Appendix 4b Transport for London quarterly performance report Quarter 3 2019/20 (1 April-7 December 2019) Contents 3 Introduction 10 Underground 16 Major projects 4 Business at a glance 11 Elizabeth line 17 Property 5 Financial summary 12 Buses 18 Media 6 Financial trends 13 Streets 19 Appendices 8 Debt and cash 14 Rail 9 Passenger journeys 15 Other operations The financial information included in the report is unaudited and does not constitute TfL’s statutory accounts. TfL’s last audited Statement of Accounts for the year ending 31 March 2019 was published in July 2019. Introduction In November 2019, the Board reviewed and Capital expenditure at the end of the approved a revised set of financial targets quarter was £942m, £65m behind the for 2019/20, that reflect our improved revised target. All areas continue to financial performance. These replace underspend, however, we forecast this those set in our original Budget published will not materially impact our budget in March 2019 and from Q3 we started delivery milestones. The current forecast is reporting against these revised targets as that we will deliver 90 per cent of project reflected in this report. milestones on time, however, we remain behind on station accessibility. Demand growth on London Underground slowed significantly in Q3 compared to the Key highlights for the capital programme previous two quarters. Underlying growth in Q3 include completion of works at the by the end of this quarter was 1.6 per cent Upminster Depot in readiness for a more compared to 2.2 per cent reported at the frequent District line service and start end of Q2. Underlying demand on buses at of signal fit out works at Nine Elms and the end of Q3 was 1.6 per cent lower than Battersea station and along the railway the same period of last year, an acceleration tunnels on the Northern Line Extension. in decline compared to the previous two quarters when we reported a reduction of Despite the slowing of demand this quarter, 1.2 per cent. we are confident we will achieve our revised net operating surplus target of £625 We continued our focus on cost control, million for 2019/20 and will work with the with operating costs £16m or 0.4 per cent delivery teams to review our capital plans ahead of the revised target, offsetting the to ensure we continue improving forecast adverse variance from passenger income. accuracy in the capital delivery areas. Our net cost of operations, which is our net deficit after taking into account financing Simon Kilonback and capital renewals cost, was £16m better Chief Finance Officer than our revised targets. Tony King Interim Group Finance Director Transport for London quarterly performance report 3 Business at a glance Keeping London moving, working and growing to make life in our city better How we report on our business Facts and figures Revised target at a glance Trains on the Other Passenger Crossrail Underground TfL network Grants Borrowing income income funding London Underground 945 £2.2bn £0.5bn £1.2bn £5.0bn £1.0bn Elizabeth line Sources of funds Currently operating as TfL Rail £9.9bn 23% spent renewing and improving the network through one of the Buses 77% largest capital investment spent on running and operating programmes in Europe London Buses 580km the network every day TfL-operated highways Streets TfL Road Network Total passenger income Total costs Rail 720km £0.1bn (2%) £0.4bn £0.3bn DLR, London Overground and London Trams TfL-operated Rail and London (4%) (3%) Underground routes £0.1bn (2%) £1.1bn (11%) Other operations £2.9bn £6.4bn (65%) London Dial-a-Ride, London River Services, London Taxi and (58%) £1.2bn Private Hire, Santander Cycles, Victoria Coach Station and £1.5bn (12%) (30%) Emirates Air Line, Crossrail 2, Planning and other Group Items 9,330 £5.0bn £9.9bn Buses on the total passenger total costs TfL network income Major projects Responsible for our largest and most complex projects £0.5bn (5%) £0.4bn (8%) Property Our commercial and residential estate and building portfolio 6,365 London Underground Rail Operating cost Capital renewals Media Traffic signals operated by TfL Buses TfL Rail Crossrail New capital investment Advertising estate and digital marketing infrastructure Other operations Net financing Cash reserve movements Transport for London quarterly performance report 4 Financial summary Performance in the year to date Operating account Cash flow summary TfL Group Q3 Q3 revised Q3 TfL Group Q3 Q3 revised Q3 (£m) 2019/20 target Variance 