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Full text of "Chicago O'Hare International Airport : financial statements for the six months ended June 30 ..."

Digitized by the Internet Archive 

in 2012 with funding from 

CARLI: Consortium of Academic and Research Libraries in Illinois 



http://www.archive.org/details/chicagoohareint197282chic 



3 5556 029 297116 





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CITY OF CHICAGO 



CHICAGO- 'HARE INTERNATIONAL AIRPORT 

FINANCIAL STATEMENTS 

FOR THE SIX MONTHS ENDED JUNE 30, 1972 



RAN 



OFFICE OF THE CITY COMPTROLLER 










1/tAd 






J'o: /f 7y?^" 

Sua* i**?*- 




CITY OF CHICAGO 
Richard J. Daley, Mayor 



DEPARTMENT OF FINANCE 
Room 501, City Hall 
Chicago, Illinois 60602 



David E. Stahl 

City Comptroller and 

Director of Financial Management 

312-744-7100 

| ^rk Burrus 

Deputy Director of Financial Management 

312-M4-3233 

Richard J. Golden 

Deputy Director of Data Processing 
312-744-8161 



« 



CHICAGO-O'HARE INTERNATIONAL AIRPORT 

FINANCIAL STATEMENTS 

FOR THE SIX MONTHS ENDED JUNE 30, 1972 



CONTENT^ 

Pages 

Exhibit A - Balance Sheet - June 30, 1972 2 

Exhibit B - Summary of Changes in Fund Balances - All Funds Other 

than Revenue Fund, for the six months ended June 30, 1972 3 

Exhibit C - Summary of Changes in Account Balances - Revenue Fund 

for the six months ended June 30, 1972 4 

Exhibit D - Comparative Statement of Revenues and Expenses for the 

six months ended June 30, 1972 and 1971 5-6 

Exhibit E - Reconciliation to "Net Revenues" as Defined in Bond 

Ordinance for the six months ended June 30, 1972 and 1971 7 

Exhibit F - Details of Application of Proceeds of Revenue Bonds 

for the six months ended June 30, 1972 8 

- - - - Notes to Financial Statements 9-12 



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EXHIBIT D 
Page 1 of 2 



CHICAGO-O'HARE INTERNATIONAL AIRPORT 
COMPARATIVE STATEMENT OF REVENUES AND EXPENSES 
FOR SIX MONTHS ENDED JUNE 30, 1972 AND 1971 



Period 



1972 



1971 



Increase 

or 
(Decrease ') 



REVENUES : 

Flight fees, exclusive of ramp rentals 
Rentals, utility sales, concessions and 
income from investments 

Total 

EXPENSES , excluding fixed charges: 
Salaries and wages- 
Department of Aviation-Administrative 
Department of Aviation-Operating 
Corporation Counsel's office 
Comptroller's office 
Fire department 
Polic e department 
Indirect administrative and general 



Fire department supplies and maintenance 

Gasoline 

Heat, light, power and water 

Insurance - general 

Insurance - workmen's compensation and 

disability 
Laundry, Uniform rental and other 

cleaning services 
Materials and supplies 
Professional services 
Provision for doubtful accounts 
Provision for pensions 
Bank service charges 
Repairs and maintenance 
Telephone and telegraph 
Travel 
Vehicles 

Machinery and equipment 
Miscellaneous 
Indirect administrative and general expenses 

Department of Aviation 

Other 

Total operating expenses, excluding 
fixed charges 
NET OPERATING INCOME BEFORE FIXED CHARGES 

AND APPLICATION OF REVENUES 



$13,874,172.52 $12,386,307.46 $1,487,865.06 

12,224,306.91 11,197,880.85 1,026,426.06 

$26,098,479.43 $23,584,188.31 $2,514,291.12 



220 

3,576 

36 

21 

937 

710 

275 



$ 5,779 

1 

10 

857 

227 

30 

36 

456 

1,009 

: 156 

426 

25 

2,151 

12 

1 

178 

61 

33 

15 
275 



$11.433 



$14,665 



756.35 
616.28 
594.00 
720.90 
742.13 
522.65 
197.62 



199 
153 
25 
18 
798 
605 
246 



149.93 $ 5,047 



558.32 
780.33 
677.43 
528.17 

436.38 

504.44 

153.86 

553.41 

993.55) 

293.79 

595.05 

146.08 

363.84 

397.52 

404.00 

405.87 

569.14 

369.79 
197.62 



2 

8 

656 

243 

25 

32 

391 

634 

230 

364 

23 

2,269 

10 

3 

19 

52 

16 

13 
246 



091.42 $10,293 



388.01 $13,290 



300.14 
990.03 
182.00 
886.45 
514.33 
539.80 
116.93 



21 
422 

11 

2 

139 

104 

29 



529.68 $ 731 



317.14 ( 
770.98 
310.54 
963.65 ( 

451.39 

968.51 

287.93 

814.02 

312.33 ( 

511.32 

166.34 

847.29 ( 

515.58 

200.72 ( 

670.37 

561.88 

941.10 

119.33 
116.93 



2 

201 

16 



3 

64 

374 

387 

61 

2 

118 

1 

1 

158 

8 

16 

2 
29 



377.03 $1,139 



811.28 $1,374 



456.21 
626.25 
412.00 
834.45 
227.80 
982.85 
080.69 



620.25 

758.82) 
009.35 
366.89 
435.48) 

984.99 

535.93 

865.93 

739.39 

305.88) 

782.47 

428.71 

701.21) 

848.26 

803.20) 

733.63 

843.99 

628.04 

250.46 
080.69 



714.39 



576.73 



(Continued to next page) 



■5- 



EXHIBIT D 
Page 2 of 2 



CHICAGO-O'HARE INTERNATIONAL AIRPORT 

COMPARATIVE STATEMENT OF REVENUES AND EXPENSES 

FOR SIX MONTHS ENDED JUNE 30, 1972 AND 1971 



Period 



NET OPERATING INCOME BEFORE FIXED CHARGES 

AND APPLICATION OF REVENUES (brought forward) 

PROVISION FOR FIXED CHARGES : 
Interest on revenue bonds 
Depreciation - all properties 
Amortization of deferred engineering charges 



OPERATING INCOME IN EXCESS OF EXPENSE 

OTHER INCOME : 

Income earned on investments: 
Emergency Reserve Account 
Reserve Maintenance Account 

OTHER EXPENSE : 

Operating income expended for: (Note D) 

Capital Improvements 
Expenses for major repairs and maintenance 

charged to the Reserve Maintenance account 

OTHER EXPENSE: NET 

INCOME IN EXCESS OF EXPENSE (EXHIBIT E) 



1972 



1971 



Increase 

or 
(Decrease ") 



$14,665,388.01 $13,290,811.28 $1,374,576.73 



$ 4,932,586.73 $ 5,122,047.20 ($ 189,460.47) 
3,877,983.08 3,758,465.11 119,517.97 



24,534.02 



24,534.02 



$ 8,835,103.83 $ 8,905,046.33 ($ 69,942.50 ) 
$ 5,830,284.18 $ 4,385,764.95 $1,444,519.23 



$ 524,265.13 $ 488,528.23 $ 35,736.90 
29.362.59 66.485.65 ( 37,123.06 ) 

$ 553,627.72 $ 555,013.88 ( $ 1,386.16 ) 



$ 1,028,975.23 $ 1,175,304.36 ($ 146,329.13) 

116,815.98 178,505.50 ( 61,689.52 ) 

$ 1,145,791.21 $ 1,353,809.86 ($ 208,018.65 ) 

$ 592,163.49 $ 798,795.98 ($ 206,632.49 ) 

ft 5,738,120.69 $ 3,586.968.97 $1.651 .151^12 



See notes to financial statements 



-6- 



EXHIBIT E 



CHICAGO-O'HARE INTERNATIONAL AIRPORT 
RECONCILIATION TO "NET REVENUES" 
AS DEFINED IN BOND ORDINANCE 
FOR THE SIX MONTHS ENDED JUNE 30, 1972 AND 1971 



1972 



1971 



Income in excess of expense (Exhibit D) 



$ 5,238,120.69 $ 3,586,968.97 



Add (deduct) adjustments to reflect ordinance 
basis of accounting: 

Amounts included above in determination of 
income and expense: 

Interest on revenue bonds 
Depreciation - all properties 
Amortization of deferred engineering costs 
Interest earned on investments of: 
Emergency Reserve Account 
Reserve Maintenance Account 
Expenses of the Reserve Maintenance Account 
Amount not included above in determination of 
income and expense - application of deferred 
income from preceding year as a reduction of 
flight fee requirements 



4,932,586.73 

3,877,983.08 

24,534.02 

524,265.13)( 
29,362.59)( 
116,815.98 



3,436,654.02 



5,122,047.20 

3,758,465.11 

24,5 34.02 

488,528.23) 
66,485.65) 
178,505.50 



261,676.91 



"Net Revenues" as defined in bond ordinance 



$17,073,066.80 $1 2, 377., 1 83.83 



Allocation of net revenues (In order of priority) : 
Interest account 
Debt Service Reserve Account 
Sinking Fund Account - Minimum sinking fund 

payment 
Reserve Maintenance Account 
Emergency Reserve Account 

To reduce flight fee requirements - Future periods 
Remainder of debt service requirements as defined 

by the Bond Ordinance (allocated to Sinking Fund) 



$ 4,932,586.73 $ 5,122,047.20 
1,114,481.00 1,114,481.00 



1,479,000.00 
560,000.00 
468,792.43 

6,860,532.37 



1,657,674.27 



1,414,000.00 
560,000.00 
493,005.41 

2,140,428.42 



1,533,221.80 



Total 



£17,073,066.80 $17,377,183.83 
(Exhibit C) 



Total allocation to Sinking Fund Account: 
Minimum payment 
Additional allocation of remaining net revenues 



$ 1,479,000.00 $ 1,414,000.00 
1,657,674.27 1,533,221.80 



See notes to financial statements 



$ 3,116,674.77 $ 7,947,771 .80 



-7- 








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CHICAGO-O'HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 

JUNE 30, 1972 

Note A - General: 

The issuance of Chicago-0 'Hare International Airport Revenue Bonds was authorized by 
an ordinance adopted December 29, 1958, and subsequent supplemental ordinances. The 
purpose of the issues is to provide funds for the extension and improvement of the 
Airport and its facilities. 

Data with respect to Revenue Bonds as of June 30, 1972 is as follows: 

Amount authorized $230,000,000 

Amount sold 224,000,000 
Amount called or purchased and 

retired ($5,620,000 during 

the six months ended June 30, 1972) 41,446,000 

Amount outstanding 182,554,000 

The unexpended proceeds from Revenue Bond issues amounted to 
$15,924,217 at June 30, 1972. 

Operating revenues from flight fees, rentals, concessions, and other sources 
(accounted for collectively through the Revenue Fund) are restricted by the Bond 
Ordinance as to their use for the purposes enumerated in Note B5 . For each specified 
purpose, a separate account is provided within the Revenue Fund. 

The financial statements include amounts in respect of Airport facilities paid for by 
the City, State and Federal Governments, and private parties (totaling approximately 
$80,100,000 at cost, less allowances for depreciation of approximately $17,200,000 
at June 30, 1972), as well as those acquired with proceeds of the Revenue Bonds. 

Note B - Accounting Policies: 

1. United States Government Securities: 

The aggregate market value of the securities at June 30, 1972 was approximately 
$761,000 in excess of cost; however, approximately $372,000 of this amount repre- 
sents the increase in market value from date of purchase to June 30, 1972 of United 
States Treasury bills, which have no stated interest rates. Accrued interest is in- 
cluded only on those securities having stated interest rates; discounts and premiums 
are recognized at time of maturity or disposition. 

2. Accounts Receivable: 

The Bond Ordinance requires that provision be made for all uncollectible accounts 
receivable, which are defined as all accounts receivable not collected within 30 
days after due date. Accordingly, as of June 30, 1972, an allowance was established 
for such accounts totaling $336,623, of which approximately $168,200 was subsequently 
collected through September 30, 1972. 



-9- 



Note B - Accounting Policies (Continued) 

3. Property and Equipment: 

The costs of earthwork and landscaping have been charged to the land account. 
Interest is capitalized from the commencement of work through the year of completion 
on land improvements provided through the use of City money. 

All replacements of vehicles, furnishings, signs, and other equipment are expensed 
during the year of acquisition in accordance with the terms of the Ordinance. 

Grants from State and Federal Governments are recognized only as received. As of 
June 30, 1972, a maximum of $11,600,000 may be realized in future periods from such 
grants . 

Depreciation is provided in respect of facilities other than land on a straight- 
line basis, using annual rates calculated to amortize the cost of the individual assets 
over their estimated useful lives commencing in the year following the year of ac- 
quisition or completion of construction. 

Under the terms of the Ordinance, only depreciation and amortization applicable to 
facilities acquired with City money are taken into account in establishing flight fee 
revenue requirements. 

4. Interest on City's Investment in Airport Property: 

The Ordinance provides that "Airport expenses," for the purpose of computing flight 
fees collectible from the airlines, shall take into account interest on money of the 
City invested in property and equipment and deferred engineering costs. (See Note B5f) 

5. Allocation of Operating Revenues: 

The Ordinance requires the allocation of revenues for specified purposes in the 
following order of priority: 

a. Ordinary costs of operation and maintenance, but not in excess 
of the amount budgeted by the City for such purposes. 

b. Amounts equal to interest on bonds outstanding. During the six months 
ended June 30, 1972, interest of $4,932,587 was paid. 

c. The debt service reserve must be maintained at an amount equal to 
two years' interest requirements. 

The debt service reserve for Revenue Bonds issued prior to the 
Series of 1967 was fully funded in a prior year. In respect to 
these bonds for which the debt service reserve requirement was 
fully funded, bonds in the principal amount of $4,852,000 were 
purchased and retired during the six months ended June 30, 1972; 
accordingly, the applicable interest requirement for the six months 
ended June 30, 1972 ($459,540) was transferred to the sinking fund. 



•10- 



5. Allocation of Operating Revenues: 

c . (Continued) 

During the six months ended June 30, 1972, allocations of $38,125, 
$146,625, and $929,731 were made to the debt service reserve applicable 
to the Revenue Bonds, Series of 1967, Series of 1968 and Series of 
March 1970, respectively. 

d. For the Sinking Fund, a minimum payment ranging from $2,957,000 for 
1972 ($1,479,000 for the six months ended June 30, 1972) to $13,945,000 
in 1998. Additional amounts are allocable to the Sinking Fund as ex- 
plained in Note B5c ($459,540 for the six months ended June 30, 1972) 
and Note B5h ($1,657,674 for the six months ended June 30, 1972). The 
total amount added to the Sinking Fund from all sources during the six 
months ended June 30, 1972 was $3,596,214. 

e„ For reserve maintenance, $1,120,000 annually until $4,666,666 is 
accumulated. Major repairs, renewals, and replacements may be 
paid for with these funds. During the six months ended June 30, 1972, 
expenditures for these purposes totalling $116,816 were made from 
the account. For the six months ended June 30, 1972, $560,000 was 
allocated to the reserve maintenance account. 

f. For emergency reserve, amounts (total for the six months ended June 
30, 1972, $468,792) equal to the semi-annual provisions for (a) de- 

1 preciation and amortization on assets acquired with City money (for 

the six months ended June 30, 1972 $124,071) and (b) interest on 
City money invested in Airport assets (for the six months ended June 
30, 1972, $344,721). These funds may be used to abate landing fees 
in the event the Airport is closed. 

g. To the extent that revenues for the year as defined in the 
Ordinance, including deferred income from the preceding year, 
exceed "Airport expense" as defined, the excess shall be deferred 
income and considered as revenues of the next succeeding year. 

In accordance with this provision, revenues of $6,860,532 for the 
six months ended June 30, 1972 have been so deferred in the 
Revenue Fund, to be carried over to reduce flight fee requirements 
for 1973. 

h. Any remaining revenues after making the aforementioned allocations 
are to be allocated to the sinking fund ($1,657,674 for six months 
ended June 30, 1972). 

/ 

Note C - Revenue Bond Retirement: 

Money in the sinking fund account is to be applied as rapidly as practicable to the 
retirement of bonds, by call, purchase in the open market, or tender. 



-11- 



Note C - Revenue Bond Retirement (Continued) : 

Bonds may be redeemed by call, from funds provided by Airport Revenues, at prices 
ranging downward from 105% of principal amount to par value, plus accrued ' interest , 
to December 31, 1989; and, thereafter, at par value plus accrued interest. Bonds 
also may be redeemed by purchase in the open market or tender at prices not in 
excess of call prices. 

From various dates commencing January 1, 1974 (varying with the terms of the in- 
dividual bond issues) to December 31, 1989, the total bonds outstanding of any issue 
may also be redeemed from resources other than Airport revenues at maximum prices of 
2% of principal amount in excess of the aforementioned call prices; and thereafter, 
at par value, plus accrued interest. 

Through June 30, 1972, bonds in the principal amount of $41,446,000 ($5,620,000 in 
the six months ended June 30, 1972) have been purchased at a cost (exclusive of 
bond premium) of $37,782,082 ($5,091,765 in the six months ended June 30, 1972) 
and retired, with funds provided by the Sinking fund. Premiums in the amount of 
$388,995 (none in the six months ended June 30, 1972) have been paid on bonds 
purchased and retired. Such premiums were charged to airport operations in the year 
of payment . 

Note D - Use of Operating Revenues: 

The Bond Ordinance does not permit the use of operating revenues for capital im- 
provements or other expenditures not directly related to the operation of the 
Airport; however, the Airline Representative has agreed to all such capital im- 
provement expenditures, which have the effect of increasing flight fee requirements. 

Note E - Commitments: 

Work to be performed under uncompleted contracts in force for Airport facilities to 
be financed by Revenue Bond money aggregated approximately $10,150,000 at June 30, 
1972. 

Note F - Subsequent Events: 

On August 30, 1972, the City Council of Chicago authorized and directed to be sold 
$8,000,000 of Chicago-O'Hare International Airport 67 Revenue Bonds, Series of 1972. 
These bonds were sold at 100.051% of principal amount plus accrued interest from 
July 1, 1972 to date of delivery. The proceeds of the issue are to be used for 
construction of pedestrian tunnels, motor vehicle parking facilities and hotel access 
road, expansion of heating and refrigeration facility and fuel system modifications. 



-12- 



•+~ 






(9, 






U 




CITY OF CHICAGO 



CHICAGO-O'HARE INTERNATIONAL AIRPORT 

FINANCIAL STATEMENTS 

FOR THE SIX MONTHS ENDED JUNE 30, 1973 



TRANSPORTATION (SERJ 

LIBRARY' 



JUM 2l 1977 

NORTHWESilK.n UrjiVERSlTY 



OFFICE OF THE CITY COMPTROLLER 



i 



9 



•* 



/ » 




T OF CHICAGO 
:hard J. Daley, Mayor 



PARTMENT OF FINANCE 
om501, City Hall 
icago, Illinois 60602 



:o H. Loser 

ng City Comptroller 
/744 7100 

irk Burrus 

it Deputy Comptroller 
7744 3233 



CHICAGO-O'HARE INTERNATIONAL AIRPORT 

FINANCIAL STATEMENTS 

FOR THE SIX MONTHS ENDED JUNE 30, 1973 



Prepared by the Accounting Division 
Office of the City Comptroller 
City of Chicago, Illinois 
October 5, 1973 



CONTENTS 



Pages 

Exhibit A - Balance Sheet - June 30, 1973 2 

Exhibit B - Summary of Changes in Fund Balances - All Funds Other 

than Revenue Fund, for the six months ended June 30, 1973 3 

Exhibit C - Summary of Changes in Account Balances - Revenue Fund 

for the six months ended June 30, 1973 4 

Exhibit D - Comparative Statement of Revenues and Expenses for the 

six months ended June 30, 1973 and 1972 5-6 

Exhibit E - Reconciliation to "Net Revenues" as Defined in Bond 

Ordinance for the six months ended June 30, 1973 and 1972 7 

Exhibit F - Details of Application of Proceeds of Revenue Bonds 

for the six months ended June 30, 1973 8 

- - - - Notes to Financial Statements 9-12 



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EXHIBIT D 
Page 1 of 2 



CHICAGO-O'HARE INTERNATIONAL AIRPORT 
COMPARATIVE STATEMENT OF REVENUES AND EXPENSES 
FOR SIX MONTHS ENDED JUNE 30, 1973 AND 1972 



SVENUES : 

Flight fees, exclusive of ramp rentals 
Rentals, utility sales, concessions and 
income from investments 

Total 

CPENSES, excluding fixed charges: 
Salaries and wages - 

Department of Aviation - Administrative 

Department of Aviation - Operating 

Corporation Counsel's office 

Comptroller's office 

Fire department 

Police department 

Indirect administrative and general 



re department supplies and maintenance 

soline 

at, light, power and water 

surance - general 

surance - workmen's compensation and 

disability 

imdry, uniform rental and other 

cleaning services 

terials and supplies 

afessional services 

Dvision for doubtful accounts 

^vision for pensions 

ik service charges 

pairs and maintenance 

Lephone and telegraph 

ivel 

licles 

ihinery and equipment 

scellaneous 

iirect administrative and general expenses 

)epartment of Aviation 

)ther 

Total operating expenses, excluding 
fixed charges 
OPERATING INCOME BEFORE FIXED CHARGES 



ND APPLICATION OF REVENUES 



Period 



1973 



1972 



$12,358,500.02 $13,874,172.52 

13,192,038.34 12,224,306.91 

$25,550,538.36 $26,098,479.43 



Increase 

or 
(Decrease) 

($1,515,672.50) 

967,731.43 

( $ 547,941.07 ) 



$ 214,084.21 $ 220,756.35 ($ 



4,019,249.10 

48,606.82 

27,885.45 

1,018,628.83 

1,274,403.15 

334,290.23 



3,576,616.28 

36,594.00 

21,720.90 

937,742.13 

710,522.65 

275,197.62 



6,672.14) 

442,632.82 

12,012.82 

6,164.55 

80,886.70 

563,880.50 

59,092.61 



$ 6,937,147.79 $ 5,779,149.93 $1,157,997.86 



1,561.65 

10,897.02 

1,041,964.88 

234,428.44 

31,961.12 

40,310.24 
470,606.15 
699,468.52 
139,238.94) 
589,868.38 

25,459.77 
2,251,076.63 

16,052.00 
2,717.34 

97,951.78 
222,074.43 

52,489.18 

12,808.24 
334,290.23 



1,558.32 

10,780.33 

857,677.43 

227,528.17 

30,436.38 

36,504.44 

456,153.86 

1,009,553.41 

156,993.55) 

426,293.79 

25,595.05 

2,151,146.08 

12,363.84 

1,397.52 

178,404.00 

61,405.87 

33,569.14 

15,369.79 
275,197.62 



$12,933,894.85 $11,433,091.42 
$12,616,643.51 $14,665,388.01 



3.33 

116.69 

184,287.45 

6,900.27 

1,524.74 

3,805.80 
14,452.29 
( 310,084.89) 
17,754.61 
163,574.59 
( 135.28) 
99,930.55 
3,688.16 
1,319.82 
( 80,452.22) 
160,668.56 
18,920.04 

( 2,561.55) 
59,092.61 

$1,5 00,803.43 

( $2,048,744.50 ) 



(Continued to next page) 



-5- 



EXHIBIT D 
Page 2 of 2 



CHICAGO-O'HARE INTERNATIONAL AIRPORT 

COMPARATIVE STATEMENT OF REVENUES AND EXPENSES 

FOR SIX MONTHS ENDED JUNE 30, 1973 AND 1972 



Period 



1973 



1972 



Increase 

or 

(Decrease) 



ET OPERATING INCOME BEFORE FIXED CHARGES 



AND APPLICATION OF REVENUES (brought forward) $12,616,643.51 $14,665,388.01 ( $2,048,744.50 ) 



ROVISION FOR FIXED CHARGES : 
Interest on revenue bonds 
Premium on bonds retired 
Depreciation - all properties 
Amortization of deferred engineering charges 



PERATING INCOME IN EXCESS OF EXPENSE 

THER INCOME : 

Income earned on investments: 
Emergency Reserve Account 
Reserve Maintenance Account 



CHER EXPENSE : 
Operating income expended for: (Note D) 

Capital improvements 
Expenses for major repairs and maintenance 

charged to the Reserve Maintenance account 



HER EXPENSE: NET 



ICOME IN EXCESS OF EXPENSE (EXHIBIT E) 



$ 4,976,610.17 

21,750.00 

4,077,748.45 

24,534.02 

$ 9,100,642.64 

$ 3,516,000.87 



$ 4,932,586.73 

3,877,983.08 
24,534.02 

$ 8,835,103.83 

$ 5,830,284.18 



$ 502,323.79 $ 524,265.13 
136,983.39 29,362.59 



$ 44,023.44 

21,750.00 

199,765.37 



$ 265,538.81 
( $2,314,283.31 ) 

($ 21,941.34) 
107,620.80 



$ 639,307.18 $ 553,627.72 $ 85,679.46 



$ 764,642.65 

209,788.75 

$ 974,431.40 

$ 335,124.22 



$ 1,028,975.23 



116,815.98 



$ 1,145,791.21 
$ 592,163.49 



$ 3.180>876.65 $ 5.238.120.69 



($ 264,332.58) 

92,972.77 
( $ 171,359.81 ) 
( $ 257,039.27 ) 
($2.057.244.04) 



>e notes to financial statements. 



