Dallas Airport System DAL - RBD - Heliport

Dallas Investor Conference November 12, 2019 Table of Contents

Tab Department of Aviation Overview 1 Economy Overview 2 Air Service Highlights 3 Financial Performance 4 Current Debt Profile 5 Questions & Answers 6 Department of Aviation Overview Airport Overview

• (DAL) is one of the busiest medium-hub air carrier/general aviation airports in the world, serving the Dallas metropolitan region and the Dallas-Fort Worth metroplex. • DAL, which encompasses approximately 1,300 acres, is located in North Central , within the Dallas city limits, approximately 7 miles north of the City of Dallas’s (the City) central business district, and primarily services thirteen counties. • DAL has experienced unprecedented growth in passenger traffic since the repeal of the in 2014. The airport continues to grow and create an innovative airport experience and a positive economic impact. • Together, the Airport, Dallas Executive Airport and the heliport are referred to as the Dallas Airport System (the System). The System is managed and operated by the City’s Department of Aviation (DOA). 4 Airport Overview (Cont.)

Details of Airport: – 2 Runways – 20 Gates – 1,300 Acres – Average of 527 aircraft operations a day

• In 2014, DAL opened 20 new gates, expanded the main lobby space and baggage claim area, as well as opened a new ticketing/check-in hall. DAL also doubled the amount of airport concessionaires offering an impressive selection to satisfy any traveler’s needs. • In 2015, DAL focused on expanding parking at Love Field to accommodate the increased traffic. In 2018, the newly constructed Garage C opened with an additional 5,000 spaces bringing the total amount of parking spaces in the garages at DAL to 12,450. 5 Economic Overview Economic Overview

• Home of the JFK Sixth Floor Museum at Dealey Plaza, the George W. Bush Presidential Library and Museum and The Perot Museum of Nature and Science

• 2018 Census Reported Dallas/Fort Worth is the 5th Fastest growing city in the US

• Dallas/Fort Worth is home to more than 100,000 businesses

• The City of Dallas has diverse employment opportunities as noted by the Corporate HQ

• 1,500 Corporate Headquarters in Dallas

• Dallas is Ranked #4 in Fortune 500 Corporate Headquarters

7 Air Service Highlights Carriers

Mainline Regional

9 Passenger Trends (FY 2005 – FY 18)

Enplaned Passengers by Airline

DALLAS LOVE FIELD ENPLANED PASSENGERS BY AIRLINE For Fiscal Years Ended September 30

Trans Fiscal Year Southwest Continental Alaska Air AA Eagle States Delta Seaport United Skywest Virgin TOTAL 2005 2,863,010 113,452 ------2,976,462 2006 2,948,678 156,108 95,576 44,012 ------3,244,374 2007 3,606,129 151,160 47,807 80,361 25,090 - - - - - 3,910,547 2008 3,853,325 135,146 - 79,797 ------4,068,268 2009 3,722,812 102,828 - 36,385 - 9,662 - - - - 3,871,687 2010 3,823,138 90,891 - - - 35,093 - - - - 3,949,122 2011 3,916,851 61,632 - - - 38,365 552 273 - - 4,017,673 2012 3,973,171 11,367 - - - 29,442 2,839 37,980 19,368 - 4,074,167 2013 4,052,521 - - - - 55,725 3,064 43,826 49,515 - 4,204,651 2014 4,206,949 - - - - 66,005 2,103 70,774 12,055 - 4,357,886 2015 6,119,879 - - - - 148,599 2,414 39,437 251 409,511 6,720,091 2016 7,118,753 - - - - 161,248 - 52 - 507,443 7,787,496 2017 7,191,042 - - 8,952 - 167,911 - - - 445,457 7,813,362 2018 7,483,996 - - 204,800 - 175,465 - - - 272,983 8,137,244

Source: Airport records. 10 DAL Destinations

• Delta Airlines has 1 non-stop flight • Alaska Airlines has 4 non-stop flights

• Atlanta, GA (ATL) • Los Angeles, CA (LAX)

• Portland, OR (PDX)

• San Francisco (SFO)

• Seattle (SEA)

11 Southwest has 61 Non-stop Flights

12 Passenger Split

FY 2018 Passengers 16,235,553

32%

68%

Originating & Destination Connecting

13 Financial Performance Airline Revenue Trending $180

$160 $0.644 $0.341 Executive Airport & $140 Heliport $0.652 $120 $78.728 Non-Airline $0.431 $74.253 Revenues