2018/19 Variance (£m) 2019/20 target Variance 2018/19 Variance Passenger income 3,416 3,427 (11) 3,337 79 Net cost of operations (87) (103) 16 (174) 87 Other operating income 709 708 1 562 147 Net capital account 378 383 (5) (149) 527 Total operating income 4,125 4,135 (10) 3,899 226 Working capital movements (103) (231) 128 (333) 230 Business Rates Retention 649 649 - 644 5 Increase/(decrease) in cash balances 188 49 139 (656) 844 Other revenue grants 58 58 - 40 18 Total income 4,832 4,842 (10) 4,583 249 Operating cost (4,318) (4,334) 16 (4,192) (126) Passenger journey analysis Net operating surplus 514 508 6 391 123 TfL Group Q3 Q3 revised Q3 Capital renewals (292) (302) 10 (255) (37) (£m) 2019/20 target Variance 2018/19 Variance Net cost of operations before financing 222 206 16 136 86 Number of passenger journeys (millions) 2,767 2,792 (25) 2,788 (21) Net financing costs (309) (309) - (310) 1 Average yield per passenger journey (£) 1.23 1.23 - 1.20 0.03 Net cost of operations (87) (103) 16 (174) 87 Operating cost per journey (£) (1.56) (1.55) (0.01) (1.50) (0.06) Capital account The Q3 net operating surplus is £514m, underlying demand decline compared to £123m better than last year, and £6m, or one last year now stands at -1.6 per cent, after per cent, better than our revised target. being -1.2 per cent at the end of Q2. TfL Group Q3 Q3 revised Q3 (£m) 2019/20 target Variance 2018/19 Variance Total income to the end of Q3 is £4,832m, Operating costs are £4,318m, £126m New capital investment (650) (705) 55 (952) 302 £249m higher than last year. Passenger higher than last year, driven by growth Crossrail (733) (738) 5 (1,009) 276 income is £79m higher, mainly owing to in Elizabeth line costs (£102m), increased London Underground journeys. Other London Overground costs (following Total capital expenditure (1,383) (1,443) 60 (1,961) 578 operating income is £147m up on last year, the introduction of new trains), and bus Financed by: with new Ultra Low Emission Zone (ULEZ) operators’ contract costs, which are linked income of £105m following the introduction to inflation. Costs are broadly in line with Investment grant 607 607 - 664 (57) of the scheme in April 2019. the revised target (£16m lower). Property and asset receipts 149 158 (9) 5 144 Borrowing 269 300 (31) 669 (400) Passenger income is £11m lower than the Total capital expenditure (excluding revised target. London Underground Crossrail) is £942m, £65m behind the Crossrail funding sources 609 633 (24) 345 264 underlying journeys remain up on last year, revised target. Costs are lower on a number Other capital grants 127 128 (1) 129 (2) but are no longer growing at the rates seen of programmes and it is now unlikely we in the first half of the year. Underlying bus will meet our revised spend target for the Total 1,761 1,826 (65) 1,812 (51) journeys declined in the first half of the year. For project milestones, we expect to Net capital account 378 383 (5) (149) 527 year. However, in Q3 this trend worsened, deliver 90 per cent on time this year. Transport for London quarterly performance report 5 Financial trends Total income Total passenger income Quarterly (£m)* Year to date (£m) Quarterly (£m)* Year to date (£m) 2,500 6,000 1,750 4,000 1,517 3,416 3,427 2,131 17 3,303 3,269 3,337 43 44 4,832 4,842 3,500 31 4,723 1,500 41 42 43 76 4,574 4,583 77 5,000 70 60 58 250 128 2,000 298 300 1,196 293 298 1,700 709 708 1,166 3,000 293 504 1,596 364 1,603 1,529 513 562 1,250 15 455 1,108 1,112 14 1,019 1,018 4,000 916 26 14 15 27 1,046 1,019 1,021 707 707 256 792 25 25 105 684 104 2,500 1,500 190 213 97 96 1,000 240 1,517 248 240 351 282 351 3,000 3,416 3,427 2,000 177 3,303 3,337 335 332 3,269 750 886 1,980 1,988 1,000 1,166 1,196 1,905 1,863 1,857 1,108 1,112 1,500 2,000 670 699 637 644 500 1,000 500 1,000 250 500 0 0 0 0 Q3 2018/19 Q4 2018/19 Q1 2019/20 Q2 2019/20 Q3 2019/20 Q3 2016/17 Q3 2017/18 Q3 2018/19 Q3 2019/20 Q3 revised Q3 2018/19 Q4 2018/19 Q1 2019/20 Q2 2019/20 Q3 2019/20 Q3 2016/17 Q3 2017/18 Q3 2018/19 Q3 2019/20 Q3 revised target target Passenger income Grants Other income Passenger income Grants Other income London Underground Buses London Underground Buses Rail TfL Rail Other operations Rail TfL Rail Other operations £10m below revised targets 5% year on year £11m below revised targets 2% year on year Total income is tracking slightly below the revised target as passenger Despite a slow down in Tube and buses demand, Friday 29 November 2019 income growth has stalled.