-6- 



EXHIBIT E 



CHICAGO -0' HARE INTERNATIONAL AIRPORT 
RECONCILIATION TO "NET REVENUES" 
AS DEFINED IN BOND ORDINANCE 
FOR THE SIX MONTHS ENDED JUNE 30, 1973 AND 1972 



Income in excess of expense (Exhibit D) 



1973 



$ 3,180,876.65 



1972 



$ 5,238,120.69 



Add (deduct) adjustments to reflect ordinance 
basis of accounting: 

Amounts included above in determination of 
income and expense: 

Interest on revenue bonds 
Depreciation - all properties 
Amortization of deferred engineering costs 
Interest earned on investments of: 
Emergency Reserve Account 
Reserve Maintenance Account 
Expenses of the Reserve Maintenance Account 
Amount not included above in determination of 
income and expense - application of deferred 
income from preceding year as a reduction of 
flight fee requirements 

"Net Revenues" as defined in bond ordinance 



4,976,610.17 

4,077,748.45 

24,534.02 

( 502,323.79) 
( 136,983.39) 
209,788.75 



8,043,892.99 
$19.874.143.85 



4,932,586.73 

3,877,983.08 

24,534.02 

( 524,265.13) 
( 29,362.59) 
116,815.98 



3,436,654.02 
$17.073.066.80 



Allocation of net revenues (In order of priority): 
Interest account 
Debt Service Reserve Account 
Sinking Fund Account - Minimum sinking fund 

payment 
Reserve Maintenance Account 
Emergency Reserve Account 

To reduce flight fee requirements - Future periods 
Remainder of debt service requirements as defined 
by the Bond Ordinance (allocated to Sinking Fund) 

Total 



$ 4,976,610.17 
1,234,760.00 

1,939,000.00 
472,804.22 
454,213.52 

9,364,972.11 

1,431,783.83 

$19.874.143.85 
(Exhibit C) 



$ 4,932,586.73 
1,114,481.00 

1,479,000.00 
560,000.00 
468,792.43 

6,860,532.37 

1,657,674.27 
$17.073.066.80 



'otal allocation to Sinking Fund Account: 
Minimum payment 
Additional allocation of remaining net revenues 



ee notes to financial statements. 



-7- 



$ 1,939,000.00 
1,431,783.83 

$ 3.370.783.83 



$ 1,479,000.00 
1,657,674.27 

$ 3.136.674.27 



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CHICAGO-O'HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 

JUNE 30, 1973 



Note A - General: 

The issuance of Chicago-O'Hare International Airport Revenue Bonds was authorized 
by an ordinance adopted December 29, 1958, and subsequent supplemental ordinances. 
The purpose of the issues is to provide funds for the extension and improvement of 
the Airport and its facilities. 

Data with respect to Revenue Bonds as of June 30, 1973 is as follows: 

Amount authorized $238,000,000 

Amount sold 232,000,000 
Amount called or purchased and 

retired ($3,184,000 during the 

six months ended June 30, 1973) 49,354,000 

Amount outstanding 182,646,000 

The unexpended proceeds from Revenue Bond issues amounted to $16,793,588 at June 30, 
1973. 

Operating revenues from flight fees, rentals, concessions, and other sources 
(accounted for collectively through the Revenue Fund) are restricted by the Bond 
Ordinance as to their use for the purposes enumerated in Note B5. For each 
specified purpose, a separate account is provided within the Revenue Fund. 

The financial statements include amounts in respect of Airport facilities paid for 
by the City, State and Federal Governments, and private parties (totaling approx- 
imately $86,100,000 at cost, less allowances for depreciation of approximately 
$19,000,000 at June 30, 1973), as well as those acquired with proceeds of the 
Revenue Bonds. 

Note B - Accounting Policies: 

1. United States Government Securities: 

The aggregate market value of the securities at June 30, 1973 was approximately 
$43,900 in excess of cost; such excess represents the increase ($589,100) in 
market value from date of purchase to June 30, 1973 of United States Treasury 
Bills, which have no stated interest rates. Accrued interest is included only on 
those securities having stated interest rates; discounts and premiums are recog- 
nized at time of maturity or disposition. 

2. Accounts Receivable: 

The Bond Ordinance requires that provision be made for potential uncollectible 
accounts receivable, which are defined as all accounts receivable not collected 
within 30 days after due date. Accordingly, as of June 30, 1973, an allowance 
was established for such accounts totaling $407,962 of which approximately 
$147,000 was subsequently collected through August 31, 1973. 



-9- 



Note B - Accounting Policies (Continued) 

3. Property and Equipment: 

The costs of earthwork and landscaping have been charged to the land account. 
Interest is capitalized from the commencement of work through the year of comple- 
tion on land improvements provided through the use of City money. 

All replacements of vehicles, furnishings, signs, and other equipment are expensed 
during the year of acquisition in accordance with the terms of the Ordinance. 

Grants from State and Federal Governments are recognized only as received. As of 
June 30, 1973, a maximum of $11,800,000 may be realized in future periods from such 
grants. 

Depreciation is provided in respect of facilities other than land on a straight- 
line basis, using annual rates calculated to amortize the cost of the individual 
assets over their estimated useful lives commencing in the year following the year 
of acquisition or completion of construction. 

Under the terms of the Ordinance, only depreciation and amortization applicable 
to facilities acquired with City money are taken into account in establishing 
flight fee revenue requirements. 

4. Interest on City's Investment in Airport Property: 

The Ordinance provides that "Airport expenses", for the purpose of computing 
flight fees collectible from the airlines, shall take into account interest on 
money of the City invested in property and equipment and deferred engineering 
costs. (See Note B5f). 

5. Allocation of Operating Revenues: 

The Ordinance requires the allocation of revenues for specified purposes in the 
following order of priority: 

a. Ordinary costs of operation and maintenance, but not in excess 
of the amount budgeted by the City for such purposes. 

b. Amounts equal to interest on bonds outstanding. During the six 
months ended June 30, 1973, interest of $4,976,610 was paid. 

c. The debt service reserve must be maintained at an amount equal 
to two years' interest requirements. 

The debt service reserve for Revenue Bonds issued prior to the 
Series of 1968 was fully funded in a prior year. In respect to 
these bonds for which the debt service reserve requirement was 
fully funded, bonds in the principal amount of $2,441,000 were 
purchases and retired during the six months ended June 30, 1973; 
accordingly, the applicable interest requirement for the six 
months ended June 30, 1973 ($230,515) was transferred to the 
sinking fund. 



-10- 



5. Allocation of Operating Revenues: 

c. (Continued) 

During the six months ended June 30, 1973, allocations of $146,625, 
$929,731, and $158,404 were made to the debt service reserve applic- 
able to the Revenue Bonds, Series of 1968, Series of March, 1970, 
and Series of 1972, respectively. 

d. For the Sinking Fund, a minimum payment ranging from $3,878,000 for 
1973 ($1,939,000 for the six months ended June 30, 1973) to $14,545,000 
in 1998. Additional amounts are allocable to the Sinking Fund as ex- 
plained in Note B5c ($230,515 for the six months ended June 30, 1973) 
and Note B5h ($1,431,784 for the six months ended June 30, 1973). The 
total amount added to the Sinking Fund from all sources during the six 
months ended June 30, 1973 was $3,601,299. 

e. For reserve maintenance, $1,160,000 annually until $4,833,333 is 
accumulated. Major repairs, renewals, and replacements may be paid 
for with these funds. During the six months ended June 30, 1973, 
expenditures for these purposes totalling $209,789 were made from 
the account. For the six months ended June 30, 1973, $472,804 was 
allocated to the reserve maintenance account. 

f. For emergency reserve, amounts (total for the six months ended June 
30, 1973, $454,214) equal to the semi-annual provisions for (a) de- 
preciation and amortization on assets acquired with City money (for 
the six months ended June 30, 1973, $108, 752) and (b) interest on 
City money invested in Airport assets (for the six months ended June 
30, 1973, $345,462). These funds may be used to abate landing fees 
in the event the Airport is closed. 

g. To the extent that revenues for the year as defined in the Ordinance, 
including deferred income from the preceding year, exceed "Airport 
expense" as defined, the excess shall be deferred income and con- 
sidered as revenues of the next succeeding year. In accordance with 
this provision, revenues of $9,364,972 for the six months ended June 
30, 1973 have been so deferred in the Revenue Fund, to be carried 
over to reduce flight fee requirements for 1974. 

h. Any remaining revenues after making the aforementioned allocations 

are to be allocated to the sinking fund ($1,431,784 for the six months 
ended June 30, 1973). 

Note C - Revenue Bond Retirement: 

Money in the sinking fund account is to be applied as rapidly as practicable to the 
retirement of bonds, by call, purchase in the open market, or tender. 



-11- 



Note C - Revenue Bond Retirement (Continued) : 

Bonds may be redeemed by call, from funds provided by Airport Revenues, at 
prices ranging downward from 1057 o of principal amount to par value, plus 
accrued interest, to December 31, 1991, and, thereafter, at par value plus 
accrued interest. Bonds also may be redeemed by purchase in the open market 
or tender at prices not in excess of call prices. 

From various dates commencing January 1, 1974 (varying with the terms of the 
individual bond issues) to December 31, 1994, the total bonds outstanding of 
any issue may also be redeemed from resources other than Airport revenues at 
various amounts, maximum 2%, of principal amount in excess of the aforementioned 
call prices; and thereafter, at par value, plus accrued interest. 

Through June 30, 1973, bonds in the principal amount of $49,354,000 ($3,184,000 
in the six months ended June 30, 1973) have been purchased at a cost (exclusive 
of bond premium) of $45,223,358 ($2,998,636 in the six months ended June 30, 
1973), and retired, with funds provided by the sinking fund. Premiums in the 
amount of $410,745 ($21,750 in the six months ended June 30, 1973) have been 
paid on bonds purchased and retired; such premiums were charged to Airport 
operations in the year of payment. Discounts on bonds retired are retained in 
the sinking fund and used to retire additional bonds. 

Note D - Use of Operating Revenues: 

The Bond Ordinance does not permit the use of operating revenues for capital 
improvements or other expenditures not directly related to the operation of the 
Airport; however, the Airline Representative has agreed to substantially all 
such capital improvement expenditures, which have the effect of increasing 
flight fee requirements. 

Note E - Commitments and Contingent Liabilities: 

Work to be performed under uncompleted contracts in force for Airport facilities 
to be financed by Revenue Bond money aggregated approximately $9,200,000 at 
June 30, 1973. 



-12- 



i 




CITY OF CHICAGO 



CHICAGO -0' HAKE INTERNATIONAL AIRPORT 

FINANCIAL STATEMENTS 

FOR THE SIX MONTHS ENDED JUNE 30, 1974 



."Y.NSF RTATION 

u. .:-:. JBRARY 

NOV 2 i \m 



TRAN 






HE 
9797.7C4 

C 53Z 

1974- 



OFFICE OF THE CITY COMPTROLLER 







Y OF CHICAGO 
hard J. Daley, Mayor 



=>ARTMENT OF FINANCE 
)m 501, City Hail 
cago, Illinois 60602 



rk Burrus 

g City Comptroller 
744-7100 



CHICAGO -O'HARE INTERNATIONAL AIRPORT 

FINANCIAL STATEMENTS 

FOR THE SIX MONTHS ENDED JUNE 30, 1974 



Prepared by the Accounting Division 
Office of the City Comptroller 
City of Chicago, Illinois 
October 8, 1974 



Id*" 



„;iO» 



tlBR*** 






CONTENTS 



Pages 

Exhibit A ~ Balance Sheet - June 30, 1974 2 

Exhibit B - Summary of Changes in Fund Balances - All Funds Other 

than Revenue Fund, for the six months ended June 30, 1974 3 

Exhibit C - Summary of Changes in Account Balances - Revenue Fund 

for the six months ended June 30, 1974 4 

Exhibit D - Comparative Statement of Revenues and Expenses for the 

six months ended June 30, 1974 and 1973 5-6 

Exhibit E - Reconciliation to "Net Revenues" as Defined in Bond 

Ordinance for the six months ended June 30, 1974 and 1973 7 

Exhibit F « Details of Application of Proceeds of Revenue Bonds 

for the six months ended June 30, 1974 8 

m •. M m. Notes to Financial Statements 9-12 



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r-j| 



EXHIBIT D 
Page 1 of 2 



CHICAGO- 0' HARE INTERNATIONAL AIRPORT 
COMPARATIVE STATEMENT OF REVENUES AND EXPENSES 
FOR SIX MONTHS ENDED JUNE 30, 1974 AND 1973 

Period 



1974 



1973 



Increase 

or 

(Decreas e') 



REVENUES : 

Flight fees, exclusive of ramp rentals 
Rentals, utility sales, concessions and 
income from investments 

Total 

EXPENSES, excluding fixed charges: 
Salaries and wages - 

Department of Aviation - Administrative 

Department of Aviation - Operating 

Corporation Counsel's office 

Comptroller's office 

Fire department 

Police department 

Indirect administrative and general 



Fire department supplies and maintenance 

Gasoline 

Heat, light, power and water 

Insurance - general 

Insurance - workmen's compensation and 

disability 
Laundry, uniform rental and other 

cleaning services 
Materials and supplies 
Professional services 
Provision for doubtful accounts 
Provision for pensions 
Bank service charges 
Repairs and maintenance 
Telephone and telegraph 
Travel 
Vehicles 

Machinery and equipment 
Miscellaneous 
Indirect administrative and general expenses: 

Department of Aviation 

Other 

Total operating expenses, excluding 
fixed charges 
NET OPERATING INCOME BEFORE FIXED CHARGES 

AND APPLICATION OF REVENUES 



$10,600,638.41 $12,358,500.02 ($1,757,861.61) 

16,017,575.65 13,192,038.34 2,825,537.31 
$26,618,214.06 $25,550,538.36 $1,067,675.70 



259 

4,646 

48 

30 

1,126 

1,545 

387 



$ 8,043 



2 


571.97 


1 


23 


270.14 


10 


1,237 


872.55 


1,041 


211 


459.67 


234 



40 

34 
519 
995 
105 
741 

18 
2,149 

18 
6 

32 
269 

48 

18 
387 



$14,694 



$11,923 



765.54 
024.08 
626.65 
003.30 
044.95 
936.68 
335.20 



214 

4,019 

48 

27 

1,018 

1,274 

334 



736.40 $ 6,937 



521.60 

942.52 

316.16 

914.27 

393.25)( 

070.62 

288.64 

171.02 

711.67 

533.83 

340.15 

566.07 

744.90 

831.43 
335.20 



31 

40 
470 
699 
139 
589 

25 
2,251 

16 
2 

97 
222 

52 

12 

334 



805.56 $12,933 



408.50 $12,616 



084.21 
249.10 
606.82 
885.45 
628.83 
403.15 
290.23 



45 
626 

2 

107 

271 

53 



147.79 $1,106 

561.65 1 

897.02 12 

964.88 195 

428.44 ( 22 

961.12 8 



310.24 

606.15 

468.52 

238.94) 

868.38 

459.77 

076.63 ( 

052.00 

717.34 

951.78 ( 

074.43 

489.18 ( 



( 



808.24 
290.23 



5 

48 

296 

33 

151 

7 

101 

2 

3 

65 

47 

3 

6 

53 



894.85 $1,760 



643.51 ( $ 693 



681.33 
774.98 
19.83 
117.85 
416.12 
533.53 
044.97 



588.61 

010.32 
373.12 
907.67 
968.77) 

560.48 

■367.72) 
710.01 
445.75 
845.69 
202.24 
171.13) 
905.61) 
659.67 
816.49 
611.63) 
491.64 
744.28) 

023.19 
044.97 



910.71 



235.01 ) 



(Continued to next page) 



-5- 



EXHIBIT D 
Page 2 of 2 



CHICAGO- 0' HARE INTERNATIONAL AIRPORT 
COMPARATIVE STATEMENT OF REVENUES AND EXPENSES 
FOR SIX MONTHS ENDED JUNE 30, 1974 AND 1973 



Increase 
Period or 



1974 1973 (Decrease) 

NET OPERATING INCOME BEFORE FIXED CHARGES 

AND APPLICATION OF REVENUES (brought forward) $11,923,408.50 $12,616,643.51 ($693,235.01) 

PROVISION FOR FIXED CHARGES : 

Interest on revenue bonds $ 4,723,396.64 $ 4,976,610.17 ($253,213.53) 

Premium on bonds retired 35,435.00 21,750.00 13,685.00 

Depreciation - all properties 4,049,186.32 4,077,748.45 ( 28,562.13) 

Amortization of deferred engineering charges 24,534.0.2 24,534.02 



$ 8,832,551.98 $ 9,100,642.64 ($268.090.66) 

OPERATING INCOME IN EXCESS OF EXPENSE $ 3,090,856.52 $ 3,516.000.87 ($425,144.35) 

OTHER INCOME : 

Income earned on investments: 

Emergency Reserve Account $ 725,326.13 $ 502,323.79 $223,002.34 

Reserve Maintenance Account 58,343.96 136,983.39 ( 78,639.43) 

$ 783,670.09 $ 639,307.18 $144,362.91 

OTHER EXPENSE : 

Operating income expended for: (Note D) 

Capital improvements $ 519,410.24 $ 764,642.65 ($245,232.41) 
Expenses for major repairs and maintenance 

charged to the Reserve Maintenance account 58,343.96 209,788.75 ( 151,444.79 ) 

$ 577,754.20 $ 974,431.40 ($396,677.20 ) 

OTHER EXPENSE: NET ( $ 205,915.89 ) $ 335,124.22 ($541,040.11 ) 

INCOME IN EXCESS OF EXPENSE (EXHIBIT E) $ 3 . 296. 777,,. 41 $ 3.180.876.65 $ns,fiQS.7fi 



See notes to financial statements 



-6- 



EXHIBIT E 



CHICAGO- 0' HARE INTERNATIONAL AIRPORT 
RECONCILIATION TO "NET REVENUES " 
AS DEFINED IN BOND ORDINANCE 
FOR THE SIX MONTHS ENDED JUNE 30, 1974 AND 1973 

1974 1973 

Income in excess of expense (Exhibit D) $ 3,296,772.41 $ 3,180,876.65 

Add (deduct) adjustments to reflect ordinance 
basis of accounting: 

Amounts included above in determination of 
income and expense: 

Interest on revenue bonds 4,723,396.64 4,976,610.17 

Depreciation - all properties 4,049,186.32 4,077,748.45 

Amortization of deferred engineering costs 24,534.02 24,534.02 

Interest earned on investments of: 

Emergency Reserve Account ( 725,326.13) ( 502,323.79) 

Reserve Maintenance Account ( 58,343.96) ( 136,983.39) 

Expenses of the Reserve Maintenance Account 58,343.96 209,788.75 

Amount not included above in determination of 
income and expense - application of deferred 
income from preceding year as a reduction of 
flight fee requirements 10,772,536.26 8,043,892.99 

"Net Revenues" as defined in bond ordinance $??., 141 ,099.52 $1 9 , 874 , 1 43 .85 

Allocation of net revenues (In order of priority): 

Interest account $ 4,723,396.64 $ 4,976,610.17 

Debt Service Reserve Account 158,404.00 1,234,760.00 
Sinking Fund Account - Minimum sinking fund 

payment 2,040,000.00 1,939,000.00 

Reserve Maintenance Account 472,804.22 

Emergency Reserve Account 451,311.83 454,213.52 

To reduce flight fee requirements - Future periods 12,107,641.19 9,364,972.11 
Remainder of debt service requirements as defined 

by the Bond Ordinance (allocated to Sinking Fund) 2,660,345.86 1,431,783.83 

Total ft??. 141 .099 .5? $19.874.141^15. 

(Exhibit C) 

Total allocation to Sinking Fund Account: 

Minimum payment $ 2,040,000.00 $ 1,939,000.00 

Additional allocation of remaining net revenues 2,660, 345 .86 1,431, 783 .83 

$ 4.700.34^.86 ft 3.370,783.83 



See notes to financial statements. 



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CHICAGO-O'HARE INTERNATIONAL AIRPORT 
NOTES TO FINANCIAL STATEMENTS 



Note A - General: 

The issuance of Chicago-O'Hare International Airport Revenue Bonds was authorized 
by an ordinance adopted December 29, 1958, and subsequent supplemental ordinances. 
The purpose of the issues is to provide funds for the extension and improvement 
of the Airport and its facilities. 

Data with respect to Revenue Bonds as of June 30, 1974 is as follows: 

Amount authorized $238,000,000 

Amount sold 232,000,000 

Amount called or purchased and 
retired ($3,704,000 during 
the six months ending June 
30, 1974) 59,338,000 

Amount outstanding 172,662,000 

The unexpended proceeds from Revenue Bond issues amounted to $7,764,955 at June 
30, 1974. 

Operating revenues from flight fees, rentals, concessions, and other sources (ac- 
counted for collectively through the Revenue Fund) are restricted by the Bond Ordi- 
nance as to their use for the purposes enumerated in Note B5 . For each specified 
purpose, a separate account is provided within the Revenue Fund. 

The financial statements include amounts in respect of Airport facilities paid for 
by the City, State and Federal Governments, and private parties (totaling approx- 
imately $88,433,000 at cost, less allowances for depreciation of approximately 
$20,708,000 at June 30, 1974), as well as those acquired with proceeds of the 
Revenue Bonds. 

Note B - Accounting Policies: 

1. United States Government Securities: 

As of June 30, 1974, the market value of United States Treasury bills exceeded 
cost by approximately $276,108 and the cost of United States Treasury notes ex- 
ceeded market value by approximately $603,120. Hence, the aggregate market 
value of the securities was approximately $327,012 less then cost. Accrued in- 
terest is included only on those securities having stated interest rates; dis- 
counts and premiums are recognized at time of maturity or disposition. 

2. Accounts Receivable: 

The Bond Ordinance requires that provision be made for potential uncollectible ac- 
counts receivable, which are defined as all accounts receivable not collected with- 
in 30 days after due date. Accordingly, as of June 30, 1974, an allowance was 
established for such accounts totaling $513,370 of which approximately $128,000 
was subsequently collected through August 31, 1974. 



-9- 



Note B - Accounting Policies (Continued) 

3. Property and Equipment: 

The costs of earthwork and landscaping have been charged to the land account. 
Interest is capitalized from the commencement of work through the year of comple- 
tion on land improvements provided through the use of City money. 

All replacements of vehicles, furnishings, signs, and other equipment are expensed 
during the year of acquisition in accordance with the terms of the Ordinance. 

Grants from State and Federal Governments are recognized only as received. As of 
June 30, 1974, a maximum of $9,700,000 may be realized in future periods from such 
grants. 

Depreciation is provided in respect of facilities other than land on a straight- 
line basis, using annual rates calculated to amortize the cost of the individual 
assets over their estimated useful lives commencing in the year following the year 
of acquisition or completion of construction. 

Under the terms of the Ordinance, only depreciation and amortization applicable to 
facilities acquired with City money are taken into account in establishing flight 
fee revenue requirements. 

4. Interest on City's Investment in Airport Property: 

The Ordinance provides that "airport expenses," for the purpose of computing flight 
fees collectible from the airlines, shall take into account interest on money of 
the City invested in property and equipment and deferred engineering costs. (See 
Note B5f). 

5. Allocation of Operating Revenues: 

The Ordinance requires the allocation of revenues for specified purposes in the 
following order of priority: 

a. Ordinary costs of operation and maintenance, but not in excess 
of the amount budgeted by the City for such purposes. 

b. Amounts equal to interest on bonds outstanding. During the 
six months ended June 30, 1974 interest of $4,723,397 was paid. 

c. The debt service reserve must be maintained at an amount equal 
to two years' interest requirements. 

During the six months ended June 30, 1974, an allocation of $158,404 
was made to the debt service reserve applicable to the Series of 1972 
Revenue Bonds. 

The debt service reserve for Revenue Bonds issued prior to the Series 
of 1972 was fully funded in a prior year. In respect to those bonds 
for which the debt service reserve requirement was fully funded, 
bonds in the principal amount of $3,704,000 were purchased and re- 
tired during the six months ended June 30, 1974. Accordingly, the 
applicable interest requirement for the six months ended June 30, 
1974 ($382,150) was transferred to the sinking fund. 



-10- 



5. Allocation of Operating Revenues: (Continued) 

d. For the sinking fund, a minimum payment ranging from $4,080,000 
for 1974 ($2,040,000 for the six months ended June 30, 1974) to 
$14,545,000 in 1998 is required. Additional amounts are allocable 
to the sinking fund as explained in Note B5C ($382,150 for the six 
months ended June 30, 1974) and Note B5H ($2,660,346 for the six 
months ended June 30, 1974). The total amount added to the sink- 
ing fund from all sources during the six months ended June 30, 1974 
was $5,082,496. 

e. The reserve maintenance account was fully funded as of June 30, 
1974 at $4,833,333. Major repairs, renewals and replacements may 
be paid for with these funds. During the six months ended June 30, 
1974 expenditures for these purposes totaling $58,344 were made 
from the account. 

f. For emergency reserve, amounts (total for the six months ended 
June 30, 1974, $451,312) equal to the semi-annual provisions for 
(a) depreciation and amortization on assets acquired with City 
money (for the six months ended June 30, 1974, $101,339) and (b) 
interest on City money invested in airport assets (for the six 
months ended June 30, 1974, $349,973). These funds may be used to 
abate landing fees in the event the airport is closed. 

g. To the extent that revenues for the year as defined in the Ordinance, 
including deferred income from the preceding year, exceed "Airport 
expense" as defined, the excess shall be deferred income and con- 
sidered as revenues of the next succeeding year. In accordance with 
this provision, revenues of $12,107,641.19 for the six months ended 
June 30, 1974 have been so deferred in the Revenue Fund, to be car- 
ried over to reduce flight fee requirements for 1975. 

h. Any remaining revenues after making the aforementioned allocations 
are to be allocated to the sinking fund ($2,660,346 for the six 
months ended June 30, 1974). 

Note C - Revenue Bond Retirement: 

Money in the sinking fund account is to be applied as rapidly as practicable to the 
retirement of bonds, by call, purchase in the open market or tender. 

Bonds may be redeemed by call, from funds provided by Airport revenues, at prices 
ranging downward from 1057 o of principal amount to par value, plus accrued interest, 
to December 31, 1991, and, thereafter, at par value plus accrued interest. Bonds 
also may be redeemed by purchase in the open market or tender at prices not in ex- 
cess of call prices. 



-11- 



Note C - Revenue Bond Retirement (Continued) 

From various dates commencing January 1, 1974 (varying with the terms of the in- 
dividual bond issues) to December 31, 1994, the total bonds outstanding of any 
issue may also be redeemed from resources other than Airport revenues at various 
amounts (maximum 2% of principal amount) in excess of the aforementioned call 
prices, and thereafter, at par value, plus accrued interest. 

