Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Comprehensive Annual Financial Report
For the Fiscal Year Ended June 30, 2012
Prepared by: Finance Department
Contents
Introductory Section (unaudited)
Table of contents i Letter of transmittal ii-v Organizational chart vi List of appointed officials vii GFOA certificate viii
Financial Section
Independent auditor's report 1-2 Management's discussion and analysis 3 - 11 Financial statements: Combined statements of net assets 12 - 13 Combined statements of revenues, expenses and changes in net assets 14 Combined statements of cash flows 15 - 16 Notes to basic combined financial statements 17 - 36 Required supplementary information: Illinois Municipal Retirement Plan 37 Metropolitan Airport Authority Health Benefit Plan 38 Supplementary information: Combining schedule of net assets 39 -40 Combining schedule of revenues, expenses and changes in net assets 41 Schedule of other expenses 42
Statistical Section (unaudited)
Statistical section contents 43 Net assets and changes in net assets 44 -45 Principal revenue sources and revenues per enplaned passenger 46 -47 Changes in cash and cash equivalents 48 -49 Revenue rates 50 - 51 Ratios of outstanding debt, debt service and debt limits 52 - 53 Pledged revenue coverage 54 - 55 Population in the air trade area 56 - 57 Principal employers 58 Authority and combined affiliate employees 59 -60 Enplaned passengers 61 - 62 Takeoff and landing operations summary 63 Takeoff and landing operations by airline or cargo carrier 64 -65 Airline landed weights 66 -67 Primary origin and destination passenger markets 68 Capital asset information 69
METROPOLITAN AIRPORT AUTHORITY
OF ROCK ISLAND COUNTY, ILLINOIS
QUAD CITY INT'L AIRPORT P.O. BOX 9009 MOLINE, IL 61265-9009 309-764-9621 (309) 757-1515 FAX
December 4, 2012
Commissioners, Citizens of Rock Island County and Other Interested Parties:
State law requires that every general purpose local government publish within six months of the close of each fiscal year a complete set of audited financial statements. This report is published to fulfill that requirement for the fiscal year ended June 30, 2012.
Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements.
McGladrey LLP, Certified Public Accountants, have issued an unqualified ("clean") opinion on the Metropolitan Airport Authority of Rock Island County, Illinois' (Authority) financial statements for the year ended June 30, 2012. The independent auditor's report is located at the front of the financial section of this report.
Management's discussion and analysis (MD&A) immediately follows the independent auditor's report and provides a narrative introduction, overview and analysis of the basic financial statements. MD&A complements this letter of transmittal and should be read in conjunction with it.
Profile of Government
In 1910, a Rock River valley pasture, known as Franing Field, was selected for the first coast-to-coast flight by army planes. Three men leased 30 acres in this pasture and it officially became an airport. One- year later real estate had increased to 200 acres. In 1926, regular airmail service began. Operations were expanded in 1927 when Boeing Air Transport began flying between Chicago and San Francisco. Later that year, Boeing Air Transport, Valley Air Transport, Pacific Air Transport, and National merged to form United Airlines which provided passenger and mail service to the east and west coasts as well as to the southwestern United States.
In 1935, the City of Moline, Illinois, took over the Airport as a municipal, tax supported airport. The second largest Work Projects Administration project in Illinois was underway at a cost to Moline of $165,000 and $365,000 to the federal government. A new terminal and hangar were built in 1939 with five scheduled air carrier flights per day and 24 private aircraft based on airport property. Rock Island County citizens voted in 1947 to buy the Airport creating the Metropolitan Airport Authority of Rock Island County, Illinois, as its owner and under the jurisdiction of the state of Illinois. Currently, seven townships in Rock Island County provide financial support to the Airport. They include Hampton, Moline, South Moline, Rock Island, South Rock Island, Blackhawk and Coal Valley. The mayors of Moline, Milan, East Moline, Rock Island, and Silvis each appoint one commissioner to the Authority's board, and the Chair of the Rock Island County Board aoooints three more with the consent of the Board.
ii Ozark Air Lines began service at the Airport in 1950. In 1954, a terminal building was built to provide space for United and Ozark Airlines, as well as limousine service, car rentals, the Civil Aeronautics Administration, and the U. S. Weather Bureau. In March 1985, a new terminal, parking lot and roadway system were completed. Major improvements have been made since that time to the terminal and other public space, most notably a capital project expanding the terminal and concourses to nearly 160,000 square feet in 2001 and redesign of the public parking lot to accommodate over 2,000 vehicles in both 1999 and 2009 in anticipation of increased utilization of the state-of-the-art facility.
Many customer service elements have continued to be added in recent years, providing further conveniences for today's traveler. The Authority has contracted for customer care services and curbside (skycap) assistance. Wheelchair and electric golf cart services, as well as skycap services assist travelers of all ages as needed for arriving and departing flights. Technological advances with the airport's website and complimentary wi-fi connectivity in the terminal add to the conveniences for the business traveler.
The Metropolitan Airport Authority owns and operates over $100 million in assets on the more than 2,000- acre campus. Some of those assets include a four-bay public safety building, impressive airfield maintenance facility, and other structures that serve a variety of needs on Airport property. An air freight complex opened in 1992. Additionally, various hangars for private and corporate aircraft along with an industrial park complement the landscape on the south side of the property. The longest runway extends just over 10,000 feet, and improvement projects are continuously underway to further enhance safety and efficiency for aircraft at the Quad City International Airport. Federal and state dollars are used to support most projects that are related to the airfield.
Local Economy
The Quad Cities metropolitan area is located along the Mississippi River in eastern Iowa and western Illinois, approximately 165 miles west of Chicago and midway between Minneapolis to the north and St. Louis to the south. The Quad City region has a population of approximately 422,000. The following are the top 10 employers in the area:
Company Employees Type of Business
Rock Island Arsenal 8,500 Defense Manufacturing Deere & Company 7,300 Agiculture OEM Genesis Health System 4,900 Health Care System Trinity Regional Health System 2,900 Health Care System Tyson Fresh Meats 2,400 Food Processsing Alcoa, Inc. 2,250 Aerospace & Defense Aluminum Hy-Vee Food Stores 1,622 Supermarket and Other Grocery Kraft Foods/Oscar Mayer 1,500 Food Processsing XPAC 1,195 Supply Chain Management Logistics Wal-Marl Super Centers 1,066 Warehouse Clubs and Supercenters
The area boasts a healthy variety of tourism and recreational opportunities including hiking & biking trails, dozens of area golf and disc golf courses, ice skating and sporting facilities, arts and cultural festivals and events and much more-all along the banks of the Mighty Mississippi River.
Long- Term Financial Planning
Federal and state funding for capital improvements is extremely important to the Authority. Airfield work is largely paid for by federal funds. Historically for the Airport, 95 percent of the costs of these projects has come from federal sources. Due to budget cuts by Congress, the federal percentage of Airport Improvement Project costs for the Airport dropped to 90 percent for grants awarded in 2012. Passenger facility charge (PFC) dollars also playa large role in funding airfield construction and purchasing equipment essential to the airfield and terminal.
iii The Authority issued over $24 million in bonds, mostly secured by PFC revenue, on July 1, 2010. This money refinanced existing PFC debt and was used to purchase snow removal equipment in 2011 and round out the funding of the airfield rehabilitation project of Runway 9/27 in 2011 and 2012. The proceeds will also be used to purchase five new loading bridges in fiscal year 2013.
For an Airport Authority, passengers drive discretionary revenue. Dollars spent by passengers on parking, eating and shopping is money available to the Authority for special projects and building cash reserves. Those reserves are earmarked for debt service and special projects outlined in the Major Initiatives section. Fiscal year 2012 brought in 409,795 passengers to the Quad City International Airport. This was about an 11 percent decrease over fiscal year 2011.
Passengers cannot patronize an airport without air service, so the Authority Board has included in its strategic plan a commitment to control costs that it passes on to its tenants. The Board has opted to subsidize airline landing fees to remain price competitive with other airports in the area. In addition, it is a goal of the Authority to provide services to its airlines such as fueling and ground handling, at a more affordable rate than they can do it themselves or purchase from a third party vendor. The Board has established certain levels of cash reserves for this purpose.
Relevant Financial Policies
The Federal Aviation Administration (FAA) disallows certain revenue generated by the Airport to be used for certain marketing incentives for airlines. This topic has gained the spotlight as many airlines need financial assistance. The Metropolitan Airport Authority is committed to the FAA regulations and their own internal policy of not discriminating in the incentives offered to airlines, offering only incentives that help defray costs of the airlines and not issuing any type of revenue guarantees, and also financing those incentive packages with the appropriate revenue stream.
Major Initiatives
The Airport is currently working on a number of large capital projects. The runway 9/27 rehabilitation project was completed mid-October 2011 , which improved the existing runways and reconstructed the midfield. A temporary runway -10/28 had been constructed and completed to be used during the reconstruction of runway 9/27. With runway 9/27 being complete, conversion of runway 10/28 into a taxiway began in fiscal year 2012. All associated lighting and painting on the temporary runway is being altered accordingly. This new taxiway (P for Papa) will allow aircraft from the General Aviation side of the airport to taxi to a main runway without having to cross an active runway. This is a major safety enhancement.
Construction for the replacement of the Authority's aged fuel farm was completed in January 2012. The end result of the fuel farm replacement included three 50,000-galion tanks for jet fuel, as well as three tanks for de-icing fluid for the airlines to use for storage and to fill their de-icing trucks. Also associated with the fuel farm project was the complete remodeling of a historic building called the "pump house" to become a support facility for the fuel farm. Lastly, the fuel farm access road was repaved with asphalt in June of 2012.
The first phase of improving the rental car facilities was substantially completed in January 2011 by expanding and repaving the rental car ready return lot. Phase two of the expansion includes the construction of a quick turn-around facility for fueling, washing and servicing rental cars. This work will be paid for with Customer Facility Charge revenue. Construction on phase two is anticipated to begin in the spring/summer of 2013.
The Authority plans to expand its airfield maintenance building for storing snow removal equipment. The addition to the 32,000-square foot building will allow the airport to house all of its snow removal equipment under one roof and operate more efficiently. In Phase 1, an additional 14,000 square feet will be added, and in Phase 2, another 10,000 square feet will be added. The Authority was awarded a $2.88 million grant in September 2012 that will pay for 90 percent of the cost of expanding the building for both phases 1 and 2. Site work is expected to cost around $1.3 million, bringing the total cost of the project to $5 to $5.2 million. The Authority expects to receive an additional grant that will pay for 90 percent of the site work. The expansion is expected to begin in the fall of 2012, with the project lasting about a year.
iv The Authority also started plans to convert a vacant airport-owned cargo building into a new Federal Inspection Services Facility, which is needed to meet demand for the clearance of international cargo, passengers and flight crews. The estimated $2.8 million project will relocate the U.S. Customs and Border Protection into the airport's Cargo Building No.3. It now operates out of the Civil Air Patrol building east of the main terminal building on the airport. New federal requirements are forcing the Airport to relocate the existing customs facility to accommodate more passengers and new technology. Construction on this project will begin in the fall of 2012 and will be completed in 2013. The Authority was awarded a $1.8 million dollar grant in September of 2012 for this project.
An updated airport master plan is currently underway. The master plan is a comprehensive study of an airport that documents the short, medium, and long-term development plans needed to meet future aviation demand. The overall goal of a master plan is to provide the framework needed to guide future airport development that will cost-effectively satisfy aviation demand, while considering potential environmental and socioeconomic impacts.
Economic development on airport land continues to be a focus for the Authority to increase non- aeronautical revenue through ground and building rents.
Economic development on airport land continues to be a focus for the Authority to increase nonaeronautical revenue through ground and building rents. Subsequent to year-end, the Authority entered into a ground lease for a new hotel to be built on Airport land pending satisfaction of certain contingencies, which would generate additional revenue through rents for the Authority. More information can be found in Note 13 to the basic financial statements.
Awards and Acknowledgements
The Government Finance Officers Association (GFOA) last awarded a Certificate of Achievement for Excellence in Financial Reporting to the Metropolitan Airport Authority for its comprehensive annual financial report (CAFR) for its fiscal year ended June 30, 2011. In order to be awarded a Certificate of Achievement, the government had to publish an easily readable and efficiently organized CAFR that satisfied both accounting principles generally accepted in the United States of America and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR again meets the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.
The preparation of this report would not have been possible without the efficient and dedicated service of the entire staff of the finance and administration department. We wish to express our appreciation to all members of the department who assisted and contributed to the preparation of this report. Credit also must be given to the Chair and Commissioners of the Authority Board for their unfailing support for maintaining the highest standards of professionalism in the management of the Authority's finances.
Respectfully submitted,
Bruce E. Carter, AAE. Director of Aviation
Angela M. Burch, CPA Finance Manager
v Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Organizational Chart June 30, 2012
Board of Commissioners
I
Cathie Roehau Bruce Carter Tracy Kotecki Marketing Director of Aviation Executive Assistant Representative
I Bryan Johnson
Assistant Director of Aviation and Operations
I I I I
Michael Haney Michael Swanson Angela Burch Michael Allardyce Director of Projects Public Safety Finance Manager - Facilities Manager and Construction Manager
I I I
Robert Peters Public Safety Administration Staff Custodial Services Department Manager
I
Building Custodial Services Maintenance -
Airfield Maintenance -
vi Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
List of Appointed Officials June 30, 2012
Board of Commissioners
Carl Robinson, Chairman
James Jannes, Vice Chairman
Molly Foley, Secretary
Andrew Gianulis, Treasurer
James Davies, Commissioner
Robert Leibovitz, Commissioner
Donald Margenthaler, Commissioner
Richard Work, Commissioner
vii Certificate of Achievement for Excellence in Financial Reporting Presented to Metropolitan Airport Authority of Rock Island County Illinois For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2011
A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. _e.
President
Executive Director
viii
McGladrey LLP
II McGladrey
Independent Auditor's Report
To the Board of Commissioners Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate Moline, Illinois
We have audited the accompanying basic financial statements of the Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate (Authority), as of and for the years ended June 30, 2012 and 2011, as listed in the table of contents. These financial statements are the responsibility of the Authority's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Authority's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinions.
In our opinion, the basic financial statements referred to above present fairly, in all material respects, the financial position of the Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate, as of June 30, 2012 and 2011, and the respective changes in financial position and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards for the years ended June 30, 2012 and 2011, we have also issued our report dated December 4, 2012 and November 11, 2011, respectively, on our consideration of the Authority's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, and other matters. The purpose of those reports is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. Those reports are an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audits. Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis, Illinois Municipal Retirement Plan and Metropolitan Airport Authority Health Benefit Plan on pages 3 through 11, 37 and 38, respectively, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District's basic financial statements. The combining statements and schedule of other expenses, listed in the table of contents as supplementary information, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District's basic financial statements. The accompanying introductory and statistical sections, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion on or provide assurance on it.
Davenport, Iowa December 4, 2012
2 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Management's Discussion and Analysis Year Ended June 30, 2012
This Management's Discussion and Analysis (MD&A) of the Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate (Authority) provides the reader with a narrative overview of the Authority's financial statements and activities for the fiscal year ended June 30, 2012. Metropolitan Airport Authority operates the Quad City International Airport in Moline, Illinois and QCIA Airport Services, LLC.
