fy 2014 adopted budget

Transcription

FY 2014 ADOPTED BUDGET
Finance Department
P.O. Box 619428
DFW Airport, Texas 75261-9428
FY 2014 Adopted Budget Introduction
Table of Contents
Introduction
DFW’s Vision Statement and Board of Directors.…..................................................................... 2
DFW Infrastructure....................................................................................................................... 4
Strategic Plan................................................................................................................................6
DFW's Airline Use Rate Agreement Model................................................................................... 7
DFW Fund Structure………......................................................................................................... 9
FY 2013 Budget Amendments and Outlook……………………………………………………….... 10
Budget Schedule.....………………………………………………………………............................. 11
Executive Summary
FY 2014 Key Performance Indicators…......................................................................................12
FY 2014 Budget Comparisons and Walkforward……………..…………………………………….. 12
FY 2014 102 Budget Exposures…………………........................................................................ 15
FY 2014 Capital Project Exposures …………………………………………………....................... 16
Passenger Airline Cost per Enplanement (CPE).........................................................................18
Revenues and Expenses Budget Overview…………………………………………………………. 20
Capital Programs and Debt Financing.….………….................................................................... 22
Airline Cost Centers
Airfield Cost Center……………………………........................................................................... 23
Terminal Cost Center………………………................................................................................ 26
Transfers - Joint Capital Account Transfer................................................................................. 28
Transfers - DFW Terminal Contribution...................................................................................... 29
Cost Per Enplanement (CPE) Calculation...………………………………………………………... 30
DFW Cost Center
DFW Cost Center Revenues and Expenses.............................................................................. 31
Parking Business Unit................................................................................................................. 33
Concessions Business Unit........................................................................................................ 35
Rental Car Center (RAC) Business Unit..................................................................................... 36
Commercial Development Business Unit................................................................................... 37
Other DFW Revenues and Expenses......................................................................................... 38
Operating Expenses
FY 2014 Expense Budget by Major Cost Driver......................................................................... 40
Operating Budget by Category................................................................................................... 44
Contingency Outside of Rate Base............................................................................................ 47
Net Debt Service Budget............................................................................................................ 47
Positions..................................................................................................................................... 48
Departments
Department Overview and Walkforwards…............................................................................... 49
Capital Budget
Projected Capital - Uses of Cash by Capital Account................................................................ 66
DFW Capital Account….............................................................................................................. 68
Joint Capital Account.................................................................................................................. 69
Capital Project-Sources of Cash .............................................................................................. 72
1 DFW International Airport
Airport Background
The Dallas/Fort Worth International Airport (the “Airport” or “DFW”) was created by a “Contract
and Agreement” between the cities of Dallas, Texas, and Fort Worth, Texas (“the Cities”) on
April 15, 1968 for the purpose of developing and operating an airport as a joint venture between
the Cities. Although owned by Dallas and Fort Worth, DFW is located within the boundaries of
the Cities of Grapevine, Coppell, Irving, Euless, and Fort Worth; and within Dallas and Tarrant
Counties.
Source: DFW Airport Information Technology Services/GIS Group
DFW is a located within a four-hour flight time of 95% of the U.S. population and currently ranks
fourth among the world’s busiest airports in terms of operations and eighth in terms of
passengers. Its central location is the focal point of one of the nation’s largest intermodal hubs,
connecting air, rail, and interstate highway systems. DFW currently operates daily passenger
flights to 200 destinations worldwide, including 148 nonstop domestic destinations and 52
nonstop international destinations. There are 22 passenger carriers and 17 cargo carriers
serving DFW. The Airport is recognized as a premier inland cargo hub, served by major
international cargo carriers. According to the Texas Department of Transportation, DFW is the
primary economic engine for North Texas, driving $15.7 billion of economic impact, supporting
268,000 jobs, and generating $7.4 billion in payroll annually.
DFW Infrastructure
Airfield – DFW has more operational capacity than any airport in the United States with 7
runways: 5 north/south parallels and 2 diagonals. Four of DFW’s runways are 13,400 feet in
length. DFW is focused on the future and preparing to handle next generation aircraft, including
the Airbus A380.
