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Washington Metropolitan Area Transit AuthorityFY 2009 Comprehensive Annual Financial ReportManagement's Discussion and AnalysisAs management of the Washington Metropolitan Area Transit Authority (Authority), we offer readers of thebasic financial statements this overview and analysis of the financial activities of the Authority as of June30, 2009, 2008 and 2007 and for the years ended June 30, 2009, 2008 and 2007. This discussion andanalysis is designed to assist the reader in focusing on significant financial issues and activities and toidentify any noteworthy changes in financial position. We encourage readers to consider the informationpresented here in conjunction with the basic financial statements taken as a whole.Fiscal Year 2009 Financial Highlights• Net assets increased by $93.5 million or 1.2 percent due primarily to increased capitalcontributions.• Capital assets before depreciation and amortization increased by $323.6 million, largely attributableto new rail car and bus purchases, facilities enhancements, and rail rehabilitation. Capitalcontributions were $578.3 million.• Current liabilities decreased by $432.5 million or 44.6 percent, decrease due to the repayment ofthe line of credit debt and replacement of commercial paper with long-term bonds.• Operating revenues increased by $54.7 million or 7.9 percent, due to a mid-year fare increaseeffective January 2008, and an increase in ridership. Special capital region events such as thePresidential Inauguration and sporting events contributed to the increase in revenue and ridership.• Operating expenses increased by $101.7 million or 5.6 percent, due primarily to an increase inwages, pension plan contributions and workers compensation claims reserves, and investments inrisk and safety assessments. In addition, the continuous growth of the Authority's paratransitservice and propulsion power usage, also contributed to this increase in expenses. Operatingexpenses include the increase in estimated liability for injury and damage claims related to the June22, 2009 rail car accident.Overview of the Basic Financial StatementsThis required annual report consists of three parts: Management's Discussion and Analysis, Basic FinancialStatements and Required Supplementary Information. The basic financial statements also include notesthat provide in more detail some of the information in the basic financial statements.Basic Financial Statements. The Authority's basic financial statements are prepared in conformity withgenerally accepted accounting principles in the United States of America (GAAP) as applied to an enterpriseusing the accrual basis of accounting. Under this basis, revenues are recognized in the period in which theyare earned, and expenses are recognized in the period in which they are incurred.The Authority's basic financial statements are the Statements of Net Assets, the Statements of Revenues,Expenses and Changes in Net Assets and the Statement of Cash Flows.The Statements of Net Assets report the Authority's net assets. Net assets, the difference between assetsand liabilities, are one way to measure the financial position of the Authority. This is only one measure,however, and the reader should consider other indicators, such as the rate of growth of operating subsidies,passenger fare levels, ridership, general economic conditions in the metropolitan area and the age andcondition of capital assets used by the Authority.The Statements of Revenues, Expenses and Changes in Net Assets report all of the revenues earned andexpenses incurred during the reporting periods.The Statement of Cash Flows provide information on cash receipts and cash payments during the reportingperiods.The basic financial statements can be found on pages 21-25 of this report.11
Washington Metropolitan Area Transit AuthorityFY 2009 Comprehensive Annual Financial ReportManagement's Discussion and AnalysisOverview of the Basic Financial Statements (Continued)Notes to the Basic Financial Statements. The notes provide additional information that is essential to a fullunderstanding of the data provided in the basic financial statements. The notes to the basic financialstatements can be found on pages 26-60 of this report.Required Supplementary Information. In addition to the basic financial statements and accompanying notes,this report also presents certain required supplementary information concerning the Authority's progress infunding its obligation to provide pension benefits and other post employment benefits (OPES) to itsemployees. Required supplementary information can be found on pages 61-62 of this report.Financial AnalysisStatements of Net AssetsAs noted earlier, net assets may serve over time as an indicator of the Authority's financial position. This isonly one measure; however, the reader should consider other indicators, such as the age and condition ofthe Authority's three-decade system, as well as its need for increasing operating subsidies and ridershiplevels. The following table provides an overview of the Authority's financial position for the years endedJune 30, 2009, 2008 and 2007:Table 1Condensed Statements of Net AssetsJune 30, 2009, 2008 and 2007(in thousands)2009 2008 2007Current and other assets $1,789,547 $2,175,759 $2,270,758Capital assets 8,107,460 8,193,220 8,193,773Total assets 9,897,007 10,368,979 10,464,531Current liabilities 537,094 969,625 767,616Noncurrent liabilities 1,411,518 1,544,510 1,591,253Total liabilities 1,948,612 2,514,135 2,358,869Net assets:Investment in capital assets, net ofrelated debt 7,642,442 7,649,507 7,839,778Restricted 305,953 205,337 265,884Total net assets $ 7,948,395 $ 7,854,844 $ 8,105,662Current YearNet assets increased by $93.5 million or 1.2 percent due primarily to increased capital contributions.12
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