Overview of the Financial Statements
The basic combined financial statements are designed to provide readers with a broad overview of the Authority's finances in a manner similar to a private-sector business. The basic combined financial statements are prepared using proprietary fund (enterprise fund) accounting that uses the same basis of accounting as private-sector business enterprises. Under this method of accounting, an economic resources measurement focus and an accrual basis of accounting are used. Revenues are recorded when earned; expenses are recorded when incurred. For comparable purposes, each statement summary in the MD&A includes fiscal year ended June 30, 2010, amounts also. The basic combined financial statements include the accounts of the following entities: • Metropolitan Airport Authority, which provides an airline terminal, runways and other aeronautical facilities in Moline, Illinois, for passenger and freight airlines and private aircraft.
• QCIA Airport Services, LLC, which provides fueling and ground handling services to commercial and charter airlines. The Authority is the sole member of this entity. The basic financial statements include a combined statement of net assets, a combined statement of revenues, expenses and changes in net assets, and a combined statement of cash flows. These are followed by notes to basic financial statements. In addition to the basic combined financial statements, this report also contains supplementary information.
The combined statement of net assets presents information on all of the Authority's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Authority is improving or deteriorating. The combined statement of revenues, expenses and changes in net assets reports the operating revenues and expenses and nonoperating revenues and expenses of the Authority for the fiscal year with the difference being the change in net assets for the fiscal year. The combined statement of cash flows reports cash and cash equivalents for the fiscal year resulting from operating activities, noncapital financing activities, capital and related financing activities, and investing activities.
The basic financial statements include only the Metropolitan Airport Authority of Rock Island County, Illinois, and the QCIA Airport Services, LLC. There are no other organizations or agencies whose financial statements should be combined and presented with the financial statements.
Financial Highlights • In fiscal year 2012, total enplanements (see following chart) were 409,795 compared to 460,247 in the prior year and 470,196 in fiscal year 201 O. QCIA enplanements decreased by approximately 11 percent in the current year.
• Net assets increased $4,021,553 in fiscal year 2012, $9,124,979 in fiscal year 2011 and $3,611,945 in fiscal year 2010.
3 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Management's Discussion and Analysis Year Ended June 30, 2012
MLI Enplanement History
600,000
A"n 7~" .oR".oM 460,247 500,000 4'13';'"LlK, 400,047 ~ 392,475 487,803""- 470,196 400,000 ~ .-.-418,502 ~ 409,795
300,000 jc.1,i:!c.1
200,000
100,000
0 . FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12
Assets, Liabilities and Net Assets
A number of indicators tell the story of the challenges and successes at the Authority during fiscal year 2012. Table I provides a summary of the statement of net assets which presents some insight into those challenges and successes. Table I
2012 2011 2010 Assets Current assets $ 16,507,662 $ 16,905,144 $ 24,947,378 Capital assets 103,031,836 97,783,197 77,829,757 Other noncurrent assets 11,040,660 14,733,864 7,674,762 Total assets $ 130,580,158 $ 129,422,205 $ 110,451,897
Liabilities Current liabilities $ 3,272,650 $ 5,068,970 $ 2,243,414 Noncurrent liabilities 24,792,860 25,860,140 18,840,367 Total liabilities 28,065,510 30,929,110 21,083,781
Net Assets Invested in capital assets, net of related debt 82,674,803 80,565,825 58,622,290 Restricted for Airport facilities 5,772,123 6,057,043 7,806,512 Unrestricted 14,067,722 11,870,227 22,939,314 Total net assets 102,514,648 98,493,095 89,368,116
Total liabilities and net assets $ 130,580,158 $ 129,422,205 $ 110,451,897
4 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Management's Discussion and Analysis Year Ended June 30, 2012
Total assets increased 0.9 percent in fiscal year 2012. Current assets decreased $397,482 while noncurrent assets increased $1,555,435. This net increase is primarily due to restricted cash from the 2010 bond issue proceeds being used towards the Authority's local share of the reconstruction of Runway 9/27, which in turn contributed to the increase in capital assets in 2012. In 2011, total assets increased 17.2 percent from 2010.
Total liabilities decreased 9.3 percent. Liabilities were higher in fiscal year 2011 due to the issuance of new debt on July 1, 2010 and the related accrued interest recorded at June 30, 2011 of seventeen months due to a lag in timing of when the first principal and interest payments were due compared to six months of accrued interest recorded as of June 30, 2012. In addition, accounts payable decreased significantly over the prior fiscal year due to the significant construction in progress at June 30, 2011 related to the new fuel farm and Runway 9/27. In 2011, total liabilities increased 46.7 percent from 2010.
Current assets less current liabilities (net working capital) increased 11.8 percent in 2012 and decreased 47.9 percent in 2011. Net working capital is an indicator of the Authority's ability to address its current obligations in a timely manner. Net working capital is $13,235,012 in 2012 compared to $11,836,174 in 2011 and $22,703,964 in 2010. Current assets have decreased by $397,482 while current liabilities have also decreased by $1,796,320 in 2012. Current assets and current liabilities primarily decreased due to a decrease in prepaid assets associated with the Runway 9/27 project, accrued interest payable, and accounts payable discussed above. Current liabilities were also offset by an increase in the current portion due within one year on the long-term debt.
Overall, net assets increased 4.1 percent in 2012 from $98,493,095 to $102,514,648 and 10.2 percent in 2011 to $98,493,095 from $89,368,116 in 2010.
Revenues and Expenses
Useful financial information is also provided on the combined statement of revenues, expenses and changes in net assets. This report tracks the operating activities and nonoperating activities of the Authority for the year and compares them with the activities of the prior years. Table II highlights the Metropolitan Airport Authority's revenues and expenses for the fiscal years ended June 30, 2012, 2011 and 2010.
5 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Management's Discussion and Analysis Year Ended June 30, 2012
Table II
2012 2011 2010 Operating revenues: Airline terminal complex $ 3,478,811 $ 3,393,842 $ 3,174,951 Parking Lot 3,069,292 3,448,567 3,510,087 Aeronautical facilities 2,353,753 2,376,218 2,205,800 Other operating, including general aviation and commercial/i ndustrial 1,347,993 1,329,759 1,275,814 Fueling and groundhandling services 1,074,718 1,063,757 1,069,646 Total operating revenues 11,324,567 11,612,143 11,236,298
Operating expenses: Salaries and benefits 4,089,233 4,171,749 4,042,384 Depreciation 7,664,169 6,156,054 5,699,578 Other operating expenses 6,074,098 6,450,444 6,049,846 Total operating expenses 17,827,500 16,778,247 15,791,808
Nonoperating revenues (expenses): Passenger and Customer facility charges 2,382,782 2,542,103 2,591,043 Taxes 1,760,839 1,737,126 1,641,403 Other nonoperating income, including gain on disposal of assets 59,253 184,462 292,235 Loss on disposal of capital assets (333,018) Interest expense (988,227) (836,598) (862,315) Other nonoperating expenses (6,843) (198,897) (29,487) Total nonoperating revenues 2,874,786 3,428,196 3,632,879
(Loss) before capital contributions (3,628,147) (1,737,908) (922,631)
Capital contributions 7,649,700 10,862,887 4,534,576 Change in net assets 4,021,553 9,124,979 3,611,945
Net assets, beginning 98,493,095 89,368,116 85,756,171 Net assets, ending $ 102,514,648 $ 98,493,095 $ 89,368,116
Airline terminal complex revenue includes reimbursements from airlines for their common and exclusive space in the facility. The airline use agreements specify which Airport expenses are reimbursable and those reimbursements are recorded as revenue. Changes in terminal expenses affect the airline terminal complex revenue. Total revenues in 2012 are $23,177,141 compared to $26,938,721 and $20,295,555 in 2011 and 2010, respectively.
6 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Management's Discussion and Analysis Year Ended June 30, 2012
Eighty-seven percent of the terminal space (136,161 out of 157,652 square feet) is known as rentable space. A portion of rentable space known as common space (54,958 square feet) is composed of the baggage claim area, connector area between the terminal and security screening checkpoint, and Concourses A and B and is charged to the airlines for reimbursement of costs.
Terminal Rate Base Costs to be Reimbursed
3,500,000
3,000,000
2,500,000
2,000,000 • Other Sources
1,500,000 _Airline Portion
1,000,000
500,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
This cost breaks down to $23.26 per square foot 10 years ago when the airline portion of common space reimbursable costs totaled $1,287,353 to $23.10 in 2012 when the airline portion amounted to $1,269,530, a decrease of 1.4 percent in airline liability since 2003. The cost per square foot was $22.17 in fiscal year 2011. In fiscal year 2012 and 2011, the Authority had actually billed $24.98 and $25.00, respectively, per square foot to the airlines compared to the $23.10 and $22.17, respectively calculated at the end of each year. The amount owed back to the airlines in each year was used to offset the Authority's subsidy in landing fees for 2012 and 2011.
The QCIA Airport Services, LLC had fiscal year 2012 operating revenues of $1 ,401 ,794 compared to operating expenses of $1,584,956. The operating loss of $183,162 combined with nonoperating income of $31 resulted in a loss of $183,131 on an unconsolidated basis prior to a capital contribution subsidy from the Metropolitan Airport Authority of $400,000. This compares to $1,384,505 of operating revenues and $1,780,628 of operating expenses in fiscal year 2011. The losses can be attributed to the ground- handling department.
Airport revenues decreased 14 percent or $3,761,580 from 2011 to 2012 and increased 32.7 percent or $6,643,166 from 2010 to 2011. These changes are primarily due to the fluctuation in capital contributions each year. Capital contributions are federal and state revenues for construction or acquisition of capital assets. Increases and decreases correspond to the changes in construction-in-progress.
Parking lot revenue decreased 11 percent in 2012 and decreased 1.8 and increased 4.9 percent, over 2011 and 2010, respectively. The number of enplanements at QCIA is a large factor in the fluctuation of parking lot revenues. In 2012, enplanements decreased 11 percent. Overall, this significant revenue source helped the Authority abate the taxes tied to the debt and provided needed funding for programs not covered by other sources. As the following chart notes, use of the public parking facility has been steady year-round for many years.
7 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Management's Discussion and Analysis Year Ended June 30, 2012
Parking Lot Revenue
4,000,000
3,500,000
3,000,000
2,500,000 .summer (01)
2,000,000 Fall (02) -.;vi nter (03) 1,500,000 -Spring (04)
1,000,000
500,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Total expenses in 2012 are $19,155,588 compared to $17,813,742 and $16,683,610 in 2011 and 2010, respectively, which resulted in an increase of $1 ,341 ,846 or 7.5 percent in 2012 and an increase of $1,130,132 or 6.8 percent in 2011 from 2010.
The increase in expenses is primarily due to depreciation expense. Depreciation expense increased due to the addition of various new capital assets net of deletions of approximately $17.7 million in the current year.
Landing fees paid by the airlines contributed $1,752,650 in 2012 and $1,816,139 in 2011 compared with $1,710,341 in 2010. These revenues represent reimbursements of actual costs incurred similar to space revenues. In 2012, the calculated landing fee was $4.78 (per 1,000 pounds of landed weight compared with $3.98 in 2011 and $3.30 in 2010. The Airport Authority's calculated subsidy for the 2012 and 2011 landing fee of $1.53 and $0.76 equated to approximately $605,000 and $425,000, respectively, above the $200,000 subsidy already factored into the amounts budgeted and charged to the airlines during both years. However, in 2012 and 2011, the Authority offset $94,021 and $244,192, respectively of space rent owed back to the airlines against the subsidy in landing fees resulting in an overall net subsidy by the Authority of $710,979 and $380,808, respectively for each year.
Airlines also paid a security fee to reimburse the Authority for various security-related costs. This revenue source increased in response to higher costs even after adjusting for reimbursements from the federal government.
Many departments do not generate revenue, but all generate expenses. As mentioned earlier, a portion of some of these department costs are reimbursed by the air carriers in the form of terminal rents and fees and landing fees, and the rest are funded through the tax levy, parking lot receipts, concessions, leases, reserves and other sources.
8 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Management's Discussion and Analysis Year Ended June 30, 2012
In 2012 and 2011, salaries and wages were increased 2.0 percent and 4.0 percent, respectively for each year and compensated 81 (2012) and 83 (2011) full and part-time employees, eight commissioners and a number of seasonal workers.
Total costs for the health plan decreased $70,385 or 14.2 percent and increased $69,417 or 14.2 percent in 2012 and 2011, respectively. Because the Authority is self-insured, costs for the plan vary each year based on claims experience. The Authority has purchased stop loss insurance.
Monthly Self-Funded Health Plan Costs Per Participant
$1,200
$1,000
$800
$600
$400
$200
$- 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Consistent with the Authority's emphasis on excellent customer service, it works collaboratively with the airlines to share the responsibility for skycap, customer care and curbside services. This line item also includes contract custodial labor, snow plowing in the winter, and parking lot exit booth labor. Labor purchases and services were $949,780 in 2012 and $979,060 in 2011, a decrease of about 3 percent. The decrease is primarily a result of the mild winter for 2011/2012 and the decrease in costs associated with snow plowing.
Most projects that received federal or state funding for 2012 and prior years shared costs in a ratio of 95 percent federal, 2.5 percent Illinois and 2.5 percent Authority with the exception of the Runway 9/27 Reconstruction project in which the Authority's local share was closer to 50 percent. The line item for capital contributions represents the federal and state portions of Runway and taxiway improvements. Approximately $7.6 million of this type of funding benefited the Airport in 2012 and over $10.9 million in 2011 and figured heavily in the positive change in net assets for each year. The Authority was also a recipient of stimulus funds through the American Reinvestment and Recovery Act, which was entirely federally funded and expended in 2011 and 2010.
Capital Assets
The capital asset activity is provided in Note 3 to the basic financial statements.
Several projects were completed or on-going during 2012 and 2011.
9 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Management's Discussion and Analysis Year Ended June 30, 2012
In 2012, significant projects included: • Completion of the Runway 9/27 reconstruction project which reworked our current Runway system.
• Construction began on converting Runway 10/28 to a new Taxiway (Taxiway P). This Runway was completed in 2011 and was used as a temporary Runway during the reconstruction of Runway 9/27.
• Completion of the new fuel farm which replaced the aging fuel farm with new tanks.
In 2011, significant projects included: • Construction engineering and construction work began on the Rehabilitation of the Runway 9/27 project.
• Completion of various Taxiway P paving projects which is being used as a temporary Runway (Runway 10/28) during the reconstruction of Runway 9/27.
• Completion of new parking associated with the employee lot as well as the rental car ready return lot.
• Completion of new administrative office space.
• Completion of a temporary localizer on Runway 10.
• Completion of the Taxiway D relocation project.
• Purchase of a hanger from a major corporation.
• Construction began on the new fuel farm.
• Purchases of new snow removal equipment including 4 new snow brooms, a Hagie Spray Vehicle, a high speed snow blower.
• Purchases of 3 new John Deere Tractor/Mowers.
