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Full text of "City of Chicago, Chicago-O'Hare International Airport audit report"

CTTV OF CHICAGO 
CHTCAGO-O 'HARE INTERNATIONAL AIRPORT 






AUDIT REPORT 
AT 
DECEMBER 31. 1975 



HSPOhV VH 



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■RfiN 

IE 

3797. 7C4 

:532aa 
1975 



Bansley and Kiener 

Certified Public Accountants 

300 WEST WASHINGTON STREET 

Chicagd, Illinois BDBDB 



'<£ 



to 




3 5556 029 780186 



• 



Bansley and Kiener 

Certified Public Accountants 

300 WEST WASHINGTON STREET 

CHICAGO, ILLINOIS 60606 

AREA CODE 312 263-2700 

June 18, 1976 



To the City Council of the 
City of Chicago, Illinois 



JOLIET OFFICE: 

168 NORTH OTTAWA STREET 
JOLIET. ILLINOIS 60431 
AREA CODE 815 736-7361 



We have examined the balance sheet of Chicago-O'Hare 
international Airport as of December 31, 1975, and the related 
statements of revenue and expense, changes in reserves, changes in 
contributions, and changes in retained earnings for the year then 
ended. Our examination was made in accordance with generally 
accepted auditing standards, and accordingly included such tests 
of the accounting records and such other auditing procedures as we 
considered necessary in the circumstances. We also made reference 
to the authorizing ordinance to determine that accounting trans- 
actions reflected in the attached financial statements were within 
the scope of the authority. 

In our opinion, the accompanying financial statements, 
together with our notes pertaining thereto, present fairly the 
financial position of Chicago-O'Hare international Airport as of 
December 31, 1975 and the results of its operations for the year 
then ended, in conformity with generally accepted accounting 
principles and, except as stated in Note 1C3, the applicable 
provisions of the Revenue Bond Ordinance, applied on a basis 
consistent with that of the preceding year. 



Certified Public Accountants 



(3 







£1 

rHTCAGO-0'HA: 



EXHIBIT A 
-2- 



E 

DEC 



JUTIONS AND RETAINED EARNINGS 



CURRENT ASSETS: 3iit Assets) : 

Operation and Maintenance Accoufte Year 
Cash - City Treasurer 
Cash - Bank Trustee 
U.S. Treasury Bills (Note 1A) 
Accounts Receivable (Note IB) rioted Assets): 
Less - Allowance for Doubtful 
Due from Other Funds 
Prepaid Insurance 



$ 4,676,000.00 

10,501,901.57 

2,276,398.87 

$ 17,454,300.44 



Total Current Assets 



RESTRICTED ASSETS: 
Special Accounts: 

Cash - City Treasurer 
Cash - Bank Trustee 
U.S. Treasury Bills 

(Note 1A) 
U.S. Treasury Notes 

(Note 1A) 
Accrued Interest Receiv- 
able on U.S. Treasury 
Notes 
Due from Operation and 
Maintenance Account 
Construction Accounts: 
Cash - City Treasurer 
Cash - Bank Trustee 
U.S. Treasury Bills 
(Note 1A) 



547,204.02 



599,615.44 1,146,819.46 



20 



23 



$ 18,601,119.90 



$154,223,000.00 

4,676,000.00 149,547,000.00 



16,742,000.00 
2,631,170.41 
1,356,153.97 

25,392,160.56 

4,648,437.50 

36,010.00 

4,348,448.85 



55,154,381.29 



.rline 



Total Restricted Assets 

FIXED ASSETS: (Notes 1C and ID) : 
Land 
Buildings and Other 

Facilities $286 

Less - Allowance for 

Depreciation 105 

Construction in Progress 

Total Fixed Assets 

OTHER ASSETS: 

Deferred Engineering Costs 
Less - Amortization 

Total Assets 
Note - Retained Earnings include 
Note - Contract commitments to be 

See notes to financial statements 



$ 21,910,590.09 
32,883,975.83 
29,620,780.85 



84,415,346.77 
5,855,477.75 



Contributions and 

$313.573.325.71 

red income to reduce 1976 flight fees. 
31, 1975. 



