1. TWU 234 Wage Increases 1  Pattern wage increases —$1,250 lump sum payment —1.5% increase in July 2010 —1.0% increase in December 2010 —2.5% increase in December 2011 —3.5% increase in December 2012 —3.0% increase in December 2013  Total increase over life of contract: 11.5%, plus lump sum payment  1.5% additional employee Pension Contribution  Net wage increase: 10%, lump sum payment

2. TWU 234 Important Contract Provisions 2  Five year wage progression to reach top rate  No Layoff Clause after one year of service  Split Shift Operators  Total number of straight runs not less than 60% of split shift runs  Utilized for 49% or 917 of 1,855 daily Operator and Cashier runs  Overtime paid for “Work Hours” in excess of 8 hours for each work day  Outsourcing  The Authority and Union discuss and investigate the necessity for outsourcing unless: o Unforeseen emergency o Not fully qualified employees in the department o Equipment repair requiring work or specialized training, skills and facilities o Cylinder Head and Turbocharger Rebuilds

3. 3 OperatorsCurrent2012-13 Starting wage$14.91$15.28 Top wage$24.85$25.47 Average wage$23.44$24.03 Contract wage increase2.5% Job ClassificationNumber- Full TimeNumber-Part Time Operators2,590- Mechanics2,190- Cashiers340- Total5,120- TWU 234 Contract Wages

4. 9. Healthcare

5. Healthcare 5  Comprehensive healthcare plan provided to employees  Existing 3 year contract with Independence Blue Cross  Personal Choice & HMO offered  HMO only for new hires after November 7, 2005  Healthcare provided for 3 years post retirement

6. Healthcare 6 UnionNon-Union Basic Coverage Current$1,121 per month FY 2012-13$1,233 per month Employee Contributions Current1 % of 40 hours weekly pay 5% of monthly plan premium FY 2012-13No change in formula: increases with pay No change in formula: increases with premium Co-Payment Current: HMO Current: PPO $5 per visit $10/$20 per visit $5 per visit $10/$20 per visit FY 2012-13No Change

7. 10. Pension Overview

8. Pension Summary 8  Master trust comprised of five separate plans covering City Transit, Red Arrow, Frontier, Transit Police & SAM  Regional Rail Employees covered under Railroad Retirement  Assets totaled $833 million at June 30, 2011  Preliminary composite actuarial funding ratio at July 1, 2011 is 61.3 percent  Consistent funding policy – Authority pays 100 % of Annual Required Contribution (ARC) each year  $87 Million FY 2012

9. 9 UnionNon-Union Employee Contributions Current 2% of 40 hours weekly pay 2.5% of 40 hours weekly pay effective 12/11/2011 1% of salary FY 2012-13 3.5% of 40 hours weekly pay effective 12/9/2012 1% of salary Minimum Age to Qualify for Retirement Current Age 62 with 5 years of service 30 years of service, no age requirement Age 62 with 5 years of service Age 55 with 30 years of service FY 2012-13No change Minimum Number of Years to Qualify for Retirement Current 30 years: full pension 25 years: reduced pension 30 years: full pension 25 years: reduced pension FY 2012-13No change Minimum Number of Years to be Vested Current5 Years FY 2012-13No change Pension: Eligibility & Contributions

10. Strategy To Improve Pension Funding Levels 10  Minimize unfunded enhancements to existing Plan benefits  Revised strategic asset allocation in 2011 to reduce volatility and achieve desired growth rate  Change Fund Managers

11. 11. Diesel Fuel

12. Diesel Fuel 12  Fiscal Year 2012  SEPTA employs financial hedging strategy for purchases o Ensures separation of credit risk and physical delivery risk o Provides budget certainty and allows “Price Locks” beyond 1 year - as appropriate  Annual usage approximately 16 million gallons  Cost per Gallon = $2.20: July - December 2011 $2.89: January – June 2012

13. 12. SEPTA Passenger Revenue

14. Ridership in Millions 14

15. Fare Policy 15  Fare increases every 3 years  Increases to replicate inflation  Encourage use of pre-paid fare instruments  Monthly Passes  Weekly Passes  Tokens  Discourage use of cash

16. Transit Fare Mix 16

17. Regional Rail Fare Mix 17

18. Fixed Route Fares 18 Fare Type Date of Last IncreaseCurrent Amount Date of Planned Increase Base Fare July 1, 2001$2.00July 2013 Transfers July 1, 2010$1.00July 2013 Zone Fares July 1, 2010$.50/ zoneJuly 2013 Other multi-ride tickets/passes July 1, 2010Transit Weekly $ 22.00 Monthly $ 83.00 Regional Rail Weekly $24.25 - $ 53.00 Monthly $91.00 - $191.00 July 2013 Average Fare: Current Future Transit $ 1.01 Regional Rail $ 3.75  84% of Transit users have a form of discounted pass or token  86% of Regional Rail customers use a pass or advance purchase ticket for their trips

19. Shared Ride Fares Eligibility: Seniors must be at least 65 years old 19 Fare Type Date of Last Increase Current Patron Fare Current Full Fare Date of Planned Increase Individual FareJuly 9, 2007$ 4.00$26.70unknown Group FareJuly 9, 2007$ 3.70$24.70unknown Sponsors  Philadelphia Corporation of the Aging (PCA)  Adult Day Care and Senior Centers  State Certified Third Party Agencies Fare Policy  Patron is responsible for 15% of the full fare and PennDot’s Lottery Fund pays 85%  Fares must be paid with cash or be sponsored

20. 13. Major Factors Producing Cost Increases

21. SEPTA Five Year Projection 21

22. Budgetary Challenges 22  Unbudgeted expenses greater than $5 million due to infrastructure and vehicle repairs resulting from Hurricane Irene and Tropical Storm Lee  Increased maintenance costs due to deferral of capital projects  Service cuts and major fare increases are likely in FY 2014