Long-Term Debt
The Metropolitan Airport Authority did not issue any new debt in the current year. The unused legal debt capacity is $43,665,758, which represents 2.3 percent of the assessed valuation less the debt to be repaid by pledged revenue pursuant to the applicable bond ordinance. More information regarding the long-term debt of Metropolitan Airport Authority and combined affiliate can be found in Note 4 to the basic financial statements.
Economic Factors
Twelve hubs, or connecting cities, were served during the majority of fiscal year 2012. AirTran stopped serving the Orlando market in January 2012 and ceased all operations at the QCIA after a fifteen year history between AirTran and the Metropolitan Airport Authority.
Allegiant, the newest carrier to the Authority, began service to Las Vegas and Phoenix-Mesa in the fall of 2010. They quickly added the Tampa Bay area (St. Petersburg/Clearwater) to this list in February 2011 and then Orlando-Sanford in February 2012. While most of these four cities saw two flights per week, there were on occasion more flights added during peak holiday times. The public has been supporting the flights to these much requested leisure destinations.
10 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Management's Discussion and Analysis Year Ended June 30, 2012
The QCIA Airport Services, LLC continued to work the ground handling (above/below wing) operations for the AirTran and Allegiant flights as well as charters for honor flights, gambling junkets and football teams.
American Eagle continued service to Chicago O'Hare and Dallas-Ft. Worth. Delta continued service to Atlanta, Detroit, Minneapolis-St. Paul and Memphis; although flights to these hubs varied over the months and aircraft size changed on these routes frequently. The Memphis route was discontinued in September 2011 due to the Airline's reorganization of the Memphis hub. United Express continues their flights to Chicago O'Hare and Denver. Much like Delta, aircraft size continues to vary depending on the subsidiary carrier flying the routes for United Express.
Authority management will be watching the effects that these service changes will have on passenger numbers and the complexion of concession revenue at the QCIA. Enplanements/deplanements were down approximately 11 percent over the prior fiscal year. The high cost of fuel over the fiscal year continued. As a result of this and other economic factors, the airlines began reducing their overall capacity and made a variety of adjustments to their routes, type and size of aircraft flown. One thing that continues to evolve with the airlines is the addition of ancillary fees for baggage, seat selection, and other similar amenities in order for the airlines to explore alternative revenues that are not attached directly to the ticket price.
As in the prior years, due diligence will be exercised during budget planning to target areas for savings and efficiency. All capital projects planned have been started and each has a dedicated revenue stream to ensure payment. Future projects will need to be prioritized and perhaps delayed depending on the economic impact of the air service changes. The Board and management are also looking for ways to increase non-aeronautical revenue for the airport such as ground and building rents through economic development on airport land.
Requests for Information
This financial report has been prepared in the spirit of full disclosure to provide the reader with an overview of the Metropolitan Airport Authority's financial operations. If the reader has questions or would like additional information about the Metropolitan Airport Authority of Rock Island County, Illinois or QCIA Airport Services, LLC, please direct the request to Bruce Carter, Director of Aviation, at P. O. Box 9009, Moline, Illinois 61265.
11 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Combined Statements of Net Assets June 30, 2012 and 2011
2012 2011 Assets Current assets: Cash and investments $ 13,335,352 $ 13,424,978 Prepaid items 38,487 513,663 Receivables: Property taxes 1,734,503 1,686,817 Replacement taxes 58,944 43,240 Accrued interest receivable 439 595 Due from other governments 304,868 261,134 Rents and fees (net of the allowance for uncollectible accounts 2012 $32,000 and 2011 $23,200) 663,712 615,756 Restricted receivable, passenger and customer facility charges 371,357 358,961 Total current assets 16,507,662 16,905,144
Noncurrent assets: Capital assets: Nondepreciable: Land and land reclamation 14,263,684 14,263,684 Construction-in-progress 1,493,483 8,545,016 Depreciable: Buildings and structures 45,561,740 39,920,679 Runways, lighting and roads 129,919,512 117,849,849 Machinery and equipment 10,442,125 10,428,405 Leasehold improvements 369,939 369,939 Intangibles 262,725 249,815 202,313,208 191,627,387 Less accumulated depreciation 99,281,372 93,844,190 103,031,836 97,783,197 Bond issue costs 45,753 49,876 Restricted cash and investments 10,858,693 14,502,951 Due from other governments 136,214 181,037 Total noncurrent assets 114,072,496 112,517,061
Total assets $ 130,580,158 $ 129,422,205
See Notes to Basic Combined Financial Statements.
12 2012 2011 Liabilities Current liabilities: Current portion, long-term debt $ 1,070,000 $ 210,000 Accounts payable 758,765 2,235,336 Accrued compensated absences 233,946 236,514 Accrued salaries and wages 144,737 152,083 Accrued interest 103,718 1,247,615 Unearned revenue, primarily property tax 900,609 793,338 Claims payable 60,000 50,969 Due to other governments 107,346 Other 875 35,769 Total current liabilities 3,272,650 5,068,970
Noncurrent liabilities: Long-term debt (net of discounts and deferred amount on refunding 2012 $10,040; 2011 $12,760) 24,744,960 25,812,240 Other postemployment benefits 47,900 47,900 Total noncurrent liabilities 24,792,860 25,860,140
Total liabilities 28,065,510 30,929,110
Net Assets Invested in capital assets, net of related debt 82,674,803 80,565,825 Restricted for Airport facilities 5,772,123 6,057,043 Unrestricted 14,067,722 11,870,227 Total net assets 102,514,648 98,493,095
Total liabilities and net assets $ 130,580,158 $ 129,422,205
13 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Combined Statements of Revenues, Expenses and Changes in Net Assets Years Ended June 30, 2012 and 2011
2012 2011 Operating revenues: Airline terminal complex $ 3,478,811 $ 3,393,842 Parking lot 3,069,292 3,448,567 Aeronautical facilities 2,353,753 2,376,218 General aviation, commercial/industrial activities 773,164 744,171 General activities, utilities and other 574,829 585,588 Fueling and ground handling services 1,074,718 1,063,757 Total operating revenues 11,324,567 11,612,143
Operating expenses: Salaries and benefits 4,089,233 4,171,749 Maintenance and repairs 1,018,863 1,265,659 Insurance 1,187,558 1,173,942 Public relations and advertising 612,724 864,183 Labor purchases and services 949,780 979,060 Heat, light, power and water 578,109 602,836 Other expenses 1,727,064 1,564,764 Depreciation 7,664,169 6,156,054 Total operating expenses 17,827,500 16,778,247
Operating (loss) (6,502,933) (5,166,104)
Nonoperating revenues (expenses): Passenger facility charges 1,678,265 1,828,725 Customer facility charges 704,517 713,378 Property taxes 1,437,665 1,385,823 Replacement property taxes 323,174 351,303 Investment and other income 59,253 115,563 Interest expense (988,227) (836,598) Amortization expense (6,843) (198,897) Gain (loss) on disposal of capital assets (333,018) 68,899 Total nonoperating revenues 2,874,786 3,428,196
Loss before capital contributions (3,628,147) (1,737,908)
Capital contributions 7,649,700 10,862,887 Change in net assets 4,021,553 9,124,979
Net assets, beginning 98,493,095 89,368,116 Net assets, ending $ 102,514,648 $ 98,493,095
See Notes to Basic Combined Financial Statements.
14 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Combined Statements of Cash Flows Years Ended June 30, 2012 and 2011
2012 2011 Cash flows from operating activities: Cash received from airline terminal complex, aeronautics, aviation and other $ 11,327,397 $ 11,793,471 Cash paid to suppliers (6,010,708) (6,619,022) Cash paid to employees (4,099,147) (4,140,343) Net cash provided by (used in) operating activities 1,217,542 1,034,106
Cash flows from noncapital financing activities, tax proceeds received 1,719,040 1,725,691
Cash flows from capital and related financing activities: Acquisition and construction of capital assets (6,478,287) (13,139,536) Proceeds from bonds 24,645,000 Principal paid on revenue bonds (150,000) (145,000) Principal paid on general obligation bonds (60,000) (17,880,000) Interest paid on long-term debt (2,411,974) (77,726) Passenger and customer facility charges collected 2,370,386 2,549,929 Proceeds from sale of capital assets 68,936 Net cash (used in) capital and related financing activities (6,729,875) (3,978,397)
Cash flows from investing activities: Interest collected 59,409 137,036 Proceeds from maturity of investments 19,606,706 14,916,485 Purchase of investments (18,157,556) (13,527,729) Net cash provided by investing activities 1,508,559 1,525,792
Net increase (decrease) in cash and cash equivalents (2,284,734) 307,192
Cash and cash equivalents, beginning 21,423,508 21,116,316 Cash and cash equivalents, ending $ 19,138,774 $ 21,423,508
(Continued)
15 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Combined Statements of Cash Flows (Continued) Years Ended June 30, 2012 and 2011
2012 2011 Reconciliation of operating (loss) to net cash provided by (used in) operating activities: Operating (loss) $ (6,502,933) $ (5,166,104) Adjustments to reconcile operating (loss) to net cash provided by (used in) operating activities: Depreciation 7,664,169 6,156,054 (Increase) decrease in: Accounts receivable (47,956) 306,946 Prepaid items 475,176 (439,450) Increase (decrease) in: Accounts payable (420,817) 85,263 Accrued salaries and wages (7,346) 7,049 Accrued compensated absences (2,568) 24,357 Unearned revenue 85,680 2,061 Deposits (34,894) 6,961 Claims payable 9,031 50,969 Net cash provided by (used in) operating activities $ 1,217,542 $ 1,034,106
Reconciliation of cash and cash equivalents to specific assets on the combined statements of net assets: Cash and investments $ 24,194,045 $ 27,927,929 Less items not meeting the definition of cash equivalents 5,055,271 6,504,421 Cash and cash equivalents at end of year $ 19,138,774 $ 21,423,508
Schedule of noncash capital and financing activities: Acquisition of capital assets through accounts payable due to other governments and prepaid assets $ (1,163,100) $ 2,078,015 Capital contributions 7,650,789 10,907,528 Capitalized interest 279,850 476,435
See Notes to Basic Combined Financial Statements.
16 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Notes to Basic Combined Financial Statements
Note 1. Nature of Business, Reporting Entity and Significant Accounting Policies Nature of business:
The basic combined financial statements include the activities of the following entities:
Metropolitan Airport Authority (Airport) provides an airline terminal, runways and other aeronautical facilities in Moline, Illinois, for passenger and freight airlines and private aircraft.
QCIA Airport Services, LLC (QCIAAS) provides fueling and ground handling services to commercial and charter airlines. The Authority is the sole member of this entity. QCIAAS was created in fiscal year 2004 with a perpetual term.
The Airport and QCIAAS are collectively referred to as the Authority.
Reporting entity:
Accounting principles generally accepted in the United States of America require the reporting entity include (1) the primary government, (2) organizations for which the primary government is financially accountable and (3) other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete. The Authority has the statutory authority to levy taxes and to issue bonded debt without the approval of another government. It has the right to sue and be sued, and has the right to buy, sell, lease or mortgage property in its own name. Based on these criteria, the Authority is considered a primary government and there are no other organizations or agencies whose financial statements should be combined and presented with these financial statements other than QCIAAS as noted above.
Significant accounting policies:
Principles of combination: The accompanying basic combined financial statements include the accounts of the Airport and QCIAAS. All significant intercompany accounts and transactions have been eliminated in combination.
Basis of accounting and measurement focus: The economic measurement focus and the accrual basis of accounting are used by the Authority. Under the accrual basis of accounting, revenue is recognized when earned and expenses are recognized when the liability has been incurred. Under this basis of accounting, all assets and all liabilities associated with the operation of the Authority are included in the balance sheet.
Accounting estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash, cash equivalents and investments: For purposes of reporting cash flows, all short-term investments that are highly liquid are considered to be cash equivalents. Cash equivalents are readily convertible to a known amount of cash and, at the day of purchase, have maturity no longer than three months.
17 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Notes to Basic Combined Financial Statements
Note 1. Nature of Business, Reporting Entity and Significant Accounting Policies (Continued) Investments consist of the Illinois Funds Money Market Fund, Governmental Money Market Fund, two Repurchase Agreements and Commercial Paper. The first two are external investment pools that are not SEC registered. The Repurchase Agreements and the Governmental Money Market Funds are managed by a financial institution and, therefore, regulated by the Comptroller of the Currency for Collective Investment Funds. The Illinois Funds Money Market is regulated by the State Treasurer's Office. The value of the external investment pools are recorded at amortized cost pursuant to Rule 2a-7 under the Investment Company Act of 1940.
Property taxes: Property taxes receivable represent the 2011 tax levy which is collectible in the 2012- 2013 fiscal year and six months of the 2012 tax levy which is collectible in the 2013-2014 fiscal year. Property taxes are assessed in December and become a lien on the property as of the preceding January 1 and are to be received in quarterly installments in June, August, September and November of the following year. Property taxes receivable from the 2012 tax levy are unearned on June 30, 2012, since the period for which the taxes are levied is fiscal year June 30, 2013.
Debt issuance costs, discounts and deferred amount on refunding: Debt discounts and deferred amount on refunding are reported with long-term debt. Debt issue costs are recorded as an asset in the financial statements. Debt issues costs, discounts and deferred amount on refunding are deferred and amortized over the term of the related debt using a method which approximates the effective interest method. The deferred amount on refunding was expensed during the fiscal year ending June 30, 2011 when the 2000C General Obligation Airport System Alternate Revenue Source Bonds were refunded.
Capital assets: Capital assets are carried at cost and defined by the Authority as assets with an initial, individual cost of $10,000 or more and an initial useful life greater than one year. Interest related to construction of capital assets is capitalized. Capitalized interest was $279,850 during fiscal year 2012 and $476,435 during fiscal year 2011. Donated capital assets are recorded at estimated fair value at the date of donation. Depreciation is computed by the straight-line method over estimated useful lives as follows:
Buildings and structures 3-50 years Runways, lighting and roads 5-50 years Machinery and equipment 3-25 years Leasehold improvements 10 years Intangibles 3-7 years
Compensated absences: Vacation, compensating, and personal leave is accrued as a liability as it is earned. Any compensated absences accrued for at the fiscal year end is expected to be used within the following year as it is the Authority's policy to not carry over unused hours beyond an employee's anniversary date. Therefore, the entire compensated balance at June 30, 2012 of $233,946 is shown as a current liability. Sick leave benefits do not vest as the benefit is only paid in the event of death. Total nonvested sick leave benefits, for which the Authority is contingently liable as of June 30, 2012, are $568,357.
Prepaid items: Prepaid items primarily consist of advance payments to the state of Illinois for the local share of capital projects.
18 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Notes to Basic Combined Financial Statements
Note 1. Nature of Business, Reporting Entity and Significant Accounting Policies (Continued) Passenger facility charges: On December 1, 1994, the Authority began imposing, upon approval of the Federal Aviation Administration (FAA), a Passenger Facility Charge ("PFC") on each passenger enplaned at the Authority. The PFC as of June 30, 2012 is $4.50 per passenger. The Authority is authorized to collect up to $55,655,811 of these charges to fund construction of preapproved capital projects. The expiration date of the Authority is estimated by the FAA to be June 2037. Passenger facility charges collected and receivable are recorded as restricted assets. The balance in the restricted reserve accounts associated with PFC is $3,203,885 and $3,778,054 as of June 30, 2012 and 2011, respectively. On June 30, 2012 and 2011, the Authority has restricted PFC receivables of $302,153 and $291,845, respectively.
