HALIFAX INTERNATIONAL AIRPORT AUTHORITY AIRPORT INTERNATIONAL HALIFAX

navigating

2001 through

TURBULENCE ANNUAL REPORT ANNUAL Since August, 2001, international passengers have enjoyed a true maritime welcome to Nova Scotia and Canada in our expanded arrivals facility. Designed by WHW Architects and built by Rideau Construction, the International Arrivals Area was officially opened in December by Halifax International Airport Authority Chairman Bernie Miller and Transport Minister David Collenette. navigating

through TURBULENCE

Y ANY STANDARDS, 2001 WAS A CONTROLS AND AN EYE ON THE HORIZON AS

TURBULENT YEAR. THE AIR IT NAVIGATED THE IMPACTS OF A SLUGGISH

TRANSPORTATION INDUSTRY ECONOMY, A LABOUR DISRUPTION, AND THE

BFELT THE SWELLS AND BUMPS OF THE YEAR S DEVASTATION OF SEPTEMBER 11 WITH ’ .

TUMULTUOUS EVENTS MORE ACUTELY THAN ANY TEAMWORK AND DETERMINATION, HIAA WAS

OTHER SECTOR OF THE ECONOMY. FOR ABLE TO HOLD STEADY THROUGH ALL OF THIS

HALIFAX INTERNATIONAL AIRPORT AUTHORITY AND EMERGE A STRONGER ORGANIZATION AT

(HIAA), 2001 WAS BOTH A YEAR OF THE END OF THE YEAR.

UNPRECEDENTED CHALLENGES AND AN THIS ANNUAL REPORT HIGHLIGHTS HIAA’S

OPPORTUNITY FOR MANAGEMENT AND STAFF ACTIVITIES, CHALLENGES, AND ACHIEVEMENTS

TO TEST THEIR METTLE. THROUGHOUT THE IN ITS SECOND YEAR OF OPERATING HALIFAX

YEAR, HIAA KEPT A FIRM HAND ON THE INTERNATIONAL AIRPORT. a year of

unprecedented

2001 Annual Report CHALLENGE

t is with great pride that I look back on turn over control and operation of Canadian the past year at Halifax International airports to not-for-profit airport authorities has IAirport Authority. It was a year of been chaan outstanding success. This policy of unprecedented challenge for HIAA and the air airport devolution has created not only transportation industry. Operating under often improved airport facilities, but also substantial stressful and difficult conditions, the new employment. Capital works at Canada’s management and staff of HIAA conducted eight largest airports rose from less than $50 page themselves with dignity, professionalism, and million in 1992 to over $1.7 billion in 2001. determination as they worked through In Halifax alone, the Airport Authority has 2 challenging labour negotiations, rebounded from initiated a multi-year $100 million Airport

Message from the Chairman the impacts of airline cutbacks and, of course, Improvement Program. coped with the cataclysmic events of Airport authorities like ours are equipped September 11. to respond to local economic needs and On December 31, 2001, we priorities through more business-like completed our second year management practices and Boards of Directors of operation. In appointed from the local community. In short, retrospect, the federal airport devolution has improved facilities, levels government’s of service, efficiency, and financial performance national policy benefiting the travelling public, local initiative to communities, and taxpayers.

Bernie Miller, Chairman Halifax International Airport Authority Board of Directors Here in Halifax, this has meant moving and autonomy so that airports can continue to Mr. Cowan is a nominee of the Board of Directors forward with the long-overdue and much-needed act in the best interests of the economic regions and Msrs. Scott and Streatch are nominees of llengeexpansion of our airport facility. It has also they serve. Halifax Regional Municipality (HRM). All are meant greater accountability to the community In many ways, 2001 was a year of distinguished members of our community and we serve, reaching out to all our stakeholders consolidating and testing much of what we had will play an important role in continuing the and continuing an important dialogue about the put in place the year before. We began to see high calibre of governance required for our future of the Airport and its critical role in the our vision to create a world-class airport facility Airport Authority. economic development of the region. bear fruit as we opened our new international At the same time, on behalf of the Board of

The HIAA Board of Directors is also working arrivals area and began development of the Directors and our community, I would like to Chairman the from Message diligently to represent the community’s interests domestic arrivals area and airside subdivision. express our heartfelt gratitude to retiring Board

at the national level. On June 12, 2001, the The Board of Directors was able to pull back members Sara Filbee, Royden MacBurnie, Michael 3 Government of Canada announced an initiative from a day-to-day management role in the O’Hara, and Bill Richardson. They have worked

to develop a Canada Airports Act to address a Airport Authority and focus more appropriately tirelessly for the Authority and each has played page number of perceived policy issues arising out of on governance. This was due in large part to an important role, both during the four difficult airport devolution. Along with our counterparts the leadership of Reg Milley, who assumed the years of negotiations prior to transfer and during across the country, we are working to ensure position of President & CEO in January, and his these first two, very challenging years, operating that the new Act advances the efforts of airports capable management team. the Airport. We look forward to their continuing to operate in a safe, secure, efficient, and Finally, we are pleased to welcome three support in the years ahead as important financially sustainable manner and that it new members to our Board of Directors. They are "Airport Associates" within the community. strengthens, rather than erodes, local control Jim Cowan, Robert Scott, and Ken Streatch. Thank you all. 2001 Annual Report 2001 Annual hands

on the CONTROLS 2001 Annual Report

y first year as President & CEO of On September 11, we were all shocked by attracting new airlines, routes, air cargo business, HIAA was certainly an extraordinary the devastating attacks in New York, Washington, and retail tenants to our facility. I am pleased to controlsMone. Although the management and and Pennsylvania. For the men and women in the report that these efforts have had considerable staff of the Airport Authority faced a number of air transportation industry, the use of commercial success. Late in the year, a number of airlines daunting challenges, we came through them a airliners as weapons of terror hit particularly announced their intention to resume routes or stronger organization with both a renewed close to home. When the Federal Aviation initiate new ones to Halifax. Early in 2002, Delta sense of purpose and a greater sense of Administration (FAA) closed airports across Airlines announced its intention to begin offering

page community. America, we were asked to receive diverted three flights a day between Halifax and Boston Even as I took the helm in January, the international aircraft bound for the United through Delta Connection in May.