The Airport’s designated hourly capacity arrival/departure flow is
approximately 186-193 aircraft operations per hour under reduced instrument flight conditions
and approximately 270-279 aircraft operations per hour under optimum visual flight conditions, a
condition that prevails approximately 94% of the time. DFW estimates it is using close to 60%
of its aircraft operation capacity at this time.
Terminals – DFW has 5 terminals (A, B, C, D, and E) totaling 6.3 million square feet of building
space, including 155 aircraft boarding gates, 358 ticketing positions with supporting self-service
kiosks, and 15 security checkpoints. As of June 30, 2013, 9 of the gates were closed for
renovation as part of the Terminal Renewal and Improvement Program (TRIP) and 12 were not
regularly scheduled, including 5 gates in the Terminal E Satellite facility that is connected to
Terminal E via a tunnel. Collectively, the airlines averaged 6.7 turns per active gate for the first
six months of FY 2013.
DFW Terminal Complex
American Airlines operates domestic service in Terminals A and C, and both domestic and
international service in Terminal D. American Eagle operates domestic service in Terminals B
and D, and international service in Terminal D. All other domestic flights service in Terminals B
and E. All international flights arrive in DFW’s Terminal D. Terminal D has 2.2 million of square
feet and 27 gates. All terminal gate leases expire September 30, 2020 per the terms of a ten
year Airline Use Agreement which became effective in October 01, 2010. DFW’s Federal
Inspection Service (FIS) facilities are located in Terminal D. The Airport’s FIS facility is
approximately 406,000 square feet with 60 inspection booths and 8 baggage carousels.
DFW is responsible for all of the janitorial and facility maintenance in Terminals B, D and E, and
baggage maintenance in Terminals B and E. Most of the maintenance and janitorial functions
are contracted out to third parties. Costs associated with maintenance of these facilities are
included in DFW’s operating budget. American Airlines is responsible for the majority of the
facilities maintenance custodial services and all of the baggage maintenance in Terminals A and
C. In Terminal D, they maintain their preferentially leased jet bridges and all of the Terminal D
baggage systems. The cost of these maintenance activities are paid directly by American
Airlines and not included in DFW’s budget or financial statements.
Transit System – DFW’s people mover system (Skylink) transports passengers and employees
between terminals on the secure side. DFW operates 16 to 24 fully automated cars on Skylink
during normal operations. Skylink cars circle the 5 terminals in 2 directions, and trains arrive an
average of every 2 minutes at each terminal. There are 2 Skylink stations in each terminal. The
average customer ride is about 5 minutes. DFW also uses buses to transport passengers and
employees between terminals on the non-secure side, as well as to the Grand Hyatt Hotel,
parking lots and the Rental Car Center (RAC). DFW uses 29 buses to shuttle passengers
between the terminals and Grand Hyatt (Terminal Link); 59 buses between remote and express
parking lots and the terminals; 5 buses for various DFW activities and service between the
Trinity Railway Express Centerpoint station and the terminals; 32 buses between employee
parking lots and the terminals; and 54 buses between the terminals and the RAC.
Airport Operations Center/Emergency Operations Center (AOC/EOC) – DFW’s AOC/EOC
serves as a single point of contact to centralize communications for DFW’s passengers, guests,
tenants, employees, and contractors. This includes the 9-1-1 call management of police, fire
and emergency medical response teams and 3-1-1 non-emergency services. The AOC/EOC
handles an average of 27,000 and 1,950 calls, respectively, each month.
DFW Controlling Documents
In addition to the Contract and Agreement between the Cities, DFW is governed by several
other key documents, including the 30th Supplemental Bond Ordinance which modified the
original 1968 Concurrent Bond Ordinance (collectively called the Bond Ordinances); and the
Use Agreements between DFW and the Signatory Airlines. Collectively, these agreements are
called the Controlling Documents.
The Controlling Documents define how DFW manages its business affairs. DFW does not
collect any local tax revenue to fund its operations.