Customer facility charges: On January 1, 2006, the Authority began imposing, upon approval of the Board of Commissioners and pursuant to an agreement with rental car agencies, a Customer Facility Charge ("CFC") on each car rented at the Authority. The CFC is $3.00 per transaction, per day, with a cap of $15.00. The Authority is authorized to collect this fee pursuant to Ordinance to fund studies and possible construction costs related to the rental car facility. The Board has delegated the Authority to change the amount of the CFC to the Director of Aviation. Customer facility charges collected and receivable are recorded as restricted assets. The balance in the restricted reserve accounts associated with CFC is $1,696,241 and $1,631,413 as of June 30, 2012 and 2011, respectively. On June 30, 2012 and 2011, the Authority has restricted CFC receivables of $69,204 and $67,116, respectively.
Airline incentives: The Authority can offer airlines economic incentives to either attract new service or new destinations to the Airport. Incentives include waiving landing fees, space rental, fuel hook-up and flowage fees and providing for an advertising campaign. The costs associated with these incentives are expensed by the Authority in the Public Relations and Advertising line item as a part of operating expenses. Incentives are financed with Airport revenues to the extent allowed by the Federal Aviation Administration (FAA) and property and replacement tax dollars. For the years ended June 30, 2012 and 2011, incentives amounted to $47,505 and $241,906, respectively.
Airline subsidies: The Authority may offer airline subsidies to keep landing fees and space rent as low as possible. Subsidies are financed with Airport revenues to the extent allowed by the Federal Aviation Administration (FAA) and property and replacement tax dollars. For the years ended June 30, 2012 and 2011, subsidies amounted to $605,000 and $425,000, respectively, above the $200,000 subsidy already factored into the amounts budgeted and charged to the airlines during both years for landing fees. In 2012 and 2011, the Authority offset $94,021 and $244,192, respectively of space rent owed back to the airlines against the subsidy in landing fees which resulted in an overall net subsidy by the Authority of $710,979 in 2012 and $380,808 in 2011.
Operating and nonoperating revenues and expenses: Operating revenues and expenses are distinguished from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with the Authority's principal ongoing operations. The principal operating revenues of the Authority result from exchange transactions of Airport operations and airline activities. Nonoperating revenues result from nonexchange transactions such as passenger and customer facility charges, taxes and investment earnings. Expenses associated with operating the Airport facilities and providing airline services are considered operating. All expenses not meeting this definition, such as interest and amortization, are reported as nonoperating expenses.
19 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Notes to Basic Combined Financial Statements
Note 1. Nature of Business, Reporting Entity and Significant Accounting Policies (Continued) Net assets: Net assets represent the difference between assets and liabilities. Net assets invested in capital assets, net of related debt, consists of capital assets, net of accumulated depreciation, reduced by any outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. Net assets invested in capital assets, net of related debt excludes unspent debt proceeds. As of June 30, 2012 and 2011 there were unspent bond proceeds of $5,457,927 and $8,804,868, respectively. Net assets are reported as restricted when there are limitations imposed on their use either through enabling legislation adopted by the Authority or through external restrictions imposed by creditors, grantors or laws or regulations of other governments. When an expense is incurred for purposes for which both restricted and unrestricted net assets are available, the Authority first applies restricted resources.
Accounting pronouncements: The Authority is applying all applicable Governmental Accounting Standards Board (GAS B) pronouncements as well as following all Financial Accounting Standards Board guidance issued on or before November 30, 1989, unless that guidance conflicts with or contradicts GASB pronouncements. The Authority has elected to not apply FASB guidance subsequent to November 30, 1989.
Reclassification: Certain amounts in the 2011 financial statements have been reclassified to conform to the 2012 presentation with no effect on net assets or change in net assets.
Note 2. Cash and Investments The Authority's cash, cash equivalents and investments as of June 30, 2012 and 2011, consist of the following:
2012 2011
Petty cash $ 2,800 $ 3,000 Checking accounts 5,137,886 5,223,426 Savings accounts 1,696,241 1,631,413 Certificate of deposits with maturities greater than 3 months 1,507,950 1,005,888 Investments 15,849,168 20,064,202 $ 24,194,045 $ 27,927,929
Interest rate risk: Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The Authority's investment policy does not specifically limit investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates, but it does state the investment portfolio should provide sufficient liquidity to pay Authority obligations as they become due.
20 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Notes to Basic Combined Financial Statements
Note 2. Cash and Investments (Continued) As of June 30, 2012 and 2011, the Authority had the following investments:
2012 Weighted Average Maturities Investment Type (Years) Fair Value
Illinois Funds Money Market Fund 0.0630 $ 8,308,962 Repurchase Agreement, FNMA 0.0027 1,788,483 Repurchase Agreement, GNMA 0.0027 789,797 Government Money Market Fund 0.0877 15,005 Commercial Paper: Ecolab Inc 0.1096 699,880 Citigroup Funding Inc 0.4164 749,799 HSBC Finance Corp 0.3096 499,800 ING Funding 0.2110 699,720 Abbey Natl N America 0.4849 1,299,269 Abbey Natl N America 0.4192 749,458 Abbey Natl N America 0.4959 248,995 $ 15,849,168
2011 Weighted Average Maturities Investment Type (Years) Fair Value
Illinois Funds Money Market Fund 0.1041 $ 6,984,260 Repurchase Agreement, FNMA 0.0027 3,859,157 Repurchase Agreement, GNMA 0.0027 415,917 Government Money Market Fund 0.0795 3,306,335 Commercial Paper, Intesa Funding LLC 0.7397 5,498,533 $ 20,064,202
The Illinois Money Market Fund and Government Money Market Fund are valued at an amortized cost of $8,308,962 and $15,005 for 2012, respectively and $6,984,260 and $3,306,335 for 2011, respectively pursuant to Rule 2a-7 under the Investment Company Act of 1940.
21 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Notes to Basic Combined Financial Statements
Note 2. Cash and Investments (Continued) Credit risk: Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Statutes authorize the Authority to make deposits in federally insured banks, savings and loan associations or other financial institutions, and to invest available funds in the following types of depository accounts or investments:
• Securities of the U.S. Government or its Agencies • Certificates of Deposit • Passbook Savings Accounts • Commercial Paper • Illinois State Funds • Treasury Management Investment Fund • Repurchase Agreements • Obligations of the Federal National Mortgage Association • Bankers Acceptance
The Authority's general investment policy is to apply the prudent-person rule: Investments shall be made utilizing the judgment and care, under the circumstances then present, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investments, considering probable safety of their capital as well as the probable income to be derived. The Authority's investment policy does not further limit its investment choices in relation to credit risk.
As of June 30, 2012 and 2011, the Authority's investments were rated as follows:
2012 Moody's Standard & Investment Type Investor Services Poor's
Illinois Funds Money Market Fund Not rated AAAm Repurchase agreement, FNMA Aaa AA+ Government Money Market Fund Aaa-mf AAAm Commercial Paper: Ecolab Inc P-2 A-2 Citigroup Funding Inc P-2 A-2 HSBC Finance Corp P-2 A-1 ING Funding P-1 A-1 Abbey Natl N America P-1 A-1
2011 Moody's Standard & Investment Type Investor Services Poor's
Illinois Funds Money Market Fund Not rated AAAm Repurchase agreement, FNMA Aaa AAAm Government Money Market Fund Aaa-mf AAAm Commercial Paper, Intesa Funding LLC P-1 A-1
22 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Notes to Basic Combined Financial Statements
Note 2. Cash and Investments (Continued) Concentration of credit risk: The Authority's investment policy limits the deposit of funds with the State of Illinois Public Treasurer's Investment Pool to 60 percent. Furthermore, with the exception of U.S. Treasury securities and local governmental investment pools, no more than 50 percent of the total investment portfolio shall be invested with a single financial institution. The Authority's investments in commercial paper with Abbey Natl N America did represent more than 5 percent of the total investments at 14.5 percent as of June 30, 2012. Commercial paper with Intesa funding LLC did represent more than 5 percent of total investments at 27 percent as of June 30, 2011. Money market mutual funds, repurchase agreements, external investment pools, and other pooled investments are excluded from this consideration since the Authority doesn't "hold" the underlying investments.
Custodial credit risk: Custodial credit risk is the risk that in the event of a bank failure, the government's deposits may not be returned to it. It is the Authority's policy to require that time deposits in excess of FDIC insurable limits be secured by collateral or private insurance to protect public deposits in a single financial institution if it were to default.
As of June 30, 2012 and 2011, none of the Authority's deposits with financial institutions were exposed to custodial credit risk due to deposits not being covered by federal depository insurance or secured by some form of collateral authorized by the Authority's investment policy.
The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g. broker-dealer) to a transaction, a government will not be able to recover the value of its investment of collateral securities that are in the possession of another party. The Authority had no investments that were exposed to custodial credit risk.
Note 3. Capital Assets Capital asset activity for the year ended June 30, 2012, is as follows:
June 30, 2011 Additions Retirements June 30, 2012 Nondepreciable assets: Land and land reclamation $ 14,263,684 $ $ $ 14,263,684 Construction-i n-prog ress 8,545,016 13,164,722 20,216,255 1,493,483 Total nondepreciable assets 22,808,700 13,164,722 20,216,255 15,757,167
Depreciable assets: Buildings and structures 39,920,679 5,641,061 45,561,740 Runways, lighting and roads 117,849,849 14,588,771 2,519,108 129,919,512 Machinery and equipment 10,428,405 41,317 27,597 10,442,125 Leasehold improvements 369,939 369,939 Intangibles 249,815 26,210 13,300 262,725 Total depreciable assets 168,818,687 20,297,359 2,560,005 186,556,041
Less accumulated depreciation for: Buildings and structures 20,613,763 1,299,942 21,913,705 Runways, lighting and roads 66,893,721 5,444,667 2,186,090 70,152,298 Machinery and equipment 5,916,563 833,354 27,597 6,722,320 Leasehold improvements 268,135 37,075 305,210 Intangibles 152,008 49,131 13,300 187,839 Total accumulated depreciation 93,844,190 7,664,169 2,226,987 99,281,372
Total depreciable assets, net 74,974,497 12,633,190 333,018 87,274,669
Capital assets, net $ 97.783.197 $ 25.797.912 $ 20.549.273 $ 103.031.836
23 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Notes to Basic Combined Financial Statements
Note 3. Capital Assets (Continued) As of June 30, 2012, the Authority's air freight buildings #2 & #3 with a net book value of $393,068 and $551,807, respectively, were idle.
Capital asset activity for the year ended June 30, 2011, is as follows:
June 30,2010 Additions Retirements June 30, 2011 Nondepreciable assets: Land and land reclamation $ 14,260,327 $ 3,357 $ $ 14,263,684 Construction-i n-prog ress 7,905,742 22,623,442 21,984,168 8,545,016 Total nondepreciable assets 22,166,069 22,626,799 21,984,168 22,808,700
Depreciable assets: Buildings and structures 37,146,954 3,463,017 689,292 39,920,679 Runways, lighting and roads 99,747,883 18,500,502 398,536 117,849,849 Machinery and equipment 7,700,678 3,459,745 732,018 10,428,405 Leasehold improvements 369,939 369,939 Intangibles 206,179 43,636 249,815 Total depreciable assets 145,171,633 25,466,900 1,819,846 168,818,687
Less accumulated depreciation for: Buildings and structures 20,173,908 1,129,147 689,292 20,613,763 Runways, lighting and roads 62,892,107 4,400,150 398,536 66,893,721 Machinery and equipment 6,097,945 550,599 731,981 5,916,563 Leasehold improvements 231,162 36,973 268,135 Intangibles 112,823 39,185 152,008 Total accumulated depreciation 89,507,945 6,156,054 1,819,809 93,844,190
Total depreciable assets, net 55,663,688 19,310,846 37 74,974,497
Capital assets, net $ 77.829.757 $ 41.937.645 $ 21.984.205 $ 97.783.197
Note 4. Long-Term Debt The following is a summary of changes in long-term debt for the year ended June 30, 2012:
Decreases and Amount Due in June 30, 2011 Additions Payments June 30, 2012 One Year
General obligation bonds (A) $ 24,645,000 $ $ 60,000 $ 24,585,000 $ 910,000 Priority revenue bonds (B) 1,390,000 150,000 1,240,000 160,000 26,035,000 210,000 25,825,000 1,070,000 Less discounts and deferred amount on refunding 12,760 2,720 10,040 26,022,240 207,280 25,814,960 1,070,000 Compensated absences 236,514 328,645 331,213 233,946 233,946 Total long-term debt $ 26,258,754 $ 328,645 $ 538,493 $ 26,048,906 $ 1,303,946
24 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Notes to Basic Combined Financial Statements
Note 4. Long-Term Debt (Continued) The following is a summary of changes in long-term debt for the year ended June 30, 2011 :
Decreases and Amount Due in June 30, 2010 Additions Payments June 30, 2011 One Year
General obligation bonds (A) $ 17,880,000 $ 24,645,000 $ 17,880,000 $ 24,645,000 $ 60,000 Priority revenue bonds (8) 1,535,000 145,000 1,390,000 150,000 19,415,000 24,645,000 18,025,000 26,035,000 210,000 Less discounts and deferred amount on refunding 207,533 194,773 12,760 19,207,467 24,645,000 17,830,227 26,022,240 210,000 Compensated absences 212,157 305,931 281,574 236,514 236,514 Total long-term debt $ 19,419,624 $ 24,950,931 $ 18,111,801 $ 26,258,754 $ 446,514
(A) On July 1, 2010, the Authority issued $24,645,000 in General Obligation Alternate Revenue Bonds, Series 2010. Principal is due in annual amounts each December. Series 201 OA, $3,495,000 were issued by the Authority to refund $3,495,000 of the outstanding $6,495,000 Series 2000B general obligation Airport System Alternate Revenue Source Bonds. Series 2010B, $5,570,000, and Series 201 OC, $1,545,000 were issued to refund $7,115,000 of the Series 2000C General Obligation Airport System Alternate Revenue Source Bonds. Series 2010D, $2,500,000, were issued to purchase loading bridges for use at the Airport. Series 2010E, $11,535,000, were issued for the purpose of financing a portion of the costs of the runway system of the Airport and related capital improvements and acquiring additional snow removal equipment. In addition, the Authority paid off in whole the Series 2000A General Obligation Airport System Alternate Revenue Bonds in the amount of $4,270,000 and the other $3,000,000 of the 2000B Bonds with General Fund and PFC monies. The bond agreement requires the Authority to provide for and collect property tax revenues of at least 125 percent of the principal and interest due each fiscal year on the 201 OC Bonds, after payment of debt service on the 1998A Bonds. In addition, the Authority is required to provide for and collect property tax revenues as well as PFC revenues of at least 125 percent of principal and interest due each fiscal year on the 2010 A, B, D and E Bonds, after payment of debt service on the 1998A Bonds.
The bonds include certain covenants to collect certain revenues to provide not less than 125 percent of the annual principal and interest on the bonds.