4 economy was already showing signs of States. Halifax International Airport received In December, we officially opened our weakness. While our passenger numbers grew by more diverted aircraft than any other Canadian new international arrivals area, Message from the President & CEO six percent in the first half of the year, the airport, and we were the first to have airplanes marking a significant milestone in airlines continued to experience serious declines back in the air. I was particularly proud of the our $100 million Airport in revenues and responded by cutting routes response by our employees, our partners, and the Improvement Program. Despite the across North America, including those operating community during those difficult days as the economic challenges of 2001, we at Halifax. crisis unfolded. They epitomized “grace under believe that in order to stimulate In the fall of 2000, we entered into our pressure”, coming together with creativity, future growth, it is imperative to first collective bargaining negotiations with compassion, and professionalism. move forward with our plans to Local 80829 of the Union of Canadian Transport In addition to the enormous human toll, the invest in this long-overdue Employees (UCTE). By the spring of 2001, these events of September 11 had a devastating impact expansion of our facility. negotiations came to an impasse leading to a on the air transportation industry. Passenger Critical to the industry’s four-week strike. It was a tough beginning to numbers dropped significantly in the fourth recovery in the months our relationship but we learned a tremendous quarter. The situation worsened as airlines began ahead will be our amount about each other during that period. In to cut back and Canada 3000 closed its doors ability to restore public May, when the team came back together, we did altogether. In addition to the immediate impacts confidence in air so with a greater mutual understanding and, I on our revenues, the bankruptcy of Canada 3000 safety. While, in believe, a stronger commitment to working left us with $1.6 million in unpaid bills from Canada, we have together. Little did we know then, how much the carrier. one of the most our strength and teamwork would be tested in Despite these setbacks, our team continued stringent air the months ahead. to aggressively market the Airport in 2001, transport Reg Milley, diligently togrow ourbusiness. tumultuous events and how weworked Through Turbulence technologies toprotect air passengers. country implement new procedures and the industry, and airportauthorities across the over the coming months asTransport Canada, Canadian airportswillbefurther enhanced system following the tragedy. Securityat industry tookimmediate stepstoenhance the security systems inthe world, government and Halifax InternationalAirportAuthority 2001 navigated through the turbulent months of This annual report isthe storyof how we controls whilenever losing sight of the horizon. dual focus. You must keep acareful hand onthe in future growth. our operating costs, whilecontinuing toinvest these challenges, wemust find waystoreduce insurance, security, and rent costs. To meet business, whilecoping with increased work torecover ourrevenues and grow our few years, there willbe new challenges aswe to crystallizethe jobthatisahead. Inthe next to describe the yearthatisbehind us, butalso The theme of thisreport, Navigating through turbulence requires a – how westeadied ouroperation during President &CEO , isparticularly apt,not only Navigating the nextfiveyears.Thesearekeydriversto traffic andaircraftmovementsforecastedover The followingtableoutlinesthepassenger Rent Payable to Transport Canada Planned CaptialExpenditures Percent Change Total AircraftMovements Percent Change Passenger Volume Year Five Year Forecast 2001 2006 (actual) 2002 20032004 2005 3,7,1 2,2,0 2,7,0 1,3,0 1,6,0 $9,112,300 $35,678,313 $20,824,500 $20,073,000$10,334,400 $12,661,600 2,852,061 2,746,971 2,929,9453,015,675 3,103,990 3,194,973 -30.5% -10.0% 9.1%2.5% 2.5% 2.5% 93,912 84,521 92,21294,517 96,880 99,302 - -3.7%6.7%2.9% 2.9% 2.9% 4.3% – – 31240 45150 46230 $4,863,300 $4,632,300 $4,541,500 $3,122,400 $– $ – FORECAST Five Year to thepublicandourcustomers. provide thebestairportfacilityandservices our financialsuccess,whichenableusto

forecast2001 Annual Report page 5 Five Year Forecast 2001 Annual Report page 6 The Eye of the Storm

Capturing Attention Photographs of the 40 diverted aircraft parked on our runway captured attention around the world, appearing on the covers of many international magazines, including the leading industry publication Airports International, an Italian aviation magazine, a Japanese air traffic control magazine, and British Airways’ News. Canadian publications, including Wings, and the Air Canada Pilots’ Association newsletter Journal, have also carried the photos. O precaution wastaken. Each passenger began the daunting taskof unloading, every and other supplies for passengers. Then, aswe the grounded planes, and organized food, water, back-up generators toprovide airconditioning for to accommodate them. The EOCteamcoordinated were sitting onourrunway 15/33,which weclosed carrying approximately 8,000passengers and crew immediately and, withinafewhours, 40large jets in Halifax. to ensure the smooth handling of the situation shoulder withouroperations and securitystaff Immigration, and NavCanada worked shoulder-to- Measures Organization, Canada Customs and Municipality, RCMP, Nova Scotia Emergency airlines, Transport Canada, Halifax Regional partners, including representatives from the Centre (EOC)wasfullyoperational. OurEOC expect between40and 50aircraft. approximately 11:00a.m.,wewere notified to airports for the firsttime inAmerican history. At (AST), the FAA haltedallflight operations atU.S. our tarmac. At 9:40a.m.Atlantic Standard Time handle the logistical crisisthatwasunfolding on through Customs. It took16 hours of non-stop tobeprocessed the AirTerminal Building (ATB) luggage hadtobesearched before they couldenter STORM Diverted aircraft beganarriving almost By 11:45a.m.,ourEmergency Operations the United States, wemobilized to watched inhorror atthe devastation in n September11,whilethe world the eyeof the storm ’ s carry-on accommodations. planes and safelytaken totemporary effort before allthe passengers were off their at 11:30a.m.on Saturday, September 15.The three minutes of silence. We joined the rest of the country inobserving sang the American and Canadian national anthems. inspiration, and twoRCMPofficers inred serge Airport Chaplainspoke words of comfort and moving ceremony inthe ATB, ourCEOand the victims during anational day of mourning. At a flags asasymbolof respect for their hosts. them arrivedbackatthe Airportwearing Canadian remained cooperative and understanding. Many of heightened but,throughout everything, passengers able toallowplanes backinthe air. Securitywas homes tothe stranded passengers and crew. In addition, privatecitizens opened their facilities throughout the community. centres, schools, and other passengers atrecreation and food for the organized accommodations Regional Municipality at the Airport,Halifax coordinated logistics While the EOC The CommunityRespondswithHeart The final diverted aircraft departed Halifax On September14,wepausedtoremember the By the earlyhours of September13,wewere Keeping theLinesofCommunication Open travel, andmanyothers.Withup-to-dateinformationon-line,ourwebsitereceived2.1millionhitsinSeptember-substantiall with callsandemailsfromthemedia,familymembersofstrandedpassengers,peoplewhohadplannedorwereplanningto more thanthe40,000to50,000receivedinatypicalmonth.We setupamediacentre, holdingregularmediabriefingsand fielding about300mediacallsinthefourdaysdivertedplaneswereHalifax.We communicatedregularlywith employees, volunteersandothersviaemail,withourCEOprovidingface-to-facebriefingstothesegroupsaswell. people whose liveswere touched inapositiveway we received hundreds of thankyoulettersfrom global recognition and praise. At the Airportalone, handled atthe Airportearned thiscommunity and compassion withwhich the passengers were phenomenal community response, and the warmth the future. true team,forming bonds thatwilllast well into community-at-large came together torespond asa out of the crisis. Ouremployees, partners, and the remember and cherish the good things that came the aftermath of September 11,wemust also insurance costs. reduced passenger traffic, and higher securityand the lossof key customers, lessrevenue due to At Halifax International Airport,weare faced with industry hassuffered enormous losses. throughout the economy and the globalairline irrevocably altered. The event hassent shock waves those who lostlovedones havebeenhorribly and United Stateswilllinger along time. The livesof aircraft inhonour of ourtwocommunities. While facing the many challenges posedby The effectsof the terrorist attacksonthe In thehoursanddaysfollowingSeptember11tragedy, wewereinundated announced thatitwillname one of its by the kindness and generosity shown German airline Lufthansa has and inGander, Newfoundland, passengers and crew bothhere hospitality offered toits appreciation for the by somany people. In