Through June 30, 1974, bonds in the principal amount of $59,338,000 ($3,704,000 
in the six months ended June 30, 1974) have been purchased at a cost (exclusive 
of bond premium) of $54,661,768 ($3,486,485 in the six months ended June 30, 
1974), and retired, with funds provided by the sinking fund. Premiums in the 
amount of $510,430 ($35,435 in the six months ended June 30, 1974) have been 
paid on bonds purchased and retired; such premiums were charged to airport 
operations in the year of payment. Discounts on bonds retired are retained in 
the sinking fund and used to retire additional bonds. 

Note D - Use of Operating Revenues: 

The Bond Ordinance does not permit the use of operating revenues for capital im- 
provements or other expenditures not directly related to the operation of the Air- 
port; however, the Airline Representative has agreed to substantially all such 
capital improvement expenditures, which have the effect of increasing flight fee 
requirements . 

Note E - Commitments: 

Work to be performed under uncompleted contracts in force for Airport facilities 
to be financed by Revenue Bond money aggregated approximately $880,000 at June 30, 
1974. 



-12- 



#C.O. 62 




„. ; D 0!tfAT!ON 
ClHilK J.BkMY 



CITY OF CHICAGO 



CHICAGO -0' HARE INTERNATIONAL AIRPORT 

FINANCIAL STATEMENTS 

FOR THE SIX MONTHS ENDED JUNE 30, 1975 



Ian 

zx 

I7T 
/ 



OFFICE OF THE CITY COMPTROLLER 




:iTY OF CHICAGO 
Richard J. Daley, Mayor 



DEPARTMENT OF FINANCE 
Room 501, City Hall 
:hicago, Illinois 60602 



"lark Burrus 

ity Comptroller 
12/744-7100 



lobert E. Shaw 

irst Deputy Comptroller 
12/744 3233 



CHICAGO -O' HARE INTERNATIONAL AIRPORT 

FINANCIAL STATEMENTS 

FOR THE SIX MONTHS ENDED JUNE 30, 1975 



Prepared by the Accounting Division 
Office of the City Comptroller 
City of Chicago, Illinois 
October 31, 1975 



CONTENTS 



Pages 
Exhibit A - Balance Sheet - June 30, 1975 2 

Exhibit B - Summary of Changes in Fund Balances « All Funds Other 

than Revenue Fund, for the six months ended June 30, 1975 3 

Exhibit C - Summary of Changes in Account Balances - Revenue Fund 

for the six months ended June 30, 1975 4 

Exhibit D - Comparative Statement of Revenues and Expenses for the 

six months ended June 30, 1975 and 1974 5-*6 

Exhibit E - Reconciliation to "Net Revenues" as Defined in Bond 

Ordinance for the six months ended June 30, 1975 and 1974 7 

Exhibit F - Details of Application of Proceeds of Revenue Bonds 

for the six months ended June 30, 1975 8 

„ m „ „ Notes to Financial Statements 9-12 



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CHICAGO-O'HARE INTERNATIONAL AIRPORT 
COMPARATIVE STATEMENT OF REVENUES AND EXPENSES 
FOR SIX MONTHS ENDED JUNE 30, 1975 AND 1974 



EXHIBIT D 
Page 1 of 2 



Period 



REVENUES : (Schedule B-l) 

Flight fees, exclusive of ramp rentals 
Rentals, utility sales, concessions and 
income from investments 

Total 

EXPENSES , excluding fixed charges : 
Salaries and wages « 

Department of Aviation « Administrative 

Department of Aviation « Operating 

Corporation Counsel's office 

Comptroller's office 

Fire department 

Police department 

Indirect administrative and general 



Fire department supplies and maintenance 

Gasoline 

Heat, light, power and water 

Insurance « general 

Insurance « workmen's compensation and 

disability- 
Laundry , uniform rental and other 

cleaning services 
Materials and supplies 
Professional services 
Provision for doubtful accounts 
Provision for pensions 
Bank service charges 
Repairs and maintenance 
Telephone and telegraph 
Travel 
Vehicles 

Machinery and equipment 
liscellaneous 
Cndirect administrative and general expenses 

Department of Aviation 

Other 

Total operating expenses, excluding 
fixed charges 

[ET OPERATING INCOME BEFORE FIXED CHARGES 



AND APPLICATION OF REVENUES 



19 7 5 



19 7 4 



Increase 

or 

(Decrease) 



$13,441,859.02 $10,600,638.41 $2,841,220.61 
16,028,328.75 16,017.575.65 10,753.10 



JLl-Z- 



$29,470,187.77 $26,618,214.06 $2,851,9 73.71 



$ 292,019.51 


$ 


259,765.54 


$ 


32,253.97 


5,285,072.80 


4 


,646,024.08 




639,048.72 


54,648.00 




48,626.65 




6,021.35 


35,136.90 




30,003.30 




5,133.60 


1,237,184.25 


1 


,126,044.95 




111,139.30 


1,635,244.73 


1 


,545,936.68 




139,308.05 


435,940.52 




387,335.20 




48,605.32 


$ 9,025,246.71 


$ 8 


,043.736.40 


$ 


981,510.31 


2,224.01 




2,571.97 


( 


347.96) 


26,923.11 




23,270.14 




3,652.97 


1,758,907.34 


1 


,237,872.55 




521,034.79 


216,639.66 




211,459.67 




5,179.99 


38,579.10 




40,521.60 


( 


1,942.50) 


51,310.14 




34,942.52 




16,367.62 


890,316.06 




519,316.16 




370,999.90 


1,123,940.94 




995,914.27 




128,026.67 


199,181.41 


( 


105,393.25) 




304,574.66 


846,196.64 




741,070.62 




105,126.02 


9,308.59 




18,288.64 


( 


8,980.05) 


2,908,863.78 


2 


,149,171.02 




759,692.76 


25,985.75 




18,711.67 




7,274.08 


3,040.03 




6,533.83 


( 


3,493.80) 


13,620.95 




32,340.15 


( 


18,719.20) 


66,716.23 




269,566.07 


( 


202,849.84) 


26,532.85 




48,744.90 


( 


22,212.05) 


24,415.82 




18,831.43 




5,584.39 


435,940.52 




387,335.20 




48,605.32 


$17,693,889.64 


$14 


,694,805.56 


$2 


,999,084.08 


$11,776,298.13 


$11 


,923,408.50 


($ 


147,110.37) 



(Continued to next page) 



-5- 



EXHIBIT D 
Page 2 of 2 



CHICAGO-0 ' HARE INTERNATIONAL AIRPORT 

COMPARATIVE STATEMENT OF REVENUES AND EXPENSES 

FOR SIX MONTHS ENDED JUNE 30, 1975 AND 1974 



Period 



19 7 5 



19 7 4 



Increase 

or 

(Decrease) 



NET OPERATING INCOME BEFORE FIXED CHARGES 

AND APPLICATION OF REVENUES (brought forward) $11,776,298.13 $11,923,408.50 ( $ 147,110.37) 



PROVISION FOR FIXED CHARGES : 
Interest on revenue bonds 
Premium on bonds retired 

Depreciation « all properties (Schedule A-2) 
Amortization of deferred engineering charges 



OPERATING INCOME IN EXCESS OF EXPENSE 

3 THER INCOME : 

Income earned on investments: 
Emergency Reserve Account 
Reserve Maintenance Account 



) THER EXPENSE : 
Operating income expended for: (Note D) 

Capital improvements 
Expenses for major repairs and maintenance 

charged to the Reserve Maintenance account 



THER EXPENSE: NET 



$ 4,408,874.20 

8,275.00 

4,949,279.73 

24,534.02 

$ 9,390,962.95 

$ 2,385,335.18 



$ 4,723,396.64 ($ 314,522.44) 

35,435.00 ( 27,160.00) 

4,049,186.32 900,093.41 

24,534.02 ~ 

$ 8,832,551.98 $ 558,410.97 

$ 3,090,856.52 ( $ 705,521.34 ) 



$ 877,797.95 $ 725,326.13 $ 152,471.82 

58,343.96 55,630.46 



113,974.42 



NCOME IN EXCESS OF EXPENSE (EXHIBIT E) 



$ 991,772.37 $ 783,670.09 $ 208,102.28 

$ 7,386,608.63 $ 519,410.24 $6,867,198.39 

582,261.36 58,343.96 523,917.40 

$ 7,968,869.99 $ 577,754.20 $7,391,115.79 

$ 6,977,097.62 ( $ 205,915.89 ) ( $7,183,013.51 ) 

( $ 4.591.762.44 ) $ 3.296.772.41 f $7 .888.534. 85) 



ie notes to financial statements 



-6- 



EXHIBIT E 



CHICAGO-0 ' HARE INTERNATIONAL AIRPORT 
RECONCILIATION TO "NET REVENUES'' 



AS DEFINED IN BOND ORDINANCE 
FOR THE SIX MONTHS ENDED JUNE 30, 1975 AND 1974 



1975 1974 



ncome in excess of expense (Exhibit D) ($ 4,591,762.44) $ 3,296,772.41 

dd (deduct) adjustments to reflect ordinance 
basis of accounting: 

Amounts included above in determination of 
income and expense: 

Interest on revenue bonds 4,408,874.20 4,723,396.64 

Depreciation - all properties 4,949,279.73 4,049,186.32 

Amortization of deferred engineering costs 24,534.02 24,534.02 

Interest earned on investments of: 

Emergency Reserve Account ( 877,797.95) ( 725,326.13) 

Reserve Maintenance Account ( 113,974.42) ( 58,343.96) 

Expenses of the Reserve Maintenance Account 582,261.36 58,343.96 

Amount not included above in determination of 
income and expense - application of deferred 
income from preceding year as a reduction of 
flight fee requirements 13,730,138.21 10,772,536.26 

"Net Revenues" as defined in bond ordinance $18.111.552.71 $22.141.099.52 

llocation of net revenues (In order of priority) : 

Interest account $ 4,408,874.20 $ 4,723,396.64 

Debt Service Reserve Account 9,576.00 158,404.00 
Sinking Fund Account « Minimum sinking fund 

payment 2,226,000.00 2,040,000.00 

Reserve Maintenance Account 580,000.00 

Emergency Reserve Account 438,745.61 451,311.83 

To reduce flight fee requirements - Future periods 7,510,660.60 12,107,641.19 
Remainder of debt service requirements as defined 

by the Bond Ordinance (allocated to Sinking Fund) 2,937,696.30 2,660,345.86 

Total $18.111.552.71 $22.141.099.52 

(Exhibit C) 

otal allocation to Sinking Fund Account: 
Minimum payment $ 2,226,000.00 $ 2,040,000.00 

Additional allocation of remaining net revenues 2,937,696.30 2,660,345. 86 

$ 5.163.696.30 $ 4.700.345.86 



ee notes to financial statements 



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CHICAGO-0 ' HARE INTERNATIONAL AIRPORT 
NOTES TO FINANCIAL STATEMENTS 



Note A - General: 

The issuance of Chicago-0 'Hare International Airport Revenue Bonds was authorized 
by an ordinance adopted December 29, 1958, and subsequent supplemental ordinances. 
The purpose of the issues is to provide funds for the extension and improvement 
of the Airport and its facilities. 

Data with respect to Revenue Bonds as of June 30, 1975 is as follows: 

Amount authorized $238,000,000 

Amount sold 232,000,000 

Amount called or purchased and 
retired ($2,930,000 during 
the six months ended June 
30, 1975) 71,230,000 

Amount outstanding 160,770,000 

The unexpended proceeds from Revenue Bond issues amounted to $4,552,719 at June 
30, 1975. 

Operating revenues from flight fees, rentals, concessions, and other sources (ac- 
counted fcr collectively through the Revenue Fund) are restricted by the Bond Ordi- 
nance as to their use for the purposes enumerated in Note B5. For each specified 
purpose, a separate account is provided within the Revenue Fund. 

The financial statements include amounts in respect of Airport facilities paid for 
by the City, State and Federal Governments, and private parties (totaling approx- 
imately $100,436,000 at cost, less allowances for depreciation of approximately 
$22,539,000 at June 30, 1975), as well as those acquired with proceeds of the 
Revenue Bonds . 

Note B - Accounting Policies: 

1. United States Government Securities: 

As of June 30, 1975, the market value of United States Treasury bills exceeded cost 
by approximately $166,503 and the cost of United States Treasury notes exceeded 
market value by approximately $40,201. Hence, the aggregate market value of the 
securities was approximately $126,302 more than cost. Accrued interest is included 
only on those securities having stated interest rates; discounts and premiums are 
recognized at time of maturity or disposition. 

2. Accounts Receivable: 

The Bond Ordinance requires that provision be made for potential uncollectible ac- 
counts receivable, which are defined as all accounts receivable not collected with- 
in 30 days after due date. Accordingly, as of June 30, 1975, an allowance was 
established for such accounts totaling $1,426,354 of which approximately $301,584 
was subsequently collected through August 31, 1975. 



-9- 



Note B - Accounting Policies (Continued) 

3. Property and Equipment: 

The costs of earthwork and landscaping have been charged to the land account. 
Interest is capitalized from the commencement of work through the year of comple- 
tion on land improvements provided through the use of City money. 

All replacements of vehicles, furnishings, signs, and other equipment are expensed 
during the year of acquisition in accordance with the terms of the Ordinance. 

Grants from State and Federal Governments are recognized only as received. As of 
June 30, 1975, a maximum of $9,176,000 may be realized in future periods from such 
grants. 

Depreciation is provided in respect of facilities other than land on a straight- 
line basis, using annual rates calculated to amortize the cost of the individual 
assets over their estimated useful lives commencing in the year following the year 
of acquisition or completion of construction. 

Under the terms of the Ordinance, only depreciation and amortization applicable to 
facilities acquired with City money are taken into account in establishing flight 
fee revenue requirements. 

4. Interest on City's Investment in Airport Property: 

The Ordinance provides that "airport expenses," for the purpose of computing flight 
fees collectible from the airlines, shall take into account interest on money of 
the City invested in property and equipment and deferred engineering costs. (See 
Note B5f). 

5. Allocation of Operating Revenues: 

The Ordinance requires the allocation of revenues for specified purposes in the 
following order of priority: 

a. Ordinary costs of operation and maintenance, but not in excess 
of the amount budgeted by the City for such purposes. 

b. Amounts equal to interest on bonds outstanding. During the 
six months ended June 30, 1975 interest of $4,408,874 was paid. 

c. The debt service reserve must be maintained at an amount equal 
to two years' interest requirements. 

During the six months ended June 30, 1975, an allocation of $9,576 
was made to the debt service reserve applicable to the Series of 
1972 Revenue Bonds. 

The debt service reserve requirement was fully funded as of June 
30, 1975. Bonds in the principal amount of $2,930,000 were pur- 
chased and retired during the six months ended June 30, 1975; 
accordingly, the applicable interest requirement for these bonds 
($300,055) was transferred to the sinking fund. 



-10- 



5. Allocation of Operating Revenues: (Continued) 

d. For the sinking fund, a minimum payment ranging from $4,452,000 
for 1975 ($2,226,000 for the six months ended June 30, 1975) to 
$14,545,000 in 1998 is required. Additional amounts are allocable 
to the sinking fund as explained in Note B5C ($300,055 for the six 
months ended June 30, 1975) and Note B5H ($2,937,696 for the six 
months ended June 30, 1975). The total amount added to the sink- 
ing fund from all sources during the six months ended June 30, 1975 
was $5,463,751. 

e. For reserve maintenance, $1,160,000 is funded annually ($580,000 
for the six months ended June 30, 1975) until $4,833,334 is accu- 
mulated. Major repairs, renewals and replacements may be paid 
for with these funds. During the six months ended June 30, 1975, 
expenditures for these purposes totaling $582,261 were made from 
this account. 

f. For emergency reserve, amounts (total for the six months ended 
June 30, 1975, $438,746) equal to the semi-annual provisions for 
(a) depreciation and amortization on assets acquired with City 
money (for the six months ended June 30, 1975, $87,289) and (b) 
interest on City money invested in airport assets (for the six 
months ended June 30, 1975, $351,457). These funds may be used 
to abate landing fees in the event the airport is closed. 

g. To the extent that revenues for the year as defined in the Ordi- 
nance, including deferred income from the preceding year, exceed 
'Airport expense" as defined, the excess shall be deferred income 
and considered as revenues of the next succeeding year. In ac- 
cordance with this provision, revenues of $7,510,661 for the six 
months ended June 30, 1975 have been so deferred in the Revenue 
Fundj to be carried over to reduce flight fee requirements for 
1976. 

h. Any remaining revenues after making the aforementioned allocations 
are to be allocated to the sinking fund ($2,937,696 for the six 
months ended June 30, 1975). 

Note C - Revenue Bond Retirement: 

Money in the sinking fund account is to be applied as rapidly as practicable to the 
retirement of bonds, by call, purchase in the open market or tender. 

Bonds may be redeemed by call, from funds provided by Airport revenues, at prices 
ranging downward from 105% of principal amount to par value, plus accrued interest, 
to December 31, 1991, and, thereafter, at par value plus accrued interest. Bonds 
also may be redeemed by purchase in the open market or tender at prices not in ex- 
cess of call prices. 

From various dates commencing January 1, 1975 (varying with the terms of the in- 
dividual bond issues) to December 31, 1994, the total bonds outstanding of any 
issue may also be redeemed from resources other than Airport revenues at various 
amounts (maximum 27o of principal amount) in excess of the aforementioned call 
prices, and thereafter, at par value, plus accrued interest. 



-11- 



Note C - Revenue Bond Retirement (Continued) 

Through June 30, 1975, bonds in the principal amount of $71,230,000 ($2,930,000 
in the six months ended June 30, 1975) have been purchased at a cost (exclusive 
of bond premium) of $65,801,984 ($2,703,116 in the six months ended June 30, 
1975), and retired, with funds provided by the sinking fund. Premiums in the 
amount of $528,890 ($8,275 in the six months ended June 30, 1975) have been paid 
on bonds purchased and retired; such premiums were charged to airport operations 
in the year of payment. Discounts on bonds retired are retained in the sinking 
fund and used to retire additional bonds. 

Note D - Use of Operating Revenues: 

The Bond Ordinance does not permit the use of operating revenues for capital im- 
provements or other expenditures not directly related to the operation of the 
Airport; however, the Airline Representative has agreed to substantially all such 
capital improvement expenditures, which have the effect of increasing flight fee 
requirements. 

Note E - Commitments: 

Work to be performed under uncompleted contracts in force for Airport facilities 
to be financed by Revenue Bond money aggregated approximately $828,770 at June 
30, 1975. 



-12- 



#C.O. 62 




CITY OF CHICAGO 



CHICAGO- O 1 HARE INTERNATIONAL AIRPORT 

FINANCIAL STATEMENTS 

FOR THE SIX MONTHS ENDED JUNE 30, 1976 



^ASPORTATION CENTER 
LIBRARY 

JAM 6 W7 

NORTHWESTERN UNiVERSlTv 



OFFICE OF THE CITY COMPTROLLER 




Y OF CHICAGO 
hard J. Daley, Mayor 



ARTMENT OF FINANCE 
m 501, City Hall 
cago, Illinois 60602 



k Burrus 

lomptroller 
744-7100 



ert E. Shaw 

Deputy Comptroller 
744-3233 



CHICAGO- O' HARE INTERNATIONAL AIRPORT 

FINANCIAL STATEMENTS 

FOR THE SIX MONTHS ENDED JUNE 30, 1976 



Prepared by the Accounting Division 
Office of the City Comptroller 
City of Chicago, Illinois 
December 7, 1976 




H J- 







ITY OF CHICAGO 
ichard J. Daley, Mayor 



EPARTMENT OF FINANCE 
oom 501, City Hall 
hicago, Illinois 60602 



lark Burrus 

y Comptroller 
2/744-7100 



3bert E. Shaw 

st Deputy Comptroller 
2/744-3233 



CONTENTS 



Pages 

Exhibit A - Balance Sheet - June 30, 1976 2 

Exhibit B - Conparative Statement of Revenue and Expense for 

the six months ended June 30, 1976 and 1975 3 

Exhibit C - Analysis of changes in reserves for the six months 

ended June 30, 1976 4 

Exhibit D - Analysis of changes in contributions for the six 

months ended June 30, 1976 5 

Exhibit E - Analysis of changes in retained earnings June 30, 

1976 6 

Schedule A-1-Reconciliation of "Net Revenues" as defined in 
Revenue Bond Ordinance for the six months ended 
June 30, 1976 and 1975 7 

Schedule A-2-Analysis of changes in reserve for construction 

for the six months ended June 30, 1976 8 

Notes to Financial Statements 9-15 



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O 



CITY OF CHICAGO 
CHICAGO-O'HARE INTERNATIONAL AIRPORT 



COMPARATIVE STATEMENT OF REVENUE AND EXPENSE 
FOR THE SIX MONTHS ENDED JUNE 30, 1976 AND 1975 



PERATING REVENUES (Note 1-E): 
Flight Fees, less Ramp Rental 
Credit of $2,795,070.00 
J'Rent, Concessions, and Utilities 
Total Operating Revenues 



Six Months Ended June 30 , 



1976 



$14,976,274.06 

16,234,111.16 

$31,210,385.22 



12Z5 



$13,441,859.02 

15,262,657.41 
$28,704,516.43 



PERATING EXPENSES: 
Salaries and Wages 
Depreciation 
Amortization of Deferred 

Engineering Costs 
Repairs and Maintenance - Including 
Expenditures from Reserve 
Maintenance Account 
Other Operating Expenses 

Total Operating Expenses 
Net Operating Income 



$ 9,705,770.09 
5,247,851.40 

24,534.04 



3,255,591.91 

6,448,352.08 

$24,682,099.52 

$ 6,528,285.70 



$ 9,025,246.71 
4,949,279.73 

24,534.02 



3,491. 
5,759 


125 
779 


14 
.15 


$23,249 


964 


75 


$ 5,454 


551 


.68 



DD: NON-OPERATING INCOME: 
Interest Earned on Investments: 
Unrestricted 
Restricted 

Total Non-Operating Income 
Total Income 



$ 742,378.32 

1,240,936.47 

$ 1,983,314.79 

$ 8,511,600.49 



$ 765,671.34 

1,277,403.10 

$ 2,043,074.44 

$ 7,497,626.12 



ESS: NON-OPERATING EXPENSE: 
Interest on Revenue Bonds 
Premium on Revenue Bonds Retired 

Total Non-Operating Expense 

Net Income 

DD (DEDUCT) ADJUSTMENTS TO REFLECT 
ORDINANCE BASIS OF ACCOUNTING: 
Depreciation 
Amortization of Deferred 

Engineering Costs 
Expenditures from Reserve 

Maintenance Account 
Interest earned on Investments - 

Restricted 
Interest on Revenue Bonds 
Allocation of Revenues: 

Revenue Bond Interest 

Debt Service 

Revenue Bond Retirement 

Reserve Maintenance 

Emergency Reserve 
Expenditures of Operating Revenue 

for Capital Improvements (Note 1C3) 

fCREASE (DECREASE) IN DEFERRED INCOME 

TO REDUCE FUTURE FLIGHT FEES - TO RETAINED EARNINGS 



$ 4,133,269.97 

45,750.00 

$ 4,179,019.97 

$ 4,332,580.52 



5,247,851.40 

24,534.04 

161,958.53 

( 1,240,936.47) 
4,133,269.97 

( 4,133,269.97) 

( 5,448,876.53) 
( 580,000.00) 
( 541,657.11) 



$ 4,408,874.20 

8,275.00 

$ 4,417,149.20 
$ 3,080,476.92 



4,949,279.73 

24,534.02 

582,261.36 

( 1,277,403.10) 
4,408,874.20 

( 4,408,874.20) 

( 9,576.00) 

( 5,163,696.30) 

( 580,000.00) 

( 438,745.61) 



( 1,357,968.99 ) ( 7,386,608.63 ) 



$ SQ7,4SS.39 ( S ft ?1Q 477 M ) 



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CITY OF CHICAGO 
CHICAGO-O'HARE INTERNATIONAL AIRPORT 

ANALYSIS OF CHANGES IN RETAINED EARNINGS 
JUNE 30, 1976 



EXHIBIT E 



Deferred 
Income to 
Reduce Future 
Flight Fees 



City 
Equity 



Total 



BALANCE - 

JANUARY 1, 1976 

Add: 

Increase in Deferred 

Income to Reduce Future 

Flight Fees 
Increase in Fixed Assets 

Acquired with Revenue 

Bond Money 
Revenue Bonds Retired 

during the six months 

ended June 30, 1976 

Total 
Balance 



$5,088,992.34 $ 766,485.41 $ 5,855,477.75 



$ 597,485.39 



56,845.44 



597,485.39 



56,845.44 



5,964,000.00 5,964,000.00 



$ 597,485.39 $6,020,845.44 $ 6,618,330.83 
$5,686,477.73 $6,787,330.85 $12,473,808.58 



Less : 

Provision for Depreciation 
of Assets Acquired with 
Revenue Bond Money 

BALANCE - 

June 30, 1976 



4,162,632.18 



4,162,632.18 



55,686^77.73 ft? , 674 . 698 . 67 ft 8,311 1 76 AO 



-6- 



SCHEDULE A-l 



CITY OF CHICAGO 
CHICAGO- 0' HARE INTERNATIONAL AIRPORT 

RECONCILIATION TO "NET REVENUES" AS DEFINED 
IN REVENUE BOND ORDINANCE 
FOR THE SIX MONTHS ENDED JUNE 30, 1976 AND 1975 



;et income 



JJD OR (DEDUCT) ADJUSTMENTS TO REFLECT 
ORDINANCE BASIS OF ACCOUNTING: 

Amounts Included Above in Determination 
of Net Income : 
Depreciation 
Amortization of Deferred 

Engineering Costs 
Expenditures from Reserve 

Maintenance Account 
Interest Earned on Investments - Restricted 
Interest on Revenue Bonds 
Amounts Not Included Above in Determination 
of Net Income: 

Expenditures of Operating 

Revenue for Capital Improvements (Note 1C3) 
Application of Deferred Income from 
Preceding Year as Reduction of 
Flight Fees 



NET REVENUES" AS DEFINED IN BOND ORDINANCE 

LLOCATION OF "NET REVENUES" IN ORDER OF 
PRIORITY (Note IF) : 
Revenue Bond Interest 
Debt Service 

Revenue Bond Retirement - Minimum Payment 
Reserve Maintenance 
Emergency Reserve 
Deferred Income to Reduce 

Flight Fees in Following Year 
Remainder - Additional Allocation 

to Revenue Bond Retirement 

3TAL ALLOCATION OF "NET REVENUES" 



Six Months Ended June 30. 
1976 1975 

$ 4,332,580.52 $ 3,080,476.92 



5,247,851.40 



24,534.04 



4,949,279.73 
24,534.02 



161,958.53 582,261.36 
( 1,240,936.47) ( 1,277,403.10) 
4,133,269.97 4,408,874.20 



( 1,357,968.99) ( 7,386,608.63) 

5,088.992.34 13,730,138.21 
$16,390.7,81 .34 $18,111 ,557.71 



$ 4,133,269.97 

2,338,000.00 
580,000.00 
541,657.11 

5,686,477.73 

3.110.876.53 



$ 4,408,874.20 

9,576.00 

2,226,000.00 

580,000.00 

438,745.61 

7,510,660.60 

2,937.696.30 



$16.390.281 .34 $18, m ,557.71 



;e notes to financial statements. 



