Indianapolis Airport Authority
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Indianapolis Airport Authority INDIANAPOLIS, IN COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED DecemBer 31, 2008 COMPREHENSIVE ANNUAL FINANCIAL REPORT Fiscal Year Ended December 31, 2008 INDIANAPOLIS AIRPORT AUTHORITY Indianapolis, IN Prepared by the Finance Department Indianapolis Airport Authority INTRODUCTORY SECTION Mission statement 4 Indianapolis Airport Authority facilities map 5 Board of Directors 6 Organizational structure and senior management team 7 Letter of transmittal to the Board 8-22 Certificate of Achievement for Excellence in Financial Reporting 23 FINANCial SECTION Independent accountants’ report 26 Management’s discussion and analysis 27-41 Audited financial statements Balance Sheets 42-43 Statements of Revenues, Expenses and Changes in Net Assets 44 Statements of Cash Flows 46-47 Notes to Financial Statements 48-78 Supplementary information Schedules of Balance Sheet Information 80-83 Schedules of Revenues, Expenses, and Changes in Net Assets Information 84-85 Schedules of Operating Revenues 86 Schedule of Operating Expenses 88-89 Schedule of Bond Debt Service Requirements to Maturity 90-91 STATISTICal SECTION Financial trend data Balance Sheets 94-95 Net Assets and Changes in Net Assets 96-97 Changes in Cash and Cash Equivalents 98-99 Revenue capacity data Operating Revenues 100-101 Signatory Airline Rates and Charges 102 Debt capacity data Outstanding Debt by Type and Revenue Bond Debt Service Ratios 104-105 Revenue Bond Debt Service Coverage 106-107 Operating information Airline Landing Weight Statistics 108-109 Enplaned Passenger Statistics 110-111 Number of Airport Employees by Identifiable Activity 112-113 Schedule of Insurance 114 Demographic and economic data Indianapolis – Carmel MSA Demographic and Economic Statistics 115 Principal Employers in Indianapolis – Carmel MSA 115 Capital Assets and Other Airport Information 116 Comprehensive Annual Financial Report Fiscal Year Ended December 31, 2008 This section contains the following subsections: > Mission statement > Indianapolis Airport Authority Facilities Map > Board of Directors > Organizational structure and senior management team > Letter of transmittal to the Board > Certificate of Achievement Our vision is to be a world-class, globally competitive transportation center. Our mission is to operate the transportation center to provide safe, efficient, attractive facilities and excellent services. We recognize our responsibilities for: 1. Being responsive to the 6. Working in cooperation with needs of our customers and private and public entities to communities. enhance the region’s economic vitality. 2. Providing superior value for our customers. 7. Ensuring cultural diversity in all entities that do business 3. Anticipating change and with the Authority. planning for the future, mea- suring our progress, meeting 8. Providing a positive, cultur- our commitments, and main- ally diverse, and productive taining the public trust. working environment. 4. Providing prudent manage- 9. Operating in an environ- ment of our assets and financial mentally safe and compatible resources. manner. 5. Promoting and marketing domestic and international transportation services for both passengers and cargo. NEW BOARD MEMBERS JOINING IAA IN 2009 Randall L. Tobias, President Chairman Emeritus Eli Lilly & Company Alex M. Azar, II Years of service: 1 Sr. Vice President, Corporate Affairs & Communications Lilly USA LLC Lacy M. Johnson, Vice President Partner, Ice Miller LLP Years of service: 9 Andrew Miller Bose Public Affairs Group Alfred R. Bennett, Secretary Correctional Facilities Consultant Retired Superintendent, Indiana Boy’s School Years of service: 4 Jean Wojtowicz Cambridge Capital Management Corp N. Stuart Grauel, Treasurer Retired Vice President, IPALCO Years of service: 9 ADVISORY BOARD MEMBERS Kelly J. Flynn Senior Partner, Flynn & Zinkan Realty Co. Years of service: 4 Jack Morton Director, Information Technology YMCA of Greater Indianapolis Years of service: 7 Hancock County Shirley M. Haflich Retired Educator Years of service: 5 Lynn T. Gordon President & CEO Citizens Bank Years of service: 5 Michael Stayton Morgan County Former Chief of Staff & COO United Nations World Food Programme Years of service: 1 no picture Steven C. Dillinger available Owner, S.C. Dillinger & Associates Insurance Agency Years of service: 12 Robert H. Voorhies Hamilton County Retired President, Central Indiana Labor Council Years of service: 9 IAA Board of Directors Executive Director Communications Engineering & Airport Properties Special Finance Air Service & Marketing Environmental Director & IMC Projects Matters John J. Kish Greta Hawvermale Executive