2001 Annual Report page 7 The Eye of the Storm y focus on the HORIZON 2001 Annual Report

he terrorist attacks on the United States restricted areas. This now involves searching Air passengers have shown great patience as new have dramatically and forever altered every vehicle before allowing its entry to security procedures require them to arrive earlier Tsecurity policies and procedures at the airfield.horizo We have also placed security and wait in longer lines prior to boarding their airports around the globe. Halifax International personnel at all entrances to secure areas – no flights. HIAA and our airline and government Airport is no exception. partners are doing everything we possibly can to Even before September ensure the safety of air travel in Canada, and we 11, our standards for safety are confident that we provide one of the safest page and security were among the flying environments in the world. most stringent in the world. While the events of the past year have had

8 Immediately following the significant impacts on our organization and will disaster, Transport Canada put additional strains on our finances, it is

Focus on the Horizon introduced a new, even more critical to both our recovery and our future rigorous security regime. In growth that we keep our attention focused addition to these new squarely on the horizon. For HIAA, that means standards, the federal remaining steadfast in our determination to grow government has created the all facets of our business. Whether it is through Canadian Air Transport Security Authority, which will take over many of the key security functions currently handled by the one enters the restricted area without being airlines. Transport Canada has also announced personally checked. expenditures of well over $1 billion in enhanced In order to meet the increased pre-board screening equipment and procedures, demands of the new security measures, explosive detection systems, security we have doubled the size of our security improvements to aircraft design, and the complement provided by the Canadian selective deployment of armed police on aircraft. Corps of Commissionaires and conducted While most of the security procedures seen extensive training for new and existing staff. In our continued commitment to Airport expansion by travellers are the responsibility of the airlines addition, the RCMP has also increased its force of or our determination to develop new airline and Transport Canada, HIAA has crucial security officers on-site. customers, new routes, new air cargo business, or responsibilities behind the scenes that have also In the coming months, new security new retail partners, the team at HIAA has changed since September 11. One of our major protocols and new technology will be introduced responded by stepping up our efforts to recover roles is to protect the integrity of the Airport’s to further enhance security at Canadian airports. and rebuild. n community topersuade carriers toexpand or tourism industry and the localbusiness up ourefforts. We partnered withthe regional dealt another blowtothe industry, westepped base for growth and recovery. fall toreplace lostairservice and buildasolid response, weworked diligently throughout the us with$1.6million inunpaid bills. In impact onourrevenue base, butthe carrier left Not onlydid thishaveanimmediate and severe November, Canada 3000declared bankruptcy. discontinued daily service toBoston.Then, in week toReykjavikand American Eagle announced the cancellation of itsthree flights a Halifax-Washington routes. Icelandair elimination of itsnon-stop Halifax-Newark and quarters of 2001,AirCanada announced the slowing economic conditions inthe firsttwo and rationalization of routes. Inresponse to feel the impactsof airline cutbacks, closures, 3000 the second-largest airline inthe nation. airlines merged inearlyspring, making Canada into anew market of customers. These three stiff competition onthe low-fare front, tapping CanJet, Royal, and Canada 3000were providing the year. Inaddition toourother carriers, service toand from Halifax inthe earlypartof Travellers enjoyedanunprecedented levelof air R e-building OurAirService Then, when the tragedy of September 11 Beginning mid-year, however, webeganto AirTours International inthe spring of 2002. begin operating weeklyservice toLondon using Canadian Affair/Sunquest announced they would mid-summer 2002. with the airside lotsready for occupancy by By year-end, the workwas95percent complete serviced lotswithdirect accesstothe airfield. allowed ustodevelop approximately 12fully an extension toTaxiway Alpha,which inturn Dexter Construction. Thisproject consisted of Engineering, and the construction workto of this$7.0million development toVaughan airside subdivision inApril,awarding the design needed toincrease ourcargo-handling capacity. realize thisgreat opportunity, however, we from 20,000to40,000tonnes peryear. To double ouraircargo business through Halifax, in 2000indicated thatwehavethe potential to An aircargo development study commissioned Realizing ourAirCargo Potential Canada 3000 announced thatthey would pick upmany of Conquest Tours and Skyservice Airlines Montreal, Ottawa and St.John the spring and added Tango flights toToronto, their non-stop service to Newark and Calgary in end, ourefforts beganto paydividends. initiate service toand from Halifax. Byyear- We beganthe firstphaseof ourplanned Air Canada announced they wouldresume ’ s flights tosundestinations. directions andassistpassengers.TheirvividNovaScotiatartanvestssetthemapartfromthecrowd,makinga the nextfourdays,theyloggedmorethanathousandhours,workingaroundclocktodistributefood,provide dozen volunteerhostsarrivedattheAirport,withoutbeingcalled,toofferwhateverassistancetheycould.Over highly visiblesourceofinformationandsupport.TheVolunteer HostProgramcelebrateditsfirstanniversayin Volunteer HostsStepintoHelp ’ s. Subsequently, October, 2001,andtheTour Programcontinuestobepopularwithschoolsandcommunitygroups. prospects for the remaining lots. operations here, and weare activelydeveloping expressed interest inexpanding orinitiating synergy and potential for economic growth. activities thattogether willcreate tremendous variety of other aircraft servicing and repair shipment areas, offshore supplycentres, and a aircraft maintenance facilities, cargo trans- Canadian-American diplomatic agenda with issue thatisreceiving renewed attention onthe the upperlevelfor customs pre-clearance, an former facility. Inaddition, spaceisreserved on contrast to300passengers perhour inthe officials toprocess 900passengers perhour and food inspection facilities, which allows expanded and upgraded customs, immigration, “ and energy industries, tocreate astrong, dynamic seafaring tradition, and ouremerging high-tech showcases the natural beautyof Nova Scotia, our arrivals area. Its distinctive maritime theme times larger thanthe previous international north-end of the building, the facility isthree officially opened inDecember. Locatedatthe Program The flagship project of our AirportImprovement Welcoming theWorld sense of place A number of companies have already These lots willbeideal locations for The new international arrivalsarea provides – the international arrivalsarea Within anhouroftheattacksonWorld Trade Centre,morethana ” , and awarmmaritime welcome. – – in