The Controlling Documents require that
Gross Revenues of the Airport be deposited into the “102 Revenue and Expense Fund” (102
Fund). Gross Revenues are defined as all Airport revenues and receipts except: bond
proceeds; Passenger Facility Charge (PFC) proceeds used to fund capital projects (rather than
for debt service); interest earned on unspent bonds; proceeds in the Capital Accounts; PFC
receipts; grant proceeds used to fund capital projects; and sale of land or mineral rights,
including natural gas royalties.
Strategic Plan
DFW updated its Strategic Plan in FY 2012 keeping the same overall structure as its previous
Plan, but with some change in strategic focus on:







The initiation of the 8-year, $2.0 billion Terminal Renewal and Improvement Program
(TRIP) to renovate and modernize our 4 older terminals.
The impact of global airline alliances on airline and airport competition, and DFW’s
increased focus on becoming the most preferred “Super Global Hub” in the world.
A 10–year Airline Use Agreement that redefines DFW’s business model and relationship
with the airlines.
An increased emphasis on becoming a “business partner’ with airlines and contractors to
provide superior services to DFW’s passenger guests.
An expanded definition of DFW’s primary customer groups beyond the passenger to
include airlines and tenants.
A critical shift in focus - that all DFW’s employees either directly or indirectly support our
customers.
A financial plan that establishes DFW’s financial targets through FY 2020, to be updated
annually.
The Strategic Plan is a critical document that includes DFW’s Vision and Mission Statements
and identifies the critical strategies to achieve DFW’s Primary Business Goal of growing the
core business of domestic and international passenger and cargo airline service. DFW takes a
balanced approach to its Strategic Plan. Management focuses its Key Drivers/Results of being
cost competitive, satisfying the customer, and achieving operational excellence, through
engaged employees. A copy of DFW’s full Strategic Plan is available at www.dfwairport.com. A
schematic of the DFW Strategic Plan follows:
Airline Use Agreement Rate Model
The Use Agreement is a hybrid model, whereby the Signatory Airlines pay landing fees and
terminal rentals based on the net cost to provide those services, and DFW retains a portion of
the net revenues from non-airline business units (e.g., parking) in the DFW Cost Center (DFW
CC). The following chart is a summary of the current Airline Use Agreement rate model:
7
Operating Revenue and Expense Fund (the 102 Fund)
Airfield
DFW Cost Centers
Terminal
Expenses
Direct Costs
Expenses
Direct Costs
DPS and Overhead Allocations
Debt Service (net of PFCs)
Less: Misc. Airfield Revenues
General Aviation
Fueling Facility Lease
Less: Misc. Terminal Rentals
Federal Inspection Fees
Turn Fees; TSA Rentals
Concessions Reimbursements
DFW
DFW Revenues (Business Units)
Parking, Concessions, RAC,
Commercial Development,
Employee Transp., Taxis,
Utilities, and Interest Income
Less: Expenses
Direct Costs
+/- Transfers/Adjustments
+/- Transfers/Adjustments
- Lower Threshold Adjustment
+ DFW Terminal Contribution
+ Upper Threshold Adjustment + Annual Capital Transfer
+/- True-Up Adjustment
Net Cost = Landing Fees (KPI) Net Cost =Terminal Rentals (KPI)
- Transfers/Other
- Skylink Costs
- DFW Terminal Contribution
KPI = DFW Cost Center
Net Revenues
Airline Cost & Airline Cost per Enplanement (KPI)
+/- Threshold Adjustments
Net Revenues to the
DFW Capital Account (KPI)
Capital Accounts (Capital Improvement Fund)
Joint Capital Account
+ Natural Gas Royalties
+ Sale of Land Proceeds
- Annual Capital Transfer to
the Terminal Cost Center
Coverage Account
DFW Capital Account
Funded from existing coverage,
plus coverage from New Debt
Service from all three cost
centers as debt service
increases
Funded annually from DFW CC.
Contributions must be higher than
Lower Threshold and cannot
exceed the Upper Threshold.