G 



d 



CITY OF CHICAGO 
CHTCAGO-O'HARE I NTERNATI ONAL AIRPORT 

BALANCE SHEET 
DECEMBER 31, 1975 



EXHIBIT A 
-2- 



ASSETS 

CURRENT ASSETS: 

Operation and Maintenance Account: 
Cash - City Treasurer 
Cash - Bank Trustee 
U.S. Treasury Bills (Note 1A) 
Accounts Receivable (Note IB) 
Less _ Allowance for Doubtful Accounts 
Due from Other Funds 
Prepaid Insurance 



Total Current Assets 



RESTRICTED ASSETS: 
Special Accounts: 

Cash - City Treasurer 
Cash - Bank Trustee 
U.S. Treasury Bills 

(Note 1A) 
U.S. Treasury Notes 

(Note 1A) 
Accrued Interest Receiv- 
able on U.S. Treasury 
Notes 
Due from Operation and 
Maintenance Account 
Construction Accounts: 
Cash - City Treasurer 
Cash - Bank Trustee 
U.S. Treasury Bills 
(Note 1A) 



9,196,202.05 
2,093,838.37 



6,560,695.33 

604,142.55 

3,039,057.94 

7,102,363.68 
121,872.63 
439,160.65 



$ 17,867, 292. li 



33,817.93 

4,992,698.00 

20,580,296.12 
23,018,398.45 

451,527.09 
2,276,398.87 $ 51,353,136.46 



93,622.61 
25,177.06 

4,829,264.62 



4,948,064.29 



$ 48,506,553.06 



Total Restricted Assets 

FIXED ASSETS: (Notes lC and ID): 
Land 
Buildings and Other 

Facilities $286,385,782.20 

Less - Allowance for 

Depreciation 105,849,136.64 180,536,645.56 

Construction in Progress 10,117, 376.07 

Total Fixed Assets 



56,301,200.75 



OTHER ASSETS: 

Deferred Engineering Costs 
Less - Amortization 



$ 1,226,701.79 
982,444.30 



239,160,574.69 



244,257.49 



LIABILITIES, RESERVES, CONTRIBUTIONS AND RETAINED EARNINGS 



CURRENT LIABILITIES (Payable from Current Assets) : 
Revenue Bonds Payable - Due within One Year 
Vouchers and Accounts Payable 
Due to Special Accounts 

CURRENT LIABILITIES (Payable from Restricted Assets) : 
Special Accounts: 

Vouchers and Accounts Payable $ 547,204.02 

Construction Accounts: 

Vouchers and Accounts Payable 599,615.44 

Total current Liabilities 



$ 4,676,000.00 

10,501,901.57 

2,276,398.87 

$ 17,454,300.44 



1,146,819.46 
$ 18,601,119.90 



LONG-TERM LIABILITIES: 

Revenue Bonds Payable (Note 2) 
Less - Portion Due within One Year 

RESERVES (Exhibit C) : 
Debt Service 
Revenue Bond Retirement 
Reserve Maintenance 
Emergency Reserve 

Matured Interest on Revenue Bonds 
Matured Revenue Bonds 
Construction 

Total Reserves 

CONTRIBUTIONS (Exhibit D) : 
City of Chicago 
State and Federal 
Public Utility, Concessionaire and Airline 

Total Contributions 

RETAINED EARNINGS (Exhibit E) 



$154,223,000.00 
4,676,000.00 



16,742,000.00 
2,631,170.41 
1,356,153.97 

25,392,160.56 

4,648,437.50 

36,010.00 

4,348,448.85 



$ 21,910,590.09 
32,883,975.83 
29,620,780.85 



149,547,000.00 



55,154,381.29 



84,415,346.77 



5,855,477.75 



Total Liabilities, Reserves, Contributions and 
Retained Earnings 



Total Assets $313,573,325.71 Retained Earnings S313 , 573 , 325 .71 

Note - Retained Earnings include $5,088,992.34 which represent, in accordance with the Revenue Bond Ordinance, deferred income to reduce 1976 flight fees. 
Note - Contract commitments to be financed by the Operation and Maintenance Account totaled $7,774,015.10 at December 31, 1975. 