2001 Annual Report page 9 Focus on the Horizon of our new of ” Sneak Peek Tours Peek Sneak “ Strengthening and expanding our expanding and Strengthening The regional media are also a crucial part of also a crucial are media regional The A Strong Community Connection A Strong we understand Airport, International Halifax At business in the are We connections. value of the place just as much and connections, making of as we with our community value on connecting world. to the our community on connecting do has been a top priority connections community of a series In 2001, we held past year. over the in Airport and at the briefings stakeholder our first annual hosted and Halifax downtown delivered Reg Milley, Our CEO, in May. meeting as many in 2001, meeting 20 speeches face-to-face. as possible, members community also hosted We international arrivals area, and a grand opening a grand and arrivals area, international members community of hundreds that brought We with us. this achievement out to celebrate report, distributed our first annual and produced stakeholder our regular with six issues of along newsletter. in closely with them worked We community. the Airport covered support as they 2001 providing This positive issues. air transportation and helpful was particularly relationship working as HIAA September 11 crisis, the during staff and Affairs & Public Communications replacing the existing 20-year-old lime treatment lime 20-year-old existing the replacing provincial exceed or will meet and plant, standards. protection environmental Upon completion, this major redevelopment this major Upon completion, Protecting Our Environment Our Environment Protecting Airport the of component key Another a of construction is the Program Improvement which facility, water treatment state-of-the-art slate. caused by pyritic run-off acidic neutralizes by CBCL was designed plant This $7.0 million The Construction. built by ACL Limited and early in 2002, will be fully operational facility project will allow us to provide our customers provide will allow us to project goods high-quality of range greater with a much our increasing while substantially services, and 60 some to creating In addition revenues. retail retail contemporary outlets will offer the jobs, hours. extended and street-pricing, concepts, Enhancing Service to Air Travellers of a number In 2001, HIAA implemented In response needs. customer to meet initiatives a staffed we opened demand, to increasing that has proven facility storage baggage sets of three added We popular. extremely lounge departures in the workstations quadruple access internet and telephone travellers giving their for private workspace while waiting and we area, parking the By reconfiguring flight. spaces to additional able to create were peak season. during vehicles rental accommodate information our flight we modernized Finally, in the seating as well as added display screens, arrivals area. In June, we began In June, We completed the design phase of this phase of design completed the We Building our Retail Business team successfully development Our business to the retailers leading of a number attracted the us to expand Airport in 2001, allowing available to our customers. services and products Tim Hortons, includes roster tenant Our new Deli, Boardwalk Brisket King, Burger Starbucks, Island Bar/Lounge, Legends Alehouse, Maritime and (newsstand Group Hudson Beach Company, Travelex and free), (duty AerRianta gift shop), actively we are addition, In exchange). (foreign to round retailers other with several negotiating services and products of selection out the and food and stores retail new The available. operation outlets will be phased in for beverage Centre the of 2002, as construction throughout proceeds. project Retail Expansion Core the began preparing in 2001, and project This $12.0 documents. tender construction will project landlord and tenant joint million retail lobby and main the size of the quadruple Building. Air Terminal the of area heightened security spending and interest in interest and security spending heightened WHW Architects concept. clearance perimeter the completed the Construction Rideau and over one in just arrivals project international Expansion our North-End is part of area The year. a of completion the will include which Project, to our domestic renovation and expansion major in 2002. arrivals area Airport Breaks Ground on Water Treatment Facility Treatment Airport on Water Breaks Ground pyritic slate run-off on Airport property. pyritic slate construction of a water treatment facility to address the long standing issue of standing the long to address facility water treatment of a construction 2001 Annual Report page 10 Focus on the Horizon financial REVIEW the media worked together to keep the For the year ended December 31, 2001, the Authority negotiated as part of our transfer agreement. community informed. generated $28.7 million in operating revenues As we look to 2002 and beyond, it is clear that Our Community Consultative Committee (compared with $26.6 million for the 11 months our past operating results are not indicative of our also met in 2001. This was an opportunity for ended December 31, 2000). On January 1, 2001, an future financial performance. The Authority has HIAA to meet with representatives of such key

Airport Improvement Fee (AIF) was introduced, established financing of up to $30.0 million to fund Review Financial stakeholder groups as the Metropolitan Halifax earning an additional $8.3 million, for total revenues our Airport Improvement Program, in addition to Chamber of Commerce, the Tourism Industry of $37.0 million. Every AIF dollar collected was any future surpluses. In 2002, we anticipate 11 Association of Nova Scotia (TIANS), the Nova applied to capital projects, which are approved continued increases in costs for enhanced security, Scotia Department of Economic Development, through a consultation process, including expansion war and terrorism insurance, full realty taxes on new and Air Canada to discuss the air transportation of the north-end arrivals area, construction of a water construction, and maintenance of our expanded page needs of the community. Together, we also treatment facility, development of an airside facility. As well, HIAA operates the Airport under a looked further into the future exploring how subdivision, and replacement of approach lighting lease with Transport Canada that sets out the HIAA and the community can best work on runway 15. calculation of annual ground rent. From 2000 to together to ensure continued prosperity for Total operating expenses for 2001 were $23.0 2002, this calculation resulted in no rent payable. the region. million (compared to $19.6 million for 11 months in However, in 2003, we will begin our $3.1 million 2000). The increase in annualized operating annual rent obligation to Transport Canada – Airport Authority Receives Awards expenses was attributable to added security and escalating each year thereafter, as well as repayment HIAA was honoured by TIANS with its 2001 insurance costs, bad debts related to Canada 3000, of our Airport chattels loan, amounting to $1.3 review Transportation Sector Award for our higher operational costs from an unusually harsh million annually for four years. These increases, Report 2001 Annual commitment to the community, to economic winter, and additional labour costs. when coupled with sharp declines in passenger development, and to customer service. Our excess of operating revenues over expenses traffic, seriously undermine our revenues on all In addition, HIAA’s Communications & totaled $5.7 million – excluding AIF of $8.3 million levels. Public Affairs team received two awards from ($7.0 million – excluding AIF in 2000). This excess As we face these very serious financial challenges the Airports Council International - North was retained and invested in our capital program, in the short and medium term, we have revamped America in its annual Excellence in Marketing enabling us to meet ongoing operating our five year projections. We know we can weather and Communications contest for our electronic requirements, as well as proceed with much-needed the storm – we are confident in the resilience of the employee newsletter E-News and our repairs and maintenance to our ageing air travel industry, in the strength of our region’s corporate branding campaign, introducing a infrastructure. Our capital expenditures for the year economy, and in our own ability to manage our new logo, designed by Brian Harrison of Lou were $35.7 million, which were financed by our expenses and grow our business. By carefully charting Cable Design Inc. excess of revenues over expenses including AIF, and our course and keeping a firm hand on the controls, a $6.0 million contribution from Transport Canada, we can successfully navigate the turbulence ahead. 2001 2000 6,126 12,829 13,929 6,757 $ 40,903 $ 21,730 $ 40,903 $ 21,730 Cash and cash equivalentsCash and receivable Accounts 393 Inventories expensesPrepaid $ 428 1,144 $ 4,332 9,044 accrued liabilities payable and Accounts revenueDeferred $ 4) (note debt long-term of portion Current 257 13,532 3,127 $ 268 6,465 5)capital assets (note 230 Equity in capital assets 130 129 162 - 21,127 1,830 7,056 Commitments (note 7) (note Commitments See accompanying notes to financial statements. Board: the On behalf of Director Director ASSETS assets: Current 2)Capital assets (note 3) costs (note Organization AND NET ASSETS LIABILITIES, DEFERRED CONTRIBUTIONS liabilities: Current 1,188 33,589 4) (note debt Long-term Security deposits to related contributions Deferred 2,285 6,616 assets: Net 5,332 515 5,600 487 December 31, 2001, with comparative figures for 2000 figures for 2001, with comparative December 31, dollars) of (in thousands BALANCE SHEET REPORT TO THE DIRECTORS