Airline Cost Centers – The Airline Cost Centers are cost recovery in nature, such that the
amount charged to the airlines equals the cost to provide services, after certain adjustments.
Landing fees and terminal rental rates are based on the net cost to operate and maintain the
airfield and terminals, respectively. DFW charges the direct operating and maintenance costs
for the airfield and terminals, plus allocated Department of Public Safety (DPS) and overhead
costs, plus debt service, net of Passenger Facility Charges (PFCs), to each cost center; then,
subtracts ancillary revenues generated in these cost centers; and credits or charges certain
transfers and/or adjustments (see True-Up Adjustments below). The budgeted landing fee rate
is determined by dividing the net cost of the airfield by estimated landed weights. The budgeted
average terminal rental rate is determined by dividing the net cost of the terminal cost center
divided by leasable square footage. The Use Agreement requires the Airport to charge an
equalized terminal rental rate for all 5 terminals.
The amount paid by the airlines for landing fees and terminal rent fees less airline incentive
payments equals airline cost, which is an airport industry Key Performance Indicator (KPI).
Another common industry KPI is passenger airline cost per enplaned passenger or CPE. This
KPI for passenger airlines is calculated by dividing the amount paid by passenger airlines for
landing fees and terminal rent fees less airline incentive payments (i.e., collectively, airline cost)
by the number of enplanements.
DFW Cost Center – All non-airline business units, plus interest income, are included in the
DFW Cost Center. The DFW Cost Center is also responsible for all costs associated with the
Skylink people mover system per the terms of the Use Agreement. The net revenues from this
cost center are transferred to the DFW Capital Account providing the net revenues are not lower
than the Lower Threshold or not higher than the Upper Threshold. If either of these occur, then
a Threshold or True-Up Adjustment is required. One of DFW’s most important KPIs is Net
Revenues from the DFW Cost Center. This KPI measures the net revenues generated by
DFW’s non-airline business units, after adjusting for the cost of Skylink, and drives the amount
of cash flow that can be transferred to the DFW Capital Account each year.
Joint Capital Account - Funds in the Joint Capital Account (JCA) require DFW and airline
approval before money can be spent. The JCA is funded from the proceeds from natural gas
royalties and the sale of land, plus interest income on the account. Supplemental funding for
projects paid from the JCA comes from grants and the issuance of debt. Per the terms of the
Use Agreement, an Annual Capital Transfer (described below) is made from the JCA to the
Terminal Cost Center to lower airline cost through FY 2017.
Coverage Account – The Airport established the Coverage Account as part of the new Use
Agreement in order to implement rolling coverage. It was initially funded from coverage
collected in FY 2010 (the last year of the old Use Agreement). Each year, the Coverage
Account is rolled into the 102 Fund as a source of revenue, and then transferred back into the
Coverage Account as excess revenue at the end of the year. The Coverage Account must equal
25% of aggregate debt service each year. If new debt is issued, each cost center must generate
the incremental coverage required to fund 25% of the new debt service. These incremental
coverage amounts are collected in the 102 Fund through rates and charges during the fiscal
year.
DFW Capital Account – This is DFW’s discretionary account and is funded primarily from the
Net Revenues of the DFW Cost Center, plus interest income. Supplemental funding for projects
paid from the DFW Capital Account comes from grants and the issuance of debt. Funds in this
account may be used for any legal purpose without prior airline approval.
Threshold Adjustments – The Use Agreement established a Lower Threshold and an Upper
Threshold for Net Revenues from the DFW Cost Center to limit the amount transferred annually
to the DFW Capital Account. If DFW Cost Center Net Revenues are budgeted to be less than
the Lower Threshold ($43.0 million in FY 2014), an incremental charge (i.e., a Lower Threshold
Adjustment) is collected through landing fees in an amount sufficient to achieve the Lower
Threshold amount. Conversely, if DFW Cost Center Net Revenues are budgeted to be greater
than the Upper Threshold ($64.3 million in FY 2014), then 75% of the excess is credited to the
Airfield Cost Center as an Upper Threshold Adjustment. This reduces budgeted landing fees.
