Metra Board of DirectorsJune 10, 2011

Presented by Alex CliffordExecutive Director/CEO

Defeating the Deficit 2011, 2012 and Beyond

$10.0

$12.0

$14.0

$16.0

$18.0

$20.0

$22.0

$24.0

$26.0

2.90 2.95 3.00 3.05 3.10 3.15 3.20 3.25 3.30 3.35 3.40 3.45 3.50

Average Price Per Gallon J une to December

Budget

Overr

un (

Millions)

2011 Fuel Price Effect On Budget

1

Metra 2011 Forecast

Diesel Fuel Variance $ (18.5)

$ in millions

2

Metra 2011 Forecast

Diesel Fuel Variance $ (18.5)

$ in millions

Revenue Variance, Net 1.0

Balance (17.5)

3

Metra 2011 Forecast

Diesel Fuel Variance $ (18.5)

$ in millions

Revenue Variance, Net 1.0

Balance (17.5)Operating Efficiencies 6.2

Balance (11.3)

4

Metra 2011 Forecast

Diesel Fuel Variance $ (18.5)

$ in millions

Revenue Variance, Net 1.0

Balance (17.5)Operating Efficiencies 6.2

Balance (11.3)

Cash Items:

Est. 2011 Excess Sales Tax 9.0

Est. Senior Fare Proceeds 2.5

FEMA Snow Reimbursement 0.9

Total Cash 12.4

5

Metra 2011 Forecast

Diesel Fuel Variance $ (18.5)

$ in millions

Revenue Variance, Net 1.0

Balance (17.5)Operating Efficiencies 6.2

Balance (11.3)

Cash Items:

Est. 2011 Excess Sales Tax 9.0

Est. Senior Fare Proceeds 2.5

FEMA Snow Reimbursement 0.9

Total Cash 12.4

Balance $ 1.16

Financial Picture 2012 and Beyond

• Funding and fare gaps• How we have managed

through • The future as it stands

today• Next steps

7

$287

$311 $309

$369

$310

$374

$318

$384

$327

$396

$338

$408

$200

$250

$300

$350

$400

$450

2008($23.6)

2009($60.0)

2010($64.0)

2011($66.0)

2012($68.6)

2013($70.5)

Actual/Estimated RTA Projections

( In

$M

illio

ns)

Shortfall

Growing Sales Tax Shortfall

Cumulative

Shortfall

$353.6

Metra 85% Sales Tax and New Transit Funding

2008 – 2013 Actual/Estimated vs. RTA Projections Made in 2007

8

Growing Fare GapMetra vs. Peer Agency Fares

Monthly Fares, 1990 and 2011Monthly Fares in Effect in 1990 by Metra Zone, Metra

vs. Avg. of Large Agencies

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

A B C D E F G H I J K L M

Metra, 1990 Avg of Large Systems, 1990

Monthly Fares in Effect in 2011 by Metra Zone, Metra vs. Avg. of Large Agencies

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

A B C D E F G H I J K L M

Metra, 2011 Avg of Large Systems, 2011

9

Depleting Capital to Fund Operations

$0

$10

$20

$30

$40

$50

$60

( In

$M

illi

on

s)

Actual and Planned Transfers from Capital to Operating

2008-2009 temporary relief from 2008 fare

increase & sale tax increase

10

Operating Cuts• Management Depletion

– Vacancies not filled

– Lack of training

– Lack of competitive pay

• Systems Decline– Outdated IT systems

– Outdated financial systems

– Lack of strategic technology planning

• Operating Cuts– Deferred apprentice program

– Uniforms and other customer interface

– Fewer Double-Header Locomotives11

($30.0)

($20.0)

($10.0)

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

(in $

Mill

ion

s)2011 Cash Situation

2011 Cash Balance Without Transfer of Capital Funds

12

Growing Operating Deficit

9.30%

24.30%

41.00%

2006 2011

Pe

rce

nt

Gro

wth

Revenue Expense Deficit

Metra Historical Financial Results – Percent Growth from 2006

Deficit

Expense

Revenue

13

2006Deficit = $250MExpense = $525MRevenue = $275M

2010Deficit = $319MExpense = $616MRevenue = $296M

Growing Capital Deficit(

In $

Mil

lio

ns)

0

50

100

150

200

250

300

350

4002

006

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

Capital Core Preventive Maintenance

Funding needed to achieve a State of Good Repair

* 2012 – 2015 amounts are projected estimates

† Not inclusive of State of Illinois Bond funding

$7.37B NeededOver 10-Years

State of Good Repair – Capital Budget*

14

Growing Funding Deficit

$0

$20

$40

$60

$80

$100

$120

$14020

09

2010

2011

2012

2013

Capital Funds Recovery Ratio Relief Sales Tax Operating Funding Gap

( In

$M

illi

on

s)

Capital Funds / Credits / Other Sources to cover Operating Expense Growth

Estimated 2011 Sales

Tax Surplus

2010 Sales Tax to cover 2009 deficit

15

Operating/Capital Downward Spiral• Reduced On-Time Reliability

– Rising Delays– Slow orders– Locomotive failures

• Inferior Customer Environment– Heating & Air Conditioning– Station environment– More over-crowding, shorter trains– Service cuts, less frequent service

• Failure to Meet Recovery Ratio

• Shrinking instead of Growing– Lost New Starts opportunities

16

Next Steps

• Request for Finance Committee Meeting– Late June

17