’ We conducted our audit in accordance with Canadian generally accepted generally with Canadian in accordance our audit conducted We in all material fairly, present statements financial these In our opinion, AUDITORS We have audited the balance sheet of Halifax International Airport Authority as Authority Airport International Halifax of sheet balance the have audited We in net changes and operations of statements the and at December 31, 2001 are statements financial These ended. year then the cash flows for assets and express is to Our responsibility management. Authority's the of responsibility the on our audit. based statements financial on these an opinion an audit perform that we plan and require standards Those standards. auditing free are statements financial the whether assurance to obtain reasonable evidence on a test basis, examining, includes An audit misstatement. material of An audit statements. financial in the disclosures and amounts the supporting estimates significant used and principles accounting the assessing also includes statement financial overall the as well as evaluating by management, made presentation. as at December 31, 2001 and Authority the of position financial the respects, in ended year then the its cash flows for and its operations of results the required As principles. accepted accounting generally Canadian with accordance principles these that, in our opinion, we report Act, Corporations Canada by the year. preceding the with that of on a basis consistent have been applied Accountants Chartered Canada Halifax, 13, 2002 February HALIFAX INTERNATIONAL AIRPORT AUTHORITY

2001 Annual Report page 12 Financial Statements (in thousandsof dollars) Year endedDecember31,2001,withcomparativefiguresfor 2000 ASSETS NET IN CHANGES AND OPERATIONS OF STATEMENT OPERATING EXPENSES REVENUES e ses n fya 117$7,056 - $ 21,127 7,056 $ 7,056 See accompanyingnotestofinancialstatements. 14,071 of airport operations. development of theHalifax InternationalAirport.Therevenuesandexpenses for 2000reflect11months *On February1,2000,theAuthority assumedresponsibilityfor themanagement,operationand Net assets, end of year Net assets, beginning of year Excess of revenues overexpenses te eeu 8 765 1,449 26,630 5,815 - 2,756 1,538 785 28,728 8,155 6,142 3,691 $ 8,328 8,407 7,690 $ Airport improvement fees(note 6) Operating revenues 8,165 Other revenue Rentals Parking revenues Concessions Terminal and passenger securityfees Landing fees neetepne-230 1,618 - 824 1,973 1,810 530 5,984 9,108 2,981 6,867 10,634 Interest expense Amortization Property and other taxes General and administrative Materials, services and supplies Salaries, wages and benefits 70626,630 37,056 29519,574 22,985 012000* 2001 (in thousandsof dollars) Year endedDecember31,2001,withcomparativefiguresfor 2000 FLOWS CASH OF STATEMENT ahadcs qiaet,edo er$114$9,044 51 $ 1,144 8,993 $ 9,044 See accompanyingnotes tofinancialstatements. Cash and cashequivalents, end of year (7,900) Cash and cashequivalents, beginning of year Increase (decrease) incashand cashequivalents INVESTING ACTIVITIES FINANCING ACTIVITIES OPERATIONS Cash providedby(usedin): oa iacn ciiis5806,963 5,870 11,516 21,909 Total financing activities Total operations oa netn ciiis(569 (9,486) (102) (35,679) - (4,747) (4,637) 5,829 - (3,100) Total investing activities (35,679) Additions toorganization costs - Capital assetsacquired from Transport Canada (130) Expenditures oncapitalassets(note 5) Increase indeferred contributions Repayments of long-term debt Increase inlong-term debt 7,056 $ 14,071 $ Change innon-cash operating working capital: Items not involving cash: Excess of revenues overexpenses eae ocptlast ,0 4,234 6,000 487 related tocapitalassets 28 162 (230) (428) (27) (33) (3,101) 35 Increase insecuritydeposits Increase (decrease) indeferred revenue (1,205) Increase inaccounts payable and Increase inprepaid expenses Decrease (increase) ininventories Increase inaccounts receivable mriain1931,618 1,973 Amortization cre iblte ,6 5,952 7,067 accrued liabilities 012000 2001

2001 Annual Report page 13 Financial Statements NOTES TO FINANCIAL STATEMENTS

Year ended December 31, 2001 (tabular amounts in thousands of dollars) 2001 Annual Report

GENERAL c) Capital assets The Halifax International Airport Authority (the "Authority") was incorporated on Capital assets are recorded at cost, net of contributions and government November 23, 1995 as a corporation without share capital under Part II of the assistance and are amortized over their estimated useful lives on a straight-line Canada Corporations Act. On February 1, 2000, the Authority signed a 60-year ground basis as follows: lease with Transport Canada and assumed responsibility for the management, Asset Rate operation and development of the Halifax International Airport. Excess revenues over Computer hardware and software 20% - 33% expenses are retained and reinvested in airport operations and development. Leasehold improvements 2.5% - 10% The financial statements of the prior year reflect 11 months of airport operations Machinery, equipment, furniture and fixtures 5% - 20% page and one month of pre-transfer activities. Vehicles 5% - 16.7% The objective of the Authority is to manage a financially self-sustaining,

14 international-calibre aviation complex that enhances provincial economic growth. Construction in progress is recorded at cost and is transferred to leasehold The Authority is governed by a Board of Directors whose members are nominated improvements when the projects are complete and the assets are placed into service.

Notes to Financial Statements by the Halifax Regional Municipality, the Province of Nova Scotia and the Federal Government, as well as the Metropolitan Halifax Chamber of Commerce. The d) Organization costs nominated members can also appoint additional members who represent the interests Organization costs represent start-up expenditures, including due diligence, of the community. engineering studies, and legal fees, incurred by the Authority in advance of the The Authority is exempt from federal and provincial income tax, federal large transfer of operations to the Authority from Transport Canada. Organization costs are corporation tax, and Nova Scotia capital tax. being amortized to operations on a straight-line basis over a period of three years.