$100 $0.263 Millions $0.508 $68.351 Airline Revenues $80 $65.744 $60 $64.428 $60.806

$40 $77.726 $70.368 $56.766 $20 $37.055 $23.288 $29.354

$- Actual Actual Actual Actual Budget Budget 2015 2016 2017 2018 2019 2020 15 Cash on Hand

• The Aviation Department has approximately $46.2 million in unrestricted cash on hand (excluding the Capital Fund and the Emergency Reserve Fund), as follows:

Operating Fund (#0130) $ 25,898,852.59 90-Day Operating Reserve (#0246) $ 13,604,193.20 Contingency Reserve (#0248) $ 6,692,893.63 Total unrestricted Cash $ 46,195,939.42

• The current year (FY 2018) O&M Expense budget (excluding debt service and capital transfers) equals $76,505,409, which represents approximately 220 days unrestricted cash on hand (based on a 365 day year)

16 Historical & Budgeted Operating Results & Coverage

Actual Actual Actual Actual Budget Budget 2015 2016 2017 2018 2019 2020

Total Airline System Revenues $ 84,602,049 $ 94,045,750 $ 103,230,000 $ 125,768,978 $ 144,961,794 $ 157,098,282

O&M Expenses $ 55,108,000 $ 73,944,000 $ 80,176,000 $ 79,573,000 $ 93,322,000 $ 104,789,000 Deposit to O&M Reserve Account 1,410,995 - 2,763,803 2,378,750 2,475,794 2,794,532 Net Revenues $ 28,083,054 $ 20,101,750 $ 20,290,197 $ 43,817,228 $ 49,164,000 $ 49,514,750

Net Debt Service on GARBs (1) Series 2015 Bonds $ - $ - $ - $ 2,730,875 $ 9,249,625 $ 9,240,625 Series 2017 Bonds - - - - 2,921,250 9,893,625 Total GARBs $ - $ - $ - $ 2,730,875 $ 12,170,875 $ 19,134,250

Remaining Net Revenues $ 28,083,054 $ 20,101,750 $ 20,290,197 $ 41,086,353 $ 36,993,125 $ 30,380,500

Debt Service Coverage on GARBs N/A N/A N/A 16.05 4.04 2.59

17 (1) Net of Capitalized Interest. Capital Improvement Program (1) The Aviation Department has a Capital Improvement Program (CIP), intended to maintain existing airfield facilities and accommodate anticipated future demand at the Airport • 2020 – 2026 PROJECTS FY20 FY21 FY22 FY23 FY24 FY25 FY26 (2) DAL Alternate Entry (est.) $ 22,500,000 $ 135,000,000 DAL Baggage Handling System (2) Upgrade (est.) $ 5,000,000 $ 150,000,000 (2) DAL CONRAC (est.) $ 20,000,000 $ 280,000,000 Rehab of Love Field Taxiways / Apron $ 38,800,000 $ 40,810,000 $ 17,620,000 $ 56,466,000 $ 18,021,500 Rehab of Dallas Executive Airport (DEA) Taxiways $ 1,953,500 $ 9,314,500 $ 11,515,000 $ 8,480,500 $ 420,000

Drainage Master Plan (est.) (2) $ 15,000,000 $ 160,000,000 Elevator Upgrades (Phase 1-3) $ 1,000,000 $ 1,000,000 $ 1,000,000 DAL EMS Suite @ Terminal $ 1,100,000 DAL Entry Road Enhancements $ 15,100,000 (2) Garage A Replacement (est.) $ 19,000,000 $ 255,000,000 $ 1,000,000

DAL Streetscape Project - Lemmon Ave Improvement $ 2,200,000 $ 12,177,150 $ 6,000,000

DEA Streetscapes Improvements $ 2,000,000 $ 4,000,000 DAL Reconstruct RWY 13R-31L $ 124,300,000 (2) DAL Reconstruct RWY 13L-31R (est.) $ 6,500,000 $ 120,000,000

DAL Station 21 ARFF Replacement $ 1,500,000 $ 18,500,000 TOTALS $ 207,953,500 $ 113,801,650 $ 334,635,000 $ 604,946,500 $ 16,420,000 $ 184,521,500 $ 120,000,000 18 Source: City of Dallas, Department of Aviation, Dallas Love Field 5-Year Airside Capital Improvement Program, November 5, 2019. (1) Preliminary, subject to change (2) New Project in 2020 -2026 CIP Capital Improvement Program Funding Plan (1) Anticipated funding sources for the CIP are FAA Airport Improvement Program (AIP) entitlement grants, AIP discretionary funds, Passenger Facility Charges (PFCs), and Aviation Departments funds.

