  leases 
for  most  of  the  airport's  land,  buildings  and  terminal  space  expire  in  1998. 

The  following  is  a  schedule  by  years  of  the  minimum  future  rental  income 
on  noncancelable  operating  leases  as  of  December  31,  1981: 


1982 
1983 
1984 
1985 
1986 
Later  Years 


$  21,241,596 
20,915,161 
20,230,419 
17,816,520 
17,784,232 
191,122,973 


Total  Minimum  Future  Rental  Income 


$289,110,901 


CHICAGO-O'HARE  INTERNATIONAL  AIRPORT 

NOTES  TO  FINANCIAL  STATEMENTS 

YEARS  ENDED  DECEMBER  31,  1981  AND  1980 


Note  3  -  Leasing  Arrangements  with  Tenants  -  Continued 

Minimum  future  rental  income  does  not  include  contingent  rentals  which 
may  be  received  under  certain  leases  based  on  the  tenants'  revenues  or  fuel  flow. 
Contingent  rentals,  excluding  flight  fees,  amounted  to  approximately  $8,128,000 
for  the  year  ended  December  31,  1981. 

In  1979,  the  City  of  Chicago  received  $461,421  from  the  sale  of  a 
bankrupt  tenant's  lease.  This  amount  is  being  amortized- over  the  remaining  life 
of  the  lease  at  approximately  $50,000  per  year. 

Note  4  -  Airline  Deposits 

Under  the  terms  of  a  Financing  Participation  Agreement,  the  City  of 
Chicago  (which  is  being  reimbursed  primarily  from  a  Federal  grant)  and  certain 
participating  airlines  are  sharing  the  cost  of  improvements  to  the  Federal  Inspec- 
tion area  within  the  International  Terminal  Building.  The  participating  airlines 
deposited  $1,022,451  in  1979  with  the  City,  as  the  airlines'  share  of  the  project 
cost.  The  deposits,  interest  earned  on  the  deposits  and  costs  of  construction 
are  included  in  the  accompanying  financial  statements.  The  following  activity 
took  place  during  1981  and  1980  relating  to  this  agreement: 

1981        1980 


Deposit  Balance  at  Beginning  of  Period        $  907,565  $1,031,901 
Interest  Income  122,496     101,999 

Airlines'  Share  of  Expenditures  (771,952)   (226,335) 

Deposit  Balance  at  End  of  Period  $  258,109  $  907,565 

Note  5  -  Pension  Plans 

The  employees  of  the  City  of  Chicago  are  covered  under  various  con- 
tributory retirement  plans  established  by  state  statute  and  administered  by 
independent  pension  boards.  Substantially  all  of  the  Airport  employees  are 
members  of  the  Policemen's  Annuity  and  Benefit  Fund  of  Chicago,  the  Firemen's 
Annuity  and  Benefit  Fund  of  Chicago,  the  Municipal  Employees',  Officers'  and 
Officials'  Annuity  and  Benefit  Fund  of  Chicago  or  the  Laborers'  and  Retirement 
Board  Employees'  Annuity  and  Benefit  Fund  of  Chicago. 

Each  pension  plan  is  financed  primarily  by  (a)  City  contributions,  (b) 
employee  contributions,  and  (c)  income  from  pension  fund  investments.  The  City's 
contributions,  which  are  established  by  state  statute,  are  multiples  of  the 
employees'  contribution  made  two  years  prior.  The  City's  contribution  is  financed 
through  a  separate  property  tax  levy  and  the  personal  property  replacement  tax. 
The  Airport  reimburses  the  City's  Corporate  Fund  for  the  estimated  contribution 
which  pertains  to  Airport  employees.  These  reimbursements,  recorded  as  expense, 
amounted  to  $3,157,380  and  $2,813,804  in  1981  and  1980. 


CHICAGO-O'HARE  INTERNATIONAL  AIRPORT 

NOTES  TO  FINANCIAL  STATEMENTS 

YEARS  ENDED  DECEMBER  31,  1981  AND  1980 


Note  5  -  Pension  Plans  -  Continued 

All  pension  funds  receive  an  actuarial  valuation  annually.  However,  the 
amount  of  unfunded  liabilities  or  required  current  year  actuarial  provisions  which 
pertain  expressly  to  the  Airport  are  not  computed,  as  no  specific  identification 
of  Airport  employees  is  made  for  actuarial  purposes. 

Note  6  -  Commitments  and  Contingencies 

Purchase  orders  and  contract  commitments  to  be  financed  by  the  operation 
and  maintenance  account  totaled  approximately  $16,221,000  at  December  31,  1981. 
In  addition,  approximately  $7,862,000  as  of  December  31,  1981,  has  been  earmarked 
by  Airport  management  for  specific  future  projects,  although  not  under  purchase 
order,  contract  or  other  formal  commitment. 

The  City  of  Chicago  is  a  defendant  in  litigation  related  to  the  Airport 
in  which  a  judgement  was  entered  against  the  City  on  January  6,  1982.  The  City  of 
Chicago  has  appealed  the  decision.  In  the  opinion  of  the  City  this  claim  will  not 
have  a  material  effect  on  the  financial  condition  of  the  Airport.