See notes to financial statements. 



(3 



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EXHIBIT C 
-4- 



cr 



(THTCAflO-O'HAR 



ANALYSIS O] 



FOR THE YEAR 



Re 1 Matured 
B< Revenue 
lnt< Bonds 



Construction 



Total 



BALANCE - JANUARY 1, 197 5 

Add - Cash on Deposit 
with Bank Trustee at 
January 1, 1975 

ADJUSTED BALANCE - 
JANUARY 1, 197 5 



JL90, 393.75 



$8,263,027.21 $52,635,870.78 



7,729,569.69 



J.90, 393.75 $8,263,027.21 $60,365,440.47 



Add: 

Allocation of Net Revenue $8,70 
Interest Earned on 

Investments - Restricted 
Transfer from Debt 

Service Account 
Transfer from Revenue 

Bond Interest Account (8, 54 



$ - $21,201,513.82 

500,527.55 2,261,851.03 



Total 
Balance 



$ 15( 



$ 500,527.55 $23,463,364.85 



JL_iJL JL90, 393.75 $8,763,554.76 $83,828,805.32 



Less: 

Purchase of Chicago-O'Hare 

International Airport 

Revenue Bonds $ 

Expenditures by Bank 

Trustee during 1975 

for Retirement of 

Bonds and Payment 

of Coupons 
Expenditures from Reserve 

Maintenance Account 
Expenditures for Fixed 

Assets Acquired with 

Revenue Bond Money 



15) 



$ 8,978,296.63 



154,383.75 



11,588,658.44 
3,692,363.05 

4,415,105.91 4,415,105.91 



Total 



£—iJ> l54, 383.75 $4,415,105.91 $28,674,424.03 



BALANCE - DECEMBER 31, 197 5 £ 



See notes to financial statements 



36.010.00 $4.348.448.85 $55.154.381.29 



a 



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i 



EXHIBIT C 
-4- 



CITY OF CHICAGO 
CHICAGO-O'HARE INTERNA TTONAL AIRPORT 

ANALYSIS OF CHANGES IN RESERVES 
FOR THE YEAR ENDED DECEMBER 31, 197 5 



Revenue 




Revenue 






Matured 


Matured 


Bond 


Debt 


Bond 


Reserve 


Emergency 


Interest on 


Revenue 


Interest 


Service 


Retirement 


Maintenance 


Reserve 


Revenue Bonds 


Bonds 



Construction Total 



BALANCE - JANUARY 1, 1975 $ - $17,722,624.00 $ 8,086.29 $3,663,002.88 $22,979,130.40 $ $ $8,263,027.21 $52,635,870.78 

Add - Cash on Deposit 
with Bank Trustee at 
January 1, 1975 - = = - I 7,539,175.94 190,393.75 - 7,729,569.69 

ADJUSTED BALANCE - 

JANUARY 1, 1975 £ - $17,722,624.00 $ 8,086.29 $3,663,002.88 $22,979,130.40 $ 7,539,175.94 $190,393.75 $8,263,027.21 $60,365,440.47 

Add: 

Allocation of Net Revenue $8,701,980.28 $ 9,576.00 $10,452,736.72 $1,160,000.00 $ 877,220.82 $ $ - $ $21,201,513.82 

Interest Earned on 

Investments - Restricted - 225,514.14 1,535,809.34 - - 500,527.55 2,261,851.03 

Transfer from Debt 

Service Account - (990,200.00) 990,200.00 - - - 

Transfer from Revenue 

Bond Interest Account 

Total 

Balance 

Less: 

