Comprehensive Annual Financial Report - Metro Transit

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictManagement’s Discussion and AnalysisJune 30, 2011 and 2010(in thousands) 2011 2010 Incr (Decr) % Change 2009 Incr (Decr) % ChangeAssetsNon-capital assets $ 294,671 $ 346,659 $ (51,988) -15.0% $ 525,780 $ (179,121) -34.1%Capital assets 1,124,557 1,167,998 (43,441) -3.7% 1,221,482 (53,484) -4.4%Total assets 1,419,228 1,514,657 (95,429) -6.3% 1,747,262 (232,605) -13.3%LiabilitiesCurrent liabilities 64,078 61,319 2,759 4.5% 118,697 (57,378) -48.3%Long-term liabilities 696,519 760,771 (64,252) -8.4% 874,640 (113,869) -13.0%Total liabilities 760,597 822,090 (61,493) -7.5% 993,337 (171,247) -17.2%Net AssetsInvested in capital assets 548,481 576,917 (28,436) -4.9% 650,862 (73,945) -11.4%Restricted net assets 39,431 33,263 6,168 18.5% 12,730 20,533 161.3%Unrestricted net assets 70,719 82,387 (11,668) -14.2% 90,333 (7,946) -8.8%Total net assets 658,631 692,567 (33,936) -4.9% 753,925 (61,358) -8.1%Total liabilities and net assets $ 1,419,228 $ 1,514,657 $ (95,429) -6.3% $ 1,747,262 $ (232,605) -13.3%Total assets amoun ted to $1.42 billion as of June 30, 2011, as compared to $1.51 billion and$1.75 billion as of June 30, 2010 and 2009, respectively. Non-capital assets primarily consistof unrestricted and restricted cash and investments. Non-capital assets decreased $51.9million between 2011 and 2010 and decreased $179.1 million between 2010 and 2009.Accordingly, combined capital assets including construction in process decreased $43.4million between 2011 and 2010 and decreased $53.5 million between 2010 and 2009. Totalassets decreased by $95.4 million between 2011 and 2010 and decreased by $232.6 millionbetween 2010 and 2009. The variance between 2011 and 2010 and between 2010 and 2009assets is primarily related to the termination of capital lease agreements of $64.7 million and$186.8 million, respectively.Metro’s total net assets decreased $33.9 million and decreased $61.4 million respectively,between 2011 and 2010 and between years 2010 and 2009. The changes in net assets for2011 and 2010 are primarily the result of depreciation.Total liabilities decreased $61.5 between 2011 and 2010 and decreased $171.2 millionbetween 2010 and 2009. The variance results from the termination of capitallease/leaseback agreements.Statements of Revenues, Expenses, and Net Assets: Total operating revenues increased$1.3 million and decreased $2.1 million, respectively, between 2011 and 2010 and between2010 and 2009. Transit passenger revenues accounted for $46.0 million and $44.6 million in2011 and 2010 respectively representing 74.6 percent of total operating revenues for 2011and 73.7 percent for 2010. The overall increase in Transit operating revenues is related to afull year of service restoration by Metro Transit. In 2011, Metro ridership growth is 5.8percent higher than 2010. The last fare increase approved by the Board of Commissionersoccurred in January 2009.Total operating expenses increased $16.9 million between 2011 and 2010 and are related toservice restoration. The $9.3 million decrease in expenses between 2010 and 2009 are thenet result of a Missouri service cut partially reversed by State of Missouri emergency aid.5