1. SIGNIFICANT ACCOUNTING POLICIES e) Revenue recognition a) Presentation and basis of accounting Landing fees, terminal fees, parking revenues and passenger security fees are The Authority's financial statements are prepared in accordance with accounting recognized as the airport facilities are utilized. Concession revenues are recognized principles generally accepted in Canada. The preparation of financial statements on the accrual basis and calculated using agreed percentages of reported requires management to make estimates and assumptions that affect the reported concessionaire sales, with specified minimum guarantees where applicable. Rental amounts of certain assets and liabilities at the date of the financial statements and revenues are recognized over the lives of respective leases, licenses, and permits. the reported amounts of certain revenues and expenses during the year. Actual Airport improvement fees ("AIF") are recognized when departing passengers board results could differ from those estimates. their aircraft as reported by the airlines. Deferred revenue consists primarily of concession revenue for minimum b) Inventories guarantees and license fees received in advance of services being rendered. Inventories consist of materials, parts and supplies and are stated at the lower of cost and estimated net realizable value. 4. raiaincss$320$3,290 (1,005) $ 3,290 (2,102) $ 3,014 447 3,118 1,173 24,672 1,703 Accumulated amortization - 4,291 Organization costs 4,228 24,672 109 Construction inprogress Vehicles 4,337 Machinery, equipment, Leasehold improvements 2. urn oto fln-emdb 6 130 268 Current portion of long-term debt 3. Transport Canada non-interest bearing debt, Halifax Regional Municipality repayable Halifax Regional Municipality deed transfer tax Computer hardware LONG-TERM DEBT 927 525 $ 1,062 509 414 $ ORGANIZATION COSTS 409 $ 1,476 918 furniture and fixtures $ and software CAPITAL ASSETS eaal nfl nArl1 0220200 5,192 200 338 5,192 $ 208 commencing January 1,2003through January 1,2006 repayable inannual instalments of $1,297,825 $ secured byageneral securityagreement, repayable infullonApril 1,2002 contribution, unsecured, non-interest bearing, in monthly instalments of $5,633 loan, unsecured, non-interest bearing, repayable 564$215$3,8 6,616 $ 33,589 $ 2,105 $ 35,694 $ otAcmltd e ok Net book Net book Accumulated Cost amortization value ,8 2,285 $ 1,188 $ ,3 5,600 $ 5,332 $ 012000 2001 ,0 5,730 5,600 012000 2001 2000 2001 pnn aac ,3 - $ 1,830 $ 4,234 (2,404) 6,000 (7,830) Less: amounts applied to capitalassetexpenditures Contributions received 1,299 from Transport Canada Opening balance 1,303 1,365 from Transport 1,365 Canada tofund capitalassetexpenditures. 268 Deferred contributions represent the unspent balance of contributions received 5. $ these credit facilities tofinance certaincapitalexpenditures. basis points. Subsequent toDecember31,2001,the Authority begantodraw on is availabletoamaximum of $24.0million and bearsinterest atprime rate less65 rate less70basispoints. A demand instalment loantofinance construction costs demand instalment loantoamaximum of $6.0million bearing interest atprime any public registry until there hasoccurred anevent of default. other assetsof the Authority. This security isnot registered, recorded orfiledin interest inthe leasewithTransport Canada, and asecurityinterest inallof the Agreement containing afixed mortgage bywayof subleaseof the Authority's Commerce for $30.0million, which, inthe event of default, willbesecured byan The Authority hasauthorized credit facilities withthe Canadian Imperial Bank of 2006 2005 2004 2003 2002 follows: The aggregate principal repayments required overeachof the next fiveyearsare as The credit facilities consist of acombined operating line of credit and a DEFERRED CONTRIBUTIONSRELATED TO CAPITAL ASSETS 1,830 $ - $ 012000 2001

2001 Annual Report page 15 Notes to Financial Statements NOTES TO FINANCIAL STATEMENTS (continued)

Year ended December 31, 2001 (tabular amounts in thousands of dollars) 2001 Annual Report

6. AIRPORT IMPROVEMENT FEES 7. COMMITMENTS On January 1, 2001, the Authority implemented an AIF of $10 per local boarded a) Transfer agreement passenger to fund the cost of major capital expenditures. These fees are collected Effective February 1, 2000, the Authority signed a 60-year ground lease with by the air carriers under an agreement between the Authority, the Air Transport Transport Canada (the "Landlord") which provides for the Authority to lease the Association of Canada, and the air carriers serving Halifax International Airport. Halifax International Airport (the "Airport"). A 20-year renewal option may be Under the agreement, AIF revenues may only be used to pay for the capital and exercised, but at the end of the term, unless otherwise extended, the Authority is related financing costs of major airport infrastructure development as jointly obligated to return control of the Airport to the Landlord. agreed with air carriers. The operating lease for the Airport requires the Authority to calculate rent page 2001 payable to the Landlord utilizing a formula reflecting annual airport revenues, AIF revenue (net): passenger volumes, and predetermined base operating costs and capital

16 AIF revenue, net of bad debts $ 9,108 expenditures. The estimated lease obligations for the next five years are AIF collection costs (780) approximately as follows:

Notes to Financial Statements 8,328 Expenditures: 2002 $ - North-end expansion 10,553 2003 3,122 Centre core retail expansion 459 2004 4,542 Pyritic slate treatment facility 6,045 2005 4,632 Capital expenditures (pending ratification) 7,685 2006 4,863 24,742 Excess of expenditures over AIF revenue (net) $ (16,414) b) Pension As a condition of transfer, the existing Government of Canada pension assets and Net assets of the Authority as at December 31, 2001 are as follows: accrued benefits obligation for certain employees may be transferred to the Net assets provided by airport improvement fees $ 8,328 Authority under a Reciprocal Transfer Agreement. Employees will have up to one Net assets provided by other operations 12,799 year following the signing of this Agreement to direct the disposition of their $ 21,127 Government of Canada pension funds. The remaining assets of the plan, together with the actuarially determined pension benefit obligation, will be transferred to the Authority's pension plan on a fully funded basis. The amount of this transfer to the Authority cannot be determined at this time. employees havechosen totransfer their PSSA Planpension credits tothe Plan, such time asthe Pension Transfer Agreement hasbeenfinalized and the transferred employees may betransferred tothe Authority asdescribed innote 7(b). Until Government of Canada pension assetsand accruedbenefits obligation for certain no assetsorliabilities and, therefore, hasno surplus ordeficit. The existing of funding the Plan.As of the effectivedate of the funding valuation, the Planhas become members of the defined contribution plan. contribution planinlieu of the defined benefit plan.Allother employeeswill However, these employeesmay electtobecome members of the defined participated under the Public Service Superannuation Act ("PSSA") Plan. who were employedbythe Authority onFebruary 1,2000and previously benefit component isfor former Transport Canada continuing full-time employees which hasdefined benefit and defined contribution components. The defined The Authority sponsors apension plan(the "Plan")onbehalfof itsemployees 8. million. To December31,2001, the Authority hasexpended $6.2million. cost of the treatment facility required under the plantobeapproximately $6.5 Environment and LabouronJanuary 27,2000.The Authority estimated the capital pursuant toanindustrial approval granted bythe Nova Scotia Department of The Authority hasproceeded toimplement aPyritic SlateRun-off Management Plan Environmental d) Transport Canada million (2000-$2.4million) wasfinanced byacontribution received from 2001, the Authority hasexpended $31.9million onthese contracts, of which $7.8 amounting toapproximately $35.1million (2000-$24.7million). To December31, At December31,2001,the Authority hascontractual construction commitments Constructioninprogress c) finance these commitments An actuarial valuation hasbeenprepared asof February 1,2000,for purposes PENSION (note 5) . The Authority alsohascredit facilities availableto (note 4) . receivable balances and maintains reserves for potential credit losses. are derived from airlines. The Authority performs ongoing credit valuations of significant portion of the Authority's revenues, and resulting receivable balances, The Authority issubjecttocredit riskthrough itsaccounts receivable. A Creditrisk b) market rates of interest availabletothe Authority for similardebt instruments. contractual future payments of principal and interest, discounted atthe current relative tothe carrying valueof $5,599,733(2000-$5,729,300). 31, 2001,the fair valueof long-term debt was$5,007,313(2000-$4,241,800) due tothe relatively short periods tomaturity of the instruments. At December payable and accruedliabilities, and securitydeposits approximate their fair value The carrying valuesof cashand cashequivalents, accounts receivable, accounts Fairvalues a) 9. 31, 2001,inaccordance withthe recommendations of the actuarial valuation. Authority's contributions for the period from January 1,2001through December expense for 2001amounted to$723,566(2000-$568,187)and consisted of the February 1,2000. there willbeno liability for pensionable service prior tothe effectivedate of The fair valuesof long-term debt were estimated basedonthe present valueof FINANCIAL INSTRUMENTS Pension costsare charged tooperations asservices are rendered. Pension