Purchase of Chicago-O'Hare 

International Airport 

Revenue Bonds $ 158,444.03 $ - $ 8,819,852.60 $ - $ - $ - $- $ -$ 8,978,296.63 

Expenditures by Bank 

Trustee during 1975 

for Retirement of 

Bonds and Payment 

of Coupons _____ 11,434,274.69 154,383.75 - 11,588,658.44 

Expenditures from Reserve 

Maintenance Account - 3,692,363.05 - - - - 3,692,363.05 

Expenditures for Fixed 

Assets Acquired with 

Revenue Bond Money 

Total 
BALANCE - DECEMBER 31, 197 5 £ 
See notes to financial statements. 



(8,543,536.25) 


1 - - - - 8,543,536.25 


_ 


$ 158,444.03 


$ (980,624.00)$11,442,936.72 $1,385,514.14 $ 2,413,030.16 $ 8,543,536.25 


$ - $ 500,527.55 $23,463,364.85 


$ 158,444.03 


$16,742,000.00 $11,451,023.01 $5,048,517.02 $25,392,160.56 $16,082,712.19 


$190,393.75 $8,763,554.76 $83,828,805.32 





- - - - - 4,415,105.91 4,415,105.91 


$ 


158,444.03 $ - $ 8,819,852.60 $3,692,363.05 $ - $11,434,274.69 $154,383.75 $4,415,105.91 $28,674,424.03 


$ 


$16,742,000.00 $ 2.631.170.41 $1,356,153.97 $25,392,160.56 S 4.648.437.50 $ 36.010.00 $4,348,448.85 $55,154,381.29 



o 



c 



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<r 



CTTY OF CHICAGO 
CHTCAGO-0 ' HARE INTERNATIONA 

ANALYSIS OF CHANGES IN CON 11 . 



FOR THE YEAR ENDED DECEMBEI 



BALANCE - JANUARY 1, 1975 

Add: 

increase in Fixed Assets Acquired with: 
City Money 

State and Federal Money (Note 1C2) 
Public Utility, Concessionaire and 
Airline Money 

Total 

Balance 

Less : 

Provision for Depreciation 

Amortization of Deferred Engineering Costs 

Total 

BALANCE - DECEMBER 31, 1975 



Lty, 
ire 
e 

.48 



.93 



EXHIBIT D 
-5- 



Total 



$71,557,301.96 



.30 


$ 5,576,961. 
9,161,656. 


82 
.30 


.30 


$14,738,618 


.12 


.78 


$86,295,920 


.08 









.93 $ 1,831,505.23 
49,068.08 



$ 1,880,573.31 



85 $84.415.346.77 



See notes to financial statements 



c 



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CITY OF CHICAGO 
CHICAGO-O'HARE I NTERNATI ONAL AIRPORT 

ANALYSIS OF CHANGES IN CONTRIBUTIONS 
FOR THE YEAR ENDED DECEMBER 31, 1975 



EXHIBIT D 
-5- 



BALANCE - JANUARY 1, 1975 

Add: 

Increase in Fixed Assets Acquired with: 
City Money 

State and Federal Money (Note 1C2) 
Public Utility, Concessionaire and 
Airline Money 

Total 

Balance 



City 

of 

Chicago 



$19,145,986.71 



$ 5,576,961.82 
(2,637,781.85) 



State 

and 

Federal 



$31,242,577.77 



2,637,781.85 



Public Utility, 

Concessionaire 

and Airline 

$21,168,737.48 



Total 



$71,557,301.96 



$ 5,576,961.82 



- 




9, 


,161, 


,656. 


,30 


9, 


,161, 


,656.30 


$ 2,939,179.97 


$ 2,637,781.85 


$ 9, 


,161, 


,656. 