The Authority's property tax revenues of $1 ,437,665, less the current year payments on the Series 1998A Bonds represents 941 percent of principal and interest payments and/or amounts accrued in 2012 of $134,732 on the 201 OC Bonds. The total principal and interest remaining to be paid on the 201 OC Bonds is $1,843,375. The Authority's property tax revenues and PFC revenues of $3,115,930, less the current year payments on the Series 1998A Bonds represents 251 percent of principal and interest payments and/or amounts accrued in 2012 of $1 ,171,489 on the 2010 A, B, D and E Bonds. The total principal and interest remaining to be paid on the 2010 A, B, D and E Bonds is $36,561,950.
25 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Notes to Basic Combined Financial Statements
Note 4. Long-Term Debt (Continued)
The interest rate on the Series 201 OA Bonds ranges from 3.800 percent to 4.250 percent. The annual debt service requirements are as follows:
Year Ending June 30: Principal Interest Total
2013 $ 775,000 $ 119,053 $ 894,053 2014 805,000 89,032 894,032 2015 835,000 57,872 892,872 2016 865,000 25,573 890,573 2017 215,000 4,569 219,569 $ 3,495,000 $ 296,099 $ 3,791,099
The interest rate on the Series 201 OB Bonds ranges from 4.250 percent to 5.000 percent. The annual debt service requirements are as follows:
Year Ending June 30: Principal Interest Total
2013 $ $ 274,533 $ 274,533 2014 274,532 274,532 2015 274,533 274,533 2016 274,533 274,533 2017 685,000 259,976 944,976 2018 - 2022 4,885,000 608,409 5,493,409 $ 5,570,000 $ 1,966,516 $ 7,536,516
The interest rate on the Series 201 OC Bonds is 5.000 percent. The debt service requirements are as follows:
Year Ending June 30: Principal Interest Total
2013 $ 135,000 $ 70,875 $ 205,875 2014 140,000 64,000 204,000 2015 150,000 56,750 206,750 2016 155,000 49,125 204,125 2017 165,000 41,125 206,125 2018 - 2021 740,000 76,500 816,500 $ 1,485,000 $ 358,375 $ 1,843,375
26 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Notes to Basic Combined Financial Statements
Note 4. Long-Term Debt (Continued)
The interest rate on the Series 201 OD Bonds ranges from 5.500 percent to 5.650 percent. The annual debt service requirements are as follows:
Year Ending June 30: Principal Interest Total
2013 $ $ 138,010 $ 138,010 2014 138,010 138,010 2015 138,010 138,010 2016 138,010 138,010 2017 138,010 138,010 2018 - 2022 340,000 680,445 1,020,445 2023 - 2024 2,160,000 111,375 2,271,375 $ 2,500,000 $ 1,481,870 $ 3,981,870
The interest rate on the Series 201 OE Bonds ranges from 5.350 percent to 5.500 percent. The annual debt service requirements are as follows:
Year Ending June 30: Principal Interest Total
2013 $ $ 624,045 $ 624,045 2014 624,045 624,045 2015 624,045 624,045 2016 624,045 624,045 2017 624,045 624,045 2018 - 2022 3,120,225 3,120,225 2023 - 2027 4,615,000 2,711,163 7,326,163 2028 - 2031 6,920,000 765,852 7,685,852 $ 11,535,000 $ 9,717,465 $ 21,252,465
(B) On December 28, 1998, the Authority issued $2,730,000 of Series 1998 A priority revenue bonds with a variable interest rate payable monthly. Principal is due in annual amounts each November through 2018. The bond agreement requires the Authority to provide for and collect revenues of at least 125 percent of the principal and interest due each fiscal year on all outstanding bonds.
27 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Notes to Basic Combined Financial Statements
Note 4. Long-Term Debt (Continued)
The variable interest rate is determined by a bond remarketing agent for each weekly rate period. This interest rate is defined by the bond ordinance as the lowest rate which, in the judgment of the remarketing agent on the basis of prevailing financial market conditions, would permit the sale of the bonds at par plus accrued interest. This interest rate cannot exceed 9 percent. The Authority also has the option to convert to a fixed rate to be determined at the time exercised.
The Authority's revenues, net of operating expenses less depreciation of $2,563,188 (excluding the QCIA Airport Services, LLC) represents 1,509 percent of principal and interest payments and/or amounts accrued in 2012 of $169,857 on the 1998A priority revenue bonds. The total principal and interest remaining to be paid on the 1998A priority revenues bonds is $1,254,364.
The annual debt service requirements on these bonds with interest calculated, based on the rate in effect on June 30, 2012 of 0.28 percent, are as follows:
Year Ending June 30: Principal Interest Total
2013 $ 160,000 $ 3,472 $ 163,472 2014 165,000 3,024 168,024 2015 170,000 2,562 172,562 2016 175,000 2,086 177,086 2017 185,000 1,596 186,596 2018-2019 385,000 1,624 386,624 $ 1,240,000 $ 14,364 $ 1,254,364
The bonds are subject to redemption and payment prior to the maturity in whole on any date or in part on any interest payment date.
Legal debt margin: As of June 30, 2012 and 2011, the general obligation bond indebtedness of the Authority did not exceed its legal debt margin, as shown in the following computation:
2012 2011
Assessed valuation $ 1,898,511,200 $ 1,890,066,693
Statutory debt limitation, 2.30% of assessed valuation $ 43,665,758 $ 43,471,534 Total debt: General obligation bonds (Airport System Alternate Revenue Source), 2010 issue, Series A, B, C, D and E 24,585,000 24,645,000 Deduct 2010 issue, Series A, B,C, D and E general obligation bonds, not subject to debt limit (24,585,000) (24,645,000) Unused legal debt capacity $ 43,665,758 $ 43,471,534
28 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Notes to Basic Combined Financial Statements
Note 5. Retirement Fund Commitments Illinois Municipal Retirement Fund:
Plan description: The Authority's defined benefit pension plan for employees provides retirement and disability benefits, post retirement increases and death benefits to plan members and beneficiaries. The Authority's plan is affiliated with the Illinois Municipal Retirement Fund (IMRF), an agent multiple- employer plan. Benefit provisions are established by statute and may only be changed by the General Assembly of the State of Illinois. IMRF issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained on-line at www.imrf.org.
Funding policy: As set by statute, the Authority's plan members are required to contribute 4.50 percent of their annual covered salary. The statutes require employers to contribute the amount necessary, in addition to member contributions, to finance the retirement coverage of its own employees. The employer contribution rate used by the employer for fiscal years 2012 and 2011 was 10.85 percent and 8.50 percent, respectively, of annual covered payroll. The employer's annual required contribution rate for fiscal years 2012 and 2011 was 10.85 percent and 10.09 percent, respectively. The Authority also contributes for disability benefits, death benefits and supplemental retirement benefits, all of which are pooled at the IMRF level. Contribution rates for disability and death benefits are set by the IMRF Board of Trustees, while the supplemental retirement benefits rate is set by statute.
Annual pension: For fiscal year ended June 30, 2012, the Authority's actual contributions for pension cost was $436,090 while its required contribution for fiscal year 2012 was $383,170. For fiscal year ended June 30, 2011, the Authority's actual contributions for pension cost was $335,064 while its required contribution for fiscal year 2011 was $387,984.
Three-Year Trend Information Fiscal Year Annual Pension Percentage of Net Pension Ended Cost (APC) APC Contributed Obligation
06/30/2012 $ 383,170 114% -% 06/30/2011 387,984 86 06/30/2010 249,264 100
The required contribution for fiscal year ended June 30, 2012 was determined as part of the December 31, 2009, actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions at December 31,2009, included (a) 7.5 percent investment rate of return (net of administrative and direct investment expenses), (b) projected salary increases of 4.00 percent a year, attributable to inflation, (c) additional projected salary increases ranging from 0.4 percent to 10 percent per year depending on age and service, attributable to seniority/merit and (d) postretirement benefit increases of 3 percent annually. The actuarial value of Authority's plan assets was determined using techniques that spread the effects of short-term volatility in the market value of investment over a five- year period with a 20 percent corridor between the actuarial and market value of assets. The Authority's plan unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on an open 30-year basis.
29 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Notes to Basic Combined Financial Statements
Note 5. Retirement Fund Commitments (Continued) The required contribution for fiscal year ended June 30, 2011 was determined as part of the December 31, 2008, actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions at December 31,2008, included (a) 7.5 percent investment rate of return (net of administrative and direct investment expenses), (b) projected salary increases of 4.00 percent a year, attributable to inflation, (c) additional projected salary increases ranging from 0.4 percent to 10 percent per year depending on age and service, attributable to seniority/merit and (d) postretirement benefit increases of 3 percent annually. The actuarial value of Authority's plan assets was determined using techniques that spread the effects of short-term volatility in the market value of investment over a five- year period with a 20 percent corridor between the actuarial and market value of assets. The Authority's plan unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on an open 30-year basis.
Funded status and funding progress as of June 30, 2012: As of December 31,2011, the most recent actuarial valuation date, the plan was 78.93 percent funded. The actuarial accrued liability for benefits was $9,665,555 and the actuarial value of assets was $7,629,015, resulting in an underfunded actuarial accrued liability (UAAL) of $2,036,540. The covered payroll (annual payroll of active employees covered by the plan) was $3,529,495 and the ratio of the UAAL to the covered payroll was 58 percent.
Funded status and funding progress as of June 30, 2011: As of December 31, 2010, the most recent actuarial valuation date, the plan was 80.78 percent funded. The actuarial accrued liability for benefits was $8,924,852 and the actuarial value of assets was $7,209,870, resulting in an underfunded actuarial accrued liability (UAAL) of $1 ,714,982. The covered payroll (annual payroll of active employees covered by the plan) was $3,328,339 and the ratio of the UAAL to the covered payroll was 52 percent.
The schedule of funding progress, presented as RSI following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits.
Note 6. Leasing Activities The Authority's leasing operations are accounted for as operating leases and consist primarily of space rentals and landing fees which are governed by written agreements. These agreements range from month-to-month leases to long-term leases with various specified terms. Some of these lease agreements contain cancelable conditions which eliminate any future guaranteed rentals or are contingent upon the income produced by the lessee.
Certain long-term agreements are industrial site leases which have terms that are subject to restrictions and covenants on the permitted use and performance standards of the property.
The Authority also leases land and building space under various long-term leases which expire between October 2012 and May 2037.
30 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Notes to Basic Combined Financial Statements
Note 6. Leasing Activities (Continued) The following is a schedule by years of the future minimum lease rentals to be received under these leases as of June 30:
During the year ending June 30:
2013 $ 2,320,181 2014 2,149,641 2015 1,937,387 2016 1,193,179 2017 475,961 2018 - 2022 1,690,340 2023 - 2027 994,695 2028 - 2032 778,580 2033 - 2037 236,542 Total future minimum lease rentals to be received $ 11,776,506
Note 7. Deferred Compensation Plan The Authority offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457(b). The plan, available to all Authority employees, permits them to defer a portion of their salary until future years.
Note 8. Commitments As of June 30, 2012, the Authority has financial commitments related to various construction projects totaling approximately $3,347,938. The contracts will be paid with federal and state grants, passenger facility charges and operating proceeds.
Note 9. Risk Management The Authority provides self-insured health and dental benefits to substantially all of its employees and their immediate families. Self-insurance is in effect up to a stop loss amount of $70,000 per covered person with an aggregate annual ceiling of approximately $537,567, excluding lasered individuals. Coverage for all claims in excess of the stop loss amounts has been obtained from private insurance companies. The claim administration procedures are performed by an independent claims administrator. Liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Claims payable include all known claims and an amount for claims that have been incurred but not reported (IBNR). Claim liabilities are estimated by considering the effects of inflation, recent claim settlement trends, including frequency and amount of pay-outs and other economic and social factors. The changes in the aggregate liabilities for claims included in claims payable for the year ended June 30, 2012 and claims receivable for the year ended June 30, 2011, are as follows:
2012 2011
Claims payable, beginning of year $ 50,969 $ (134,640) Claims incurred 487,076 557,461 Claim payments (478,045) (371,852) Claims payable (receivable), end of year $ 60,000 $ 50,969
31 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Notes to Basic Combined Financial Statements
Note 9. Risk Management (Continued) As of June 30, 2011 the Authority had re-insurance receivables totaling $34,031 which were netted against claims payable amounts of $85,000 for a net payable of $50,969.
The Authority is also self-insured for unemployment compensation claims. Unemployment compensation is charged quarterly as the state assesses the Authority based upon actual claims paid.
The Authority is exposed to various risks of loss related to theft, damage to or the destruction of assets. These risks are covered by the purchase of commercial insurance. The Authority's liability insurance carrier does not provide coverage for perils of war or terrorism. Settled claims have not exceeded commercial insurance coverage in any of the past three fiscal years.
Note 10. Industrial Revenue Bonds The Authority has issued Industrial Revenue Bonds to provide financial assistance to private sector entities for the acquisition and construction of industrial and commercial facilities deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private sector entity served by the bond issuance. Neither the Authority, the state, nor any political subdivision thereof is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements.
As of June 30, 2012 and 2011, there was one series of Industrial Revenue Bonds outstanding with a principal amount outstanding of approximately $2,200,000.
Note 11. Other Postemployment Benefits (OPEB) Plan description: The Authority sponsors a single-employer, self-insured, health care plan that provides medical benefits to employees and retirees. Retiree coverage begins at IMRF retirement age of at least 55 and continues until the retiree is medicare eligible. The plan does not issue a stand-alone financial report.
Funding policy: Health insurance plan contributions on behalf of the employee are negotiated by management and the union and governed by the Authority's union contract. Employees pay a portion of the health insurance costs and the Authority pays the remainder. Retirees are required to pay the same premiums as those charged to COBRA participants. Those rates are calculated as 125 percent of the expected costs based on the entire population covered.
Annual OPEB cost and net OPEB obligation: The Authority's annual other postemployment benefit (OPEB) cost (expense) was calculated by an actuary based on the annual required contribution (ARC) of the employer, an amount actuarially determined in accordance to the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed 30 years. The Authority has recorded an OPEB cost (expense) of the entire projected actuarial accrued liability of $47,900 as of June 30, 2012 and June 30, 2011.
32 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Notes to Basic Combined Financial Statements
Note 11. Other Postemployment Benefits (OPEB) (Continued) The Authority's annual OPES cost, percentage of annual OPES cost contributed to the plan and the net OPES obligations for 2012 and the two preceding years follows:
Percentage of Annual Annual OPES Net OPES Fiscal Year Ended OPES Cost Cost Contributed Obligation
06/30/2012 $ 4,902 46.2% $ 47,900 06/30/2011 4,902 46.2 47,900 06/30/2010 4,902 46.2 47,900
Funded status and funding progress as of June 30, 2012 and 2011: As of June 30, 2010, the most recent actuarial valuation date, the actuarial accrued liability for benefits for fiscal years ending 2012 and 2011 of $47,900 was unfunded. The covered payroll (annual payroll of active employees covered by the plan) for fiscal years 2012 and 2011 was $3,529,495 and $3,328,339 and the ratio of the unfunded actuarial accrued liability to the covered payroll was 1.36 percent and 1.44 percent, respectively.