2001 Annual Report page 17 Notes to Financial Statements board of DIRECTORS 2001 Annual Report

Bernard Miller, Chairman Mary R. Brooks, Director Royden J. MacBurnie, FCA, Director Bernie’s aviation involvement spans five decades. Mary holds the William A. Black Chair of Commerce at Prior to his retirement in 1989, Roy was Vice Chairman Starting in 1957 as a Passenger Agent with Trans-Canada Dalhousie University and is Professor of Marketing and and Chief Financial Officer with Central Trust Company Air Lines (TCA) in Halifax, he rose to hold a series of Transportation at the University. Her career includes in Halifax. He was Vice Chairman of The Central directorssenior executive positions with Air Canada. Bernie various teaching and research appointments at Guaranty Trust Corporation in Calgary and previously retired in 1991 as Vice President In-Flight Service. Since Dalhousie University. She currently chairs the served as Executive Vice President and Chief Operating 1992, he has been closely involved with the transfer and International Trade and Transport Committee at the Officer of Nova Scotia Savings & Loan Company. He is operation of Halifax International Airport, and served as Washington-based Transportation Research Board. Mary a Chartered Accountant and is a Fellow of the Institute

page the Airport’s CEO for most of its first year after transfer. has completed consulting contracts for both industry of Chartered Accountants of Nova Scotia. Following retirement from Air Canada, Bernie spent and government in Canada, the Caribbean, Europe,

18 several years as the Director of Dalhousie University’s Southeast Asia, and Australia. Don Mills, Director Advanced Management Centre. He now operates his own As the President & CEO of Corporate Research

Board of Directors labour relations consulting business, MILR Inc. and is a Pierre Champagne, Director Associates Inc. and Vice Chairman of CCL Group, Don is member of the Saint Mary’s University management Pierre is a graduate of Saint Mary’s University with 37 one of Canada’s leading public opinion and market faculty. On the national level, Bernie serves as the Chair years of aviation experience, of which 26 years were research professionals. He is currently Chair of the of the Council of Airport Authority Chairs for Canada and involved in airport operation and management in senior Arthritis Society; and serves as Director of the United as a Director of the Canadian Airports Council (CAC). level positions. Pierre currently consults on domestic Way Advisory Board, Greater Halifax Partnership, and international airport projects. Dalhousie University, Canadian Association of Market Frank Matheson, Vice Chairman Research Organizations, The Office Interiors Group, Frank is President & CEO of Homburg Canada Inc., K. Sara Filbee, Director Ashburn Golf Club, Market Decisions (LLC - Maine), and an international real estate company with holdings in Sara is Chair of the Board of Advisors and past Vice Total Marketing & Communications (Bermuda). Don is residential, commercial, industrial, and retail properties. President, Operations for HR-Dept.com, an application also Past President of the Metropolitan Halifax Chamber He is Corporate Secretary of Homburg Invest Inc., a TSE service provider. She also serves as Senior Consultant, of Commerce and past Chair of the Greater Halifax- listed real estate company with holdings in Canada and Industrial Analysis Centre, Industry Canada. Her Dartmouth YMCA. the U.S.A. He is a Director of Cedar Income Fund, a extensive career includes an appointment as President NASDAQ listed real estate investment trust. Frank is & CEO of the Atlantic Provinces Economic Council, as Michael J. O’Hara, Director a past Chairman of the Halifax School Board and the Principal with KPMG Management Consulting, as Michael practices law in Dartmouth, Nova Scotia. His Halifax Forum Commission and has served on Director, Commercial Banking for Canadian Imperial practice areas include civil litigation, administrative, and many community and industry related boards Bank of Commerce, and as Partner with McInnes Cooper. employment law. Mike is a member of the Canadian and commissions. She also served as Chair of the United Way/Centraide Transport Lawyers Association and served as President of Canada and Metro United Way. that organization in 1993. He also served on the Transportation Sector of Nova Scotia Voluntary Planning. He is a former Chair of the Transportation Committee of the Halifax Board of Trade. 1984, and isaFellowof The Management Accountants. The Management Accountants of Canada in1983to Certified Management Accountant, servedasPresident of restructuring and managing their affairs. Billisa Limited toassistcompanies infinancial difficulties by In 1990he formed William H.Richardson Consultants drugs, and adirector of anumber of public companies. Drugs Limited, alarge public company inwholesale positions for 21years. He wasChairman of Northwest and President of Empire Theatre Limited. He held these Limited, Chairman &CEOof Lawtons DrugStores Limited, Bill isaformer Vice President of Empire Company W. H.Richardson, education inCanada. and current information onlegalissuesaffecting Education LawReporterwhich provides comprehensive presently onthe National Advisory Board of the served onseveral provincial and localboards and is municipal, employment, and education law. Arthas Art has27yearsof practice experience inthe areas of Arthur W. D.Pickup, Director Q.C., Director Commerce, and the Nova Scotia SportHall of Fame. Ambulance Society, Metropolitan Halifax Chamberof the Board of Directors for The ShawGroup, St. John Board of Governors of Saint Mary Chairman of ProGear GolfManufacturing, sits onthe British Consul for the Maritime Provinces, Fred is Group of Companies. Inaddition tobeing the Honorary Fred isPresident &Chief Executive Officer of the Secunda Fred Smithers, Roy isachartered accountant. with EPA, CPAir, and Canadian Airlines International. the airline industry for 15yearsinexecutive positions communications sectors. Prior to1988,Royworked in management company engaged inthe transportation and Officer of Newfoundland CapitalCorporation, a From 1988to1998he wasPresident &Chief Operating Newfoundland-based public utilityholding company. marine container terminal and adirector of FortisInc., a also adirector of Halterm Limited, Halifax's largest transportation industry throughout North America. He is a publicly traded Canadian company engaged inthe Roy isChairman &Chief Executive Officer of Clarke Inc., Roy Rideout, Director Director ’ Missing: Seated fromleft: Middle rowfromleft: Back rowfromleft: Fred Smithers,RoyRideout,MichaelJ.O'Hara,PierreChampagne s University aswell K. SaraFilbee,DonMills,StephenL.Wallace Frank Matheson,BernardMiller, RegMilley Royden J.MacBurnie,ArthurW. D.Pickup,JamesS.Cowan, Mary R.Brooks, W.Mary H.Richardson Counsel tothe Authority. Since 1995,JimhasactedasSecretary and General feasibility of establishing an airportauthority inHalifax. original AirportPlanning Committee, which studied the Provinces Transportation Commission. He wasonthe Dalhousie University, and pastChairof the Atlantic Scales. He isthe Chairof the Board of Governors of Jim isapartner inthe lawfirmStewartMcKelvey Stirling James S.Cowan, of Nova Scotia. Institute and Past President of the Consulting Engineers the Nova Scotia Chapter of the UrbanDevelopment New Brunswick in1986.Stephen isaformer director of received hisengineering degree from the University of planning, and geomatics consulting services. He land surveying, civil/municipal engineering, land use firm Wallace Macdonald &Lively, Ltd., specializing in Stephen isPresident of the Bedford-based consulting Stephen L.Wallace, Q.C., Director Secretary