.30 


$14, 


,738, 


,618.12 


$22,085,166.68 


$33,880,359.62 


$30, 


,330, 


,393, 


.78 


$86, 


,295, 


,920.08 



Less : 

Provision for Depreciation 

Amortization of Deferred Engineering Costs 

Total 

BALANCE - DECEMBER 31, 1975 



$ 


125, 
49, 


,508.51 
,068.08 


$ 


996,383.79 


$ 


709, 


,612.93 


$ 1,831, 
49, 


505.23 
068.08 


$ 


174, 


,576.59 


$ 


996,383.79 


$ 


709, 


,612.93 


$ 1,880, 


,573.31 


$21 


,910, 


,590.09 


$32 


,883,975.83 


$29 


,620, 


,780.85 


$84,415, 


,346.77 



See notes to financial statements. 



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CHICAGO 


-0 


CITY 
'HARE 


OF CHICAGO 
INTERNATIONAL 


AIRPORT 


ANALYSIS 


OF 


CHANGES 


IN RETAINEE 


) EARNINGS 



DECEMBER 31, 1975 



EXHIBIT E 
-6- 



Deferred 

Income to 

Reduce Future 

Flight Fees 



City 
Equity 



Total 



BALANCE - 

JANUARY 1, 1975 

Add: 

Increase in Fixed 

Assets Acquired 

with Revenue 

Bond Money 
Revenue Bonds 

Retired during 

1975 

Total 

Balance 

Less: 

Provision for 

Depreciation of 
Assets Acquired 
with Revenue 
Bond Money (, 
Decrease in Deferred 
income to Reduce 
Future Flight 
Fees 



$13,730,138.21 $(5,058,566.66) $ 8,671,571.55 



$ 4,415,105.91 $ 4,415,105.91 
9,477,000.00 9,477,000.00 



L 



$13,892,105.91 $13,892,105.91 



$13,730,138.21 $ 8,833,539.25 $22,563,677.46 



8,641,145.87 



$ 8,067,053.84 $ 8,067,053.84 



8,641,145.87 



Total $ 8,641,145.87 $ 8,067,053.84 $16,708,199.71 

BALANCE - 

DECEMBER 31, 1975 | 5,088,992.34 $ 766,485.41 $ 5.855.477.75 



See notes to financial statements. 



< 



m 



SCHEDULE A-l 
CITY OF CHICAGO -7- 

CHICAGO-O'HARE INTERNATIONAL AIRPORT 

RECONCILIATION TO "NET REVENUES" AS DEFINED 
IN REVENUE BOND ORDINANCE 
FOR THE YEARS ENDED DECEMBER 31, 197 5 AND 1974 

Years Ended December 31, 



1975 1974 



NET INCOME $ 1,641,904.80 $ 7,613,812.65 

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

Amounts included Above in Deter- 
mination of Net income: 

Depreciation 9,898,559.07 9,736,636.37 

Amortization of Deferred 

Engineering Costs 49,068.08 49,068.08 

Expenditures from Reserve 

Maintenance Account 3,692,363.05 2,734,968.32 

Interest Earned on Invest- 
ments - Restricted (2,261,851.03) (3,429,491.82) 
interest on Revenue Bonds 8,701,980.28 9,291,422.23 
Amounts Not Included Above in 
Determination of Net Income: 
Expenditures of Operating 
Revenue for Capital 

Improvements (Note 1C3) (9,161,656.30) (1,811,541.30) 
Application of Deferred 
Income from Preceding 
Year as Reduction of 
Flight Fees 

"NET REVENUES" AS DEFINED IN BOND 
ORDINANCE 

ALLOCATION OF "NET REVENUES" IN 
ORDER OF PRIORITY (Note IF) : 

Revenue Bond interest $ 8,701,980.28 $ 9,291,422.23 

Debt Service 9,576.00 316,808.00 

Revenue Bond Retirement - 

Minimum Payment 4,452,000.00 4,07 9,000.00 

Reserve Maintenance 1,160,000.00 1,160,000.00 

Emergency Reserve 877,220.82 902,979.58 

Deferred Income to Reduce 

Flight Fees in Following Year 5,088,992.34 13,730,138.21 
Remainder - Additional Allocation 

to Revenue Bond Retirement 6,000,736.72 5,477,062.77 

TOTAL ALLOCATION OF "NET REVENUES" $26,290.506.16 $34.957.410.79 



See notes to financial statements. 