Director Senior Director of Engineering & Environmental Matters 8 years of service 7 years of service Robert A. Duncan, A.A.E. Eric Anderson Airport Director Director of Properties & IMC 36 years of service 19 years of service Marsha A. Stone Christofer A. Matney Senior Director of Finance Director of Air Service 15 years of service 3 years of service Patzetta Trice Jennifer Tillman Senior Director of Communications & Marketing Director of Special Projects 4 years of service 7 years of service Note: Years of service included total time employed by IAA and/or BAA. Suite 100 JUNE 30, 2009 The Comprehensive Annual Financial Report of the Indianapolis Airport Authority (the “Authority” or “IAA”), for the fiscal year ended December 31, 2008, is submitted herewith. Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the Authority and its management. We believe the data, as presented, is accurate in all material aspects, that the information is presented in a manner designed to fairly set forth the financial condition of the Authority, and that all disclosures necessary to enable the reader to gain the maximum understanding of the Authority’s financial affairs have been included. This report has been prepared following the guidelines recommended by the Government Finance Officers Association of the United States and Canada (GFOA). The GFOA awards Certificates of Achievement to those governmental entities whose annual financial reports are judged to conform substantially to the high standards of public financial reporting, includ- ing generally accepted accounting principles promulgated by the Governmental Accounting Standards Board (GASB). It is our belief that the accompanying 2008 Comprehensive Annual Financial Report (CAFR) meets program standards, and will be submitted to the Government Finance Officers Association for review. PROFILE OF THE AUTHORITY Reporting Entity The Authority is a municipal corporation established January 1, 1962, to own and operate airports in and around Indianapolis, Indiana, which is more fully discussed in the Management’s Discussion and Analysis – Authority Powers and Purposes. The Authority administers an airport system comprised of Indianapolis International Airport (IND), four general aviation reliever airports, and a general aviation heliport located in downtown Indianapolis. All financial and non-financial information included in this CAFR relates solely to the Authority unless specifically stated otherwise. You may also refer to Note 1 of the financial statements for more infor- mation regarding the financial reporting entity determination underG ASB Statement No. 14. Accounting / Budgetary Control The Authority consists of a single enterprise fund and its financial statements are presented on the accrual basis of accounting using the economic resources measurement focus. This Comprehensive Annual Financial Report and each of the Authority’s monthly financial statements use the accrual method preferred for enterprise funds. Annual budgets and monthly budget reports are also prepared using the accrual basis of account- ing. The Authority’s annual budget is prepared by the IAA Finance Department and is adopted by ordinance upon approval of the Authority Board. It is submitted to the Indianapolis/Marion County City-County Council as part of the review process. The State of Indiana Department of Local Government Finance reviews the budget in the same manner. Public hearings are held at each step of the review process, and a notice of said hearings is published in accordance with Indiana law. In addition, a ten year Capital Improvement plan is prepared annually with estimates of future capital improvements and their financial impact. B udgetary control is maintained at the department, object, and character level. Internal Controls In developing and evaluating the Authority’s accounting system, consideration has been given to the adequacy of the internal control structure so that it provides reasonable, but not absolute, assur- ance regarding: (1) the safeguarding of assets against loss from unauthorized use or disposition; and (2) the reliability of financial records for preparing financial statements and maintaining account- ability for assets. The concept of reasonable assurance recognizes that: (1) the cost of implementing and utilizing a control should not exceed the benefits likely to be derived; and (2) the evaluation of costs and benefits requires estimates and judgments made by management. All internal control evaluations occur within the above framework. We believe that the Authority’s internal accounting controls adequately safeguard assets and provide reasonable assurance in the proper recording of financial transactions. The Authority’s internal controls are reviewed