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality and the health care cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.
Actuarial method and assumptions: Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and included the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefits costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.
As of June 30, 2010, actuarial valuation date, entry age actuarial cost method was used. The actuarial assumptions included a 5 percent investment rate of return which is based on the expected long-term investment return of the employer's own investments used to pay plan benefits and a 3 percent inflation rate and an initial annual health care cost inflation rate of 8 percent initially, grading down to an ultimate rate of 6 percent. The Authority's unfunded actuarial accrued liability is being amortized as a level percentage of payroll on an open basis.
33 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Notes to Basic Combined Financial Statements
Note 12. Pending Pronouncements As of June 30, 2012, the GASB has issued the following Statements not yet implemented by the Authority. The Statements which might impact the Authority are as follows:
• GASB Statement No. 60, Accounting and Financial Reporting for Service Concession Arrangements, issued November 2010, will be effective for the Authority beginning with its year ending June 30, 2013. This Statement is intended to improve financial reporting by addressing issues related to service concession arrangements (SCAs), which are a type of public-private or public-public partnership. Specifically, this Statement improves financial reporting by establishing recognition, measurement and disclosure requirements SCAs for both transferors and governmental operators, requiring governments to account for and report SCAs in the same manner, which improves the comparability of financial statements. This Statement also improves the decision usefulness of financial reporting by requiring that specific relevant disclosures be made by transferors and governmental operators about SCAs. • GASB Statement No. 61, The Financial Reporting Entity: Omnibus an amendment of GASB Statements No. 14 and No. 34, issued November 201 0, will be effective for the Authority beginning with its year ending June 30, 2013. This Statement is intended to improve financial reporting for a governmental financial reporting entity by improving guidance for including, presenting, and disclosing information about component units and equity interest transactions of a financial reporting entity. The amendments to the criteria for including component units allow users of financial statements to better assess the accountability of elected officials by ensuring that the financial reporting entity includes only organizations for which the elected officials are financially accountable or that are determined by the government to be misleading to exclude. The amendments to the criteria for blending also improve the focus of a financial reporting entity on the primary government by ensuring that the primary government includes only those component units that are so intertwined with the primary government that they are essentially the same as the primary government, and by clarifying which component units have that characteristic. • GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, issued January 2011, will be effective for the Authority beginning with its year ending June 30, 2013. This Statement is intended to enhance the usefulness of the Codification of Governmental Accounting and Financial Reporting Standards by incorporating guidance that previously could only be found in certain FASB and AICPA pronouncements. This Statement incorporates into the GASB's authoritative literature the applicable guidance previously presented in the following pronouncements issued before November 30, 1989: FASB Statements and Interpretations, Accounting Principles Board Opinions, and Accounting Research Bulletins of the AICPA's Committee on Accounting Procedure. By incorporating and maintaining this guidance in a single source, the GASB believes that GASB 62 reduces the complexity of locating and using authoritative literature needed to prepare state and local government financial reports.
34 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Notes to Basic Combined Financial Statements
Note 12. Pending Pronouncements (Continued)
• GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, issued July 2011, will be effective for the Authority beginning with its year ending June 30, 2013. This Statement is intended to improve financial reporting by providing citizens and other users of state and local government financial reports with information about how past transactions will continue to impact a government's financial statements in the future. This Statement provides a new statement of net position format to report all assets, deferred outflows of resources, liabilities deferred inflows of resources, and net position (which is the net residual amount of the other elements). The Statement requires that deferred outflows of resources and deferred inflows of resources be reported separately from assets and liabilities. This Statement also amends certain provisions of Statement No. 34, Basic Financial Statements- and Management's Discussion and Analysis-for State and Local Governments, and related pronouncements to reflect the residual measure in the statement of financial position as net position, rather than net assets. • GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, issued April 2012, will be effective for the Authority beginning with its year ending June 30, 2014. This Statement clarifies the appropriate reporting of deferred outflows of resources and deferred inflows of resources to ensure consistency in financial reporting. GASB Concepts Statement (CON) No.4, Elements of Financial Statements, specifies that recognition of deferred outflows and deferred inflows should be limited to those instances specifically identified in authoritative GASB pronouncements. Consequently, guidance was needed to determine which balances being reported as assets and liabilities should actually be reported as deferred outflows of resources or deferred inflows of resources, according to the definitions in CON 4. Based on those definitions, this Statement reclassifies certain items currently being reported as assets and liabilities as deferred outflows of resources and deferred inflows of resources. In addition, the Statement recognizes certain items currently being reported as assets and liabilities as outflows of resources and inflows of resources. • GASB Statement No. 66, Technical Corrections - 2012, issued April 2012, will be effective for the Authority beginning with its year ending June 30, 2014. This Statement enhances the usefulness of financial reports by resolving conflicting accounting and financial reporting guidance that could diminish the consistency of financial reporting. This Statement amends GASB Statement No.1 0, Accounting and Financial Reporting for Risk Financing and Related Insurance Issues, by removing the provision that limits fund-based reporting of a state or local government's risk financing activities to the general fund and the internal service fund types. As a result, governments would base their decisions about governmental fund type usage for risk financing activities on the definitions in GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. This Statement also amends GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, by modifying the specific guidance on accounting for: (a) operating lease payments that vary from a straight-line basis; (b) the difference between the initial investment (purchase price) and the principal amount of a purchased loan or group of loans; and (c) servicing fees related to mortgage loans that are sold when the stated service fee rate differs significantly from a current (normal) servicing fee rate. These changes would eliminate any uncertainty regarding the application of GASB Statement No. 13, Accounting for Operating Leases with Scheduled Rent Increases, and result in guidance that is consistent with the requirements in GASB Statement No. 48, Sales and Pledges of Receivables and Future Revenues and Intra-Entity Transfers of Assets and Future Revenues, respectively.
35 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Notes to Basic Combined Financial Statements
Note 12. Pending Pronouncements (Continued) • GASB Statement No. 67, Financial Reporting for Pension Plans, issued June 2012, will be effective for the Authority beginning with its year ending June 30, 2014. This Statement replaces the requirements of GASB Statement No. 25, Financial Reporting for Defined Benefit Pension Plans and Note Disclosures for Defined Contribution Plans, and GASB Statement No. 50, Pension Disclosures, as they relate to pension plans that are administered through trusts or similar arrangements meeting certain criteria. This Statement builds upon the existing framework for financial reports of defined benefit pension plans, which includes a statement of fiduciary net position (the amount held in a trust for paying retirement benefits) and a statement of changes in fiduciary net position. This Statement enhances note disclosures and required supplementary information for both defined benefit and defined contribution pension plans. This Statement also requires the presentation of new information about annual money-weighted rates of return in the notes to the financial statements and in 1O-year required supplementary information schedules. • GASB Statement No. 68, Accounting and Financial Reporting for Pensions, issued June 2012, will be effective for the Authority beginning with its year ending June 30, 2015. This Statement replaces the requirements of GASB Statement No. 27, Accounting for Pensions by State and Local Governmental Employers, and GASB Statement No. 50, Pension Disclosures, as they relate to governments that provide pensions through pension plans administered as trusts or similar arrangements that meet certain criteria. This Statement requires governments providing defined benefit pensions to recognize their long-term obligation for pension benefits as a liability for the first time, and to more comprehensively and comparably measure the annual costs of pension benefits. This Statement also enhances accountability and transparency through revised and new note disclosures and required supplementary information. The Authority's management has not yet determined the effect these Statements will have on the Authority's financial statements.
Note 13. Subsequent Event The Authority entered into a ground lease agreement on August 1, 2012 with a lessee to build a new hotel on Airport land subject to certain contingencies. Rent will commence at the end of the twelve-month period following the lessee's contingency date. Rent will be collected at a minimum monthly amount of 7.5 percent of the appraised value of the property, currently calculated at $3,812.50 per month or 2.3 percent of monthly gross receipts, whichever is greater. Annual rent shall be subject to review and reappraisal every 5 years. The lease term is 30 years with three 1O-year options and two additional 5-year options.
36 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Required Supplementary Information Illinois Municipal Retirement Plan
SCHEDULE OF FUNDING PROGRESS
Unfunded Actuarial (Over UAAL as a Actuarial Accrued funded) Percentage Fiscal Actuarial Value of Liability AAL Funded Covered of Covered Year Valuation Assets (AAL) (UAAL) Ratio Payroll Payroll Ended Date (a) (b) (b-a) (alb) (c) [(b-a)/c]
2012 12/3112011 $ 7,629,015 $ 9,665,555 $ 2,036,540 78.93% $ 3,529,495 57.70% 2011 12131/2010 7,209,870 8,924,852 1,714,982 80.78 3,328,339 51.53 2010 12131/2009 6,725,575 8,095,006 1,369,431 83.08 3,061,436 44.73
On a market value basis, the actuarial value of assets as of December 31, 2011 is $7,188,876. On a market basis, the funded ration would be 74.38 percent.
The information presented in the required supplementary schedules was determined as part of the actuarial valuation at the dates indicated. Additional information as of the latest actuarial valuation follows:
The required contribution was determined as part of the December 31, 2009 actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions included (a) 7.50 percent investment rate of return (net of administrative and direct investment expenses), (b) projected salary increases of 4 percent a year, attributable to inflation, (c) additional projected salary increases ranging from .4 percent to 10 percent per year depending on age and service attributable to seniority/merit and (d) postretirement benefit increases of 3 percent per year. The actuarial value of IMRF assets was determined using techniques that spread the effects of short-term volatility in the market value of investments over a five-year period with a 20 percent corridor between the actuarial and market value of assets. IMRF's unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on an open 30-year basis.
37 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Required Supplementary Information Metropolitan Airport Authority Health Benefit Plan
SCHEDULE OF FUNDING PROGRESS
Actuarial UAAL as a Actuarial Accrued Percentage Fiscal Actuarial Value of Liability Unfunded Funded Covered of Covered Year Valuation Assets (AAL) (UAAL) Ratio Payroll Payroll Ended Date (a) (b) (b-a) (alb) (c) [(b-a)/c]
2012 06/3012010 $ $ 47,900 $ 47,900 -% $ 3,529,495 1.36% 2011 06/30/2010 47,900 47,900 3,328,339 1.44 2010 06/30/2010 47,900 47,900 3,061,436 1.56
The information presented in the required supplementary schedule was determined as part of the actuarial valuation as of June, 2010. Additional information follows: a. The actuarial method used to determine the ARC is the entry age actuarial cost method. b. There are no plan assets. c. The actuarial assumptions included: (a) 5 percent investment rate of return which includes 3 percent inflation rate and (b) an initial 8 percent health care inflation rate declining down to a 6 percent ultimate rate. d. The amortization method is level percentage of pay on an open basis.
38
Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Combining Schedule of Net Assets June 30, 2012
Metropolitan Airport QCIA Airport Authority Services, LLC Eliminations Combined Assets Current assets: Cash and investments $ 12,564,541 $ 770,811 $ $ 13,335,352 Prepaid items, primarily construction 38,487 38,487 Receivables: Property taxes 1,734,503 1,734,503 Replacement taxes 58,944 58,944 Accrued interest receivable 439 439 Due from other governments 304,868 304,868 Rents and fees 499,559 164,153 663,712 Restricted receivable, passenger and customer facility charges 371,357 371,357 Total current assets 15,572,698 934,964 16,507,662
Noncurrent assets: Capital assets: Land, land reclamation and improvements 14,263,684 14,263,684 Buildings and structures 45,561,740 45,561,740 Runways, lighting and roads 129,919,512 129,919,512 Machinery and equipment 9,625,724 816,401 10,442,125 Leasehold improvements 369,939 369,939 Intangibles 262,725 262,725 Construction-in-progress 1,493,483 1,493,483 201,126,868 1,186,340 202,313,208 Less accumulated depreciation 98,266,820 1,014,552 99,281,372 102,860,048 171,788 103,031,836 Bond issue costs 45,753 45,753 Restricted cash and investments 10,858,693 10,858,693 Due from other governments 136,214 136,214 Investment in combined affiliate 1,044,785 (1,044,785) Total noncurrent assets 114,945,493 171,788 (1,044,785) 114,072,496
Total assets $ 130,518,191 $ 1,106,752 $ (1 ,044,785) $ 130,580,158
39 Metropolitan Airport QCIA Airport Authority Services, LLC Eliminations Combined Liabilities Current liabilities: Current portion, long-term debt $ 1,070,000 $ $ $ 1,070,000 Accounts payable 731,789 26,976 758,765 Accrued compensated absences 210,159 23,787 233,946 Accrued salaries and wages 133,533 11,204 144,737 Accrued Interest 103,718 103,718 Unearned revenue 900,609 900,609 Claims payable 60,000 60,000 Due to other governments Other 875 875 Total current liabilities 3,210,683 61,967 3,272,650
Noncurrent liabilities: Long-term debt 24,744,960 24,744,960 Other post employment benefits 47,900 47,900 Total noncurrent liabilities 24,792,860 24,792,860
Net Assets Invested in capital assets, net of related debt 82,503,015 171,788 82,674,803 Restricted for Airport facilities 5,772,123 5,772,123 Unrestricted 14,239,510 872,997 (1,044,785) 14,067,722 Total net assets 102,514,648 1,044,785 (1,044,785) 102,514,648
Total liabilities and net assets $ 130,518,191 $ 1,106,752 $ (1 ,044,785) $ 130,580,158
40 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Combining Schedule of Revenues, Expenses and Changes in Net Assets Year Ended June 30, 2012
Metropolitan Airport QCIA Airport Authority Services, LLC Eliminations Combined Operating revenues: Airline terminal complex $ 3,478,811 $ $ $ 3,478,811 Parking Lot 3,069,292 3,069,292 Aeronautical facilities 2,353,753 2,353,753 General aviation, commercial/industrial activities 773,164 773,164 General activities, utilities and other 247,753 327,076 574,829 Fueling and ground handling services 1,074,718 1,074,718 Total operating revenues 9,922,773 1,401,794 11,324,567
Operating expenses: Salaries and benefits 3,487,862 601,371 4,089,233 Maintenance and repairs 895,382 146,761 (23,280) 1,018,863 Insurance 947,925 239,633 1,187,558 Public relations and advertising 612,724 612,724 Labor purchases and services 949,780 949,780 Heat, light, power and water 573,258 4,851 578,109 Other expenses 1,712,715 458,844 (444,495) 1,727,064 Depreciation 7,530,673 133,496 7,664,169 Total operating expenses 16,710,319 1,584,956 (467,775) 17,827,500
Operating income (loss) (6,787,546) (183,162) 467,775 (6,502,933)
Nonoperating revenues (expenses): Passenger facility charges 1,678,265 1,678,265 Customer facility charges 704,517 704,517 Property taxes 1,437,665 1,437,665 Replacement property taxes 323,174 323,174 Investment and other income 59,222 31 59,253 Interest expense (988,227) (988,227) Amortization expense (6,843) (6,843) (Loss) on disposal of capital assets (333,018) (333,018) Gain from combined affiliate 284,644 (284,644) Total nonoperating revenues (expenses) 3,159,399 31 (284,644) 2,874,786
Capital contributions 7,649,700 400,000 (400,000) 7,649,700
Change in net assets 4,021,553 216,869 (216,869) 4,021,553
Net assets, beginning 98,493,095 827,916 (827,916) 98,493,095 Net assets, ending $ 102,514,648 $ 1,044,785 $ (1,044,785) $ 102,514,648
41 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Schedule of Other Expenses Years Ended June 30, 2012 and 2011
2012 2011
Employee benefits and payroll taxes $ 757,855 $ 655,075 Engineering and consulting services 149,366 187,036 General supplies and uniforms 131,696 128,294 Travel and training 100,428 94,368 Professional fees 227,354 179,690 Office supplies 12,909 12,181 Telephone and computer 233,835 192,313 Dues and subscriptions 42,505 37,392 Property taxes 20,985 22,162 Postage 5,301 5,386 Miscellaneous 44,830 50,867 $ 1,727,064 $ 1,564,764
42
Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Statistical Section Contents
The statistical section of the Authority's comprehensive annual financial report presents detailed information as a context for understanding what the information presented in the financial statements, note disclosures and required supplementary information say about the Authority's overall financial health.