13,730,138.21 


10,772,536.26 


$26,290,506.16 


$34,957,410.79 



( 



< 



CI 
CHTCAGO-0'HA 



ANALYSIS OF CHANGE 



FOR THE YEAR 



SCHEDULE A- 2 
-8- 



g and Fueling 
ration System 
mansion Expansion 



BALANCE - JANUARY 1, 1975 



Add: 



Total 



93.36 $1,161,264.31 $8,263,027.21 



Interest Earned on InvestmeJ 
Restricted 

Balance 



20.54 



57,138.57 



500,527.55 



13.90 $1,218,402.88 $8,763,554.76 



Less: 

Expenditures for Fixed Asse* 

with Revenue Bond Money 31.40 



1,030,548.00 



4,415,105.91 



BALANCE - DECEMBER 31, 1975 82.50 $ 187.854.88 $4.348.448.85 



Note - Negative amount resulti 



See notes to financial stateme 



< 



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C7TY OF CHICAGO 
CHTCAGO-O'H ARF, INTERNATIONAL AIRPORT 

ANALYSIS OF CHANGES IN RESERVE FOR CONSTRUCTION 
FOR THE YEAR ENDED DECEMBER 31, 1975 



SCHEDULE A- 2 



BALANCE - JANUARY 1, 1975 



General 

Construction 

of 1968 



Elevated 
Garage 



Runway Pedestrian Heating and Fueling 

4R-22L Tunnels and Refrigeration System 

and Land Access Roads Plant Expansion Expansion 



Total 



$2,854,298.97 $317,910.97 $3,281,967.54 $347,192.06 $300,393.36 $1,161,264.31 $8,263,027.21 



Add: 



Interest Earned on Investments 
Restricted 

Balance 



170,666.47 



71,661.78 



160,874.00 



19,666.19 



20,520.54 



57,138.57 



500,527.55 



$3,024,965.44 $389,572.75 



$3,442,841.54 



$366,858.25 



$320,913.90 $1,218,402.88 $8,763,554.76 



Less: 

Expenditures for Fixed Assets Acquired 
with Revenue Bond Money 

BALANCE - DECEMBER 31, 1975 



$3,024,965.44 



(175,799.13) 



3,442,841.54 



49,284.10 



68,231.40 



1,030,548.00 



4,415,105.91 



$565,371.88 



$317.574.15 



$252,682.50 $ 187.854.88 $4.348,448.85 



Note - Negative amount results from adjustment to final contract liability. 



See notes to financial statements. 



t 



-9- 



CTTY OF CHICAGO 
CHICAGO-O'HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 
DECEMBER 31 , 197 5 



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 pre- 
miums are recognized at the time of maturity or sale. The 
aggregate market value of securities at December 31, 197 5, 
was $471,312.22 in excess of cost. Components of this 
excess are as follows: 

Cost Market 



Operation and Maintenance 

Account: 

Treasury Bills $ 3,039,057.94 $ 3,056,980.19 

Special Accounts: 

Treasury Bills 20,580,296.12 20,788,479.13 

Treasury Notes 23,018,398.45 23,237,692.20 

Construction Accounts: 

Treasury Bills 4,829,264.62 4,855,177.83 

Total $51.467.017.13 $51.938.329.35 

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 uncollectible and are to be 
provided for. As of December 31, 1975, an allowance of 
$2,093,838.37 is recorded for these accounts. Approximately 
$810,000.00 of this amount was subsequently collected through 
April 30, 1976. 

