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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
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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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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.
-7-
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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
-7-
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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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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 )
e notes to financial statements
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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.
-7-
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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 $5,473,194.91
C. The Reserve for Matured Bonds represents bonds called but not pre-
sented to the bank trustee for retirement.
-15-
#C.O. 62
» • - • i
liv ' Ai CENTER
LIBRARY
1978
NORTH WES'I LRiNI UNIVERSITY
CITY OF CHICAGO
CHICAGO- 0' HARE INTERNATIONAL AIRPORT
FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 1977
AN
OFFICE OF THE CITY COMPTROLLER
97- lc^
/ve.
t
TY OF CHICAGO
chael A. Bilandic, Mayor
PARTMENT OF FINANCE
ram 501, City Hall
icago, Illinois 50602
3rk Burrus
Comotroiler
/744-71C0
bert E. Shaw
t Deout> Comotrol'er
7744-3233
CHICAGO- 0' HARE INTERNATIONAL AIRPORT
FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 1977
Prepared by the Accounting Division
Office of the City Comptroller
City of Chicago, Illinois
November 23, 1977
HE
rY OF CHICAGO
hae! A. Bilandic, Mayor
PARTMENT OF FINANCE
om 501, City Hall
cago, Illinois 50502
Tk Burrus
Comotroller
744-71C0
3ert E. Shaw
Oeouty Comotroller
744-3233
CONTENTS
Pases
Exhibit A - Balance Sheet - June 30, 1977
Exhibit B - Comparative Statement of Revenue and Expense for
the six months ended June 30, 1977 and 1976
Exhibit C - Analysis of changes in reserves for the six months
ended June 30, 1977
Exhibit D - Analysis of changes in contributions for the six
months ended June 30, 1977
Exhibit E - Analysis of changes in retained earnings June 30,
1977
Schedule A-1-Reconciliation of "Net Revenues" as defined in
Revenue Bond Ordinance for the six months ended
June 30, 1977 and 1976
Schedule A-2-Analysis of changes in reserve for construction
for the six months ended June 30, 1977
Notes to Financial Statements
7
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CHICAGO- 0' PARE INTERNATIONAL AIRPORT
WWTV^jV/ t$
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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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
.00
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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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,
- 3 -
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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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4
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
-15-
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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-
Page
2
7
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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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Id
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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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.
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