The remaining 25% may be retained in the DFW Cost Center and transferred to the DFW
Capital Account at the end of the fiscal year. The benefit of the Lower Threshold Adjustment is
that it guarantees that DFW will have a minimum level of cash to transfer to the DFW Capital
Account so that DFW can replace assets on a timely basis. Conversely, the Upper Threshold
limits the Airport’s ability to generate significantly more net revenues and serves to reduce
airlines’ costs as non-airline revenues increase. It also places a limit on DFW’s ability to
significantly increase its coverage ratios. The Threshold Amounts are adjusted annually for
inflation.
True-Up Adjustments – At the end of each fiscal year, DFW performs a reconciliation or trueup, such that revenues collected equal the actual net cost to operate and maintain the airfield
and the terminals. Any difference becomes a True-Up Adjustment and is either charged or
credited to that cost center in the next fiscal year. The True-Up Adjustments for the Airline Cost
Centers are applied back to that cost center the following year beginning in January. DFW Cost
Center True-Up Adjustments are applied against landing fees beginning in the following
January.
Annual Capital Transfer – Per the terms of the Use Agreement, an annual transfer is made
from the Joint Capital Account to the Terminal Cost Center to reduce the cost of the terminals to
the airlines for a period of 7 years. This transfer was $28 million in FY 2011 (first year of the new
Use Agreement) and will be $16 million in FY 2014. The transfer will be reduced by $4 million
each year through FY 2017 when it will be eliminated.
DFW Terminal Contribution – Per the terms of the Use Agreement, an annual transfer is made
from the DFW Cost Center to the Terminal Cost Center to pay for DFW’s share of common use
and leasable, but unleased space, in Terminals D and E. This amount is $7.7 million in FY
2014.W Cost Centers
DFW’s Fund Structure
Although DFW uses the word “fund” to describe the designation of the source and prospective
use of proceeds, DFW is an Enterprise Fund and does not utilize traditional fund accounting
commonly used by government organizations. The following table summarizes the primary
funds used by DFW:
Num ber
101
Fund Description
Prim ary Use
Fixed Assets and Long Term Debt
Capital Assets/Debt
102
O perating Revenues and Expenses
O perations
252
Passenger Facility Charges (PFC)
Capital/Debt Service
320s/330s Joint Capital Account and Bond Funds
340s
Capital/Bond Proceeds
DFW Capital Account
Capital
500-600s
Debt Service and Sinking Funds
Principal and Interest
907/910
Public Facility Im provem ent Corporation (PFIC)
Rental Car Facility/Grand Hyatt Hotel
DFW’s financial statements are issued in conformance with Generally Accepted Accounting
Principles (GAAP) and include all of DFW’s funds, whereas the Annual Budget focuses on
revenues and expenses included in the 102 Fund. DFW manages its day-to-day operations
primarily through the 102 Fund in accordance with the Controlling Documents.
Basis of Budgeting
The 102 Fund Budget is commonly called the Operating Budget, but contains elements that are
not expenses under GAAP such as debt service, reserve requirements, and certain
expenditures that may be capitalized under GAAP.
Capital expenditures are funded through the issuance of Joint Revenue Bonds, grants, PFCs, or
through the DFW or Joint Capital Accounts. From a process standpoint, the Board of Directors
does not approve an overall capital budget. The Board reviews the capital budget during the
Annual Budget process and when it reviews the Financial Plan. The Board does approve all
contracts associated with capital projects.
FY 2014 Budget Comparisons to Other Periods
FY 2013 Budget – During FY 2013 the Board approved the use of $4.5 million of contingency
budgeted outside of the rate base. The FY 2013 Budget as adjusted by contingency is
summarized in the following table. Any reference to the FY 2013 Budget in this budget
document relates to the FY 2013 Budget, as adjusted by the approved contingency.