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-8- 



CITY OF CHICAGO 
CHICAGO-O'HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 
JUNE 30, 1976 



NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES : 

A. United States Treasury Bills and Treasury Notes : 

Investments in these securities are carried at cost. Interest is 
accrued only on those securities having stated interest rates, i. e., 
Treasury Notes. Discounts and premiums are recognized at the time of 
maturity or sale. The aggregate market value of securities at June 30, 
1976, was $301,107.37 in excess of cost. Components of this excess are 
as follows: 



Cost 



Market 



Operation and Maintenance Account 

Treasury Bills 
Special Accounts: 

Treasury Bills 

Treasury Notes 
Construction Accounts: 

Treasury Bills 

Total 



$ 1,249,342.50 $ 1,254,711.70 

11,161,691.76 11,222,898.22 

37,111,835.95 37,326,368.20 

4,537,033.16 4,557,032.62 

$S4 1 059 1 903.37 SS4,361 010.74 



B. Accounts Receivable : 

In accordance with the Revenue Bond Ordinance, all accounts receivable 
uncollected for a period of thirty days after due date are considered un- 
collectible and are to be provided for. As of June 30, 1976, an allowance 
of $1,693,586.91 is recorded for these accounts. Approximately $293,000.00 
of this amount was subsequently collected through October 31, 1976. 

C. Fixed Assets and Other Assets : 

All fixed assets and other assets are recorded at cost. Land includes 
the costs of earthwork and landscaping. The financial statements reflect 
fixed assets and other assets acquired with Revenue Bond money and with 
money from other sources. These sources are: 

City money 

State and Federal money 
Public Utility, Concessionaire 
and Airline money 



-9- 



CITY OF CHICAGO 
CHICAGO- 0' HARE INTERNATIONAL AIRPORT 



NOTES TO FINANCIAL STATEMENTS 

JUNE 30, 1976 

(Continued) 



C. Fixed Assets and Other Assets (Continued ) : 

At June 30, 1976, the gross amount of those assets acquired with money 
from other sources is $111,087, 616 .50 less allowances for depreciation 
and amortization of $25,546,679.52. The net amount of these assets is 
reflected by source in the "Contributions" section of the Balance 
Sheet. 

1. Fixed assets acquired with City money include capitalized interest for 
the use of City money. Interest is capitalized from the commencement 
of the land improvement or construction activity through the year of 
completion. 

2. Fixed assets acquired with State and Federal money represent grants 
received that are reimbursements to the City for fixed assets ac- 
quired with City money. These grants are recognized only as received. 
As of June 30, 1976, a maximum of $8,449,099.92 may be realized in 
future periods from such grants. 

3. Fixed assets acquired with Public Utility, Concessionaire and Airline 
money are comprised of direct reimbursements and amounts expended 
directly and indirectly from operating revenues. The Revenue Bond 
Ordinance does not allow the expenditure of operating revenues for 
capital improvements. However, the Airline Representative has agreed 
to substantially all of these expenditures. Using operating revenues 
for this purpose has the effect of raising flight fees. 

In accordance with the Revenue Bond Ordinance, all replacements of 
vehicles, furnishings, signs and other equipment are expensed during 
the year of acquisition. 

D. Depreciation and Amortization : 

Depreciation on Buildings and Other Facilities is provided on a 
straight-line basis over the estimated useful life of the individual 
assets. Depreciation charges are begun in the year following the year 
of acquisition or completion. Deferred Engineering Costs with an 
original balance of $1,226,701.79 are being amortized on a straight- 
line basis over 25 years. 



-10- 



CITY OF CHICAGO 
CHI CAGO- ' HARE INTERNATIONAL AIRPORT 



NOTES TO FINANCIAL STATEMENTS 

JUNE 30, 1976 

(Continued) 



E. Revenues : 

In accordance with the Revenue Bond Ordinance, all operating revenues 
and unrestricted interest earned on investments are accounted for 
through the Revenue Fund. These revenues are to be allocated first to 
the Operation and Maintenance Account and then allocated in the follow- 
ing order of priority to the following special accounts: 

Revenue Bond Interest 

Debt Service 

Revenue Bond Retirement 

Reserve Maintenance 

Emergency Reserve 

Further explanation of the allocations 

for the six months ended June 30, 1976 are 

detailed in Note IF. 

Restricted interest earned on investments is comprised of: 



Special Accounts: 
Reserve Maintenance 
Emergency Reserve 

Construction Accounts 

Total 



$ 57,257.05 
1,061,260.66 



$1,118,517.71 
122,418.76 

$1.?40.<nfLAZ 



While the restricted interest of the special accounts is accounted for 
through the Revenue Fund, no restricted interest is included in the 
above allocation of revenues. Restricted interest of the construction 
accounts is accounted for in the individual construction accounts. 

F. Allocation of Revenues : 

The Revenue Bond Ordinance requires the allocation of revenues for 
specified purposes in the following order of priority: 

1. For ordinary costs of operation and maintenance, but not in excess 
of the amount budgeted by the City for such purposes. 

2. For amounts equal to interest on bonds outstanding. Interest of 
$4,133,269.97 was paid during the six months ended June 30, 1976. 



-11- 



CITY OF CHICAGO 
CHICAGO- 0' HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 

JUNE 30. 1976 

(Continued) 

F. Allocation of Revenues (Continued ) : 

3. To maintain the balance of the Debt Service Reserve at an amount equal 
to two years' interest requirements. All revenue bond issues were 
fully funded at December 31, 1975, through allocations made in prior 
years. Bonds in the principal amount of $5,964,000.00 were purchased 
during the six months ended June 30, 1976 and the corresponding in- 
terest requirement of $618,075.00 for the six months ended June 30, 
1976, was transferred to the Revenue Bond Retirement Reserve. 

4. For required minimum payments to the Revenue Bond Retirement Reserve, 
which range from $4,676,000.00 for 1976 ($2,338,000.00 for the six 
months ended June 30, 1976) to $14,545,000 in 1998. Additional 
allocations for the six months ended June 30, 1976 are $618,075.00 
and $3,110,876.53 as explained in Notes F-3 and F-8 respectively. 
The total allocation to the Revenue Bond Retirement Reserve during 
the six months ended June 30, 1976 was $6,066,951.53. 

5. For annual payment of $1, 160,000.00 ($580,000.00 for the six months 
ended June 30, 1976) to Reserve Maintenance until $4,833,334.00 is 
accumulated in the Reserve. This money is available for the payment 
of major repairs, renewals and replacements. Expenditures of 
$161,958.53 were made from this account during the six months ended 
June 30, 1976 for the specified purposes. 

6. To pay to the Emergency Reserve an amount equal to the sum of the semi- 
annual provisions for depreciation and amortization of fixed and 
other assets acquired with City money and interest on City money 
invested in fixed and other assets of the Airport. 

The components of this amount for the six months ended June 30, 1976 are 

Depreciation $ 89,744.84 

Amortization 24,534.04 

Interest 427.378.23 

Total 5^41 .6S7.11 

Monies held to the credit of the emergency reserve account shall be 
treated as revenues to provide for the abatement of landing fees in 
the event that the Airport is closed. 



-12- 



CITY OF CHICAGO 
CHICAGO-O'HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 

JUNE 30, 1976 

(Continued) 

F. Allocation of Revenues (Continued ) : 

7. To provide for deferred income to reduce future flight fees. To 
the extent that revenues for the year as defined in the Ordinance, 
including the application of deferred income from the previous year, 
exceed "Airport expense" as defined, the excess shall be considered 
deferred income and as revenues of the next succeeding year. For 
the six months ended June 30, 1976 $5,686,477.73 has been deferred 
to reduce flight fees for 1977. 

8. To provide for retirement of Revenue Bonds in addition to minimum 
payment referred to in Note F-4. Any remaining revenues after 
making the previously listed allocations shall be allocated to the 
Revenue Bond Retirement Reserve , $3,110,876.53 was so credited for 
the six months ended June 30, 1976. 

NOTE 2 - REVENUE BONDS AND RETIREMENT 

A. Revenue Bonds : 

The Chicago-O'Hare International Airport Revenue Bonds were issued 
under the authority of an ordinance adopted December 29, 1958, and 
subsequent supplemental ordinances. The Bonds were issued to pro- 
vide monies for the extension and improvement of the Airport and 
its facilities. The following information is presented regarding 
the status of the Bonds as of June 30, 1976; 

Amount authorized $238,000,000.00 

Amount sold 232,000,000.00 

Amount called or purchased 

and retired 83,715,863.75 

Amount called but not 

presented to bank trustee 

for retirement 25,136.25 

Amount outstanding 148,259,000.00 

The Revenue Bonds outstanding are composed of the following: 

4-3/4% Series of 1959 $ 65,652,000.00 

4-3/4% Series A of 1961 13,697,000.00 

4-1/4% Series B of 1961 2,050,000.00 

4-1/2% Series of 1967 2,998,000.00 

5 % Series of 1968 11,787,000.00 
6.80 % Series of March, 1970 44,625,000.00 

6 % Series of 1972 7,450,000.00 

Total $148, ^9, 000. 00 

-13- 



) 



CITY OF CHICAGO 
CHICAGO-O'HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 

JUNE 30, 1976 

(Continued) 



A. Revenue Bonds (Continued ) : 

The unexpended proceeds from Revenue Bond issue amounted to 
$4,414,022.17 at June 30, 1976. This amount is comprised of: 

Construction Accounts' Assets $4,580,645.63 
Less - Construction Accounts' 

Liabilities 166,623.46 

Reserve for Construction $4 ,414 ,0?? . 1 7 

B. Retirement : 

Revenue Bonds are to be retired as rapidly as practicable through 
the revenues allocated to the Revenue Bond Retirement Reserve. Bonds 
may be redeemed by call at process ranging downward from 105% to 100% of 
principal amount plus accrued interest to December 31, 1991, and 
thereafter, at par value plus accrued interest. In addition, Bonds may 
be redeemed by purchase in the open market or tender at prices not in 
excess of the next predetermined call prices. The following information 
is presented regarding Bonds purchased for retirement through June 30, 

1976: 

Six months ended 

June 30, 1976 Cumulative 

Par value of Bonds purchased $5,964,000.00 $83,741,000.00 

Cost of Bonds purchased 5,691,124.40 77,609,844.50 
Premiums paid on Bonds 

purchased 45,750.00 626,842.50 

Premiums paid on Bonds purchased are charged to Airport operations 
in the year of payment. Discounts on Bonds purchased are retained in 
in the Bond Retirement Reserve to purchase additional Bonds. 

Bonds also may be redeemed with monies that are not allocations of 
revenues to the Retirement Reserve. Call prices for this type of re- 
demption have been adopted which exceed the previously referred to 
call prices by not more than 2% of principal amount. As of June 30, 
1976, the City has never opted to retire Airport Bonds by this method. 



NOTE 3 - OTHER INFORMATION 



A. The Revenue Bond Ordinance provides that "Airport Expense," for 
the purpose of computing flight fees collectible from the airlines, 
shall include depreciation and amortization only on fixed assets ac- 
quired with City money and interest on City money invested in land, 
buildings, other facilities and deferred engineering costs. See Note F-6 

-14- 



CITY OF CHICAGO 
CHI CAGO-O' HARE INTERNATIONAL AIRPORT 



NOTES TO FINANCIAL STATEMENTS 



JUNE 30, 1976 
(Continued) 



NOTE 3 - OTHER INFORMATION -(Continued ) 

B. The Reserve for Matured Interest on Revenue Bonds is comprised of 
the following: 

Payment to bank trustee for 

coupons due July 1, 1976 $4,030,981.25 

Prior payments to bank trustee - 

coupons not presented for 

redemption 1,442,213.66 

Total $5,473,194.91 

C. The Reserve for Matured Bonds represents bonds called but not pre- 
sented to the bank trustee for retirement. 



-15- 



#C.O. 62 



» • - • i 




liv ' Ai CENTER 

LIBRARY 

1978 

NORTH WES'I LRiNI UNIVERSITY 



CITY OF CHICAGO 



CHICAGO- 0' HARE INTERNATIONAL AIRPORT 

FINANCIAL STATEMENTS 
FOR THE SIX MONTHS ENDED JUNE 30, 1977 






AN 



OFFICE OF THE CITY COMPTROLLER 



97- lc^ 

/ve. 



t 




TY OF CHICAGO 
chael A. Bilandic, Mayor 



PARTMENT OF FINANCE 
ram 501, City Hall 
icago, Illinois 50602 



3rk Burrus 

Comotroiler 
/744-71C0 



bert E. Shaw 

t Deout> Comotrol'er 
7744-3233 



CHICAGO- 0' HARE INTERNATIONAL AIRPORT 

FINANCIAL STATEMENTS 
FOR THE SIX MONTHS ENDED JUNE 30, 1977 



Prepared by the Accounting Division 
Office of the City Comptroller 
City of Chicago, Illinois 
November 23, 1977 






HE 




rY OF CHICAGO 
hae! A. Bilandic, Mayor 



PARTMENT OF FINANCE 
om 501, City Hall 
cago, Illinois 50502 



Tk Burrus 

Comotroller 
744-71C0 



3ert E. Shaw 

Oeouty Comotroller 
744-3233 



CONTENTS 



Pases 



Exhibit A - Balance Sheet - June 30, 1977 

Exhibit B - Comparative Statement of Revenue and Expense for 
the six months ended June 30, 1977 and 1976 

Exhibit C - Analysis of changes in reserves for the six months 
ended June 30, 1977 

Exhibit D - Analysis of changes in contributions for the six 
months ended June 30, 1977 

Exhibit E - Analysis of changes in retained earnings June 30, 
1977 

Schedule A-1-Reconciliation of "Net Revenues" as defined in 
Revenue Bond Ordinance for the six months ended 
June 30, 1977 and 1976 

Schedule A-2-Analysis of changes in reserve for construction 
for the six months ended June 30, 1977 

Notes to Financial Statements 



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Ill I U| ItillAL-U 

CHICAGO- 0' PARE INTERNATIONAL AIRPORT 



WWTV^jV/ t$ 



COMPARATIVE STATEMENT OF REVENUE AND EXPENSE 
FOR THE SIX MONTHS ENDED JUNE 30. 1977 AND 1976 



Six Months Ended June 30. 
1977 1976 



'RATING REVENUES (Note 1-E) : 
"light Fees, less Ramp Rental 

Credit of $2,795,070.00 
lent, Concessions, and Utilities 
Total Operating Revenues 

pATING EXPENSES: 
Salaries and Wages 
Depreciation 
Amortization of Deferred 

Engineering Costs 
lepairs and Maintenance - Including 

Expenditures from Reserve 

Maintenance Account 
)ther Operating Expenses 

Total Operating Expenses 
Net Operating Income 

NON-OPERATING INCOME: 
interest Earned on Investments: 
Unrestricted 
Restricted 

Total Non- Operating Income 
Total Income 

I: NON-OPERATING EXPENSE: 
interest on Revenue Bonds 
'remium on Revenue Bonds Retired 

Total Non-Operating Expense 

Net Income 

(DEDUCT) ADJUSTMENTS TO REFLECT 
1RDINANCE BASIS OF ACCOUNTING: 
Depreciation 
Amortization of Deferred 

Engineering Costs 
Expenditures from Reserve 

Maintenance Account 
Interest earned on Investments - 

Restricted 
Interest on Revenue Bonds 
Allocation of Revenues: 

Revenue Bond Interest 

Revenue Bond Retirement 

Reserve Maintenance 

Emergency Reserve 
Expenditures of Operating Revenue 

for Capital Improvements (Note 1C3) 

REASE (DECREASE) IN DEFERRED INCOME 

REDUCE FUTURE FLIGHT FEES - TO RETAINED EARNINGS 



$19,680,153.91 

16.943.029.62 

S36.623.188.53 



$10,196,689.44 
5,339,391.35 

24,534.04 



4,271,214.63 

6.863.190.90 

S26. 695.020.36 

$ 9.928.168.17 



$ 737,471.55 

1,094,290.54 

S 1.831.762.09 

311,759,930.26 



$ 3,873,484.38 

120,135.00 

$ 3.993.619.38 

$ 7,766,310.88 



5,339,391.35 

24,534.04 

483,302.65 

( 1,094,290.54) 
3,873,484.38 

( 3,873,484.38) 

( 5,708,662.12) 

( 580,000.00) 

( 597,749.70) 

( 691,558.73 ) 

$ L Q41 ,°77 .3? 



$14,976,274.06 

16.234.111.16 

$31,210.385.22 



$ 9,705,770.09 
5,247,851.40 

24,534.04 



3,255,591.91 

6.448.352.08 

S24.682.099.52 

S 6,528.285.70 



$ 742,378.32 

1.24Q.936.47 

S 1.983.314.79 

S 8.511.600.49 



$ 4,133,269.97 

45,750.00 

S 4,179.019.97 

$ 4,332,580.52 



5,247,851.40 

24,534.04 

161,958.53 

( 1,240,936.47) 
4,133,269.97 

( 4,133,269.97) 

( 5,443,876.53) 

( 580,000.00) 

( 541,657.11) 

( 1,357.968.99 ) 
$ S97 .48^ . ^Q 



notes to financial statements 



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tAhLUL. 



CITY OF CHICAGO 
CHICAGO- 0' FARE INTERNATIONAL AIRPORT 

ANALYSIS OF CHANGES IN RETAINED EARNINGS 
JUNE 30, 1977 



Deferred 
Income to 
Reduce Future City 
Flight Fees Equity Total 

BALANCE - 

JANUARY 1, 1977 3 8.617.338.85 $2.703.625.14 Sll . 320. 963 . 99 

Add: 

Increase in Deferred 

Income to Reduce Future 

Flight Fees $ 4,941,277.83 $ - $ 4,941,277.83 

Increase in Fixed Assets 

Acquired with Revenue 

Bond Money - 3,075.06 3,075.06 

Revenue Bonds Retired 

during the six months 

ended June 30, 1977 ; 8.903,000.00 8.903.000.00 

Total S 4,941.277.83 $8.906.075.06 S13 .347 . 352 . 39 

Balance $13,558,616.63 $ 11 ,609, 700 , 20 $25,163,316.83 

Less : 

Provision for Depreciation 
of Assets Acquired with 
Revenue Bond Money - 4.165.33? - 7 1 4,165.835.71 

BALANCE - 

June 30, 1977 $i? ^58 pifi.^a $JLM3 3£kJ& S'n on? 4£J .17 



-6- 



bCrtLiJUUL A-l 



CITY OF CHICAGO 
CHICA GO- ' PARE INTERNA! I ON AL A IR PORT 

RECONCILIATION TO "NET REVENUES" AS DEFINED 
IN REVENUE BOND ORDINANCE 
FOR THE SIX MONTHS ENDED JUNE 30, 1977 AND 1976 



Six Months Ended Jane 30 



1977 



1976 



INCOME 

OR (DEDUCT) ADJUSTMENTS TO REFLECT 
RDINANCE BASIS OF ACCOUNTING: 
Amounts Included. Above in Determination 
of Net Income: 
Depreciation 
Amortization of Deferred 

Engineering Costs 
Expenditures from Preserve 

Maintenance Account 
Interest Earned on Investments - Restricted 
Interest on Revenue Bonds 
Amounts Not Included Above in Determination 
of Net Income : 

Expenditures of Operating 

Revenue for Capital Improvements (Note 1C3) 
Application of Deferred Income from 
Preceding Year as Reduction of 
Flight Fees 

I REVENUES" AS DEFINED IN BOND ORDINANCE 

OCATION OF "NET REVENUES" IN ORDER OF 
RIORITY (Note IF) : 

Revenue Bond Interest 

Revenue Bond Retirement - Minimum Payment 

Reserve Maintenance 

Emergency Reserve 

Deferred Income to F.educe 

Flight Fees in Following Year 

Remainder - Additional Allocation 
to Revenue 3ond Retirement 

AL ALLOCATION OF "NET REVENUES" 



? 7,766,310.88 S 4,332,530.52 



5,339,391.35 
24 , 5 34 . 04 



5,247,851 
24,534 



483,302.65 161,953 

( 1,094,290.54) ( 1,240,936 

3,873,484.38 4,133,269 



40 

04 

53 
47) 

97 



( 



691,558.73) ( 1,357,968.99) 



8.617,338.85 
S">£l ?i ; s jig jag 

$ 3,873,484.38 

2,461,000.00 

580,000.00 

597,749.70 

13,558,616.68 

3.247.662.12 

s 2 4 3 1 8 , 5 1 2 . 9 8 



5 ,088.Q Q 2,3^ 



51 6 , 3QQ . ?8 ] J34 



$ 4 


,133,269 


.97 


: 


,338,000 


.00 




580,000 


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541,657 


.11 


5 


,636,477 


.73 


3 


.110.876 


53 


$16 


390. ?81 


1L 



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CITY OF CHICAGO 
CHICAGO- 'HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 
JUNE 30, 1977 



NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES : 

A. United States Treasury Bills and Treasury Notes : 

Investments in these securities are carried at cost. Interest is 
accrued only on those securities having stated interest rates, 1. e., 
Treasury Notes. Discounts and premiums are recognized at the time of 
maturity or sale. The aggregate market value of securities at June 30, 
1977, was $571,954.31 in excess of cost. Components of this excess are 
as follows : 



Operation and Maintenance Account 

Treasury Bills 
Special Accounts : 

Treasury Bills 

Treasury Notes 
Construction Accounts : 

Treasury Bills 



Total 



Cost 



Market 



$ 3,186,046.41 $ 3,187,977.5^ 



14,171,910.47 
32,921,720.32 



14,171,219.06 
33,477,787.80 



4,588,479.09 A, 603, 126.20 
$54,858. 1 5JL2J $55,^0 110.50 



B. Accounts Receivable: 

In accordance with the Revenue Bond Ordinance, all accounts receivable 
uncollected for a period of thirty days after due date are considered un- 
collectible and are to be provided for. As of June 30, 1977, an allowance 
of $1,556,356.23 is recorded for these accounts. Approximately $505,000.00 
of this amount was subsequently collected through October 31, 1977. 

C. Fixed Assets : 

All fixed assets are recorded at cost. Land includes the costs of 
earthwork and landscaping. The financial statements reflect fixed assets 
acquired with Revenue Bond money and with money from other sources. These 
sources are: 

City Money 

State and Federal money 
Public Utility, Concessionaire 
and Airline money 



-9"- 



CITY OF CHICAGO 
CHICAGO- 'HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 

JUNE 30, 1977 

(Continued) 



C. Fixed Assets (Continued): 

At June 30, 1977, the gross amount of those assets acquired with money 
from other sources is $115,448,456.52 less allowances for depreciation 
of $26,798,475.92. The net amount of these assets is reflected by 
source in the "Contributions" section of the Balance Sheet. 

1. Fixed assets acquired with City money include capitalized interest for 
the use of City money. Interest is capitalized from the commencement 
of the land improvement or construction activity through the year of 
completion. 

2. Fixed assets acquired with State and Federal money represent grants 
received that are reimbursements to the City for fixed assets ac- 
quired with City money. These grants are recognized only as received. 
As of June 30, 1977, a maximum of $21,792,254.12 may be realized in 
future periods from such grants. 

3. Fixed assets acquired with Public Utility, Concessionaire and Airline 
money are comprised of direct reimbursements and amounts expended 
directly and indirectly from operating revenues. The Revenue Bond 
Ordinance does not allow the expenditure of operating revenues for 
capital improvements. However, the Airline Representative has agreed 
to substantially all of these expenditures. Using operating revenues 
for this purpose has the effect of raising flight fees. 

In accordance with the Revenue Bond Ordinance, all replacements of 
vehicles, furnishings, signs and other equipment are expensed during 
the year of acquisition. 

D. Depreciation and Amortization : 

Depreciation on Buildings and Other Facilities is provided on a 
straight-line basis over the estimated useful life of the individual 
assets. Depreciation charges are begun in the year following the year 
of acquisition or completion. Deferred Engineering Costs with an 
original balance of $1,226,701.79 are being amortized on a straight- 
line basis over 25 years. 



-10- 



CITY OF CHICAGO 
CHICAGO-O'HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 

JUNE 30. 1977 

(Continued) 



E . Revenues : 

In accordance with the Revenue Bond Ordinance, all operating revenues 
and unrestricted interest earned on investments are accounted for 
through the Revenue Fund. These revenues are to be allocated first to 
the Operation and Maintenance Account and then allocated in the follow- 
ing order of priority to the following special accounts: 

Revenue Bond Interest 

Debt Service 

Revenue Bond Retirement 

Reserve Maintenance 

Emergency Reserve 

Further explanation of the allocations 

for the six months ended June 30 , 1977 are 

detailed in Note IF. 

