1 COMPREHENSIVE ANNUAL FINANCIAL REPORT BILL AND HILLARY CLINTON NATIONAL AIRPORT A COMPONENT UNIT OF THE CITY OF LITTLE ROCK, ARKANSAS FOR THE FISCAL YEARS ENDED DECEMBER 31, 2015 AND 2014 Prepared by: Bill and Hillary Clinton National Airport Finance Department 2 TABLE OF CONTENTS INTRODUCTORY SECTION State Airport Locations and LIT Service Area ....................................................................................................7 Little Rock Municipal Airport Commission..........................................................................................................9 Organizational Structure ........................................................................................................................................ 10 Airport Executive Leadership ................................................................................................................................. 11 Letter of Transmittal to the Airport Commission ............................................................................................ 13 Certificate of Achievement for Excellence in Financial Reporting ........................................................... 23 FINANCIAL SECTION Independent Auditor’s Report ...............................................................................................................................27 Management’s Discussion and Analysis (Required Supplemental Information) .................................. 31 Basic Financial Statements .................................................................................................................................. 51 Statements of Financial Position ........................................................................................................................................52 Statements of Revenues, Expenses and Changes in Net Position ...........................................................................54 Statements of Cash Flows ....................................................................................................................................................56 Notes to the Financial Statements .....................................................................................................................................58 STATISTICAL SECTION Net Position by Component ..................................................................................................................................77 Changes in Net Position .........................................................................................................................................78 Operating Revenues and Ratios ..........................................................................................................................80 Operating Expenses and Ratios .......................................................................................................................... 82 Airport Rates, Charges and Fees ........................................................................................................................ 84 Principal Revenue Customers ............................................................................................................................. 85 Outstanding Debt by Type and Debt Ratios ..................................................................................................... 86 Revenue Bonds Debt Service Coverage ...........................................................................................................88 Passenger Airline Daily Flights ............................................................................................................................ 89 Airport Operations ................................................................................................................................................... 89 Airline Landed Weight Trend ................................................................................................................................ 90 Enplaned Passenger Data .................................................................................................................................... 92 Employee Trend........................................................................................................................................................ 94 Schedule of Capital Assets .................................................................................................................................. 95 Little Rock Metro Population (Comparative Analysis) .................................................................................. 96 Little Rock Metro Population (Six-County Service Area) .............................................................................. 96 Little Rock Metro Personal Income Per Capita (Comparative Analysis) ...................................................97 Little Rock Metro Personal Income Per Capita (Six-County Service Area) ..............................................97 Little Rock Metro Unemployment Rate (Comparative Analysis) ............................................................... 98 Little Rock Metro Unemployment Rate (Six-County Service Area) ........................................................... 98 Little Rock Principal Employers .......................................................................................................................... 99 Little Rock Demographic and Economic Statistics .....................................................................................100 3 TABLE OF CONTENTS COMPLIANCE SECTION INDEPENDENT AUDITOR’S SINGLE AUDIT REPORT Schedule of Expenditures of Federal Awards ................................................................................................103 Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards ...........................................................................................................104 Report on Compliance for Each Major Federal Award Program and Report on Internal Control Over Compliance – Independent Auditor’s Report ....................................................................................106 Schedule of Findings and Questioned Costs .................................................................................................108 Summary Schedule of Prior Audit Findings .....................................................................................................111 INDEPENDENT AUDITOR’S PASSENGER FACILITY CHARGE COMPLIANCE REPORT Schedule of Passenger Facility Charge Collections and Expenditures ..................................................112 Note to Schedule of Passenger Facility Charge Collections and Expenditures ...................................112 Independent Auditor’s Report on Compliance for the Passenger Facility Charge Program; Report on Internal Control Over Compliance; and Report on Schedule of Passenger Facility Charge Collections and Expenditures ............................................................................................................113 Passenger Facility Charge Audit Summary.....................................................................................................115 Schedule of Passenger Facility Charge Program Findings and Questioned Costs .............................116 Summary Schedule of Prior Audit Findings ....................................................................................................117 4 INTRODUCTORY SECTION 5 INTRODUCTORY SECTION INTRODUCTORY SECTION CONTENTS: State Airport Locations and LIT Service Area Little Rock Municipal Airport Commission Organizational Chart Clinton National Airport Executive Leadership Letter of Transmittal to the Airport Commission Certificate of Achievement for Excellence in Financial Reporting 6 INTRODUCTORY SECTION STATE AIRPORT LOCATIONS AND LIT SERVICE AREA XNA Rogers HRO LIT Secondary Springdale Catchment Area Fayetteville JBO LIT Primary Catchment Area Memphis FSM Conway Little Rock North Little Rock LIT HOT Pine Bluff Texarkana TEX ELD Greenville 7 INTRODUCTORY SECTION INTENTIONALLY BLANK 8 INTRODUCTORY SECTION LITTLE ROCK MUNICIPAL AIRPORT COMMISSION VIRGIL L. MILLER, JR. JIM DAILEY JESSE MASON Chairman Vice Chair/Treasurer Secretary STACY HURST GUS VRATSINAS JOHN RUTLEDGE MEREDITH CATLETT Commissioner Commissioner Commissioner Commissioner 9 INTRODUCTORY SECTION ORGANIZATIONAL STRUCTURE EXECUTIVE DIRECTOR DEPUTY EXECUTIVE DIRECTOR DIRECTOR PUBLIC AFFAIRS AND AIR SERVICE DIRECTOR GOVERNMENTAL RELATIONS DEVELOPMENT DIRECTOR FINANCE DIRECTOR FACILITIES DIRECTOR HUMAN RESOURCES AND ADMINISTRATION DIRECTOR OPERATIONS DIRECTOR PROCUREMENT DIRECTOR PROPERTY, PLANNING AND DEVELOPMENT 10 INTRODUCTORY SECTION ORGANIZATIONAL STRUCTURE CLINTON NATIONAL AIRPORT EXECUTIVE LEADERSHIP RONALD F. MATHIEU, CM BRYAN MALINSOWSKI, CM SHANE CARTER Executive Director, Deputy Executive Director, Director – Public Affairs and Governmental 11 Years Service 9 Years Service Relations, 5 Years Service TOM CLARKE, PE, CM RANDY ELLISON, CM CHARLES JONES, CM Director – Properties, Planning and Director – Facilities Director - Operations Development, 8 Years Service 10 Years Service 10 Years Service ELWIN JONES DAVID TIPTON, ALLEN WILLIAMS, SPHR, TJ WILLIAMS Director – Procurement CPA, CFA, CM IPMA-CP Director – Air Service Development 17 Years Service Director