Contents Page
Financial Trends These schedules contain trend information to help the reader understand 44 - 45 how the Authority's financial performance and well being have changed over time.
Revenue Capacity These schedules contain information to help the reader assess the Authority's 46 - 51 most significant local revenue sources, the property tax (or sales tax).
Debt Capacity These schedules present information to help the reader assess the 52 - 55 affordability of the Authority's current level of outstanding debt and the Authority's ability to issue additional debt in the future.
Demographic and Economic Information These schedules offer demographic and economic indicators to help the 56 - 58 reader understand the environment within which the Authority's financial activities take place.
Operating Information These schedules contain service and infrastructure data to help the reader 59 - 69 understand how the information in the Authority's financial report relates to the services the Authority provides and the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial report for the relevant year.
43 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Net Assets and Changes in Net Assets Last Ten Fiscal Years (unaudited)
2003 2004 2005 2006 Operating revenues: Terminal $ 2,940,930 $ 2,755,479 $ 2,890,119 $ 2,929,431 Parking lot 2,126,133 2,372,608 2,666,732 2,715,161 Aeronautical 1,739,806 1,770,514 1,667,099 1,792,518 General aviation, commercial, industrial 526,200 588,399 568,018 580,846 General activities, utilities and other 563,441 807,313 656,273 625,963 Fueling services 422,689 674,527 738,917 Total operating revenues 7,896,510 8,717,002 9,122,768 9,382,836
Nonoperating revenues: Interest income 299,346 184,491 277,415 621,556 Passenger facility charges 1,701,449 1,814,195 1,862,501 1,860,723 Customer facility charges 109,749 Intergovernmental 574,412 Taxes 1,148,896 1,414,947 1,436,480 1,502,951 Total nonoperating revenues 3,149,691 3,413,633 3,576,396 4,669,391
Capital contributions 3,939,341 2,850,729 4,899,629 2,450,403
Total revenues 14,985,542 14,981,364 17,598,793 16,502,630
Operating expenses: Salaries and benefits 2,205,304 2,481,390 2,629,375 2,701,847 Maintenance and repairs 470,631 690,451 584,279 743,688 Other expenses 3,105,903 3,577,489 4,038,688 4,487,786 Depreciation 5,368,573 5,456,792 5,666,942 5,914,620 Total operating expenses 11,150,411 12,206,122 12,919,284 13,847,941
Nonoperating expenses: (Gain) loss on disposal of capital assets 18,919 366,254 (343,579) 9,938 Interest expense 1,070,609 863,849 937,199 1,021,768 Amortization of bond issuance costs 63,712 61,573 59,310 56,906 Total nonoperating expenses 1,153,240 1,291,676 652,930 1,088,612
Total expenses 12,303,651 13,497,798 13,572,214 14,936,553
Increase in net assets 2,681,891 1,483,566 4,026,579 1,566,077
Net assets at year-end: Invested in capital assets, net of related debt 52,692,320 54,526,439 55,592,890 54,084,518 Restricted 2,940,377 4,444,307 777,842 879,345 Unrestricted 9,639,774 7,785,291 14,411,884 17,384,830 Total net assets $ 65,272,471 $ 66,756,037 $ 70,782,616 $ 72,348,693
44 2007 2008 2009 2010 2011 2012
$ 3,040,264 $ 3,193,740 $ 3,215,492 $ 3,174,951 $ 3,393,842 $ 3,478,811 2,885,752 3,121,679 3,346,661 3,510,087 3,448,567 3,069,292 2,044,887 2,173,625 2,093,067 2,205,800 2,376,218 2,353,753 632,286 709,092 651,952 681,636 744,171 773,164 659,750 673,611 652,744 594,178 585,588 574,829 734,765 795,357 807,470 1,069,646 1,063,757 1,074,718 9,997,704 10,667,104 10,767,386 11,236,298 11,612,143 11,324,567
927,463 929,317 614,883 270,035 115,563 59,253 2,076,941 1,942,566 1,919,966 1,945,655 1,828,725 1,678,265 233,195 737,785 681,044 645,388 713,378 704,517
1,589,961 1,661,611 1,673,832 1,641,403 1,737,126 1,760,839 4,827,560 5,271,279 4,889,725 4,502,481 4,394,792 4,202,874
6,216,478 3,511,035 6,019,788 4,534,576 10,862,887 7,649,700
21,041,742 19,449,418 21,676,899 20,273,355 26,869,822 23,177,141
2,980,045 3,154,718 3,525,301 4,042,384 4,171,749 4,089,233 683,897 950,284 1,430,312 1,258,632 1,265,659 1,018,863 4,802,580 4,813,171 4,793,198 4,791,214 5,184,785 5,055,235 6,094,515 6,198,306 6,302,645 5,699,578 6,156,054 7,664,169 14,561,037 15,116,479 16,051,456 15,791,808 16,778,247 17,827,500
(21,154) (22,200) (68,899) 333,018 1,051,904 986,561 897,068 862,315 836,598 988,227 56,433 30,684 30,113 29,487 198,897 6,843 1,087,183 1,017,245 927,181 869,602 966,596 1,328,088
15,648,220 16,133,724 16,978,637 16,661,410 17,744,843 19,155,588
5,393,522 3,315,694 4,698,262 3,611,945 9,124,979 4,021,553
55,353,701 54,438,092 57,683,359 58,622,290 80,565,825 82,674,803 2,548,942 3,532,102 5,693,972 7,806,512 6,057,043 5,772,123 19,839,572 23,087,715 22,378,840 22,939,314 11,870,227 14,067,722 $ 77,742,215 $ 81,057,909 $ 85,756,171 $ 89,368,116 $ 98,493,095 $ 102,514,648
45 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Principal Revenue Sources and Revenues Per Enplaned Passenger Last Ten Fiscal Years (unaudited)
2003 2004 2005 2006 Airline revenues: Landing Fees $ 1,321,150 $ 1,301,978 $ 1,241,336 $ 1,316,940 Terminal Rents 1,287,353 1,169,387 1,233,416 1,233,839 Total airline revenues 2,608,503 2,471,365 2,474,752 2,550,779 Percentage of total revenues 23.6% 20.4% 19.5% 18.2%
Nonairline revenues: Parking 2,125,994 2,372,608 2,666,847 2,715,161 Rental Cars 944,240 1,016,650 1,106,845 1,145,201 Other 2,217,773 2,856,379 2,874,324 2,971,695 Total nonairline revenues 5,288,007 6,245,637 6,648,016 6,832,057 Percentage of total revenues 47.9% 51.5% 52.4% 48.6%
Non operating revenues: Passenger and customer facility charges 1,701,449 1,814,195 1,862,501 1,970,472 Interest 299,346 184,491 277,415 621,556 Other, primarily taxes 1,148,896 1,414,947 1,436,480 2,077,363 Total nonoperating revenues 3,149,691 3,413,633 3,576,396 4,669,391 Percentage of total revenues 28.5% 28.1% 28.2% 33.2%
Total revenues $ 11,046,201 $ 12,130,635 $ 12,699,164 $ 14,052,227
Enplaned Passengers 400,047 418,502 443,205 445,549
Total revenue per enplaned passenger $ 27.61 $ 28.99 $ 28.65 $ 31.54
Airline revenue per enplaned passenger $ 6.52 $ 5.91 $ 5.58 $ 5.73
46 2007 2008 2009 2010 2011 2012
$ 1,469,158 $ 1,586,210 $ 1,577,262 $ 1,710,341 $ 1,816,139 $ 1,752,650 1,221,043 1,283,188 1,288,906 1,268,006 1,331,800 1,265,871 2,690,201 2,869,398 2,866,168 2,978,347 3,147,939 3,018,521 18.1% 18.0% 18.3% 18.9% 19.6% 19.4%
2,885,752 3,121,679 3,346,661 3,510,087 3,448,567 3,069,292 1,230,119 1,335,420 1,344,640 1,326,833 1,423,439 1,554,048 3,191,632 3,340,607 3,209,917 3,443,231 3,661,097 3,682,706 7,307,503 7,797,706 7,901,218 8,280,151 8,533,103 8,306,046 49.2% 48.9% 50.5% 52.5% 53.1% 53.5%
2,310,136 2,680,351 2,601,010 2,591,043 2,542,103 2,382,782 927,463 929,317 614,883 270,035 115,563 59,253 1,611,115 1,661,611 1,673,832 1,641,403 1,737,126 1,760,839 4,848,714 5,271,279 4,889,725 4,502,481 4,394,792 4,202,874 32.7% 33.1% 31.2% 28.6% 27.3% 27.1%
$ 14,846,418 $ 15,938,383 $ 15,657,111 $ 15,760,979 $ 16,075,834 $ 15,527,441
469,735 487,803 465,406 470,196 460,247 409,795
$ 31.61 $ 32.67 $ 33.64 $ 33.52 $ 34.93 $ 37.89
$ 5.73 $ 5.88 $ 6.16 $ 6.33 $ 6.84 $ 7.37
47 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Changes in Cash and Cash Equivalents Last Ten Fiscal Years (Unaudited)
2003 2004 2005 Cash flows from operating activities: Cash received from providing services $ 7,918,365 $ 8,286,509 $ 9,258,982 Cash paid to suppliers (3,790,864) (3,965,698) (4,963,873) Cash paid to employees (2,191 ,259) (2,362,059) (2,425,819) Net cash provided by (used in) operating activities 1,936,242 1,958,752 1,869,290
Cash flows from investing activities: Interest collected 311,938 178,295 254,524 Proceeds from maturity of investments 8,557,188 7,419,792 8,961,704 Purchase of investments (7,419,792) (8,961,704) (11,544,834) Net cash provided by (used in) investing activities 1,449,334 (1,363,617) (2,328,606)
Cash flows from capital and related financing activities: Acquisition and construction of capital assets (1,274,765) (824,967) (569,258) Principal paid on revenue bonds (110,000) (115,000) (115,000) Principal paid on general obligation bonds (1,090,000) (1,155,000) (1,235,000) Principal paid on bank note (5,643) Interest paid on long-term debt (1,070,609) (863,849) (937,199) Payments on closed-end lines of credit (246,083) (2,773,042) Passenger and customer facility charges collected 1,756,679 1,756,844 1,883,122 Proceeds from sale of capital assets 17,550 375,406 Issuance of note receivable (199,838) Prepaid bond issuance costs Proceeds from bonds Payments received on note receivable 33,306 99,919 Net cash (used in) capital and related financing activities (2,017,228) (4,141,546) (503,653)
Cash flows from noncapital financing activities: Tax proceeds received 1,115,241 1,199,981 1,439,570 Intergovernmental 166,135 74,217 Net cash provided by noncapital financing activities 1,281,376 1,274,198 1,439,570
Net increase (decrease) in cash 2,649,724 (2,272,213) 476,601
Cash and cash equivalents, beginning of year 1,951,148 4,600,872 2,328,659 Cash and cash equivalents, end of year $ 4,600,872 $ 2,328,659 $ 2,805,260
48 49 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Revenue Rates Last Ten Fiscal Years (Unaudited)
2003 2004 2005 2006
Calculated landing fee (per 1,000 pounds of landed weight) $ 2.28 $ 2.43 $ 2.10 $ 2.12 Airport Authority subsidy Billed landing fee (per 1,000 pounds of landed weight) $ 2.28 $ 2.43 $ 2.10 $ 2.12
Calculated terminal rental rate (per square foot) 23.26 21.13 22.29 21.99 Excess rate charged to airlines Billed terminal rental rate (per square foot) 23.26 21.13 22.29 21.99
Note: In fiscal year 2012 and 2011, the amounts overpaid by the Airlines for terminal space rent was applied to the amount subsidized by the Authority for landing fees resulting in a net subsidy by the Authority in each year.
50 2007 2008 2009 2010 2011 2012
$ 2.44 $ 2.64 $ 3.13 $ 3.30 $ 3.98 $ 4.78 0.50 0.37 0.76 1.53
$ 2.44 $ 2.64 $ 2.63 $ 2.93 $ 3.22 $ 3.25
22.34 23.25 23.24 23.07 22.17 23.10 2.83 1.88
22.34 23.25 23.24 23.07 25.00 24.98
51 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Ratios of Outstanding Debt, Debt Service and Debt Limits Last Ten Fiscal Years (Unaudited)
2003 2004 2005 Outstanding debt per enplaned passenger: Outstanding debt by type: Revenue bonds $ 2,415,000 $ 2,300,000 $ 2,185,000 General obligation bonds 21,180,000 20,025,000 18,790,000 Closed end line of credit 2,773,042 Bank note 134,452 Total outstanding debt 26,368,042 22,325,000 21,109,452
Outstanding debt per enplaned passenger 65.91 53.35 47.63
Debt service: Principal 1,376,038 4,043,042 1,350,000 Interest 1,070,609 863,849 994,752 Total debt service 2,446,647 4,906,891 2,344,752
Ratio of debt service to total expenses 19.89% 36.35% * 17.28%
Net debt service per enplaned passenger: Net debt service $ 2,446,647 $ 4,906,891 $ 2,344,752 Net debt service per enplaned passenger 6.12 11.72 5.29
Debt limit information: Debt limit 34,582,893 36,382,274 35,932,006 Debt applicable to limit 134,452 Debt margin 34,582,893 36,382,274 35,797,554 Debt margin as a percentage of the debt limit 100.00% 100.00% 99.63% Debt limit per enplaned passenger $ 86.45 $ 86.93 $ 81.07
* These numbers include the prepayment and/or refunding of outstanding debt skewing the ratio of debt service to total expenses.