2001 Annual Report page 19 Board of Directors corporate

2001 Annual Report GOVERNANCE

The HIAA Board consists of 13 directors, 10 Committees Board Compensation appointed by nominating entities and three There are four committees of the Board of In establishing appropriate compensation for appointed by the board itself. governaDirectors. Committees are only empowered to directors, HIAA's Governance Committee Directors are nominated by the following make recommendations to the board unless conducted a compensation survey, which is entities: directed otherwise by the board. Whenever reviewed regularly to ensure it is comparable to Federal Government ...... 2 possible, all board decisions involve the entire similar markets. Provincial Government ...... 1 board. page Halifax Regional Municipality ...... 4 Committees and their chairs include: Officers and Directors Total Compensation Metropolitan Halifax Chamber of Commerce . . .3 Governance Committee, chaired by Bill Chairman: B. F. Miller ...... $ 66,300

20 HIAA Board of Directors ...... 3 Richardson; Finance and Audit Committee, chaired Vice Chairman: F. Matheson ...... $ 26,700 A director may serve no more than a total of by Royden MacBurnie; Human Resources and Secretary: J. S. Cowan ...... $ 26,400

Corporate Governance eight years. Collectively, directors are expected Pension Committee, chaired by Michael O’Hara; Directors: to possess knowledge relating to the aviation and Capital, Safety, and Environment Committee, M. R. Brooks ...... $ 16,200 industry, air transportation, business, finance, chaired by Frank Matheson. P. Champagne ...... $ 11,800 administration, law, government, engineering, K. S. Filbee ...... $ 15,000 labour organizations, and the interests of Senior Officers Compensation (Annual Base Pay) R. J. MacBurnie ...... $ 28,800 consumers. President & CEO: R. Milley ...... $ 150,000 D. Mills ...... $ 16,950 Vice President Finance & Administration: M. J. O’Hara ...... $ 27,200 Contracts in Excess of $75,000 J. Carter ...... $ 105,000 A. W. D. Pickup ...... $ 14,600 All contracts awarded during 2001 that were in Two directors served as officers in January, 2001, W. H. Richardson ...... $ 29,200 excess of $75,000 were awarded as a result of a receiving the following compensation: R. Rideout ...... $ 15,400 competitive tendering process. Interim President & CEO: F. Smithers ...... $ 12,600 B. F. Miller ...... $ 4,000 S. L. Wallace ...... $ 21,350 Interim Executive VP & COO: P. Champagne ...... $ 11,422 Total board remuneration was $328,500. Expenses reimbursed to directors were $7,800. our TEAM

Code of Conduct for Directors Our dedicated team works around the clock to in emergency response, and also handled 250

All directors of the Authority are required to ensure smooth flying at Halifax International first aid related calls. Our Team ncecomply with a Code of Conduct and Rules Airport. We faced many challenges together in With most of its management information Concerning Conflicts of Interest. These require 2001, but we emerged from these difficult times systems in place in 2000, our Finance & 21 that directors avoid and refrain from as a stronger team, with a renewed sense of Administration department was able to focus on involvement in conflict of interest situations. commitment to each other and our common fine-tuning its organizational structure and Every director of the Authority is required goals. We thank our employees for their enhancing overall efficiency this year. They page to file a disclosure statement upon becoming a unfailing dedication and professionalism. initiated long-term financial planning, secured director. Thereafter, each director must file an In addition to the activities and $30 million in bank financing for our capital annual disclosure statement, which is reviewed accomplishments of our Communications & program, began collecting the AIF in January, by the entire board and by the Authority’s Public Affairs, Facilities, and Technical Services and conducted our first post-transfer audit. As

external auditors. departments contained throughout this report, well, our information technology group team One of the Authority’s strategic objectives a great many people worked behind the scenes implemented a site-wide system upgrade and is to excel in open relationships with its to keep things running efficiently throughout our procurement team hosted the semi-annual stakeholders. The Authority is required to the year. Here are just some of their 2001 meeting of the Canadian Airports Procurement

balance many competing interests; achievements. Association. Report 2001 Annual accommodation of all interests is not possible. Our Airside Operations team relocated and Perhaps the most significant The Authority, however, has established rebuilt our Emergency Operations Centre, set accomplishment for our Human Resources processes, including a Community Consultative up a high-intensity approach lighting system on department was the signing of the organization’s Committee, by which the views of all interests runway 15, and installed permanent lighting at first collective agreement. They also took can be heard and balanced. the north and south airfield entrances to meet responsibility for the Occupational Health and new security requirements. The team performed Safety Program, developed a performance well on Transport Canada’s Aerodrome Audit, a management system for non-unionized staff, and regulatory compliance audit conducted every established an administrative process review three years at all Canadian airports. Our Airport group to continually assess and improve policies, firefighters continued to play an important role processes, and procedures.

It is with profound sadness that we acknowledge the passing of Leo de Wit, Security Officer, on December 26, 2001. Leo was a valuable member of our security team for three and a half years. On behalf of his friends and colleagues at Halifax International Airport, we extend our condolences to his family. Leo will be greatly missed. Halifax International Airport Authority 1 Bell Boulevard, Enfield, Nova Scotia B2T 1K2 Tel: 902.873.4422 Fax: 902.873.4750 www.halifax-airport.ca