PROJECTS Total Project Cost Entitlements Discretionary PFC AVI Funds

Rehab of Love Field Taxiways / Apron $ 168,947,500 $ 8,400,000 $ 30,700,000 $ 121,200,500 $ 8,647,000

Crossfield TWYs $ 45,510,000 $ 1,600,000 $ 10,000,000 $ 33,910,000

Rehabilitate Taxiway C $ 46,200,000 $ 400,000 $ 5,700,000 $ 40,100,000

Reconstruct TWY M $ 19,737,500 $ 3,600,000 $ 7,000,000 $ 1,290,500 $ 7,847,000

Miscellaneous Taxilane and Apron Improvements $ 26,250,000 $ 26,250,000

TWY A Reconstruction $ 31,250,000 $ 2,800,000 $ 8,000,000 $ 19,650,000 $ 800,000

Rehab of Dallas Executive Airport (DEA) Taxiways $ 31,683,500 $ 1,050,000 $ 24,298,500 $ - $ 6,335,000

DEA TWY Bravo $ 13,138,500 $ 300,000 $ 11,098,500 $ 1,740,000

DEA TWY Echo $ 13,530,000 $ 450,000 $ 8,986,500 $ 4,093,500

DEA TWY Juliet $ 5,015,000 $ 300,000 $ 4,213,500 $ 501,500

Reconstruct RWY 13R-31L $ 124,300,000 $ 2,500,000 $ 15,000,000 $ 106,800,000

Reconstruct RWY 13L-31R $ 126,500,000 $ 2,625,000 $ 15,750,000 $ 68,705,963 $ 6,500,000

TOTALS $ 451,431,000 $ 14,575,000 $ 85,748,500 $ 189,906,463 $ 128,282,000 19 Source: City of Dallas, Department of Aviation, Dallas Love Field 5-Year Airside Capital Improvement Program, November 5, 2019. (1) Preliminary, subject to change (2) New Project in 2020 -2026 CIP Capital Improvements - Landside Projects (1) In addition to the airfield capital projects that are included in the CIP, various landside projects based on the Master Plan recommendations were identified and are currently under various stages of planning, design or construction. A list of landside capital projects through FY 2026 and their estimated costs are tabulated below: Landside Project Est. Const. Costs Est. PFC AVI Funds

DAL Entry Road Enhancements $15,100,000 $15,100,000 DAL Garage A&B Repairs $3,000,000 $3,000,000 DAL Garage A&B Fire Suppression System $1,500,000 $1,500,000 DAL TNC Garage Modification $1,500,000 $1,500,000 DAL CONRAC (est.) (2) $300,000,000 $300,000,000 DAL Alternate Entry (est.) (2) $157,500,000 $94,500,000 $63,000,000 DAL Space Planning $2,500,000 $2,500,000 DAL EMS Suite @ Terminal $1,100,000 $1,100,000 DAL Streetscape Project - Lemmon Ave Improvement $20,377,150 $20,377,150 DAL Station 21 ARFF Replacement $20,000,000 $12,000,000 $8,000,000 DAL Drainage Masterplan (est.) (2) $175,000,000 $105,000,000 $70,000,000 DAL Baggage Handling System Upgrade (est.) (2) $155,000,000 $93,000,000 $62,000,000 DAL Streetscape Project - Perimeter Trails w/NPS $3,500,000 $3,500,000 Garage A Replacement (est.) (2) $275,000,000 $275,000,000

DAS Elevator Study / Upgrades $3,000,000 $3,000,000 DAS Exterior Lighting Improvements $2,245,000 $2,245,000 DEA Streetscapes Improvements $6,000,000 $6,000,000 $1,142,322,150 $304,500,000 $837,822,150 20 Source: City of Dallas, Department of Aviation, Dallas Love Field 5-Year Airside Capital Improvement Program, November 5, 2019. (1) Preliminary, subject to change (2) New Project in 2020 -2026 CIP Current Debt Profile Debt Summary - GARBS