Restricted interest earned on investments is comprised of: 

Special Accounts : 

Reserve Maintenance S 58,639.84 

Emergency Reserve 937,337.59 $ 995,977.43 

Construction Accounts 98 , 313 .11 



Total $1 ,QQA .QQQ,^ 



v. 



While the restricted interest of the special accounts is accounted for 
through the Revenue Fund, no restricted interest is included in the 
above allocation of revenues. Restricted interest of the construction 
accounts is accounted for in the individual construction accounts. 

F. Allocation of Revenues : 

The Revenue Bond Ordinance requires the allocation of revenues for 
specified purposes in the following order of priority: 

1. For ordinary costs of operation and maintenance, but not in excess 
of the amount budgeted by the City for such purposes. 

2. For amounts equal to interest on bonds outstanding. Interest of 
$3,873,484.38 was paid during the six months ended June 30, 1977. 



11- 



CITY OF CHICAGO 
CHICAGO- 'HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 

JUNE 30, 1977 

(Continued) 

F. Allocation of Revenues (Continued): 

3. To maintain the balance of the Debt Service Reserve at an amount equal 
to two years' interest requirements. All revenue bond issues were 
fully funded at December 31, 1975, through allocations made in prior 
years. Bonds in the principal amount of $8,903,000.00 were purchased 

or called during the six months ended June 30, 1977 and the corresponding 
interest requirement of $935,385.00 for the six months ended June 30, 
1977, was transferred to the Revenue Bond Retirement Reserve. 

4. For required minimum payments to the Revenue Bond Retirement Reserve, 
which range from $4,922,000.00 for 1977 ($2,461,000.00 for the six 
months ended June 30, 1977) to $14,545,000.00 in 1998. Additional 
allocations for the six months ended June 30, 1977 are $935,385.00 
and $3,247,662.12 as explained in Notes F-3 and F-8 respectively. 
The total allocation to the Revenue Bond Retirement Reserve during 
the six months ended June 30, 1977 was $6,644,047.12. 

5. For annual payment of $1,160,000.00 ($580,000.00 for the six months 
ended June 30, 1977) to Reserve Maintenance until $4,833,334.00 is 
accumulated in the Reserve. This money is available for the payment 
of major repairs, renewals and replacements. Expenditures of 
$483,302.65 were made from this account during the six months ended 
June 30, 1977 for the specified purposes. 

6. To pay to the Emergency Reserve an amount equal to the sum of the semi- 
annual provisions for depreciation and amortization of fixed and other 
assets acquired with City money and interest on City money invested 

in fixed and other assets of the Airport. 

The components of this amount for the six months ended June 30, 1977 are: 

Depreciation $105,501.53 
Amortization 24,534.04 

Interest 467,714.13 

Total $597,7^0-7.0. 

Monies held to the credit of the emergency reserve account shall be treated 
as revenues to provide for the abatement of landing fees in the event that 
the Airport is closed. 



-12- 



CITY OF CHICAGO 
CHICAGO-O'HARE TNTE RNATIQNAI AIRPORT 

NOTES TO FINANCIAL STATEMENTS 

JUNE 30, 1977 

(Continued) 

F. Allocation of Revenues (Continued): 

7. To provide for deferred income to reduce future flight fees. To 
the extent that revenues for the year as defined in the Ordinance, 
including the application of deferred income from the previous year, 
exceed "Airport expense" as defined, the excess shall be considered 
deferred income and as revenues of the next succeeding year. For 
the six months ended June 30 v 1977 $13,558,616.63 has been deferred 
to reduce flight fees for 1978. 

8. To provide for retirement of Revenue Bonds in addition to minimum 
payment referred to in Note F-4, Any remaining revenues after making 
the previously listed allocations shall be allocated to the Revenue 
Bond Retirement Reserve, 33,247,662.12 was so credited for the six 
months ended June 30, 1977. 

OTE 2 - REVENUE BONDS AND RETIREMENT 

A. Revenue Bonds : 

The Chicago-O'Hare International Airport Revenue Bonds were issued 
under the authority of an ordinance adopted December 29, 1958, and 
subsequent supplemental ordinances. The Eonds were issued to pro- 
vide monies for the extension and improvement of the Airport and 
its facilities. The following information is presented regarding 
the status of the Bonds as of June 30, 1977: 

Amount authorized $238,000,000.00 

Amount sold 232,000,000.00 

Amount called or 
purchased and retired 94,588,255.00 

Amount called but not 
presented to bank trustee 
for retirement 2,146,745.00 

Amount outstanding 135,265,000.00 

The Revenue Bonds outstanding are composed of the following: 

4-3/4% Series of 1959 $ 59,065,000.00 

4-3/4% Series A of 1961 12,258,000.00 

4-1/4% Series B of 1961 1,640,000.00 

4-1/2% Series of 1967 2,608,000.00 

5 % Series of 1968 10,684,000.00 
6.80% Series of March, 

1970 42,010,000.00 

6 % Series of 1972 7,000,000.00 

Total sns ?ss oon.no 

-13- 



CITY OF CHICAGO 
CHICAGO- O'KARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 

JUNE 30, 1977 

(Continued) 

A. Revenue Bonds (Continued): 

The unexpended proceeds from Revenue Bond issue amounted to 
$4,488,056.53 at June 30, 1977. This amount is comprised of: 

Construction Accounts' Assets $4,623,203.99 

Less - Construction Accounts ' 

Liabilities 135,147.46 

Reserve for Construction 54- . 4.88 | 056 , 5? 

B. Retirement : 

Revenue Bonds are to be retired as rapidly as practicable through 
the revenue allocated to the Revenue Bond Retirement Reserve. Bonds 
may be redeemed by call at prices ranging downward from 105% to 100% of 
principal amount plus accrued interest to December 31, 1991, and there- 
after, at par value plus accrued interest. In addition, Bonds may be 
redeemed by purchase in the open market or tender at prices not in excess 
of the next predetermined call prices. The following information is 
presented regarding Bonds purchased for retirement through June 30,1977: 

Six months ended 

June 30. 1977 Cumulative 

Par value of Bonds purchased or called $8,903,000.00 396,735,000.00 

Cost of Bonds purchased or called 8,847,678.75 90,440,225.75 
Premiums paid on Bonds purchased 

or called 120,135.00 777,690.00 

Premiums paid on Bonds purchased are charged to Airport operations in 
the year of payment. Discounts on Bonds purchased are retained in the Bond 
Retirement Reserve to purchase additional Bonds. 

Bonds also may be redeemed with monies that are not allocations of 
revenues to the Retirement Reserve. Call prices for this type of re- 
demption have been adopted which exceed the previously referred to call 
prices by not more than 27o of principal amount. As of June 30, 1977, the 
City has never opted to retire Airport Bonds by this method. 

3 - OTHER INFORMATION 

A. The Revenue Bond Ordinance provides that "Airport Expense," for the 
purpose of computing flight fees collectible from the airlines, shall 
include depreciation and amortization only on fixed assets acquired with 
City money invested in land, building, other facilities and deferred 
engineering costs. See Note F-6. 



-14- 



CITY OF CHICAGO 
CHICAGO- 'HARE INTERNATIONAL AIRPORT- 
NOTES TO FINANCIAL STATEMENTS 
JUNE 30, 1977 
(Continued) 

NOTE 3 - OTHER INFORMATION - (Continued) 

B. The Reserve for Matured Interest on Revenue Bonds is comprised of 
the following: 

Payment to bank trustee for 

coupons due July 1, 1977 $3,761,911.25 

Prior payments to bank trustee - 

coupons not presented for 

redemption 110,282.16 

Total S3 37?,iq?.M 

C. The Reserve for Matured Bonds represents bonds called but not pre- 
sented to the bank trustee for retirement. 



-15- 



/ 



1 





CITY OF CHICAGO 



CHI CAGO-0 1 HARE INTERNATIONAL AIRPORT 

FINANCIAL STATEMENTS 
FOR THE SIX MONTHS ENDED JUNE 30, 1978 



DAM 



37 7C4 
j "7 8 



OFFICE OF THE CITY COMPTROLLER 

TRANSPORTATION LIBRARY 

NOV 15 1980 
NORTHWESTERN UNIVERSITY 




Y OF CHICAGO 

hael A. Biiandic, Mayor 



PARTMENTOF FINANCE 
im 501 , City Hall 
cago, Illinois 60602 



k Burrus 
Comptroller 
/744-7100 



lert E. Shaw 

Deputy Comptroller 
/744-3233 



CHI CAGO- 0' HARE INTERNATIONAL AIRPORT 

FINANCIAL STATEMENTS 
FOR THE SIX MONTHS ENDED JUNE 30, 1978 



Prepared by the Accounting Division 
Office of the City Comptroller 
City of Chicago, Illinois 
November 21, 1978 



CHICAGO - CITY OF THE "I WILL" SPIRIT 



TRANSPORTATION 
LIBRA >y 







FY OF CHICAGO 
chael A. Bilandic, Mayor 



PARTMENT OF FINANCE 
om 501 , City Hall 
icago, Illinois 60602 



rk Burrus 

Comptroller 
J/744-7100 



jert E. Shaw 

it Deputy Comptroller 

7744-3233 



CONTENTS 



Exhibit A - Balance Sheet - June 30, 1978 

Exhibit B - Comparative Statement of Revenue and Expense for 
the six months ended June 30, 1978 and 1977 

Exhibit C - Analysis of changes in reserves for the six months 
ended June 30, 1978 

Exhibit D - Analysis of changes in contributions for the six 
months ended June 30, 1978 

Exhibit E - Analysis of changes in retained earnings June 30, 
1978 

Schedule A-1-Reconciliation of "Net Revenues" as defined in 
Revenue Bond Ordinance for the six months ended 
June 30, 1978 and 1977 

Schedule A-2-Analysis of changes in reserve for construction 
for the six months ended June 30, 1978 

Notes to Financial Statements 



-1- 



Pages 

2 



8 
9-15 



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v_.jl.li ur L.n.i_ua<aU 



CHICAGO-O'HARE INTERNATIONAL AIRPORT 



COMPARATIVE STATEMENT OF REVENUE AND EXPENSE 
FOR THE SIX MONTHS ENDED JUNE 30, 1978 AND 1977 



Six Months Ended June 30, 
1978 1977 



)PERATING REVENUES (Note 1-E): 
Flight Fees, less Ramp Rental 

Credit of $2,795,070.00 
Rent, Concessions, and Utilities 
Total Operating Revenues 

)PERATING EXPENSES: 
Salaries and Wages 
Depreciation 
Amortization of Deferred 

Engineering Costs 
Repairs and Maintenance - Including 
Expenditures from Reserve 
Maintenance Account 
Other Operating Expenses 

Total Operating Expenses 
Net Operating Income 

DD: NON-OPERATING INCOME: 
Interest Earned on Investments: 
Unrestricted 
Restricted 

Total Non-Operating Income 
Total Income 

ESS: N0N- OPERATING EXPENSE: 
Interest on Revenue Bonds 
Premium on Revenue Bonds Retired 

Total Non-Operating Expense 

Net Income 

i 

DD (DEDUCT) ADJUSTMENTS TO REFLECT 
ORDINANCE BASIS OF ACCOUNTING: 
Depreciation 
Amortization of Deferred 

Engineering Costs 
Expenditures from Reserve 

Maintenance Account 
Interest earned on Investments - 

Restricted 
Interest on Revenue Bonds 
Allocation of Revenues : 

Revenue Bond Interest 

Revenue Bond Retirement 

Reserve Maintenance 

Emergency Reserve 
Expenditures of Operating Revenue 

for Capital Improvements (Note 1C3) 

^CREASE (DECREASE) IN DEFERRED INCOME 
TO REDUCE FUTURE FLIGHT FEES - TO RETAINED EARNINGS 



$16,201,268.95 

18,658,054.68 

$34,859,323.63 



$19,680,158.91 

16,943,029.62 

$36,623,188.53 



$11,466,761.72 $10,196,689.44 
5,528,337.04 5,339,391.35 



24,534.04 



6,367,917.37 

8,908,277.64 

$32,295,827.81 

$ 2,563,495.82 



$ 939,164.59 

1,504,541.89 

$ 2,443,706.48 

$ 5,007,202.30 



$ 3,363,119.68 

191,764.25 

$ 3,554,883.93 

$ 1,452,318.37 



24,534.04 



4,271,214.63 

6,863,190.90 

$26,695,020.36 

$ 9,928,168.17 



$ 737,471.55 

1,094,290.54 

$ 1,831,762.09 

$11,759,930.26 



$ 3,873,484.38 

120,135.00 

$ 3,993,619.38 

$ 7,766,310.88 



5,528 337.04 5,339,391.35 

24,534.04 24,534.04 

1,291,047.24 483,302.65 

( 1,504,541.89) ( 1,094,290.54) 

3,363,119.68 3,873,484.38 

( 3,363,119.68) ( 3,873,484.38) 

( 6,219,026.82)( 5,708,662.12) 

( 580,000.00) ( 580,000.00) 

( 602,005.56)( 597,749.70) 

( 227,975.21 ) ( 691,558.73 ) 

r$ 837.312.79) $ 4,941,277.83 



ie notes to financial statements, 



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~ 5 - 



EXHIBIT E 



CITY OF CHICAGO 
CHI CAGO-O' HARE INTERNATIONAL AIRPORT 



ANALYSIS OF CHANGES IN RETAINED EARNINGS 



JUNE 30, 1978 



BALANCE - 

JANUARY 1, 1978 

Add: 

Increase in Deferred 

Income to Reduce Future 

Flight Fees 
Increase in Fixed Assets 

Acquired with Revenue 

Bond Money- 
Revenue Bonds Retired 

during the six months 

ended June 30, 1978 

Total 

Balance 

Less: 

Provision for Depreciation 
of Assets Acquired with 
Revenue Bond Money 

BALANCE - 

June 30, 1978 



Deferred 
Income to 
Reduce Future 
Flight Fees 



City 
Equity 



Total 



$21,854,982.73 $12,901,271.07 $34,756,253.80 



($ 837,312.79) $ 



36.36 



($ 837,312.79) 



36.36 



6,887,000.00 6,887,000.00 



( $ 837,312.79 ) $ 6,887,036.36 $ 6,049,723.57 
$21,017,669.94 $19,788,307.43 $40,805,977.37 



4,192,128.17 4,192,128.17 



$21.017.669.94 $15.596.179.26 $36.613.849.20 



- 6 - 



SCHEDULE A-l 



CITY OF CHICAGO 
CHICAGO-O'HARE INTERNATIONAL AIRPORT 

RECONCILIATION TO "NET REVENUES" AS DEFINED 
IN REVENUE BOND ORDINANCE 
FOR THE SIX MONTHS ENDED JUNE 30, 1978 AND 1977 



IT INCOME 



Six Months Ended June 30, 

1978 1977 

$ 1, 45271TB. 37 $ 7,766,310.88 



3D OR (DEDUCT) ADJUSTMENTS TO REFLECT 
ORDINANCE BASIS OF ACCOUNTING: 

Amounts Included Above in Determination 
of Net Income: 
Depreciation 
Amortization of Deferred 

Engineering Costs 
Expenditures from Reserve 

Maintenance Account 
Interest Earned on Investments - Restricted 
Interest on Revenue Bonds 
Amounts Not Included Above in Determination 
of Net Income: 

Expenditures of Operating 

Revenue for Capital Improvements (Note 1C3) 
Application of Deferred Income from 
Preceding Year as Reduction of 
Flight Fees 

JET REVENUES" AS DEFINED IN BOND ORDINANCE 

.LOCATION OF "NET REVENUES" IN ORDER OF 
PRIORITY (Note IF): 
Revenue Bond Interest 

Revenue Bond Retirement - Minimum Payment 
Reserve Maintenance 
Emergency Reserve 
Deferred Income to Reduce 

Flight Fees in Following Year 
Remainder - Additional Allocation 

to Revenue Bond Retirement 

TAL ALLOCATION OF "NET REVENUES" 



5,528,337.04 
24,534.04 



5,339,391.35 
24,534.04 



1,291,047.24 483,302.65 
( 1,504,541.89) ( 1,094,290.54) 
3,363,119.68 3,873,484.38 



( 227,975.21) ( 691,558.73) 

21,854,982.73 8,617,338.85 
$31.781.822.00 $24.318.512.88 



$ 3,363,119.68 

2,590,000.00 

580,000.00 

602,005.56 

21,017,669.94 

3,629,026.82 



$ 3,873,484.38 

2,461,000.00 

580,000.00 

597,749.70 

13,558,616.68 

3,247,662.12 



$31.781.822.00 $24.318.512.88 



e notes to financial statements. 



- 7 - 







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8 - 



CITY OF CHICAGO 
CHICAGO- 0' HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 
JUNE 30, 1978 

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES : 

A. United States Treasury Bills and Treasury Notes : 

Investments in these securities are carried at cost. Interest is 
accrued only on those securities having stated interest rates, 1. e., 
Treasury Notes. Discounts and premiums are recognized at the time of 
maturity or sale. The aggregate cost of securities at June 30, 1978, 
was $649,050.26 in excess of market value. Components of this excess 
are as follows: 

Cost Market 

Operation and Maintenance Account: 

Treasury Bills $10,175,472.02 $10,199,043.40 

Special Accounts : 

Treasury Bills 5,842,414.48 5,862,214.11 

Treasury Notes 41,931,079.71 41,211,957.20 

Construction Accounts: 

Treasury Bills 4,694,615.82 4,721,317.06 

Total $62.643,582.03 $61,994,531.77 

B. Accounts Receivable : 

In accordance with the Revenue Bond Ordinance, all accounts receivable 
uncollected for a period of thirty days after due date are considered un- 
collectible and are to be provided for. As of June 30, 1978, an allowance 
of $1,716,006.40 is recorded for these accounts. Approximately $387,000.00 
of this amount was subsequently collected through October 31, 1978. 

C. Fixed Assets : 

All fixed assets are recorded at cost. Land includes the costs of 
earthwork and landscaping. The financial statements reflect fixed assets 
acquired with Revenue Bond money and with money from other sources. These 
sources are: 

City Money 

State and Federal money 
Public Utility, Concessionaire 
and Airline money 



- 9 - 



CITY OF CHICAGO 
CHI CAGO-O' HARE INTERNATIONAL AIRPORT 



NOTES TO FINANCIAL STATEMENTS 



JUNE 30, 1978 
(Continued) 

C. Fixed Assets (Continued): 

At June 30, 1978 the gross amount of those assets acquired with money 
from other sources is $124,332,345.20 less allowances for depreciation 
of $29,308,240.67. The net amount of these assets is reflected by 
source in the "Contributions" section of the Balance Sheet. 

1. Fixed assets acquired with City money include capitalized interest for 
the use of City money. Interest is capitalized from the commencement 
of the land improvement or construction activity through the year of 
completion. 

2. Fixed assets acquired with State and Federal money represent grants 
received that are reimbursements to the City for fixed assets ac- 
quired with City money. These grants are recognized only as received. 
As of June 30, 1978 a maximum of $21,608,918.58 may be realized in 
future periods from such grants. 

3. Fixed assets acquired with Public Utility, Concessionaire and Airline 
money are comprised of direct reimbursements and amounts expended 
directly and indirectly from operating revenues. The Revenue Bond 
Ordinance does not allow the expenditure of operating revenues for 
capital improvements. However, the Airline Representative has agreed 
to substantially all of these expenditures. Using operating revenues 
for this purpose has the effect of raising flight fees. 

In accordance with the Revenue Bond Ordinance, all replacements of 
vehicles, furnishings, signs and other equipment are expensed during 
the year of acquisition. 

D. Depreciation and Amortization : 

Depreciation on Buildings and Other Facilities is provided on a 
straight- line basis over the estimated useful life of the individual 
assets. Depreciation charges are begun in the year following the year 
of acquisition or completion. Deferred Engineering Costs with an 
original balance of $1,226,701.79 are being amortized on a straight- 
line basis over 25 years. 



- 10 - 



CITY OF CHICAGO 
CHICAGO-O'HARE INTERNATIONAL AIRPORT 



NOTES TO FINANCIAL STATEMENTS 



JUNE 30, 1978 
(Continued) 



E. Revenues: 



In accordance with the Revenue Bond Ordinance, all operating revenues 
and unrestricted interest earned on investments are accounted for 
through the Revenue Fund. These revenues are to be allocated first to 
the Operation and Maintenance Account and then allocated in the follow- 
ing order of priority to the following special accounts: 

Revenue Bond Interest 

Debt Service 

Revenue Bond Retirement 

Reserve Maintenance 

Emergency Reserve 

Further explanation of the allocations 

for the six months ended June 30, 1978 are 

detailed in Note IF. 

Restricted interest earned on investments is comprised of: 

Special Accounts: 

Reserve Maintenance $ 79,071.62 

Emergency Reserve 1,283,133.59 $1,362,205.21 

Construction Accounts 142,336.68 

Total $1,504,541.89 



While the restricted interest of the special accounts is accounted for 
through the Revenue Fund, no restricted interest is included in the 
above allocation of revenues. Restricted interest of the construction 
accounts is accounted for in the individual construction accounts. 

Allocation of Revenues : 

The Revenue Bond Ordinance requires the allocation of revenues for 
specified purposes in the following order of priority: 

1. For ordinary costs of operation and maintenance, but not in excess 
of the amount budgeted by the City for such purposes. 

2. For amounts equal to interest on bonds outstanding. Interest of 
$3,363,119.68 was paid during the six months ended June 30, 1978. 



: .-- 11- 



CITY OF CHICAGO 
CHICAGO- 0' HARE INTERNATIONAL AIRPORT 



NOTES TO FINANCIAL STATEMENTS 



JUNE 30, 1978 
(Continued) 



F. Allocation of Revenues (Continued): 

3. To maintain the balance of the Debt Service Reserve at an amount equal 
to two years' interest requirements. All revenue bond issues were 
fully funded at December 31, 1975, through allocations made in prior 
years. Bonds in the principal amount of $6,887,000.00 were purchased 

or called during the six months ended June 30, 1978 and the corresponding 
interest requirement of $720,805.00 for the six months ended June 30, 
1978 was transferred to the Revenue Bond Retirement Reserve. 

4. For required minimum payments to the Revenue Bond Retirement Reserve, 
which range from $5,185,000.00 for 1978 ($2,590,000.00 for the six 
months ended June 30, 1978) to $14,545,000.00 in 1998. Additional 
allocations for the six months ended June 30, 1978 are $720,805.00 
and $3,629,026.82 as explained in Notes F-3 and F-8 respectively. 
The total allocation to the Revenue Bond Retirement Reserve during 
the six months ended June 30, 1978 was $6,939,831.82. 

5. For annual payment of $1,160,000.00 ($580,000.00 for the six months 
ended June 30, 1978) to Reserve Maintenance until $4,833,334.00 is 
accumulated in the Reserve. This money is available for the payment 
of major repairs, renewals and replacements. Expenditures of 
$1,291,047.24 were made from this account during the six months 
ended June 30, 1978 for the specified purposes, 

6. To pay to the Emergency Reserve an amount equal to the sum of the semi- 
annual provisions for depreciation and amortization of fixed and other 
assets acquired with City money and interest on City money invested in 
fixed and other assets of the Airport. 

The components of this amount for the six months ended June 30, 1978 
are: 

Depreciation $133,081.93 
Amortization 24,534.04 

Interest 444,389.59 

Total $602.005.56 

Monies held to the credit of the emergency reserve account shall be 
treated as revenues to provide for the abatement of landing fees in 
the event that the Airport is closed. 



- 12 - 



CITY OF CHICAGO 
CHI CAGO-0* HARE INTERNATIONAL AIRPORT 



NOTES TO FINANCIAL STATEMENTS 



JUNE 30, 1978 
(Continued) 



F. Allocation of Revenues (Continued): 

7. To provide for deferred income to reduce future flight fees. To the 
extent that revenues for the year as defined in the Ordinance, in- 
cluding the application of deferred income from the previous year, 
exceed "Airport expense" as defined, the excess shall be considered 
deferred income and as revenues of the next succeeding year. For 
the six months ended June 30, 1978, $21,017,669.94 has been deferred 
to reduce flight fees for 1979. 

8. To provide for retirement of Revenue Bonds in addition to minimum 
payment referred to in Note F-4. Any remaining revenues after making 
the previously listed allocations shall be allocated to the Revenue 
Bond Retirement Reserve. $3,629,026.82 was so credited for the six 
months ended June 30, 1978. 

NOTE 2 - REVENUE BONDS AND RETIREMENT 

A. Revenue Bonds : 

The Chicago-O'Hare International Airport Revenue Bonds were issued 
under the authority of an ordinance adopted December 29, 1958, and 
subsequent supplemental ordinances. The Bonds were issued to pro- 
vide monies for the extension and improvement of the Airport and 
its facilities. The following information is presented regarding 
the status of the Bonds as of June 30, 1978: 

Amount authorized $238,000,000.00 

Amount sold 232,000,000.00 

Amount called or 

purchased and retired 110,436,585.00 

Amount called but not 

presented to bank trustee 

for retirement 2,825,415.00 

Amount outstanding 118,738,000.00 

The Revenue Bonds outstanding are composed of the following: 

4-3/4% Series of 1959 $ 50,958,000.00 

4-3/4% Series A of 1961 9,653,000.00 

4-1/4% Series B of 1961 1,517,000.00 

4-1/2% Series of 1967 2,318,000.00 

5% Series of 1968 9,382,000.00 
6.80% Series of March, 

1970 38,505,000.00 

6% Series of 1972 6,405,000.00 

Total $118.738.000.00 



- 13 - 



CITY OF CHICAGO 
CHICAGO- 0' HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 

JUNE 30, 1978 

(Continued) 

A. Revenue Bonds (Continued): 

The unexpended proceeds from Revenue Bond issue amounted to 
$4,764,861.69 at June 30, 1978. This amount is comprised of: 

Construction Accounts' Assets $4,769,038.27 

Less - Construction Accounts' 

Liabilities 4,176.58 

Reserve for Construction $4, 764,861.69 

B. Retirement : 

Revenue Bonds are to be retired as rapidly as practicable through 
the revenue allocated to the Revenue Bond Retirement Reserve. Bonds 
may be redeemed by call at prices ranging downward from 105% to 100% 
of principal amount plus accrued interest to December 31, 1991, and 
thereafter, at par value plus accrued interest. In addition, Bonds may 
be redeemed by purchase in the open market or tender at prices not in 
excess of the next predetermined call prices. The following information 
is presented regarding Bonds purchased for retirement through June 30, 
1978: 

Six months ended 

June 30, 1978 Cumulative 

Par value of Bonds purchased or called $6,887,000.00 $113,262,000.00 

Cost of Bonds purchased or called 6,887,000.00 106,961,030.75 
Premiums paid on Bonds purchased 

or called 191,764.25 1,216,236.75 

Premiums paid on Bonds purchased are charged to Airport operations in 
the year of payment. Discounts on Bonds purchased are retained in the Bond 
Retirement Reserve to purchase additional Bonds. 

