Washington Metropolitan Area Transit AuthorityFY 2009 <strong>Comprehensive</strong> <strong>Annual</strong> <strong>Financial</strong> <strong>Report</strong>Statement of Cash Flows (Continued)For <strong>the</strong> Years Ended June 30, 2009 and 2008(in thousands)RECONCILIATION OF OPERATING LOSS TO NET CASHUSED IN OPERATING ACTIVITIES20092008Operating lossAdjustments to reconcile operating loss to net cash used inOperating activities:Depreciation and amortization expenseEffect of changes in operating assets and liabilities(Increase) decrease in accounts receivables (net) and o<strong>the</strong>r assets(Increase) decrease in materials and supplies inventory(Increase) decrease in net pension assetIncrease (decrease) in accounts payable and accrued expensesIncrease (decrease) in accrued salaries and benefitsIncrease (decrease) in estimated liability <strong>for</strong> injury and damage claimsIncrease (decrease) in deferred revenueIncrease (decrease) in retainage on contractsIncrease (decrease) in OPES obligationTotal adjustmentsNet cash used in operating activities$ (1,159,744) $ (1,112,824)425,350 412,34114,803 (26,138)(6,676) (5,813)11,330 30,1387,657 17,94110,448 3,07614,618 14,261(8,904) (8,671)(2,775) (2,099)59,406 59,247525,257 494,283$ (634,487) $ (618,541)Noncash operating, investing, capital and financing activities:Increase (decrease) in fair value of investments$1,127$528Interest expense from leasing transaction$(52,430)$(80,802)Interest in<strong>com</strong>e from leasing transaction$52,430$80,802The ac<strong>com</strong>panying notes are an integral part of <strong>the</strong>se basic financial statements.25
Washington Metropolitan Area Transit AuthorityFY 2009 <strong>Comprehensive</strong> <strong>Annual</strong> <strong>Financial</strong> <strong>Report</strong>(1 ) Summary of Significant Accounting PoliciesNotes to Basic <strong>Financial</strong> StatementsJune 30, 2009 and 2008(a)OrganizationThe Washington Metropolitan Area Transit Authority (Authority) was created, effective February 20,1967, by <strong>the</strong> Interstate Compact (Compact) by and between Maryland, Virginia and <strong>the</strong> District ofColumbia, pursuant to Public Law 89-774, approved November 6, 1966. The Authority was created toplan, construct, finance and operate a public transit system serving <strong>the</strong> Washington Metropolitan AreaTransit Zone (Zone). The Zone includes <strong>the</strong> following participating local jurisdictions: <strong>the</strong> District ofColumbia; <strong>the</strong> cities of Alexandria, Falls Church, Fairfax, Manassas and Manassas Park; and <strong>the</strong>counties of Arlington, Fairfax, Loudoun and Prince William in Virginia, and Montgomery, Anne Arundel,Charles and Prince George's in Maryland.The Authority is governed by a Board of six Directors and six Alternates, <strong>com</strong>posed of two Directorsand two Alternates from each signatory to <strong>the</strong> Compact. The Directors and Alternates <strong>for</strong> Virginia areappointed by <strong>the</strong> Nor<strong>the</strong>rn Virginia Transportation Commission from among its members; <strong>for</strong> <strong>the</strong> Districtof Columbia, by <strong>the</strong> City Council from among its members and mayoral nominees; and, <strong>for</strong> Maryland, by<strong>the</strong> Washington Suburban Transit Commission from among its members.The Board of Directors (Board) governs and sets policy <strong>for</strong> <strong>the</strong> Authority. Subject to policy directionand delegations from <strong>the</strong> Board, <strong>the</strong> General Manager is responsible <strong>for</strong> all activities of <strong>the</strong> Authority.The staff carries out <strong>the</strong>se activities through <strong>the</strong> approved organizational structure of <strong>the</strong> Authority.Based upon <strong>the</strong> provisions of GAAP, as applicable to government entities in <strong>the</strong> United States ofAmerica, management of <strong>the</strong> Authority has determined that it is a joint venture of <strong>the</strong> participating localjurisdictions.(b) <strong>Financial</strong> <strong>Report</strong>ing EntityIn evaluating <strong>the</strong> Authority as a reporting entity, management has addressed all potential <strong>com</strong>ponentunits that may fall within <strong>the</strong> Authority's oversight and control and, as such, be included within <strong>the</strong>Authority's basic financial statements. As defined by GAAP, established by <strong>the</strong> GovernmentalAccounting Standards Board (GASB), a legally separate, tax-exempt organization should be reported asa <strong>com</strong>ponent unit of a reporting entity if all of <strong>the</strong> following criteria are met:1) The economic resources received or held by <strong>the</strong> separate organization are entirely or almostentirely <strong>for</strong> <strong>the</strong> direct benefit of <strong>the</strong> primary government, its <strong>com</strong>ponent units, or itsconstituents.2) The primary government, or its <strong>com</strong>ponent units, is entitled to, or has <strong>the</strong> ability to o<strong>the</strong>rwiseaccess, a majority of <strong>the</strong> economic resources received or held by <strong>the</strong> separate organization.3) The economic resources received or held by an individual organization that <strong>the</strong> specific primarygovernment, or its <strong>com</strong>ponent units, is entitled to, or has <strong>the</strong> ability to o<strong>the</strong>rwise access, aresignificant to <strong>the</strong> primary government.26