C. Fixed Assets : 

All fixed assets are recorded at cost. Land includes 
the costs of earthwork and landscaping. The financial state- 
ments 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 



<" 






-10- 

CTTY OF CHICAGO 
CHICAGO -O'HARE INTERNATIONAL A IRPORT 

NOTES TO FINANCIAL STATEMENTS 

DECEMBER 31, 1975 

(Continued) 



C. Fixed Assets (Continued) : 

At December 31, 197 5, the gross amount of those assets 
acquired with money from other sources is $107,625,571.24 
less allowances for depreciation of $23,454,481.96. 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 capital- 
ized interest for the use of City money. Interest is 
capitalized from the commencement of the land improve- 
ment 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 acquired with City money. 
These grants are recognized only as received. As of 
December 31, 1975, a maximum of $7,825,192.71 may be 
realized in future periods from such grants. 

3. 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 Airline Repre- 
sentative 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 pro- 
vided 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. 



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-11- 



E 



CITY OF CHICAGO 
CHICAGO-0 ' HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 

DECEMBER 31, 1975 

(Continued) 



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 
Reserve Maintenance 
Emergency Reserve 

Further explanation of the allocations 
for 197 5 are detailed in Note IF. 

Restricted interest earned on investments is com- 
prised of: 



Special Accounts: 

Reserve Maintenance 
Emergency Reserve 

Construction Accounts 

Total 



$ 225,514.14 
1,535,809.34 $1,761,323.48 

500,527.55 

$2.261.851.03 



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 $8,701,980.28 was paid during 1975. 



-12- 

CTTY OF CHICAGO 
CHICAGO-O'HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 
'"" DECEMBER 31, 197 5 
(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. 
During the year all revenue bond issues became fully 
funded after an allocation of $9,576.00 was made to 
the Reserve for the Revenue Bond Series of 1972. Bonds 
in the principal amount of $9,477,000.00 were purchased 
during 197 5 and the corresponding interest requirement 
of $990,200.00 for 197 5 was transferred to the Revenue 
Bond Retirement Reserve. 

4. For required minimum payments to the Revenue Bond 
Retirement Reserve, which range from $4,452,000.00 in 
1975 to $14,545,000.00 in 1998. Additional allocations 
for 1975 are $990,200.00 and $6,000,736.72 as explained 
in Notes F-3 and F-8 respectively. The total alloca- 
tion to the Revenue Bond Retirement Reserve during 197 5 
was $11,442,936.72. 

5. For annual payment of $1,160,000.00 to Reserve Mainte- 
nance 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 $3,692,363.05 
were made from this account during 197 5 for the specified 
purposes. 

6. To pay to the Emergency Reserve an amount equal to the 
sum of the annual provisions for depreciation and amor- 
tization 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 197 5 are: 

Depreciation $125,508.51 

Amortization 49,068.08 

interest 702,644.23 

Total $877.220.82 

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. 



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-13- 

CTTY OF CHICAGO 
CHICAGO-0 ' HARE INTERNAT IONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 

DECEMBER 31, 197 5 

(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 year ended December 31, 197 5, 
$5,088,992.34 has been deferred to reduce flight 

fees for 1976. 

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, $6,000,736.72 was so credited for 
1975. 

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 December 31, 197 5: 

Amount authorized $238,000,000.00 

Amount sold 232,000,000.00 

Amount called or purchased 

and retired 77,740,990.00 

Amount called or purchased 

but not presented to bank 

trustee for retirement 36,010.00 

Amount outstanding 154,22 3,000.00 



) 



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-14- 



CITY OF CHICAGO 
CHIC AGO -O' HARE INTERNATIONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 

DECEMBER 31. 1975 

(Continued) 



A. Revenue Bonds (Continued) ; 

The Revenue Bonds outstanding are composed of the 
following: 