Bonds also may be redeemed with monies that are not allocations of 
revenues to the Retirement Reserve. Call prices for this type of re- 
demption have been adopted which exceed the previously referred to call 
prices by not more than 2% of principal amount. As of June 30, 1978 the 
City has never opted to retire Airport Bonds by this method. 

NOTE 3 - OTHER INFORMATION 

A. The Revenue Bond Ordinance provides that "Airport Expense," for the 
purpose of computing flight fees collectible from the airlines, shall 
include depreciation and amortization only on fixed assets acquired with 
City money invested in land, building, other facilities and deferred 
engineering costs. See Note F-6. 

- 14 - 



CITY OF CHICAGO 
CHICAGO-O'HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 

JUNE 30, 1978 

(Continued) 



NOTE 3 - OTHER INFORMATION - (Continued) 

B. The Reserve for Matured Interest on Revenue Bonds is comprised of 
the following: 

Payment to bank trustee for 

coupons due July 1, 1978 $3,308,732.50 

Prior payments to bank trustee- 
coupons not presented for 
redemption 89,703.71 

Total $3.398.436.21 

C. The Reserve for Matured Bonds represents bonds called but not pre- 
sented to the bank trustee for retirement. 



- 15 - 



\ #C.O. 62 




CITY OF CHICAGO 



CHICAGO-O'HARE INTERNATIONAL AIRPORT 

FINANCIAL STATEMENTS 
FOR THE SIX MONTHS ENDED JUNE 30, 1979 



vA»*w 



7^7 7<T4 

-79 



OFFICE OF THE CITY COMPTROLLER 

TRANSPORTATION LIBRARY 

NOV 15 1 o; 
NORTHWESTERN UNIVERSITY 




City of Chicago 

Jane M. Byrne, Mayor 

Department of Finance 



City Hall, Room 501 
121 North LaSalle Street 
Chicago, Illinois 60602 



Raymond Coyne 
City Comptroller 
744-7100 



Robert E. Shaw 

First Deputy Comptroller 

744-3233 



CHICAGO-O'HARE INTERNATIONAL AIRPORT 

FINANCIAL STATEMENTS 
FOR THE SIX MONTHS ENDED JUNE 30, 1979 



Prepared by the Accounting Division 
Office of the City Comptroller 
City of Chicago, Illinois 
November 13, 1979 






XRANSPORWON 
LIBRARY 



14^ 



// 



ty of Chicago 

neM. Byrne, Mayor 

tpartment of Finance 

:y Hall, Room 501 

1 North LaSalle Street 

icago, Illinois 60602 



ymond Coyne 
:y Comptroller 
4-7100 



ibert E. Shaw 

st Deputy Comptroller 

4-3233 



CONTENTS 



Exhibit A - Balance Sheets 

Exhibit B - Statements of Revenue, Expense and 
Changes in Retained Earnings 

Exhibit C - Statements of Changes in Financial 
Position 

Notes to Financial Statements 

Schedule A-1-Reconciliation to "Net Revenues" as 
Defined in Revenue Bond Ordinance 

Schedule A-2-Analysis of Changes in Contributed 
Capital 

Schedule A-3-Analysis of Changes in Retained 
Earnings - Reserved 

Schedule A-4-Analysis of Changes in Retained 
Earnings - Construction 



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EXHIBIT B 



CITY OF CHICAGO 
CHICAGO-Q'HARE INTERNATIONAL AIRPORT 

STATEMENTS OF REVENUE, EXPENSE AND CHANGES IN RETAINED EARNINGS 
FOR THE SIX MONTHS ENDED JUNE 30, 1979 AND 1978 

Six Months Ended June 30, 



1979 



1978 



OPERATING REVENUES: 
Flight Fees 

Rent, Concessions, and Utilities 
Total Operating Revenues 

OPERATING EXPENSES: 
Salaries and Wages 
Depreciation 
Amortization of Deferred 

Engineering Costs 
Repairs and Maintenance - Including 
Expenditures from Reserve 
Maintenance Account 
Other Operating Expenses 

Total Operating Expenses 
Operating Income (Loss) 

NON-OPERATING INCOME AND (EXPENSE): 
Interest Earned on Investments 
Interest on Revenue Bonds 
Premium on Revenue Bonds Retired 

Total Non-Operating (Expense) 

NET INCOME (LOSS) BEFORE OPERATING TRANSFERS 
Depreciation and Amortization 

Transferred to Reduce Contributed 
Capital 
Expenditures of Operating Revenue for 
Capital Improvements 

INCREASE (DECREASE) IN RETAINED EARNINGS 

RETAINED EARNINGS - JANUARY 1, 

RETAINED EARNINGS - JUNE 30, 



$16,428,020.75 $16,201,268.95 

19,076,469.48 18,658,054.68 

$35,504,490.23 $34,859,323.63 



$12,162,726.69 $11,466,761.72 
5,591,993.84 5,528,337.04 



24,534.04 



24,534.04 



7,760,145.44 6,367,917.37 

10,783,135.06 8,908,277.64 

$36,322,535.07 $32,295,827.81 

($ 818,044.84) $ 2,563,495.82 



$ 2,729,020.20 $ 2,443,706.48 

( 2,972,913.14) ( 3,363,119.68) 

( 199,925.00 ) ( 191,764.25 ) 

( $ 443,817.94 ) ( $ 1,111,177.45 ) 

($ 1,261,862.78) $ 1,452,318.37 



1,424,492.11 1,360,742.91 

( 1,337,511.11 ) ( 227,975.21 ) 

( $ 1,174,881.78) $ 2,585,086.07 

91,501,158.57 87,276,525.29 

$90.326.276.79 $89.861.611.36 



The notes to the financial statements are an integral part of this statement, 



-3- 



EXHIBIT C 



CITY OF CHICAGO 
CHICAGO-O'HARE INTERNATIONAL AIRPORT 

STATEMENTS OF CHANGES IN FINANCIAL POSITION 
FOR THE SIX MONTHS ENDED JUNE 30, 1979 AND 1978 



1979 



1978 



SOURCES OF WORKING CAPITAL: 

Net Income (Loss) from Operations 
Expenses Not Requiring an Outlay 
of Working Capital: 
Depreciation 

Amortization of Deferred 
Engineering Costs 

Total Working Capital from 
Operations 

City of Chicago Contributions 

Total Sources of Working 
Capital 

USES OF WORKING CAPITAL: 

Acquisition of Property, Plant and 

Equipment 
Retirement of Long-Term Liabilities 
Increase in Restricted Assets - Net 

Total Uses of Working Capital 

Net Increase (Decrease) in 
Working Capital 

COMPONENT ELEMENTS OF NET INCREASE 
(DECREASE) IN WORKING CAPITAL: 
Cash on Deposit 
U.S. Government Securities 
Accounts Receivable - Net 
Due from Other Funds 
Due from Special Accounts 
Prepaid Expenses 
Accrued Interest Receivable 
Accounts Payable 
Revenue Bonds Payable - Current 
Maturities 

Net Increase or (Decrease) 
in Working Capital 



($ 1,261,862.78) 

5,591,993.84 
24,534.04 

$ 4,354,665.10 
1,193,071.84 

$ 5,547,736.94 



$ 2,539,353.01 
4,738,000.00 
1,807,003.01 

$ 9,084,356.02 



($ 3,536,619.08) 



$ 1,452,318.37 

5,528,337.04 
24,534.04 

$ 7,005,189.45 
3,577,966.85 

$10,583,156.30 



$ 3,805,978.42 

4,297,000.00 

727,490.67 

$ 8,830,469.09 



$ 1,752.687.21 



($ 


1,927,093.31) 


($ 


2,396,972.35) 


( 


4,770,384.92) 




1,096,253.53 


( 


1,020,169.02) 


( 


513,282.27) 


( 


480,811.39) 


( 


413,026.46) 




223,080.66 


( 


28,802.30) 


( 


284,140.38) 


( 


245,151.59) 




1,234.83 




- 




1,996,664.45 




1,663,668.65 




2,725,000.00 




2,590,000.00 


($ 


3.536. 619. 08^) 


$ 


1,752,687.21 



The notes to the financial statements are an integral part of this statement. 

-4- 



CITY OF CHICAGO 
CHICAGO-O'HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 
JUNE 30, 1979 AND 1978 



NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES : 

A. Basis of Accounting : 

The accounts of Chicago-O'Hare International Airport are maintained 
and the accompanying financial statements have been prepared on the 
accrual basis of accounting. The Airport is accounted for as an 
enterprise fund. 

B*. Restricted Assets : 

The authorizing Revenue Bond Ordinance requires that during the 
period in which bonds are outstanding the City shall maintain trust 
accounts for the proceeds from the sale of bonds and certain 
allocations of net revenues (see Note 1-G). The assets of the trust 
accounts may only be used for the specific purpose of each trust 
including bond interest, debt service, emergency reserve, bond 
retirement, maintenance reserve and construction. 

(Si United States Treasury Bills and Treasury Notes : 

Investments in these securities are carried at cost. Interest 
is accrued only on those securities having stated interest rates, 
i.e., Treasury Notes. Discounts and premiums are recognized at the 
time of maturity or sale. The aggregate cost of the securities was 
$486,783.44 in excess of market value at June 30, 1979 while the cost 
exceeded market value by $649,050.26 at June 30, 1978. Components 
of this excess are as follows: 

Cost Market 



at June 30, at June 30, 

1979 1978 1979 1978 



Investments in 
U>S> Government 
Securities : 

Unrestricted $ 5,231,380.09 $10,175,472.02 $ 5,231,864.71 $10,199,043.40 
Restricted 55,042,275.79 52,468,110.01 54,555,007.73 51,795,488.37 

Total $60,273,655.88 $62,643,582.03 $59,786,872.44 $61,994,531.77 



-5- 



CITY OF CHICAGO 
CHTCAGO-O'HARE INTERNATIONAL AT££QKX 

NOTES TO FINANCIAL STATEMENTS 
JUNE 30, 1979 AND 1978 
(Continued) 



D. Accounts Receivable : 

In accordance with the Revenue Bond Ordinance, all accounts receivable 
uncollected for a period of thirty days after due date are considered un- 
collectible and are to be provided for. As of June 30, 1979 and 1978, all- 
owances of $2,600,309.63 and $1,716,006.40 respectively were recorded for 
these accounts. Approximately $1,309,000.00 of the June 30, 1979 amount was 
subsequently collected by September 30, 1979. 

E. Property, Plant and Equipment : 

All fixed assets are recorded at cost. Land includes the cost of 
earthwork and landscaping. As of June 30, 1979 and 1978 property, plant and 
equipment consisted of the following: 

1979 1978 



Land $ 50,994,641.32 $ 50,994,641.32 
Buildings and Other 

Facilities 303,693,905.25 299,307,692.66 

Construction in Progress 11,620,952.67 11,607,909.40 

Total Property - at cost $366.309.499o24 $361.910.243.38 

The financial statements reflect fixed assets acquired with Revenue 
Bond money and with money from other sources. 
These sources are: 

City Money 

State and Federal Money 
Public Utility, Concessionaire 
and Airline Money 

The gross amounts of those assets acquired with money from other 
sources is shown below: 

At June 30, 

T9T3 1971 



Cost of fixed assets 

acquired with 

contributed capital $128,695,129.94 $124,332,345.20 
Accumulated depreciation 32,044,407.37 29,308,240.67 

Net - Contribution $ 96.650.722.57 $ 95.024.104.53 



-6- 



CITY OF CHICAGO 
CHTCAGO-O'HARE INTERNATIONAL ATRPQRT 

NOTES TO FINANCIAL STATEMENTS 
JUNE 30, 1979 AND 1978 
(Continued) 



1. Fixed assets acquired with City money include capitalized interest 
for the use of City money. Interest is capitalized from the 
commencement of the land improvement or construction activity 
through the year of completion. 

2. Fixed assets acquired with State and Federal money represent grants 
received that are reimbursements for fixed assets acquired with City 
money. The grants are recognized only as received. As of June 30, 
1979 and 1978 a maximum of $23,854,394.19 and $21,608,918.58 re- 
spectively may be realized in future periods from such grants. 

3. Fixed assets acquired with Public Utility, Concessionaire and Airline 
money are comprised of direct reimbursements and amounts expended 
directly and indirectly from operating revenues. The Revenue Bond 
Ordinance does not allow the expenditure of operating revenues for 
Capital improvements. However, the Airlines Representative has 
agreed to substantially all of these expenditures. Using operating 
revenues for this purpose has the effect of raising flight fees. 

In accordance with the Revenue Bond Ordinance, all replacements of 
vehicles, furnishings, signs and other equipment are expensed during 
the year of acquisition. 

F. Depreciation and Amortization: 

Depreciation on Buildings and Other Facilities is provided on a 
straight- line basis over the estimated useful life of the individual 
assets. Depreciation charges are begun in the year following the year 
of acquisition or completion. Deferred Engineering Costs with an or= 
iginal balance of $1,226,701.79 are being amortized on a straight- line 
basis over 25 years. 



-7- 



CTTY OF CHICAGO 
CHTCAGO-O'HARE INTERNATIONAL ATRPORT 

NOTES TO FINANCIAL STATEMENTS 
JUNE 30, 1979 AND 1978 
(Continued) 



Go Revenues : 

In accordance with the Revenue Bond Ordinance, all operating revenues 
and unrestricted interest earned on investments are accounted for through 
the Revenue Fund. These revenues are to be allocated first to the 
Operation and Maintenance Account and then allocated in the following 
order of priority to the following special accounts: 

Revenue Bond Interest 
Debt Service 
Revenue Bond Retirement 
Emergency Reserve 

Further explanation of the allocations 
are detailed in Note 1-H 

Interest earned on restricted asset accounts for June 30, 1979 and 
and 1978 is detailed below: 

1979 1978 

Restricted Asset Account: 

Reserve Maintenance $ 115,544.91 $ 79,071.62 

Emergency Reserve 1,344,815.28 1,283,133.59 

Construction Reserve 233,749.71 142,336.68 

Total $1.694.109.90 $1.504.541.89 

While the restricted interest of the special accounts is accounted for 
through the Revenue Fund, no restricted interest is included in the all- 
ocation of revenues. Restricted interest of the construction accounts is 
accounted for in the individual construction accounts. 

H, Allocation of Revenues: 

The Revenue Bond Ordinance requires the allocation of revenues for 
specified purposes in the following order of priority: 

1. . For ordinary costs of operation and maintenance, but not in excess of 
the amount budgeted by the City for such purposes. 



-8- 



CTTY OF CHICAGO 
CHICAGO-O'HARE INTERNATIONAL AIREQRX 

NOTES TO FINANCIAL STATEMENTS 
JUNE 30, 1979 AND 1978 
(Continued) 



2. For amounts equal to interest on bonds outstanding. 

Interest paid during the six months ended June 30, 1979 and 1978 
totaled $2,972,913.14 and $3,363,119.68 respectively. 

3. To maintain the balance of the Debt Service Reserve at an amount 
equal to two years' interest requirements. All Revenue Bond issues 
were fully funded at December 31, 1975 through allocations made in 
prior years. Bonds in the principal amounts of $7,463,000.00 and 
$6,887,000.00 were purchased or called during the six months ended 
June 30, 1979 and 1978. The corresponding interest requirements of 
$780,695.00 and $720,805.00 for the six months ended June 30, 1979 
and 1978 were transferred to the Revenue Bond Retirement Reserve. 

4. For required minimum payments to the Revenue Bond Retirement Reserve. 
The minimum payments for the six months ended June 30, 1979 and 1978 
were $2,725,000.00 and $2,590,000.00 respectively. Remaining minimum 
Bond Retirement deposits are detailed below: 

Required Minimum 
Period Bond Retirement Payment 



1979 


$ 2,724,000.00 


1980 


5,736,000.00 


1981 


6,036,000.00 


1982 


6,354,000.00 


1983 


6,685,000.00 


1984 thru 1996 


76,452,000.00 


Total 


$103,987,000.00 



As mentioned in footnotes H-3 and H-8, additional payments to the 
Revenue Bond Retirement Reserve may be made. Allocations to the Revenue 
Bond Retirement Reserve totaled $7,389,928.36 and $6,939,831.82 for the 
six months ended June 30, 1979 and 1978 respectively. 

5. For annual payment of $1,160,000.00 ($580,000.00 for the semi annual 
payment) to the Maintenance Reserve until $4,833,334.00 is accumulated 
in the Reserve. This money is available for the payment of major re- 
pairs, renewals and replacements. Expenditures of $138,253.91 and 
$1*291, 047. 24 during the six months ended June 30, 1979 and 1978 
respectively were made from this account for the specified purposes. 



-9- 



CITY QF CHICAGO 
CHTCAGO-O'HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 
JUNE 30, 1979 AND 1978 
(Continued) 



6. To pay to the Emergency Reserve an amount equal to the sum of the 

semi annual provisions for depreciation and amortization of fixed and 
other assets acquired with City money and interest on City money in- 
vested in fixed and other assets of the Airport, 

The components of this amount for the six months ended June 30, 1979 

cfnA 1Q7S aro a a -Frill rnje • 



and 1978 are as follows: 



1979 1978 



Depreciation $110,290.03 $133,081.93 
Amortization 24,534.04 24,534.04 
Interest 398,859.65 444,389.59 

Total 

Allocation $533.683.72 $602.005.56 

Monies held to the credit of the Emergency Reserve Account shall be 
treated as revenues to provide for the abatement of landing fees in 
the event that the Airport is closed. 

7. To provide for deferred income to reduce future flight fees. To the 
extent that revenues for the year as defined in the Ordinance, in- 
cluding the application of deferred income from the previous year, 
exceed "Airport expense" as defined, the excess shall be considered 
deferred income and as revenues of the next succeeding year. For 
the six months ended June 30, 1979 and 1978 $12,304,808.83 and 
$21,017,669.94 respectively had been deferred to reduce future flight 
fees. 

8. To provide for the retirement of Revenue Bonds in addition to the 
min imum payment referred to in Note H-4. Any remaining revenues after 
making the previously listed allocations shall be allocated to the 
Revenue Bond Retirement Reserve; $3,884,233.36 and $3,629,026.82 were 
so credited for the six months ended June 30, 1979 and 1978. 



-10- 



CITY OF CHICAGO 
CHICAGO-O'HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 
JUNE 30, 1979 AND 1978 
(Continued) 

NOTE 2 - REVENUE BONDS AND RETIREMENT : 

A. Revenue Bonds : 

The Chicago-O'Hare International Airport Revenue Bonds were issued 
under the authority of an ordinance adopted December 29, 1958, and 
subsequent supplemental ordinances. The Bonds were issued to provide 
monies for the extension and improvement of the Airport and its 
facilities. The following information is presented regarding the 
status of the Bonds as of June 30,' 1979 and 1978: 

1979 1978 



Amount authorized $238,000,000.00 $238,000,000.00 

Amount sold 232,000,000.00 232,000,000.00 

Amount called or purchased 

and retired 125,097,512.50 110,436,585.00 

Amount called but not 

presented to bank trustee 

for retirement 2,915,487.50 2,825,415.00 

Amount outstanding 103,987,000.00 118,738,000.00 

The Revenue Bonds outstanding at June 30, 1979 and 1978 are composed 
of the following: 

1979 1978 



4 3/4% Series of 1959 $ 42,496,000.00 $ 50,958,000.00 

4 3/4% Series A of 1961 8,792,000.00 9,653,000.00 

4 1/4% Series B of 1961 1,253,000.00 1,517,000.00 

4 1/2% Series of 1967 1,975,000.00 2,318,000.00 

5% Series of 1968 8,201,000.00 9,382,000.00 

6.80 % Series of March, 1970 35,415,000.00 38,505,000.00 

6% Series of 1972 5,855,000.00 6,405,000.00 

Total $103.987.000.00 $118.738.000.00 

The unexpended proceeds from Revenue Bond issues amounted to 
$5,164,156.78 and $4,764,861.69 at June 30, 1979 and 1978. 

The amounts are comprised of the following: 

June 30, 



1979 1978 



Construction Accounts' Assets $ 5,187,723.05 $ 4,769,038.27 
Less - Construction Accounts' 

Liabilities 23,566.27 4,176.58 

Reserve for Construction. $ 5.164.156.78 $ 4.764.861.69 

-11- 



CTTY OF CHTCAGO 
CHICAGO-O'HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 
JUNE 30, 1979 AND 1978 
(Continued) 



B. Retirement ; 

Revenue Bonds are to be retired as rapidly as practicable through 
the revenues allocated to the Revenue Bond Retirement Reserve. Bonds may 
be redeemed by call at prices ranging downward from 105% to 100% of 
principal amount plus accrued interest to December 31, 1991, and thereafter, 
at par value plus accrued interest. In addition, Bonds may be redeemed by purchase 
in the open market or tender at prices not in excess of the next predetermined 
call prices. The followong information is presented regarding Bonds purchased 
or called for retirement through June 30, 1979. 

June 30, 1978 June 30, 1979 Cumulative 
Par value of bonds 

purchased or 

called $6,887,000.00 $7,463,000.00 $128,013,000.00 

Cost of Bond 

purchased or 

called (exclud- 
ing premium) 6,887,000.00 7,463,000.00 121,712,030.75 
Premiums paid on 

Bonds purchased 

or called 191,764.25 199,925.00 1,595,652.95 

Premiums paid on Bonds purchased or called are charged to Airport operations 
in the year of payment. Discounts on Bonds purchased are retained in the Bond 
Retirement Reserve to purchase additional Bonds. 

Bonds also may be redeemed with monies that are not allocations of revenues 
to the Retirement Reserve. Call prices for this type of redemption have been 
adopted which exceed the previously referred to call prices by not more than 2% 
of principal amount. As of June 30, 1979 the City has never opted to retire 
Airport Bonds by this method. 



-12- 



CITY OF CHICAGO 
CHICAGO-O'HARE INTERNATIONAL ATRPORT 

NOTES TO FINANCIAL STATEMENTS 
JUNE 30, 1979 AND 1978 
(Continued) 



NOTE 3 - PENSION PLANS ; 

The employees of the City of Chicago are covered under various 
contributory retirement plans established by State Statute. The 
policemen are members of The Policemen's Annuity and Benefit Fund 
of Chicago^; firemen are members of The Firemen's Annuity and Benefit 
Fund of Chicago j other employees are members of either 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. The City of Chicago contributions 
are multiples of the employee contributions made two years prior. 
The City's share of contributions is funded by net tax levies. 

Substantially all full-time City employees whose salaries are paid 
through Chicago-O'Hare funds participate in one of the above pension 
plans. Pension contributions charged to operations for June 30, 1979 
and 1978 were $1,263,627.20 and $1,140,808.73 respectively. 

Based upon the most recent information submitted by the City's 
Consulting Actuary, the total unfunded liabilities of the four City of 
Chicago Pension Funds as of December 31, 1978 is $1,616,405,630.00. 

The unfunded pension liabilities which are not reflected in these 
statements, of the four City of Chicago Pension Funds have not been 
determined. 

It is impossible to determine the portion of unfunded liabilities 
which pertain to employees paid through Chicago-O'Hare International 
Airport accounts. 

NOTE 4 - OTHER INFORMATION : 

A. The Revenue Bond Ordinance provides that "Airport expense", for 
the purpose of computing flight fees collectible from the airlines, 
shall include depreciation and amortization only on fixed assets 
acquired with City money and interest on City money invested in land, 
buildings, other facilities and deferred engineering costs. See Note 
l-H-6. 



-13- 



CITY OF CHICAGO 
CHTCAGO-O'HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 
JUNE 30, 1979 AND 1978 
(Continued) 



NOTE 4 - OTHER INFORMATION: 



B. Matured Interest on Revenue Bonds is comprised of the following: 

June 30, 1979 June 30, 1978 

Payment to bank trustee for 
coupons due July 1, 1979 
and 1978 $2,927,148.75 $3,308,732.50 

Prior payments to bank 
trustee - coupons not 
presented for redemption 98,112.46 89,703.71 

Total $3.025.261.21 $3.398.436„21 

C. Matured Revenue Bonds represent bonds called but not presented to 
the bank trustee for retirement. 

D. Contract commitments to be financed by the Operation and Maintenance 
account at June 30, 1979 and 1978 totaled $13,230,224.08 and $8,260,061.87 
respectively. 