FY 2013 Approved Budget
Approved Changes (and Dates)
Demolition of old buildings and guideway (May 2, 2013)
Roadway pavement repairs (May 2, 2013)
Thermal Plastic Airfield Markings (May 2, 2013)
Terminal E Checkpoint (May 2, 2013)
Operating Reserve (May 2, 2013)
FY 2013 Budget with approved contingency
Millions
$ 654.6
2.9
0.4
0.2
0.2
0.9
$ 659.1
FY 2013 Outlook – DFW employs continuous forecasting techniques to project revenues and
expenses for the full 12 months of the fiscal year (called the Outlook). Most of the tables and
charts in this budget document include FY 2013 Outlook comparisons to provide the best basis
for comparison (rather than comparing to the FY 2013 Budget). The detailed Outlook in this
Budget Book was developed in a bottoms-up process such that every account was reforecast.
This was completed in May 2013.
Financial Plan – DFW issued its first 10-year Financial Plan in December 2010 and this plan is
updated annually with the latest update in February 2013. This Plan was the basis for the
negotiation of the Use Agreement with the airlines and has been linked to DFW’s Strategic Plan
to establish long-term goals for the KPIs shown in yellow in the DFW Business Model discussed
above (Airline Cost, CPE, and Net Revenues from DFW Cost Center). Management’s long term
goal is to achieve or exceed the targets for these KPIs since this was the basis for the Airline
Use Agreement. Accordingly, comparisons to the Financial Plan for Fiscal Year 2014 are
included in this Budget Book. A complete copy of the 2014 Financial Plan is available at
www.dfwairport.com.
Presentation of Amounts and Prior Years Actuals – The FY 2014 Budget is presented in
tables and charts that are rounded to millions and thousands. Some columns and charts may
not appear to add-up or foot due to rounding differences. Certain prior year amounts have been
reclassified to reflect the FY 2014 presentation.
Budget Schedule
DFW’s fiscal year begins October 1. The FY 2014 Expense Budget was compiled by the various
DFW departments in May. and then reviewed and modified by Staff in May and June.
Presentations were made to representatives of the Signatory Airlines on May 23, and June 20,
2013, with follow-up information provided. A preview of the FY 2014 Budget was presented to
the Board on June 06, 2013. The final recommended Budget was presented to and approved
by the Board on July 11, 2013. The FY 2014 Budget must be submitted to the City Managers of
Dallas and Fort Worth by August 15, 2013, with approval of the two City Councils by September
30, 2013.
FY 2014 Adopted Budget Executive Summary
FY 2014 Key Performance Indicators
The following table compares the Key Performance Indicators (KPIs) of the FY 2014 Budget
with the FY 2013 Outlook and the FY 2014 Financial Plan. Each KPI is discussed further below.
Key Performance Indicators
Total 102 Expenditure Budget (Ms)
Airline Costs (Ms)
Airline Cost Per Enplanement (CPE)
DFW Cost Center Net Revenues (Ms)
Total Passengers (Ms)
Total Landed Weights (Bs)
FY13
Outlook
$650.1
$233.7
$7.54
$87.7
60.0
37.9
FY14 Fin'l
Plan
$682.3
$289.4
$9.25
$68.8
60.2
38.0
FY14
Budget
$651.3
$253.1
$8.04
$91.8
61.2
38.1
Better (Worse)
FY14B vs. FY14B vs.
FY13OL
FY14FP
($1.2)
$31.0
($19.4)
$36.3
($0.50)
$1.21
$4.1
$23.0
1.2
1.0
0.2
0.1
FY 2014 Budget Comparisons and Walkforward
The following table compares the Annual 102 Fund Budget (FY 2014 Budget) with the FY 2013
Outlook, the FY 2013 Budget, and FY 2014 Financial Plan. The FY 2014 Budget is $651.3
million, an $7.8 million (1.2%) decrease from the FY 2013 Budget and a $1.2 million (0.2%)
increase over the FY 2013 Outlook. The FY 2014 Budget is comprised of operating expenses
and debt service. Consistent with prior years, the Budget request also includes an amount of
contingency outside the rate base. This contingency may only be accessed with Board
approval.