Summary of Outstanding GARBS Debt Tax Status Current Ratings Series Outstanding Final Maturity Call Callable Par Outstanding Agency L/T Rating Outlook Series 2017 $ 116,850,000 11/1/2036 11/1/2026 $ 77,185,000 Taxable $ - Moody's A1 Stable Series 2015 105,350,000 11/1/2035 11/1/2025 72,155,000 Tax-Exempt 222,200,000 S&P A Stable Fitch A Stable $ 222,200,000 $ 149,340,000 Total $ 222,200,000 Existing Debt Service $20.0

$18.0 Net $16.0 Interest $14.0 Principal $12.0

$10.0 Millions $8.0

$6.0

$4.0

$2.0

$0.0

22 Debt Summary – Southwest Airlines Co.

Summary of Outstanding Southwest Airlines Co. Debt Tax Status Current Ratings (1) Series Outstanding Final Maturity Call Callable Par Outstanding Agency L/T Rating Outlook Series 2012 $ 105,960,000 11/1/2028 11/1/2022 $ 69,595,000 Taxable $ - Moody's A3 Stable Series 2010 310,000,000 11/1/2040 11/1/2020 310,000,000 Tax-Exempt 415,960,000 S&P BBB+ Stable Fitch A- Stable $ 415,960,000 $ 379,595,000 Total $ 415,960,000 Existing Debt Service $35.0

$30.0 Interest

$25.0 Principa l $20.0

Millions $15.0

$10.0

$5.0

$0.0

23 Provisions for Bonds

Pledged Revenues

• Under the terms of the Bond Indenture, the Bonds are limited obligations of the Issuer payable solely from: i. the Net Revenues deposited into the revenue fund established with the Trustee (the “Pledged Revenue Fund”), ii. other moneys deposited or required to be deposited to the various funds held under the Indenture, and iii. the earnings and investments thereon (collectively, the “Pledged Revenues”)

• Pursuant to the Indenture, in order to further secure the outstanding bonds and any future General Airport Revenue Bonds, the Issuer entered into the Indenture with the Trustee for the purpose of assigning and pledging to the Trustee the Net Revenues payable to the Issuer by the City in accordance with the terms of the Project Financing Agreement and for the purpose of establishing the Pledged Revenue Fund, the Project Fund, the Debt Service Fund, and the Reserve Fund and thereby providing the Pledged Revenues to be held by the Trustee to secure the payment and principal of and interest on all General Airport Revenue Bonds from time to time issued by the Issuer

• “Net Revenues” is defined in the Project Financing Agreement as the revenues of the Airport System deposited to the credit of the Aviation Revenue Fund, a fund established and maintained by the City in accordance with the terms of the Airport Use and Lease Agreement, that are available after the funding of the Operations and Maintenance Account and the Operations and Maintenance Reserve Account and deposited to the credit of the General Airport Revenue Bond Debt Service Fund, each account as established and maintained as provided in the Airport Use and Lease Agreement. “Net Revenues” do not include Passenger Facility Charges Rate Covenant

• The Issuer covenants to fix, establish, maintain and collect rates, charges and fees to… produce Net Revenues for each Fiscal Year at least equal to 1.25 times the Average Annual Debt

24 Provisions for Bonds (Cont.)

Additional Parity Bonds Test

• The Indenture requires that for either the City's most recent complete Fiscal Year or for any consecutive twelve (12) out of the most recent eighteen (18) months, the Net Revenues of the Airport System were equal to at least 1.10 times the Maximum Annual Debt Service requirements of all Parity Bonds scheduled to occur in the then current or any future Fiscal Year after taking into consideration the issuance of the Additional Parity Bonds proposed

Reserve Fund

• Pursuant to the Indenture, the Issuer is required to maintain an amount equal to the Maximum Annual Debt Service; provided, that in any event the Reserve Requirement shall be the least of i. one hundred and twenty-five percent (125%) of Average Annual Debt Service, ii. Maximum Annual Debt Service, or iii. ten percent (10%) of the stated principal amount of the Bonds

• The Reserve Requirement shall be recomputed annually and after the issuance of any series of Additional Parity Bonds

25 Questions?