52 2006 2007 2008 2009 2010 2011 2012
$ 2,065,000 $ 1,940,000 $ 1,810,000 $ 1,675,000 $ 1,535,000 $ 1,390,000 $ 1,240,000 18,655,000 18,500,000 18,320,000 18,115,000 17,880,000 24,645,000 24,585,000
65,461 20,785,461 20,440,000 20,130,000 19,790,000 19,415,000 26,035,000 25,825,000
46.65 43.51 41.27 42.52 41.29 56.57 63.02
323,991 345,461 310,000 340,000 375,000 18,025,000 210,000 1,021,768 1,051,904 986,561 897,068 862,315 836,598 988,227 1,345,759 1,397,365 1,296,561 1,237,068 1,237,315 18,861,598 1,198,227
9.01% 8.93% 8.04% 7.29% 7.43% 106.29% 6.26%
$ 1,345,759 $ 1,397,365 $ 1,296,561 $ 1,237,068 $ 1,237,315 $ 18,861,598 $ 1,198,227 3.02 2.97 2.66 2.66 2.63 40.98 2.92
37,598,584 39,127,775 41,020,595 42,027,054 42,484,351 43,471,534 43,665,758 65,461 37,533,123 39,127,775 41,020,595 42,027,054 42,484,351 43,471,534 43,665,758 99.83% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% $ 84.39 $ 83.30 $ 84.09 $ 90.30 $ 90.35 $ 94.45 $ 106.56
53 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Pledged Revenue Coverage Last Ten Fiscal Years (Unaudited)
2003 2004 2005 2006 Net revenues: Operating revenues $ 7,896,510 $ 8,717,002 $ 9,122,768 $ 9,382,836 Passenger and customer facility charges 1,701,449 1,814,195 1,862,501 1,970,472 Taxes 1,131,921 1,340,730 1,436,480 1,502,951 Intergovernmental 166,135 74,217 574,412 Investment income 299,346 184,491 277,415 621,556 Gain on disposal of capital assets 343,579 Gross revenues 11,195,361 12,130,635 13,042,743 14,052,227 Less operating expenses, less depreciation (5,781,838) (6,749,330) (7,252,342) (7,933,327) Net revenues $ 5,413,523 $ 5,381,305 $ 5,790,401 $ 6,118,900
Debt service: Principal $ 1,446,083 $ 4,043,042 $ 1,355,643 $ 323,991 Interest 1,070,609 863,849 937,199 1,021,768 Total debt service $ 2,516,692 $ 4,906,891 $ 2,292,842 $ 1,345,759
Debt service coverage $ 2.15 $ 1.10 * $ 2.53 $ 4.55
* These numbers include the prepayment and/or refunding of outstanding debt, skewing the debt service coverage ratio below the requirement of 1.25.
Note: The net revenue numbers above include QCIA Airport Services, LLC revenue and expenses.
54 2007 2008 2009 2010 2011 2012
$ 9,997,704 $ 10,667,104 $ 10,767,386 $ 11,236,298 $ 11,612,143 $ 11,324,567 2,310,136 2,680,351 2,601,010 2,591,043 2,542,103 2,382,782 1,589,961 1,661,611 1,673,832 1,641,403 1,737,126 1,760,839
927,463 929,317 614,883 270,035 115,563 59,253 21,154 22,200 68,899 14,846,418 15,938,383 15,657,111 15,760,979 16,075,834 15,527,441 (8,466,522) (8,918,173) (9,748,811) (10,092,230) (10,622,193) (10,163,331) $ 6,379,896 $ 7,020,210 $ 5,908,300 $ 5,668,749 $ 5,453,641 $ 5,364,110
$ 345,461 $ 310,000 $ 340,000 $ 375,000 $ 18,025,000 $ 210,000 1,051,904 986,561 897,068 862,315 836,598 988,227 $ 1,397,365 $ 1,296,561 $ 1,237,068 $ 1,237,315 $ 18,861,598 $ 1,198,227
$ 4.57 $ 5.41 $ 4.78 $ 4.58 $ 0.29 * $ 4.48
55 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Population in the Air Trade Area Last Thirty Years - Ten-Year Increments (Unaudited)
2010 2000 1990 1980 Primary trade area: State of Illinois: County of Rock Island 147,546 149,374 148,723 165,968 County of Mercer 16,434 16,957 17,290 19,286 County of Henry 50,486 51,020 51,159 57,968 State of Iowa, County of Scott 165,224 158,668 150,979 160,022 Total primary trade area 379,690 376,019 368,151 403,244
Secondary trade area: State of Iowa: County of Cedar 18,499 18,187 17,381 18,635 County of Clinton 49,116 50,149 51,040 57,122 County of Muscatine 42,745 41,722 39,907 40,436 Total secondary trade area 110,360 110,058 108,328 116,193
Total primary and secondary trade area population 490,050 486,077 476,479 519,437
State of Illinois 12,830,632 12,419,293 11,430,602 11,426,518 United States 308,745,538 281,421,906 248,709,873 226,545,805
Source: US Department of Commerce, Bureau of the Census
Note: Quad City International Airport's secondary trade area fluctuates with service and price levels.
56 Percentage Change 1980 -1990 1990 - 2000 2000 - 2010
(10.39)% 0.44% (1.22)% (10.35) (1.93) (3.08) (11.75) (0.27) (1.05) (5.65) 5.09 4.13 (8.70) 2.14 0.98
(6.73) 4.64 1.72 (10.65) (1.75) (2.06) (1.31) 4.55 2.45 (6.77) 1.60 0.27
(8.27) 2.01 0.82
0.04 8.65 3.31 9.78 13.15 9.71
57 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Principal Employers Current Year and Nine Years Ago (Unaudited)
2012 2003 Percentage Percentage of Total Area of Total Area Employer Employees Rank Employment Employees Rank Employment
Rock Island Arsenal 8,500 1 3.76% 6,000 2 2.76% Deere & Company 7,300 2 3.23% 7,317 1 3.36% Genesis Health System 4,900 3 2.17% 3,000 3 1.38% Trinity Medical Center 2,900 4 1.28% 2,500 5 1.15% Tyson Fresh Meats/Formerly IBP 2,400 5 1.06% 2,300 6 1.06% Alcoa, Inc. 2,250 6 0.99% 2,513 4 1.15% Hy-Vee Food Stores 1,622 7 0.72% 0.00% Kraft Foods/Oscar Mayer 1,500 8 0.66% 1,200 7 0.55% XPAC 1,195 9 0.53% 0.00% Wal-Marl Super Centers 1,066 10 0.47% 0.00% Mid American Energy 0.00% 1,200 8 0.55% Illini Hospital 0.00% 950 9 0.44% CNH Global 0.00% 816 10 0.37%
Source: Quad Cities First, Greater Quad City Region, and Bi-State Regional Commission
58
Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Authority and Combined Affiliate Employees (Unaudited)
2012 2011 2010
Administration 7 8 6 Management 6 7 7 Airfield and building maintenance 21 21 22 Custodial 8 9 9 Dispatch 4 4 4 Public safety 14 15 15 Fueling 7 7 7 Customer Service Agents 14 12 19 81 83 89
Note: Authority records for detail of employees date back to fiscal year 2005.
59 2009 2008 2007 2006 2005
7 7 6 6 6 6 6 5 5 6 20 21 19 19 18 7 8 8 9 9 4 4 3 3 3 15 15 15 15 15 7 7 8 7 7 17 83 68 64 64 64
60 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Enplaned Passengers (Unaudited)
Share of Share of Share of Share of Airline 2012 2012 Total 2011 2011 Total 2010 2010 Total 2009 2009 Total
Airtran 9,800 2.39% 56,498 12.28% 103,901 22.10% 106,720 22.93%
Allegiant 54,738 13.36 26,451 5.75
American Eagle 71,432 17.43 63.656 13.83 60.974 12.96 60.691 13.04
AT A Connection
Delta Connection 153,275 37.40 179.902 39.09 155.198 33.01 69.397 14.91
Northwest Airlink 21.875 4.65 109.958 23.63
Sl0jway
TWA Express
United Express 117,633 28.71 130.641 28.38 124.722 26.53 116.072 24.94
Subtotal 406,878 99.29 457.148 99.33 466.670 99.25 462.838 99.45
Charters 2,917 0.71 3.099 0.67 3.526 0.75 2.568 0.55
Total 409,795 100.00% 460.247 100.00% 470.196 100.00% 465,406 100.00%
61 Share of Share of Share of 2008 2008 Total 2007 2007 Total 2006 2006 Total 2005 2004 2003
120,538 24.71% 91,505 19.48% 96,866 21.74% 96,367 81,870 65,865
67,243 13.78 63,769 13.58 68,318 15.33 50,862 64,433 116,487
16,859 26,242 28,524
56,186 11.52 59,137 12.59 43,352 9.73 32,706 35,759 14,448
118,231 24.24 121,951 25.96 117,653 26.41 125,955 87,400 73,374
1,563
123,624 25.34 131,912 28.08 117,779 26.43 119,051 120,589 98,220
485,822 99.59 468,274 99.69 443,968 99.65 441,800 416,293 398,481
1,981 0.41 1,461 0.31 1,581 0.35 1,405 2,209 1,566
487,803 100.00% 469,735 100.00% 445,549 100.00% 443,205 418,502 400,047
62 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Takeoff and Landing Operations Summary (Unaudited)
General Calendar Year Air Carrier/Air Taxi Military Aviation Total
2002 $ 27,813 $ 1,531 $ 40,513 $ 69,857 2003 26,937 1,015 37,402 65,354 2004 27,076 1,015 37,025 65,116 2005 24,770 730 30,009 55,509 2006 25,071 798 25,435 51,304 2007 23,582 555 25,738 49,875 2008 23,640 477 25,053 49,170 2009 22,764 435 21,825 45,024 2010 21,917 401 19,057 41,375 2011 20,603 359 15,816 36,778
63
Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Takeoff and Landing Operations by Airline or Cargo Carrier Last Ten Fiscal Years (Unaudited)
Share of Share of Share of Share of Airline 2012 2012 Total 2011 2011 Total 2010 2010 Total 2009 2009 Total
AbxfAirborne Express -% -% -% -%
ATA1Chicago Express
Air Cargo Carriers
AirTran 108 1.13 609 6.15 1.216 12.14 1.257 11.47
Allegiant 399 4.17 195 1.97
American Eagle 2,213 23.16 1.761 17.79 1.707 17.05 1.823 16.64
Delta Connection 3,557 37.22 4.010 40.52 3.640 36.35 1.582 14.44
CSAAir
DHL/Ameriflight 263 2.75 263 2.66 260 2.60 125 1.14
Northwest 260 2.60 3.080 28.11
Planemasters
Sl0jway
Suburban Air Freight 597 5.45
United Express 3,017 31.57 3.059 30.91 2.931 29.27 2.494 22.76
Total landings 9,557 100.00% 9.897 100.00% 10.014 100.00% 10.958 100.00%
NOTE: Effective September 1. 2009 Northwest merged with Delta Connection.
64 Share of Share of 2008 2008 Total 2007 2007 Total 2006 2005 2004 2003
255 2.22% 260 2.24% 259 258 256 259
807 1,464 1,558
48 55 124 189
1,401 12.17 1,119 9.64 1,263 1,200 1,130 981
1,871 16.26 1,808 15.58 1,876 1,394 1,834 3,154
1,402 12.18 1,474 12.69 1,283 1,100 1,113 531
55
50 260 258 257
3,216 27.94 2,815 24.25 4,089 3,972 3,074 3,088
563 4.85 184 151 122
309
247 2.15 200 1.73
3,117 27.08 3,368 29.02 2,966 2,792 2,690 2,627
11,509 100.00% 11,607 100.00% 12,018 11,989 12,065 13,008
65 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Airline Landed Weights Last Ten Fiscal Years (Unaudited)
Share of Share of Share of Share of Airline 2012 2012 Tolal 2011 2011 Tolal 2010 2010 Tolal 2009 2009 Tolal
AbxlAirborne Express -% -% -% -%
AT AlChicago Express
Air Cargo Carriers
AirTran 11,232,000 2.13 63.792.000 11.43 126.512.000 22.07 130.776.000 21.98
Allegiant 55,309,000 10.47 27.016.000 4.84
American Eagle 93,250,887 17.64 74.703.224 13.39 73.210.251 12.77 77.356.315 13.00
Delta Connection 190,824,300 36.11 216.546.600 38.81 201.419.000 35.13 83.174.000 13.98
CSAAir
DHL/Ameriflight 4,232,500 0.80 4.238.294 0.76 4.188.494 0.73 2.011.900
Northwest 12.220.000 2.13 130.204.275 21.89
Planemasters
Skyway
Suburban Air Freight 25.899.700 4.35
United Express 173,658,325 32.86 171.739.521 30.78 155.724.986 27.16 145.472.883 24.45
Total landed weights 528,507,012 100.00% 558.035.639 100.00% 573.274.731 100.00% 594.895.073 100.00%
NOTE: Effective September 1, 2009 Northwest merged with Delta Connection.
66 Share of Share of
2008 2008 Tolal 2007 2007 Tolal 2006 2005 2004 2003
25,620,300 4.05% 25,965,000 4.18% 25,885,800 25,759,600 25,625,200 25,922,000
22,999,500 41,724,000 44,403,000
1,242,300 1,425,000 3,225,900 4,278,400
154,056,000 24.37 116,376,000 18.72 134,406,000 132,000,000 100,387,000 97,119,000
79,206,348 12.53 76,851,858 12.36 79,690,947 58,990,494 75,980,239 195,413,797
65,894,000 10,42 74,498,475 11.99 60,301,000 49,927,984 50,951,436 24,957,000
467,500
775,000 4,016,500 3,999,000 3,983,500
149,690,500 23.68 131,111,500 21.09 186,092,300 175,644,400 121,411,900 103,056,700
25,664,027 4.13 1,564,000 1,283,500 1,037,000
5,129,400
4,001,400 0.63 3,240,000 0.52
153,720,999 24.32 167,904,506 27.01 142,267,880 155,565,500 144,900,000 127,702,000
632,189,547 100.00% 621,611,366 100.00% 632,225,227 627,612,478 569,241,675 632,432,297
67 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Primary Origin and Destination Passenger Markets (Unaudited)
Hubs Served 2012 Served By
Chicago American Eagle, United Express Atlanta Delta Connection Minneapolis Delta Connection Orlando AirTran Dallas American Eagle Denver United Express Memphis Delta Connection Detroit Delta Connection Las Vegas Allegiant Phoenix-Mesa Allegiant S1. Petersburg/Clearwater Allegiant Orlando-Sanford Allegiant
68 Metropolitan Airport Authority of Rock Island County, Illinois and Combined Affiliate
Capital Asset Information (Unaudited)
Location City of Moline, Rock Island County, Illinois 165 miles west of Chicago, Illinois
Area 2,000 acre campus
Airport Code MLI
Runways 9/27 10,000 feet by 150 feet 13/31 7,000 feet by 150 feet 5/23 5,000 feet by 150 feet
Terminal Tenants, Exclusive 81,203 sq. ft. Tenants, Common 54,958 sq. ft. Support 21,491 sq. ft. Total 157,652 sq. ft.
Passenger Gates 12 Loading Bridges 10 Concessionaires 4 Rental Car Agencies 4
Apron Commercial Airlines 4 Cargo Airlines 1 FBO 1
Parking Public: Short-Term 197 Long-Term 1,959
Employee 297
Rental Cars 321
Air Cargo Building One: Suite 1 6,000 sq. ft. Suite 2 4,500 sq. ft. Suite 3 6,000 sq. ft.
Building Two: Suite 1 6,000 sq. ft. Suite 2 9,440 sq. ft.
Building Three 21,040 sq. ft. 52,980 sq. ft.
International: Customs
69