4-3/4% Series of 1959 $ 69,315,000.00 

4-3/4% Series A of 1961 14,339,000.00 

4-1/4% Series B of 1961 2,094,000.00 

4-1/2% Series of 1967 3,078,000.00 

5% Series of 1968 12,037,000.00 

6.80% Series of March, 1970 45,810,000.00 

6% Series of 1972 7.550,000.00 

Total $1.54.223.000.00 

The unexpended proceeds from Revenue Bond issue 
amounted to $4,348,448.85 at December 31, 1975. This 
amount is comprised of: 

Construction Accounts' Assets $4,948,064.29 
Less - Construction Accounts ' 

Liabilities 599.615.44 

Reserve for Construction $4.348.448.85 

B. Retirement : 

Revenue Bonds are to be retired as rapidly as practic- 
able 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 addi- 
tion, Bonds may be redeemed by purchase in the open market 
or tender at prices not in excess of the next predeter- 
mined call prices. The following information is presented 
regarding Bonds purchased for retirement through December 
31, 1975: 

1975 Cumulative 

Par value of Bonds 

purchased $9,477,000.00 $77,777,000.00 

Cost of Bonds purchased 8,819,852.60 71,918,720.10 
Premiums paid on 

Bonds purchased 60,477.50 581,092.50 

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. 



( 



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-15- 

CTTY OF CHICAGO 
CHICAGO -O' HARE INTERNATIONAL AlRPQRT 

NOTES TO FINANCIAL STATEMENTS 

DECEMBER 31, 1975 

(Continued) 

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 December 31, 1975, 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 collect- 
ible 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 F-6. 

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

Payment to bank trustee for 

coupons due January 1, 1976 $4,185,500.00 
Prior payments to bank trustee - 

coupons not presented for 

redemption 462,937.50 

Total $4.648.437.50 

C. The Reserve for Matured Bonds represents bonds called 
or purchased but not presented to the bank trustee for 
retirement. 



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-16- 



r.TTV OF CHICAGO 
CHICAGO-0 ' HARE I NTERNATIONAL 

NOTES TO FINANCIAL STATI 



DECEMBER 31, 197 5 



(Continued) 



NOTE 4 - GENERAL COMMENTS 



The financial statements of Chica in accordance 
with guidelines for reporting of muni 

As a result, the ending balances had to be 
adjusted. The following elimination ive at revised 
opening balances on January 1, 197 5, 

Balance 
January 1, 197 5 

Anticipated future revenues to 
be used for retirement of 
Revenue Bonds outstanding 

Property Fund - Assets Acquired 
with Revenue Bond money - 
Fund Balance 



Retained Earnings - Excess of 
Depreciation over Bonds retiree 

Total 



5,058,566.66 
$5.058.566.66 



< 



-16- 



CTTY OF CHICAGO 
CHICAGO-O'HARE I NTERNATI ONAL AIRPORT 

NOTES TO FINANCIAL STATEMENTS 

DECEMBER 31, 1975 

(Continued) 



NOTE 4 - GENERAL COMMENTS 



The financial statements of Chicago-O'Hare International Airport for 197 5 are presented in accordance 
with guidelines for reporting of municipal enterprise funds. 

As a result, the ending balances at December 31, 1974 of certain balance sheet accounts had to be 
adjusted. The following elimination details the changes made in the ending balances to arrive at revised 
opening balances on January 1, 1975. 

Balance Balance 

December 31, 1974 Elimination January 1, 197 5 

Anticipated future revenues to 
be used for retirement of 
Revenue Bonds outstanding $ 163,700,000.00 $(163,700,000.00) $ 

Property Fund - Assets Acquired 
with Revenue Bond money - 
Fund Balance (158,641,433.34) 158,641,433.34 

Retained Earnings - Excess of 

Depreciation over Bonds retired - 5, 058, 566.66 5, 058, 566.66 

Total $ 5.058.566.66 $ $5.058.566.66 



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