*14- 



SCHEDULE A-l 



CITY OF CHICAGO 
CHICAGO-O'HARE INTERNATIONAL AIRPORT 

RECONCILIATION TO "NET REVENUES" AS DEFINED 
IN REVENUE BOND ORDINANCE 
FOR THE SIX MONTHS ENDED JUNE 30, 1979 AND 1978 

Six Months Ended June 30, 



1979 



1978 



SET INCOME (LOSS) 

UDD OR (DEDUCT) ADJUSTMENTS TO REFLECT 
ORDINANCE BASIS OF ACCOUNTING: 

Amounts Included Above in Determination 
of Net Income: 
Depreciation 
Amortization of Deferred 

Engineering Costs 
Expenditures from Reserve 

Maintenance Account 
Interest Earned on Investments - Restricted 
Interest on Revenue Bonds 
Amounts Not Included Above in Determination 
of Net Income: 

Expenditures of Operating 

Revenue for Capital Improvements 
Application of Deferred Income from 
Preceding Year as Reduction of 
Flight Fees 

"NET REVENUES" AS DEFINED IN BOND ORDINANCE 

iLLOCATION OF "NET REVENUES" IN ORDER OF 
PRIORITY: 

Revenue Bond Interest 

Revenue Bond Retirement - Minimum Payment 

Reserve Maintenance 

Emergency Reserve 

Deferred Income to Reduce 

Flight Fees in Following Year 
Remainder - Additional Allocation 

to Revenue Bond Retirement 

:0TAL ALLOCATION OF "NET REVENUES" 



($ 1,261,862.78) $ 1,452,318.37 



5,591,993.84 
24,534.04 



5,528,337.04 
24,534.04 



138,253.91 1,291,047.24 
( 1,694,109.90) ( 1,504,541.89) 
2,972,913.14 3,363,119.68 



( 1,337,511.11) ( 227,975.21) 



18,566,427.91 
$23,000,639.05 

$ 2,972,913.14 

2,725,000.00 

580,000.00 

533,683.72 

12,304,808.83 

3,884,233.36 

$23.000,639.05 



21,854,982.73 
$31.781.822.00 



$ 3,363,119.68 

2,590,000.00 

580,000.00 

602,005.56 

21,017,669.94 



3,629,026.82 



$31.781.822.00 



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.18- 



CO. 62 




CITY OF CHICAGO 



CHICAGO- O 1 HARE INTERNATIONAL AIRPORT 

FINANCIAL STATEMENTS 
FOR THE SIX MONTHS ENDED JUNE 30, 1980 



RAN 



132- 

80 
Lne. 



OFFICE OF THE CITY COMPTROLLER 






APR 15 
KQRIHW£S1£RN 




Gty of Chicago 
Jane M. Byrne. Mayor 



Department of Finance 

Daniel J. Grim 
Gty Comptroller 

QtyHall. Room 501 
121 North LaSaile Street 
Chicago, Illinois 60602 
C31 2) 744-71 00 



CHICAGO- 1 HARE INTERNATIONAL AIRPORT 

FINANCIAL STATEMENTS 
FOR THE SIX MONTHS ENDED JUNE 30, 1980 



Prepared by the Accounting Division 
Office of the City Comptroller 
City of Chicago, Illinois 
November 5, 1980 



5k nt 



ty of Chicago 

ne M. Byrne, Mayor 



portment of Finance 

miel J. Grim 
y Comptroller 

y Hall, Room 501 
1 North LaSalle Street 
icago, Illinois 60602 
12)744-7100 



CONTENTS 



Exhibit A - Balance Sheets 
Exhibit B 



Statement of Changes in 
Contributed Capital 



Exhibit C - Statement of Changes in 
Retained Earnings 

Exhibit D - Statements of Revenues 
and Expenses 

Exhibit E - Statement of "Net Revenues" 
as Defined in Revenue Bond 
Ordinance 

Exhibit F - Statements of Changes in 
Financial Position 

Notes to Financial Statements 



-1- 



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-4- 



STATEMENTS OF REVENUES AND EXPENSES 
CHICAGO- 0' HARE INTERNATIONAL AIRPORT 



EXHIBIT D 



Six Months Ended June 30 
1980 1979 



OPERATING REVENUES 
Flight fees 
Rent, concessions; 



and other 
TOTAL OPERATING REVENUES 



OPERATING EXPENSES 
Salaries and wages 
Provision for depreciation 
Amortization of deferred 

engineering costs 
Repairs and maintenance-- 
including expenditures from 
maintenance reserve account 
Other operating expenses 

TOTAL OPERATING EXPENSES 
OPERATING INCOME (LOSS) 

NON OPERATING INCOME AND (EXPENSE) 
Interest earned on investments 
Discount on revenue bonds retired 
Interest on revenue bonds 
Premium on revenue bonds retired 

NET NONOPERATING INCOME (EXPENSE) 

NET INCOME (LOSS) 



$23,187,435 

24,391,577 

$47,579,012 



$13,483,038 
5,682,439 



$16,428,021 

19,076,469 

$35,504,490 



$12,162,727 
5,591,994 



23,993 



24,534 



5,291,121 7,760,145 

13,452,173 10,783,135 

$37,932,764 $36,322,535 

$ 9,646,248 ( $ 818,045 ) 



$ 3,765,475 $ 2,729,020 

182,060 

( 2,504,433) ( 2,972,913) 

( 132,672 ) ( 199,925 ) 

$ 1,310,430 ( $ 443,818 ) 

$10.956.678 f$ 1.261.863) 



See notes to financial statements. 



-5- 



EXHIBIT E 



STATEMENT OF "NET REVENUES" AS DEFINED IN REVENUE BOND ORDINANCE 
CHICAGO- O 1 HARE INTERNATIONAL AIRPORT 



NET INCOME (LOSS) 

ADD (DEDUCT) ADJUSTMENTS TO REFLECT ORDINANCE 
BASIS OF ACCOUNTING 

Amounts included above in determination of 
revenues in excess of expenses: 
Provision for depreciation 
Amortization of deferred 

engineering costs 
Expenditures from maintenance 

reserve account 
Interest earned on investments — 

restricted 
Interest on revenue bonds 
Discount on revenue bonds retired 
Amounts not included above in determination 
of revenues in excess of expenses: 
Expenditures of operating revenue 

for capital improvements 
Application of deferred income from 
preceding year as reduction of 
flight fees 

"NET REVENUES" AS DEFINED 
IN REVENUE BOND ORDINANCE 

ALLOCATION OF "NET REVENUES" IN 
ORDER OF PRIORITY 

Revenue bond interest 

Revenue bond retirement — minimum payment 

Maintenance reserve 

Emergency reserve 

Deferred income to reduce flight fees 

in following year 
Remainder — additional allocation to 
revenue bond retirement 

TOTAL ALLOCATION OF "NET REVENUES" 



Six Months Ended June 30 
1980 1979 

$10,956,678 ($ 1,261,863) 



5,682,439 5,591,994 

23,993 24,534 

138,254 

( 2,284,662)( 1,694,110) 
2,504,433 2,972,913 
( 182,060) 

( 739,612) ( 1,337,511) 
17,259,265 18,566,428 
$33.220.474 $23.000.639 



$ 2,504,433 

2,868,000 

580,000 

559,024 

22,499,303 

4,209,714 



$ 2,972,913 

2,725,000 

580,000 

533,684 

12,304,809 

3,884,233 



$33.220.474 $23.000.639 



See notes to financial statements, 



-6- 



EXHIBIT F 



STATEMENTS OF CHANGES IN FINANCIAL POSITION 
CHICAGO-O'HARE INTERNATIONAL AIRPORT 



Six months ended June 30 
1980 1979 



SOURCES OF WORKING CAPITAL 
From operations: 
Net income (loss) 

Add expenses not requiring an outlay of 
working capital: 

Provision for depreciation 
Amortization of deferred engineering 
costs 

TOTAL WORKING CAPITAL 
PROVIDED FROM OPERATIONS 

Decrease in restricted assets - net 
City of Chicago contributions for 
fixed assets 

TOTAL SOURCES OF WORKING CAPITAL 

USES OF WORKING CAPITAL 

Decrease in deferred rental income 
Acquisition of fixed assets 
Retirement of long-term liabilities 
Increase in restricted assets — net 

TOTAL USES OF WORKING CAPITAL 

INCREASE (DECREASE) IN WORKING CAPITAL 

CHANGES IN COMPONENTS OF WORKING CAPITAL 
Increase (decrease) in current assets: 
Cash 

U.S. Government securities 
Accounts receivable — net 
Due from other funds 
Due from special accounts 
Prepaid expenses 
Accrued interest receivable 

Decrease (increase) in current liabilities: 
Revenue bonds payable — current maturities 
Accounts payable 
Due to other funds 
Due to special accounts 

INCREASE (DECREASE) IN WORKING CAPITAL 

See notes to financial statements. 



$10,956,678 ($ 1,261,862) 



5,682,439 

23,993 

$16,663,110 

2,878,540 

842,247 



5,591,994 

24,534 

$ 4,354,666 



1,193,071 



$20,383,897 $ 5,547,737 



$ 24,148 

1,581,859 

10,694,000 

$12,300,007 

$ 8,083.890 



2,539,353 

4,738,000 

1,807,003 

$ 9,084,356 

(S 3.536.619 s ) 



($ 

( 
( 


3,474,612) 
7,621,474 

568,968) 
1,555,657) 

150,500 


($ 

( 

( 

( 


1,927,093) 

4,770,384) 

1,020,169) 

480,811) 

107,468 


( 


284,621) 


( 


284,140) 
1,234 


$ 


1,888,116 


8,373,895) 


$ 


2,868,000 


$ 


2,725,000 


( 


1,831,115) 
5,060,345 




1,996,664 




98,544 




115,612 



$ 6,195,774 
$ 8.083.890 



$ 4,837,2 76 
r$ 3.536.619> 



-7- 



NOTES TO FINANCIAL STATEMENTS 
CHICAGO- O 1 HARE INTERNATIONAL AIRPORT 

NOTE A— SIGNIFICANT ACCOUNTING POLICIES 

1. Basis of Accounting 

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

2. Restricted Assets 

The authorizing Revenue Bond Ordinance requires that during the period 
in which bonds are outstanding, the City of Chicago shall maintain 
trust accounts for the proceeds from the sale of bonds and certain 
allocations of "net revenues" as defined (see Note A-7). The assets 
of the trust accounts may only be used for the specific purpose of 
each trust including bond interest, debt service, emergency reserve, 
bond retirement, maintenance reserve, and construction. 

3. U.S. Government Securities 

Investments in U.S. Treasury bills and Treasury notes are carried at 
cost. Interest is accrued only on those securities having stated 
interest rates, i.e., Treasury notes. Discounts and premiums are 
recognized at the time of maturity or sale. The aggregate cost and 
market value compare as follows: 

Cost Market 



June 30, June 30, 

1980 1979 1980 1979 

Unrestricted $13,566,965 $ 5,231,380 $13,577,750 $ 5,231,864 

Restricted 55,181,126 55,042,276 56,377,505 54,555,008 

TOTAL $68.748,091 $60.273,656 $69.955.255 $59.786.872 

4. Accounts Receivable 

In accordance with the Revenue Bond Ordinance, all accounts receivable 
uncollected for a period of 30 days after due date are considered 
uncollectible and are provided for. As of June 30, 1980 and 1979, allowances 
of $3,112,463 and $2,600,310, respectively, were recorded for these accounts. 
Approximately $1,941,000 of the June 30, 1980 amount was subsequently collected 
by September 30, 1980. 



-8- 



NOTES TO FINANCIAL STATEMENTS (CONT'D) 
CHICAGO- 0' HARE INTERNATIONAL AIRPORT 

NOTE A— SIGNIFICANT ACCOUNTING POLICIES (CONT'D) 

5, Property, Plant and Equipment 

All fixed assets are recorded on the basis of cost. Land includes the 
cost of earthwork and landscaping. Fixed assets are acquired with Revenue 
Bond proceeds and three other sources as follows: 

a. Fixed assets acquired with City of Chicago money include during the 
six months ended June 30, 1980 $121,454 capitalized interest for the 
use of City of Chicago money. Interest is capitalized from the 
commencement of the land improvement or construction activ- 
ity through the year of completion. 

b. Fixed assets acquired with State and Federal money 
represent grants received that are reimbursements for 
fixed assets acquired with City of Chicago money. The 
grants are recognized only as received. As of 

June 30, 1980 and 1979 a maximum of $23,070,923 and 
$23,854,394, respectively, may be realized in future 
periods from such grants. 

c. Fixed assets acquired with Public Utility, Concession- 
aire and Airline money are comprised of direct reim- 
bursements and amounts expended directly and indirectly 
from operating revenues. The Revenue Bond Ordinance 
does not allow the expenditure of operating revenues for 
capital improvements. However, the Airlines' Repre- 
sentative has agreed to substantially all of these 
expenditures. Using operating revenues for this purpose 
has the effect of increasing flight fees. 

In accordance with the Revenue Bond Ordinance, all replacements of 
vehicles, furnishings, signs and other equipment are expensed during 
the year of acquisition. 

6. Depreciation and Amortization 

Provisions for depreciation of buildings and other facilities are 
provided on a straight-line basis over the estimated useful lives of 
the individual assets. Depreciation charges are begun in the year 
following the year of acquisition or completion. Deferred engineer- 
ing costs with an original balance of $1,226,701 are being amortized 
on a straight-line basis over 25 years and will be fully amortized 
December 31, 1980. 



-9- 



NOTES TO FINANCIAL STATEMENTS (CONT'D) 
CHICAGO-O'HARE INTERNATIONAL AIRPORT 



NOTE A— SIGNIFICANT ACCOUNTING POLICIES (CONT'D) 

7. Allocation of Revenues 

The Revenue Bond Ordinance requires the allocation of revenues for 
specified purposes in the following order of priority: 

a. For ordinary costs of operation and maintenance, but not 
in excess of the amount budgeted by the City of Chicago 
for such purposes. 

b. For amounts equal to interest on bonds outstanding. 
Interest paid during the six months ended June 30, 
1980 and 1979 totaled $2,504,433 and $2,972,913, 
respectively. 

c. To maintain the balance of the Debt Service Reserve at 

an amount equal to two years' interest requirements. All 

Revenue Bond issues were fully funded at December 31, 

1975 through allocations made in prior years. Bonds in 

the principal amounts of $13,562,000 and $7,463,000 were 

purchased or called during the six months ended June 30, 1980 and 1979, 

The corresponding interest requirements of $1,442,775 and 

$780,695 for the six months ended June 30, 1980 and 1979 were 

transferred to the Revenue Bond Retirement Reserve. 

d. For required minimum payments to the Revenue Bond Retirement Reserve. 
The minimum payments for the six months ended June 30, 1980 and 1979 
were $2,868,000 and $2,725,000, respectively. Remaining Minimum Bond 
Retirement deposits are detailed below: 

Required Minimum 
Bond Retirement 
Period Payment 

1980 $ 2,868,000 

1981 6,036,000 

1982 6,354,000 

1983 6,685,000 

1984 7,042,000 

1985 through 1991 53,920,000 

TOTAL $82.905.000 



-10- 



NOTES TO FINANCIAL STATEMENTS (CONT'D) 
CHICAGO- O 1 HARE INTERNATIONAL AIRPORT 

NOTE A- -SIGNIFICANT ACCOUNTING POLICIES (CONT'D) 

As mentioned in Notes A7-c and A7-h, additional payments 
to the Revenue Bond Retirement Reserve may be made. Allo- 
cations to the Revenue Bond Retirement Reserve totaled $8,520,489 
and $7,389,928 for the six months ended June 30, 1980 and 1979 respectively. 

e. For annual payment of $1,160,000 ($580,000 for the semi annual payment) 

to the Maintenance Reserve until $4,833,334 is accumulated in the Reserve. 
This money is available for the payment of major repairs, renewals 
and replacements. Expenditures of $ - and $138,254 during the six 
months ended June 30, 1980 and 1979, respectively, were made from this 
account for the specified purposes. 

f. To pay to the Emergency Reserve an amount equal to the sum of the 
semi annual provisions for depreciation and amortization of fixed 
and other assets acquired with City of Chicago money and interest 
on City of Chicago money invested in fixed and other assets of the 
Airport. 

The components of this amount for the six months ended June 30, 1980 

and 1979 are as follows: 

1980 1979 
Depreciation $125,150 $110,290 

Amortization 23,993 24,534 

Interest 409,881 398,860 

TOTAL ALLOCATION $559.024 $533,684 

Monies held to the credit of the Emergency Reserve Account shall 
be treated as revenues to provide for the abatement of landing 
fees in the event that the Airport is closed. 

g. To provide for deferred income to reduce future flight fees. To 

the extent that "net revenues" for the year as defined in the Revenue 
Bond Ordinance, including the application of deferred income from 
the previous year, exceed "airport expense" as defined, the excess 
shall be considered deferred income and as revenues of the next 
succeeding year. For the six months ended June 30, 1980 and 
1979, $22,499,303 and $12,304,809, respectively, had been deferred 
to reduce future flight fees. 



-11- 



NOTES TO FINANCIAL STATEMENTS (CONT'D) 
CHICAGO- 0' HARE INTERNATIONAL AIRPORT 

NOTE A--SIGNIFICANT ACCOUNTING POLICIES (CONT'D) 

h. To provide for the retirement of Revenue Bonds in addition 
to the minimum payment referred to in Note A7-d. 
Any remaining revenues after making the previously 
listed allocations shall be allocated to the Revenue 
Bond Retirement Reserve; $4,209,714 and $3,884,233 
were so credited for the six months ended June 30, 1980 and 1979, 



NOTE B- -AIRLINE DEPOSITS 

In 1979, the City of Chicago and certain airline carriers entered into a 
Financing Participation Agreement for the purpose of raising funds for 
improvements to the Federal Inspection Area within the International 
Terminal Building. Pursuant thereto, deposits totaling $1,022, 451. were 
received. The balance sheet at June 30, 1980 includes the following 
amounts relating to this agreement: 

Restricted assets: 

Cash , $ 216,209 

U.S. Government securities — at cost 942, 188 

$1.158,397 

Liabilities payable from restricted assets: 

Accounts payable $ 36,587 

Airline deposits 1,121,810 

$1.158.397 



-12- 



NOTES TO FINANCIAL STATEMENTS (CONT'D) 
CHICAG O-O* HARE INTERNATIONAL AIRPORT 

NOTE C- -REVENUE BONDS AND RETIREMENT 

1. Revenue Bonds 

The Chicago-O'Hare International Airport Revenue Bonds were issued 
under the authority of an ordinance adopted December 29? 1958, and 
subsequent supplemental ordinances. The Bonds were issued to provide 
monies for the extension and improvement of the Airport and its 
facilities. The following information is presented regarding the 
status of the Bonds as of June 30, 1980 and 1979: 



1980 



1979 



Amount authorized 

Amount sold 

Amount called or purchased 

and retired 
Amount outstanding 



$238,000,000 $238,000,000 

232,000,000 232,000,000 

149,095,000 128,013,000 

82,905,000 103,987,000 



The Revenue Bonds outstanding at June 30, 1980 and 1979 are comprised of 
the following: 



1980 



1979 



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 March, 1970 

6% Series of 1972 



$ 31,941,000 $ 42,496,000 



6,657,000 
891,000 
1,519,000 
6,562,000 
30,555,000 
4,780,000 



8,792,000 
1,253,000 
1,975,000 
8,201,000 
35,415,000 
5,855,000 



TOTAL 



$ 82.905.000 $103.987.000 



2. Retirement 

Revenue Bonds are to be retired as rapidly as practicable through the 
revenues allocated to the Revenue Bond Retirement Reserve. Bonds may 
be redeemed by call at prices ranging downward from 105% to 100%, of 
principal amount plus accrued interest to December 31, 1991, and 
thereafter, at par value plus accrued interest. In addition, Bonds 
may be redeemed by purchase in the open market or tender at prices 



13- 



NOTES TO FINANCIAL STATEMENTS (CONT'D) 
CHICAGO- 0' HARE INTERNATIONAL AIRPORT 

NOTE C— REVENUE BONDS AND RETIREMENT (CONT'D) 

not in excess of the next predetermined call prices. The following 
information is presented regarding Bonds purchased or called for 
retirement through June 30, 1980 :«, 



Cumulative 



1980 



1979 



Par value of bonds purchased 

or called 

Cost of bonds purchased 

or called (excluding 

premium) 
Premiums paid on bonds 

purchased or called 



$149,095,000 $13,562,000 $7,463,000 

142,611,971 13,379,940 7,463,000 
1,903,458 132,672 199,925 



Premiums paid on Bonds purchased or called are charged to Airport 
operations in the year of payment. Discounts on Bonds purchased are 
retained in the Bond Retirement Reserve to purchase additional Bonds. 

Bonds also may be redeemed with monies that are not allocations of 
revenues to the Retirement Reserve. Call prices for this type of 
redemption have been adopted which exceed the previously referred to 
call prices by not more than 2% of principal amount. As of June 30,1980 

the City of Chicago has never chosen to retire Airport Bonds by this 
method. 

NOTE D- -DEFERRED RENTAL INCOME 

In 1979, the City of Chicago consented to the assumption of a bankrupt 
tenant's lease and received a $461,421 settlement therefrom. This 
settlement was deemed to represent the present value of the lease and 
income will be recognized annually to parallel an escalation in the lease 
approximately as follows: 



1980-1982 
1983 

1984-1987 
1988 



$48 , 700 
53,800 
58,400 
28,000 



For the six months ended June 30, 1980 $24,148 was recognized as income, 



-14- 



NOTES TO FINANCIAL STATEMENTS (CONT'D) 
CHICAGO- 0' HARE INTERNATIONAL AIRPORT 

NOTE E— PENSION PLANS 

The employees of the City of Chicago are covered under various contribu- 
tory retirement plans established by State Statute. The policemen are 
members of the Policemen's Annuity and Benefit Fund of Chicago; firemen 
are members of, the Firemen's Annuity and Benefit Fund of Chicago; other 
employees are members of either 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. 
Contributions by the City of Chicago are multiples of the employee 
contributions made two years prior. The City of Chicago's share of 
contributions is funded by net tax levies. 

Substantially all full-time City of Chicago employees whose salaries are 
paid through Chicago-O'Hare funds participate in one of the above pension 
plans. Pension contributions charged to operations for the six months ended 
June 30, 1980 and 1979 were $1,409,644 and $1,263,627, respectively. 

It is impossible to determine the portion of unfunded liabilities which 
pertain to employees paid through Chicago-O'Hare International Airport 
accounts. 

NOTE F- -COMMITMENTS 

Contract commitments to be financed by the operation and maintenance 
account at June 30, 1980 and 1979 totaled $10,772,836 and $13,230,224, 
respectively. 



-15- 



CO. 62 




CITY OF CHICAGO 



CHICAGO- 0' HARE INTERNATIONAL AIRPORT 

FINANCIAL STATEMENTS 

FOR THE SIX MONTHS ENDED JUNE 30, 1981 



7TT7. 7C4 

pi 



OFFICE OF THE CITY COMPTROLLER 

TRANSPORTATION LIBRARY 

APR 19 19A? 
NORTHWESTERN UNIVERSITY 




of Chicago 
? M. Byrne, Mayor 



ortment of Finance 

lony N. Frotto 

ng City Comptroller 

Hall. Room 501 
North LoSalle Street 
ago. Illinois 60602 
2)744-7100 



CHICAGO- 0' HARE INTERNATIONAL AIRPORT 

FINANCIAL STATEMENTS 

FOR THE SIX MONTHS ENDED JUNE 30, 1981 



Prepared by the Accounting Division 
Office of the City Comptroller 
City of Chicago, Illinois 
November 12, 1981 



TRANSPORTATION 
LIBRARY 



HE 

C5?>2 




Oty of Chicago 
Jone M. Byrne, Moyor 



Department of Finance 

Anthony N. Fratto 
Acting City Comptroller 

Oty Hall, Room 501 
1 21 North LaSalle Street 
Chicago, Illinois 60602 
(312)744-7100 



CONTENTS 



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 "Net Revenues" as defined in 
Revenue Bond Ordinance 

Exhibit F - Statements of Changes in Financial Position 

Notes to Financial Statements 



Page 
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CHICAGO- 0' HARE INTERNATIONAL AIRPORT 
STATEMENTS OF REVENUES AND EXPENSES 
SIX MONTHS ENDED JUNE 30, 1981 AND 1980 



EXHIBIT D 



Operating revenues: 
Flight fees 
Rent, concessions and other 

Total operating revenues 

Operating expenses: 

Salaries and wages 

Provision for depreciation 

Amortization of deferred 
engineering costs 

Repairs and maintenance, 
including expenditures from 
maintenance reserve account 

Other operating expenses 

Total operating expenses 

Total operating income 

Nonoperating income (expense) : 
Interest earned on investments 
Discount on revenue bonds retired 
Interest incurred on revenue bonds 
Premium on revenue bonds retired 

Net nonoperating 
income 

Revenue in excess of expenses 



1981 



$22,031,328 
23,889,333 



$15,998,258 
5,742,105 



4,595,302 
12,559,949 



1980 



$23,187,435 
24,391,577 



$45,920,661 $47,579,012 



$13,483,038 
5,682,439 

23,993 



5,291,121 
13,452,173 



$38,895,614 $37,932,764 
$ 7,025,047 $ 9,646,248 



$ 6,071,328 $ 3,765,475 
105,924 182,060 

( 1,989,997) ( 2,504,433) 

( 2,415 ) ( 132,672) 



$ 4,184,840 $ 1,310,430 
$11.209.887 $10.956.678 



See notes to financial statements. 



»5- 



EXHIBIT E 

CHICAGO-O'HARE INTERNATIONAL AIRPORT 

STATEMENTS OF "NET REVENUES" AS DEFINED IN REVENUE BOND ORDINANCE 

SIX MONTHS ENDED JUNE 30, 1981 AND 1980 

1981 1980 

Revenues in excess of expenses $11,209,887 $10,956,678 

Add (deduct) adjustments to .reflect 
ordinance basis of accounting: 
Amounts included above in determination 
of revenues in excess of expenses: 
Provision for depreciation 5,742,105 . 5,682,439 

Amortization of deferred 

engineering costs - 23,993 

Expenditures from maintenance 
reserve account 25,385 

. Interest earned on investments, 

restricted ( 3,865,042) ( 2,284,662) 

Interest on revenue bonds 1,989,997 2,504,433 

Discount on revenue bonds retired ( 105,924) ( 182,060) 
Amounts not included above in 
determination of revenues in 
excess, of expenses: 
Expenditures of operating revenues 

for capital improvements ( 961,555) ( 739,612) 

Application of deferred income from 
preceding year as reduction of 
flight fees 26,601,267 17,259,265 

"Net revenues" as defined in 

Revenue Bond Ordinance $40.636.120 $33.220.474 

Allocation of "net revenues" in 
order of priority: , 

Revenue bond interest $ 1,989,997 $ 2,504,433 

Revenue bond retirement, minimum payment 3,018,000 2,868,000 
Maintenance reserve - 580,000 

Emergency reserve 684,421 559,024 

Deferred income to reduce flight fees 

in following year 30,369,552 22,499,303 

Remainder, additional allocation to 

revenue bond retirement 4,574,150 4,209,714 

Total allocation of "Net revenues" $40.636.120 $33.220.474 

See notes to financial statements. 