Annual Budget (Millions)
FY13
Budget
FY13
FY14 Fin'l
Outlook
Plan
FY14
Budget
Increase (Decrease)
FY14B
FY14B
vs FY13OL vs FY14FP
Operating Expenses
$360.3
$360.1
$368.4
$368.8
$8.7
$0.3
Gross Debt Service
298.8
290.0
313.9
282.5
(7.5)
(31.4)
Total 102 Fund Expenditures $659.1
Contingency O/S Rate Base
$650.1
$682.3
$651.3
10.0
$1.2
($31.0)
Total Budget w/ Contingency
$661.3
During the budget process, the planned activity for FY 2014 is reviewed and aligned with DFW’s
overall Strategic Plan. Below are some assumptions that were used in preparing the FY 2014
Budget.
Cost Cutting Efforts DFW continued its cost cutting efforts and identified $6.6 million of cost
reductions in FY 2014 as compared to FY 2013. During FY 2013, DFW demolished $2.9 million
of the old people-mover guideway system and several empty buildings. In addition, DFW
incurred $0.5 million for terminal and airfield projects. These costs are not budgeted to be
incurred in FY 2014. In addition, DFW identified $1.6 million of savings in building assessments
and other asset management projects. The new parking control system is projected to generate
$1.0 million of salary and temporary labor savings. In addition, energy rates have been lockedin lower rates generating $0.6 million of savings.
Strategic Investments Consistent with the Airport’s Mission Statement and Primary Business
Goal to Grow the Core Business the FY 2014 budget includes an investment of $3.3 million for
international marketing and public relations to support continued global expansion of air service.
AMR and US Airways Merger The merger between AMR and US Airways is pending approval
on passing U.S. antitrust review. DFW anticipates the merger will be approved and that it will
have a positive long-term impact on DFW operations in FY 2014 and beyond. The FY 2014
Budget includes an assumption that total DFW passengers will grow to approximately 61.2
million, a 1.2 million (2.0%) increase over the FY 2013 Outlook.
Terminal Renewal and Improvement Program (TRIP) The TRIP program began in the FY
2011 and will continue through FY 2018 with various construction phases during the timeline.
For FY 2014, it is expected that 3 sections of 3 terminals and associated parking garages will be
closed. This will require DFW to make significant efforts to maintain customer service and place
a constraint on DFW’s ability to grow terminal parking revenues. Also, the phasing and
construction activities will result in additional maintenance efforts in the terminals. The opening
dates and phasing of TRIP has been slowed in FY 2014 to reflect the latest schedule. This will
result in lower debt service when compared to the Financial Plan for FY 2014.
Impact of Lower PFCs on Rates and Charges DFW uses PFCs to pay for “eligible” debt
service. In past years, DFW had collected more PFCs than could be used to pay eligible debt
service. This reverses in FY 2014 as the PFC reserves will be fully utilized in FY 2013. In the
above table, ”gross” debt service decreases $7.5 million from FY 2013 to FY 2014. This
decrease has been planned for many years. Management has restructured debt over the past
few years to minimize the impact on airline rates and charges because management knew that
available PFCs would be significantly lower ($25.8 million lower in FY 2014). The net impact of
the lower PFCs and lower debt is an increase in “net debt service” and the rate base of
approximately $18.8 million. This can be seen clearly in the walkforward of Airline Cost and the
DFW Cost Center.
Major changes between the FY 2014 Budget and the FY 2013 Outlook and how they impact the
DFW Cost Center and the Airline Cost Centers are summarized below. Operating expenses
increase by $8.7 million (2.4%) from the FY 2013 Outlook. Of this increase, $5.7 million relates
to the Airline Cost Centers, and $3.0 million relates to the DFW Cost Center. Explanations of
the change in the walkforward are discussed in the Operating Expenses section.
