2015 Comprehensive Annual Financial Report

2015 COMPREHENSIVE ANNUAL FINANCIAL REPORT Memphis-Shelby County Airport Authority MEMPHIS, TENNESSEE For the Fiscal Years Ended June 30, 2015 and 2014 A COMPONENT UNIT OF THE CITY OF MEMPHIS Memphis-Shelby County Airport Authority MEMPHIS, TENNESSEE A COMPONENT UNIT OF THE CITY OF MEMPHIS Comprehensive Annual Financial Report For the Fiscal Years Ended June 30, 2015 and 2014 PREPARED BY THE FINANCE DIVISION Memphis-Shelby County Airport Authority JUNE 30, 2015 BOARD OF COMMISIONERS Pace Cooper, Chairman James J. Keras, Jr., Vice-Chairman Pamela Z. Clary J.W. Gibson II Michael E. Keeney Darrell K. Thomas Keri Wright OFFICERS AND KEY STAFF MEMBERS POSITION MEMBERS ............................................................................. POSITION Scott A. Brockman, A.A.E. .......................................................................... President and Chief Executive Officer Forrest B. Artz, C.P.A. ...................... Vice President of Finance and Administration and Chief Financial Officer, Authority Treasurer Terry S. Blue, A.A.E. ...................................................................................................... Vice President Operations Brian L. Kuhn, Esquire ............................................................................. General Counsel and Authority Secretary George E. Mabon, P.H.R. ................................................................................... Vice President Human Resources, Authority Assistant Secretary Richard V. White, A.A.E. ................................................... Vice President Properties and Business Development Jeffrey W. Hanley ................................................................ Director of F inance and Authority Assistant Treasurer Mahi C. Chambers, C.P.A. ............................................................................................... Director of Staff Services James A. Hay II .................................................................................................................. Director of Development Phillip Florey ....................................................................................................................... Director of Maintenance J. Jarrett Morgan ............................................................................................. Director of Information Technology T. E. Wallace III, A.A.E. ......................................................................... Director of Operations and Public Safety 2 TABLE OF CONTENTS INTRODUCTORY SECTION Letter of Transmittal and Exhibits .......................................................................................................................... 5 Organizational Chart ............................................................................................................................................. 14 FINANCIAL SECTION INDEPENDENT AUDITORS’ REPORT ............................................................................................................ 15 MANAGEMENT’S DISCUSSION AND ANALYSIS ....................................................................................... 18 BASIC FINANCIAL STATEMENTS: Statements of Net Position .................................................................................................................................... 37 Statements of Revenues, Expenses and Changes in Net Position ........................................................................ 39 Statements of Cash Flows ..................................................................................................................................... 40 Notes to Basic Financial Statements ..................................................................................................................... 42 REQUIRED SUPPLEMENTARY INFORMATION: Schedule of Proportionate Share of the Net Pension Liability and Related Ratios.............................................. 66 Schedule of Employer Contributions .................................................................................................................... 66 SUPPLEMENTAL SCHEDULES: Supplemental Schedule of Net Position Information by Airport .......................................................................... 68 Supplemental Schedule of Revenues, Expenses and Changes in Net Position Information by Airport .................................................................................................. 70 Supplemental Schedule of Cash Flows Information by Airport .......................................................................... 71 Supplemental Schedule of Operating Revenues by Source by Airport ............................................................... 73 Supplemental Schedule of Operating Expenses by Source by Airport ............................................................... 74 Supplemental Schedule of Debt Service Requirements - Cash Basis ................................................................. 76 STATISTICAL SECTION Operating Revenues, Expenses and Changes in Net Position - Last Ten Years ................................................. 80 3 TABLE OF CONTENTS (CONTINUED) Net Position - Last Ten Years ............................................................................................................................... 83 Passenger Enplanements Market Share - Last Ten Years ................................................................................... 84 Originating and Destination (O&D) Airline Passengers - Last Ten Years ......................................................... 86 Cost Per Enplaned Passenger - Last Ten Years ................................................................................................... 87 Cargo Market Share Enplaned - Last Ten Years ................................................................................................. 88 Landed Weights - Last Ten Years ........................................................................................................................ 90 Aircraft Operations - Last Ten Years ................................................................................................................... 92 Debt Service Coverage - Last Ten Years ............................................................................................................. 93 Ratio of Annual Bond Debt Service to Total Expenses Excluding Depreciation and Amortization - Last Ten Years .............................................................................. 94 Airport Revenue Bond Debt Per Enplaned Passenger - Last Ten Years ............................................................. 94 Use of Bond Proceeds .......................................................................................................................................... 95 Ten Largest Employers - Metropolitan Statistical Area ...................................................................................... 98 Population - Metropolitan Statistical Area ........................................................................................................... 98 Airlines Serving Memphis International Airport ................................................................................................. 99 Employers Located on Airport Property ............................................................................................................ 100 Full-time Equivalent Employees by Cost Center - Last Ten Years ................................................................... 101 Insurance In Force .............................................................................................................................................. 102 COMPLIANCE SECTION SINGLE AUDIT INFORMATION: Schedule of Expenditures of Federal and State Awards ..................................................................................... 104 Notes to Schedule of Expenditures of Federal and State Awards ...................................................................... 106 Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ............................................................................................. 107 Independent Auditors’ Report on Compliance for the Major Program and on Internal Control Over Compliance Required by OMB Circular A-133 ............................................................. 109 Schedule of Findings and Questioned Costs………………………….………………………………………. 111 4 INTRODUCTORY SECTION This Section Contains the Following: Letter of Transmittal and Exhibits Organizational Chart October 29, 2015 To the Board of Commissioners of the Memphis-Shelby County Airport Authority The Comprehensive Annual Financial Report (“CAFR”) of the Memphis-Shelby County Airport Authority (the “Authority”) for the fiscal year ended June 30, 2015, is hereby submitted. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the Finance Division of the Authority. To the best of our knowledge and belief, and as indicated by the opinion of our independent auditors, the enclosed data of the Authority is accurate in all material respects and reported in a manner designed to present fairly the financial position, results of operations, and cash flows in accordance with accounting principles generally

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