EXHIBIT F 
CHICAGO-O'HARE INTERNATIONAL AIRPORT 
STATEMENTS OF CHANGES IN FINANCIAL POSITION 
SIX MONTHS ENDED JUNE 30, 1981 And 1980 

1981 1980 



Sources of working capital: 
From operations: 

Revenues in excess of expenses 
Add (deduct) items not affecting 
working capital: 
Provision for depreciation 
Amortization of deferred 

engineering costs 
Amortization of deferred revenue 

Working capital provided from operations 

City of Chicago contributions for fixed 

assets 
Airline contributions for fixed assets 
Decrease in net restricted assets 



$ 


11,209,887 


$ 10,956,678 




5,742,105 


. 5,682,439 




— 


23,993 


( 


24,350) 


( 24,148) 


$ 


16,927,642 


$ 16,638,962 


- 


984,183 


842,247 




718,523 


- 




* ■• 


2,878,540 



$ 18,630,348 $ 20,359,749 

Uses of working capital: 

Acquisition of fixed assets $ 2,664,261 $ 1,581,859 

Decrease in long-term liabilities 5,578,000" 10,694,000 

Increase in net restricted assets 3,626,152 - 

$ 11,868,413 $ 12,275,859 

Increase (decrease) in working capital $ 6.761.935 $ 8.083.890 

Changes in components of working capital: 
Increase (decrease) in current assets: 

Cash ($ 3,578,108) ($ 3,474,612) 

U.S. government securities 98,992 7,621,474 

Accounts receivable 3,194,903 ( 568,968) 

Due from other funds ( 908,643) ( 1,555,657) 

Prepaid expenses and deposits ( 209,764) ( 284,621) 

Due from special accounts ( 174,895 ) 150,500 

( $ 1,577,515 ) $ 1,888,116 

Increase (decrease) in current ,- •••■■-, 
liabilities:. /.". 
Revenue bonds payable, current 

maturities ($ 3,018,000) ($ 2,868,000) 

Accounts payable ( 2,257,361) 1,831,115 

Due to other funds ( 3,064,089) ( 5,060,345) 

Due to special accounts - ( 98,544 ) 

($ 8,339,450 ) ($ 6,195,774) 

Increase (decrease) in working capital $ 6.761.935 $ 8.083.890 

See notes to financial statements. 
-7- 



CHICAGO-O'HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 

SIX MONTHS ENDED JUNE 30, 1981 AND 1980 

1. Summary of significant accounting policies: 

Basis of accounting: 

Financial statements have been prepared on the accrual basis of 
accounting, accounted for as an enterprise fund of the City of 
Chicago and conforming with the reporting requirements set forth in 
National Council of Governmental 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 all- 
ocations, of "net revenues" as defined. The assets of the trust accounts 
may be used only for the specific purpose of each trust, including bond 
interest, bond retirement, maintenance reserve, emergency reserve and 
construction. 

U.S. government securities: 

Investments in U.S. treasury bills and treasury notes are carried at 
cost. Interest is accrued only on those securities having stated in- 
terest rates, ige., treasury notes. Discounts and premiums are re- 
cognized at the time of maturity or sale. The aggregate cost and 
market value at June 30, 1981 and 1980, are as follows: 

Cost Market 



1981 1980 1981 1980 

Unrestricted $18,506,783 $13,566,965 $18,705,777 $13,577,750 

Restricted 59,903,931 55,181,126 59,978,752 56,377,505 

$78.410.714 $68.748.091 $78.684.529 $69.955.255 



_~8< 



CHICAGO-O'HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 

SIX MONTHS ENDED JUNE 30, 1981 AND 1980 

1. Summary of significant accounting policies: (continued) 

Accounts receivable: 

In accordance with the Revenue Bond Ordinance, all accounts re- 
ceivable uncollected for a period of 30 days after due date are 
considered uncollectible, and accordingly an allowance for 
doubtful accounts is provided. As of June 30, 1981 and 1980, 
allowances of $2,945,167 and $3,112,463, respectively, were re- 
corded for these accounts. , Approximately $1,985,000 of the June 
30, 1981 accounts receivable which were included in the allowance 
was collected by September 30, 1981. 

Fixed assets: 

All assets are recorded at cost. Land includes the cost of earth- 
work and landscaping. Assets are acquired with Revenue Bond pro- 
ceeds and three other sources as follows: 

a. Assets acquired with City of Chicago money include $76,630 
capitalized interest in 1981 for the use of City of Chicago 
money. Interest is capitalized from the commencement of the 
land improvement or construction activity through the year of 
completion. 

b. Assets are acquired with state and federal money from grants 
received that are reimbursements for assets paid for with City 
of Chicago money. The grants are recognized only as received. 
As at June 30, 1981 a maximum of $24,799,520 may be realized 
in future periods from such grants. 

c. Assets acquired with public utility, concessionaire and airline 
money comprise direct reimbursements of amounts expended directly 
and indirectly from operating revenues. The Revenue Bond Or- 
dinance does not allow the expenditure of operating revenues for 
capital improvements. However, the airlines' representative has 
agreed to substantially all of these expenditures, which totaled 
$961,555 in 1981 and $739,612 in 1980. Using operating revenues 
for this purpose has the effect of increasing flight fees. 



• CHICAGO-0'HARE INTERNATIONAL AIRPORT 
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ^ 
SIX MONTHS ENDED JUNE 30, 1981 AND 1980 

1. Summary of significant accounting policies: (continued) 

Fixed assets: (continued) 

In accordance with the Revenue Bond Ordinance, all replacements of 
vehicles, furnishings, signs and other equipment are expensed when 
acquired. 

Depreciation and amortization: 

Provisions for depreciation of buildings and other facilities are 
provided on a straight- line basis over the estimated useful lives of 
the individual assets. Depreciation charges are begun in the year 
following the year of acquisition or completion. Deferred engineering 
costs were amortized on a straight-line basis over 25 years ended 
December 31, 1980. 

Allocation of revenues : 

The Revenue Bond Ordinance requires the allocation of net revenues, as 
defined, for specified purposes in the following order of priority: 

a. For ordinary costs of operation and maintenance, but not in 

excess of the amount budgeted by the City of Chicago for such 
purposes. 

b. For amounts equal to interest payable in the current year on 

bonds outstanding. 

c. To maintain the balance of the Debt Service Reserve at an 

amount equal to two years' interest requirements * The Debt 
Service Reserve for all Revenue Bond issues outstanding was 
fully funded through allocations made in prior years. Bonds 
in the principal amounts of $8,596,000 and $13,562,000 were 
purchased or called during the six months ended June 30, 1981 
and 1980 respectively. The corresponding interest requirements 
of $907,155 in 1981 and $1,442,775 in 1980 were transferred to 
the Revenue Bond Retirement Reserve. 



10- 



CHI CAGO-0 1 HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 

SIX MONTHS ENDED JUNE 30, 1981 AND 1980 

1. Summary of significant accounting policies: (continued) 
Allocation of revenues: (continued) 

d. For required minimum payments to the Revenue bond Retirement 

Reserve. The minimum payment for the six months ended June 
30, 1981 was $3,018,000. Remaining minimum Bond Retirement 
deposits are as follows: 

Required minimum 
Bond Retirement 
Period payment 

1981 $ 3,018,000 

1982 6,354,000 

1983 6,685,000 

1984 7,042,000 

1985 7,412,000 

1986 through 1994 35,470,000 

$65.981.000 

As mentioned in Note lh below, additional allocations of net 
revenues to the Revenue Bond Retirement Reserve may be made. 
Allocations to the Revenue Bond Retirement Reserve for the 
required minimum retirements and remaining revenues after all 
other required allocations totaled $7,592,150 in 1981 and 
$7,077,714 in 1980. 

e. For annual payment of $1,160,000 to the Maintenance Reserve 

until $4,833,334 is accumulated in the Reserve. No payment 
was required during the 6 months ended June 30, 1981 since 
the $4,833,334 was accumulated as required. Interest income, 
($441,473 for the 6 months ended June 30, 1981), is required 
to be credited to the reserve account notwithstanding the 
fact that the amounts credited to the Reserve Maintenance ■ 
Account exceeds the requirement. — 

f . To pay to the Emergency Reserve an amount equal to the sum 

of the semi annual provisions for depreciation and amort- 
ization of fixed sad other assets acquired vith City of 
Chicago money and interest on City of Chicago money invested 
in fixed and other assets of the Airport. 

" -11- 



CHICAGO- 0* HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 

SIX MONTHS ENDED JUNE 30, 1981 AND 1980 

1. Summary of significant accounting policies: (Continued) 
Allocation of revenues: (Continued) 

f . continued : 

The components of this amount for 1981 and 1980 are as 
follows: 

1981 1980 

Depreciation $184,151 $125,150 
Amortization - 23,993 
Interest 500,270 409,881 

Total allocation $684.421 $559.024 

Monies held to the credit of the Emergency Reserve Account will 
be treated as revenues to provide for the abatement of landing 
fees in the event that the Airport is closed. 

g. To provide for deferred income to reduce future flight fees. To 

the extent that "net revenues" as defined in the Revenue Bond 
Ordinance for the year, including the application of deferred 
income from the previous year, exceed "airport expense" as 
defined, the excess will be considered deferred income and as 
revenues of the next succeeding year. For the six months ended 
June 30, 1981 and 1980,, $30,369,552 and $22,499,303, respectively, 
had been deferred to reduce future flight fees. 

h. To provide for the retirement of Revenue Bonds in addition to the 
minimum payment referred to in Note Id above. Any remaining 
. revenues after making the previously listed allocations will be 
allocated to the Revenue Bond Retirement Reserve; $4,574,150 and 
$4,209,714 were so credited for 1981 and 1980, respectively. 



XZ- . 



CHICAGO- 0' HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 

SIX MONTHS ENDED JUNE 30, 1981 AND 1980 



2. Airline deposits: 

Under the terms of a Financing Participation Agreement, the City of Chicago 
and certain participating airlines are sharing the cost of improvements to 
the Federal Inspection 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 are included in the 
accompanying balance sheets and include interest income earned on the funds 
less costs incurred for the improvements through June 30, 1981 and 1980. 
The balance sheets at June 30,1981 and 1980 include the following amounts 
relating to this agreement: 



Restricted assets: 
Cash 

U.S. government securities, 
at cost 



1981 



$347,140 



5347.140 



1980 

$ 216,209 

942,188 
$1.158.397 



Liabilities payable from 
restricted assets: 
Accounts payable 
Net airline deposits 



$ 85,935 
261,205 

$347.140 



$ 36,587 
1,121,810 

51.158.397 



-13- 



CHICAGO-O'HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 

SIX MONTHS ENDED JUNE 30, 1981 AND 1980 



3. Revenue Bonds and retirement: 



Revenue Bonds: 



The Chicago -0' Hare International Airport Revenue Bonds were issued 
under the authority of an ordinance adopted December 29, 1958, and 
subsequent supplemental ordinances. The Bonds were issued to pro- 
vide monies for the initial construction and subsequent extensions 
and improvements of the Airport and its facilities. The following 
information is presented regarding the status of the Bonds as at 
June 30, 1981 and 1980: 



Amount authorized 

Amount sold 

Amount called or purchased 

and retired 
Amount outstanding 



1981 

$238,000,000 
232,000,000 

166,019,000 
65,981,000 



1980 

$238,000,000 
232,000,000 

149,095,000 
82,905,000 



The Revenue Bonds outstanding at June 30, 1981 and 1980 are comprised 
of the following: 



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 



1981 1980 

$ 22,837,000 $ 31,941,000 

4,740,000 6,657,000 

582,000 891,000 

1,125,000 1,519,000 

5,147,000 6,562,000 

27,090,000 30,555,000 

4,460,000 4,780,000 

$ 65,981,000 $ 82,905,000 



3,018,000 
.$...62. 963.. 0.00 



2,868,000 
g_aQ.037.00Q 



-14- 



CHICAGO-O'HARE INTERNATIONAL AIRPORT 
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 
SIX MONTHS ENDED JUNE 30, 1981 AND 1980 



3. Revenue Bonds and retirement: (continued) 

Retirement: 

Revenue Bonds are to be retired as rapidly as practicable through the 
revenues allocated to the Revenue Bond Retirement Reserve. Bonds 
may be redeemed by call at prices ranging downward from 104.5% to 
100% of principal amount to December 31, 1995, plus accrued interest. 
In addition, Bonds may be redeemed by purchase in the open market or 
tender at prices not in excess of the next predetermined call prices. 
The following information is presented regarding Bonds purchased or 
called for retirement during the six months ended June 30, 1981 and 
1980, and the cumulative amounts through June 30, 1981: 

Cumulative 1981 1980 

Par value of bonds ' • 

purchased or called $166,019,000 $8,596,000 $13,562,000 

Cost of bonds 

purchased or called 

(excluding premium) 159,412^251 8,490,076 13,379,940 

Premiums paid on 

bonds purchased or 

called 1,946,951 2,415 132,672 



Premiums paid on Bonds purchased or called are charged to Airport operations 
in the year of purchase. Discounts on Bonds purchased are retained in 
the Bond Retirement Reserve to purchase additional Bonds. . 

Bonds also may be redeemed with monies that are not allocations- of revenues 
to the Retirement Reserve. Call prices for this type of redemption have 
been adopted which exceed the previously referred to call prices by not 
more than 2% of principal amount. 



CHICAGO-O'HARE INTERNATIONAL AIRPORT 
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 
SIX MONTHS ENDED JUNE 30, 1981 AND 1980 



4. Deferred rental Income: 

In 1979, the City of Chicago consented to the assumption by a third party 
of a bankrupt tenant 1 s lease and received $461,421 from the sale of such 
lease. The sales price is recognized annually over the remaining life of 
the lease parallel with the rental escalation terms of the assumed lease 
approximately as follows: 



1980-1982 


$48 , 700 


1983 


53,800 


1984-1987 


58,400 


1988 


$28,000 



5. Pension plans: 

The employees of the City of Chicago are covered under various contributory 
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 Retire- 
ment 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 contributions, which are established by state statute, are multiples 
of the employee's contribution made two years prior. The City's contri- 
bution 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 $1,553,826 and 
$1,409,644 in 1981 and 1980, respectively. 

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



.16- 



CHICAGO-O'HARE INTERNATIONAL AIRPORT 
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 
SIX MONTHS ENDED JUNE 30, 1981 AND 1980 



6 . Commitments : 

Contract commitments to be financed by the operation and maintenance account 
at December 31, 1980 and not expended at June 30, 1981 totaled $7,513,000. 
In addition, at June 30, 1981 $13,233,478 of the Airport's unexpended app- 
ropriations for the year 1980 remained earmarked by Airport management for 
specific future projects, although not under contract or other formal 
commi tmen t • 



17- 



*C.O. 62 







CITY OF CHICAGO 



CHI CAGO-O' HARE INTERNATIONAL AIRPORT 

FINANCIAL STATEMENTS 

FOR THE SIX MONTHS ENDED JUNE 30, 1982 



TRAN 

HE" 
T797.7£t 

GS32- 
Ju/te, 



OFFICE OF THE CITY COMPTROLLER 

TRANSPORTATION LIBRARY 
JAN 2 7 1983 

NORTHWESTERN UNIVERSITY 




City of Chicago 
Jane M. Dyrne, Mayor 



Deportment of Finance 

Anthony N. Frotto 
City Comptroller 

City Hall, Room 501 
121 North LoSolle Street 
Chicogo, Illinois 60602 
(312)744-7100 



CHI CAGO-O' HARE INTERNATIONAL AIRPORT 

FINANCIAL STATEMENTS 

FOR THE SIX MONTHS ENDED JUNE 30, 1982 



Prepared by the Accounting Division 
Office of the City Comptroller 
City of Chicago, Illinois 
November 19, 1982 



TRANSPORTATION 
LIBRARY 






9 




City of Chicago 
Jone M. Byrne, Mayor 



Department of Finance 

Anthony N. Frotto 
City Comptroller 

City Hall, Room 501 
121 North LoSalle Street 
Chicago. Illinois 60602 
(312)744-7100 



CONTENTS 

Page 

Exhibit A - Balance Sheets 2 

Exhibit B - Statements of Changes in Contributed Capital 3 

Exhibit C - Statements of Changes in Retained Earnings 4 

Exhibit D - Statements of Revenues and Expenses 5 

Exhibit E - Statements of Changes in Financial Position 6 

Notes to Financial Statements 7-1: 



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o> re 



EXHIBIT D 



CHI CAGO-0' HARE INTERNATIONAL AIRPORT 
STATEMENTS OF REVENUES AND EXPENSES 
SIX MONTHS ENDED JUNE 30, 1982 AND 1981 



1982 1981 

Operating Revenues 

Flight Fees $22,099,208 $22,031,328 

Rent, Concessions and Other 24,347,883 23,889,333 

Total Operating Revenues $46,447,091 $45,920,661 

Operating Expenses 

Salaries and Wages $18,437,442 $15,998,258 

Provision for Depreciation 5,619,327 5,742,105 
Repairs and Maintenance, Including Expenditures 

from Reserve Maintenance Account 6,932 410 4,595,302 

Other Operating Expenses 16,428,621 12,559,949 

Total Operating Expenses $47,417,800 $38,895,614 

Total Operating Income (Loss) ( $ 970,709 ) $ 7,025,047 

Nonoperating Income (Expense) 

Interest Earned on Investments $ 5,254,926 $ 6,071,328 
Discount, Net of Premiums on Revenue 

Bonds Retired 259,467 103,509 

Interest Incurred on Revenue Bonds ( 1 533,134) ( 1,989,997) 

Provision for Judgments ( 1,224,000) - 

Net Nonoperating Income $ 2,757,259 $ 4,184,840 



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



Revenues in Excess of Expenses $ 1,786,550 $11,209,887 



-5- 



EXHIBIT E 



CHICAGO- 0' HARE INTERNATIONAL AIRPORT 

STATEMENTS OF CHANGES IN FINANCIAL POSITION 

SIX MONTHS ENDED JUNE 30, 1982 AND 1981 



Sources of Working Capital 
From Operations 

Revenues in Excess of Expenses 

Add (Deduct) Items Not Affecting Working Capital 
Provision for Depreciation 
Amortization of Deferred Revenue 
Total From Operations 
Airline Contributions for Fixed Assets 
City of Chicago Net Contributions for Fixed Assets 

Total Sources of Working Capital 

Uses of Working Capital 

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

Total Uses of Working Capital 

Increase (Decrease) in Working Capital 



1982 

$ 1,786,550 
5,619,327 



( 



24,350) ( 



$ 7,381,527 

30,172 

1,616,571 



1981 



$11,209,887 

5,742,105 

24,350 ) 

$16,927,642 

718,523 

984,183 



$ 9,028,270 $18,630,348 



$ 4,243,098 $ 2,664,2bl 

6,074,000 5,578,000 

2,381,371 3,626,152 

$12,698,469 $11,868,413 

($ 3,670,199) $ 6.761.935 



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 



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

Due to Other City of Chicago Funds 
Due to Restricted Funds 



Increase (Decrease) in Working Capital 



($ 3,145,400) ($ 3,578,108) 



( 

( 
( 
( 


4,626,243) 

2,573,225 

1,054,947) 

356,334) 

24,424) 


98,992 
3,194,903 
( • 908,643) 
( 209,764) 
( 174,895) 


($ 


6,634,123) 


($ 1,577,515) 



($ 3,177,000) ($ 3,018,000) 

5,243,574 ( 2,257,361) 

( 5,315,318) ( 3,064,089) 

284,820 - 

( $ 2,963,924 ) ( $ 8,339,450 ) 

C$ 3.670.199) $ 6.761.935 



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



• b- 



CHI CAGO-0' HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 

SIX MONTHS ENDED JUNE 30, 1982 AND 1981 



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 1 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 ,-atuortization 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. 

The above requirements of the Revenue Bond Ordinance have been met for 
the six month period ended June 30, 1982. 



•7- 



CHICAGO- 0' HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 

SIX MONTHS ENDED JUNE 30, 1982 AND 1981 



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 
June 30, 1982 and 1981, are as follows: 

Cost Market 



1982 1981 1982 1981 

Unrestricted $14,125,029 $18,506,783 $14,210,327 $18,705,777 

Restricted 67,688,492 59,903,931 68,299,387 59,978,752 

Totals $81.813.521 $78,410.714 $82,509,714 $78,684.529 

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 $21,151 in 1982 
and $76,630 in 1981 for the use of City of Chicago money. Interest 
is capitalized from the commencement of the improvement or con- 
struction 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 June 30, 1982, a maximum of approxi- 
mately $23,864,934 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 $2,596,355 as of June 30, 1982 and $961,555 

as of June 30, 1981. Using operating revenues for this purpose has 
the effect of increasing 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 

-8- 



Note 2 - Revenue Bonds 



CHI CAG 0-0 'HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 

SIX MONTHS ENDED JUNE 30, 1982 AND 1981 



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 June 30, 1982 and 1981 are comprised of 
the following: 



1982 



1981 



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 



$13,447,000 $22,837,000 



2,800,000 

265,000 

705,000 

3,631,000 

23,265,000 

3,780,000 



4,740,000 
582,000 
1,125,000 
5,147,000 
27,090,000 
4,460,000 



$47,893,000 $65,981,000 

3,177,000 3,018,000 

$44,716,000 $62,963,000 



Minimum bond retirements for future years are as follows 



1982 
1983 
1984 

1985 
1986 
1987 through 1994 

Total 



$ 3,177,000 
6,685,000 
7,017,000 
7,287,000 
4,204,000 
19,523,000 

$47,893,000 



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 $177,148,209 from 
issuance through June 1982 excluding premiums paid. Premiums paid on Bonds purchased 
or called, which amounted to $1,987,007 from issuance through June 1982, are charged 
to Airport operations in the year of purchase. Discounts on Bonds purchased, which 
amounted to $6,958,791 from issuance through June 1982, are credited to Airport operc- 
tions in the year of purchase and are retained in the Bond Retirement Reserve. 



-9- 



CHI CAGO-0' HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 

SIX MONTHS ENDED JUNE 30, 1982 AND 1981 

Revenue Bond Ordinance - "Net Revenues" as Refined 
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. For the 
six months ended June 30, 1982 a provision for doubtful accounts of $206,053 
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: 

Six Months Ended June 30, 



1982 



1981 



Revenue in Excess of Expenses 



$ 1,786,550 $11,209,887 



Add (Deduct) Adjustments to Reflect Ordinance 
Basis of Accounting 

Application of Deferred Income from Preceding 

Year as Reduction of Flight Fees 
Provision for Depreciation 
Interest on Revenue Bonds 

Expenditures from Reserve Maintenance Account 
Interest Earned on Investments, Restricted 
Expenditures of Operating Revenues for 

Capital Improvements 
Additional Provision for Doubtful Accounts 
Discount on Revenue Bonds Retired 

"Net Revenues" as Defined in 
Revenue Bond Ordinance 



27,807,556 

5,619,327 

1,533,134 

854,770 

3,548,882) ( 

2,596,355) ( 
206,053) 
282,588) ( 



26,601,267 

5,742,105 
1,989,997 
25,385 
3,865,042) 

961,555) 

105,924) 



$30.967,459 $40.636.120 



As previously stated in Note 1, the Revenue Bond Ordinance requires the 

"Net Revenues" to be allocated as follows: 



Amount 



"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 

Totals 

Balance to be Allocated to Revenue 
Bond Retirement Reserve 



1982 

$30,967,459 

1,533,134 

3,177,000 
118,511 
488,147 

20,778,654 

$26,095,446 



1981 

$40,636,120 

1,989,997 

3,018,000 

684,421 

30,369,552 

$36,061,970 



$ 4.872.013 $ 4.574.150 



• 10- 



CHICAGO- 0' HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 

SIX MONTHS ENDED JUNE 30, 1982 AND 1981 



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 June 30, 1982: 



1982 
1983 

1984 
1985 
1986 

Later Years 



$ 10,620,798 
20,915,161 
20,230,419 
17,816,520 
17,784,232 
191,122,973 



Total Minimum Future Rental Income $278,490,103 



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 $3,855,518 
for the six months ended June 30, 1982. 

In 1979, the City of Chicago received $461,421 from the sale of a bank- 
rupt 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. For the six months ended 
June 30, 1982 and 1981 the following activity took place relating to this 
agreement : 



1982 



1981 



Deposit Balance at Beginning of Period 

Interest Income 

Airlines' Share of Expenditures 

Deposit Balance at End of Period 



$258,109 $907,565 
35,272 72,209 
( 30,174 ) ( 718,569 ) 

$263,207 $261,205 



■11- 



rm 



CHI CAGO-0' HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 

SIX MONTHS ENDED. JUNE 30. 1982 AND 1981 



Note 5 - Pension Plans 

The employees of the City of Chicago are covered under various con- 
tributory rpti^p^p" 1 " plans established by state statute and administered by in- 
dependent 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 
paid by the City for the Airport employees. These reimbursements, recorded as 
expense, amounted to $1,699,022 and $1,553,826 in 1982 and 1981. 

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 identifica- 
tion of Airport employees is made for actuarial purposes. 

Note 6 - Commitments and Contingencies 

Contract commitments to be financed by the operation and maintenance 
account at December 31, 1981 and not expended at June 30, 1982 totaled $12,296,000. 
In addition, at June 30, 1982 $7,862,000 of the Airport's unexpended app- 
ropriations for the vear 1981 remained earmarked by Airport management for specific 
future projects, although not under contract or other formal commitment. 



-12- 



.0.62 









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GAYLORD