Budget Category (in Millions)
FY 2013 Outlook
Budget reductions
Demolitions & other (one time)
Energy, Trans. & Asset Mgt. Projects
Parking Control System savings
Energy rates
Total budget reductions
Merit & fixed increases
Merit, Annualization & Vacancies
Pension/OPEB
Contract increases
Hardstand operations
Health care
CNG fuel credits
Insurance premiums
Total merit & fixed increases
Volume driven increases
Partially restore deicing budget
Terminal Maint. Increase (TRIP)
Total volume driven increases
Other
Marketing initiatives
Other
Total other increases
Operating expense increases
Cost center shifts
Contingency & reserves
Restore contingency
Operating reserve
Total contingency & reserves
Net Increases
FY 2014 Budget
Total
$360.1
DFW
$142.7
Airline
$217.4
(3.4)
(1.6)
(1.0)
(0.6)
(6.6)
(2.3)
(0.7)
(1.0)
(0.3)
(4.3)
(1.1)
(0.9)
(0.0)
(0.3)
(2.3)
3.9
2.3
2.0
1.0
0.6
0.7
0.5
11.0
1.4
0.7
1.7
0.0
0.2
0.5
0.8
5.3
2.5
1.6
0.3
1.0
0.4
0.2
(0.3)
5.7
1.1
0.7
1.8
0.0
0.0
0.0
1.1
0.7
1.8
0.6
0.8
1.4
7.6
0.0
0.2
0.4
0.6
1.6
0.9
0.4
0.4
0.8
6.0
(0.9)
2.0
(0.9)
1.1
8.7
$368.8
0.8
(0.3)
0.5
3.0
$145.7
1.2
(0.6)
0.6
5.7
$223.1
FY 2014 102 Budget Exposures
The FY 2014 Budget includes several exposure items that could result in DFW not obtaining its
revenue and expense budget targets. The total exposure for FY 2014 is estimated at $20.0
million. If the CEO Contingency of $2 million is not sufficient to cover this exposure,
management may request that the Board approve the use of the $10 million of contingency
outside the rate base. Following is a summary of the major exposure items in the FY 2014
Budget.
Revenues
Concessions Advertising Not Under Contract
Parking Revenues
Total Revenue Exposures
$4.0
2.0
6.0
Expenses
Overtime for U.S. Customs & Border Protection
AA Training/Reservations Debt Service
Incremental Hard Stand Activities
CNG Fuel Credit - Congressional Extension
Normal Deicing weather
Marketing Intiatives
Operating reserve
Total Expense Exposures
3.0
1.5
1.0
0.8
0.3
5.0
2.4
14.0
Total Exposures
$20.0
In prior years, the budget did not include revenues for business that was not under contract at
the time the budget was developed. This was changed in FY 2014. The FY 2014 budget
includes $4 million of advertising revenues that are not currently under contract. If these
contracts do not materialize, DFW will be challenged to achieve its concessions revenue
budget. In addition, the parking revenues budget carries an exposure of an estimated $2 million.
It is not clear if the Airport will be able to achieve its planned parking revenue growth given the
limited parking capacity due to TRIP construction. However, management was aggressive with
its projections.
DFW has several exposure items from a cost perspective. DFW has requested to participate in
a limited federal program where DFW could reimburse the U.S. Customs & Border Protection
Agency (CBP) for overtime for its agents up to $3 million per year. This action is in response to
recent increases in wait times for arriving international passengers that clear customs. DFW
has not included any funds in the budget for this program because it is not certain if CBP
authorization will be granted. If it does, management will request the use of contingency.
As part of American Airline’s (AA) emergence from bankruptcy, DFW agreed to finance
renovations of their leased training facility. It is currently unclear if or when AA will begin this
work, so it has not been included in the budget. If AA begins and completes this work before the
start of the year, the debt service budget would need to be increased $1.5 million.
Due to the significant growth of international service, DFW has begun hardstanding aircraft at
peak times during the day. The budget assumes a modest increase in hardstanding operations
over the FY 2013 Outlook. However, management estimates that there may be as much as
$1.0 million of cost exposure if significant new flights are added during peak times, or if new
wide-body flights are added (e.g., to China). Although this is a positive development from a
business perspective, the budget would need to be increased if this occurs.
In FY 2013, Congress approved a CNG fuel credit through December 2013. The FY 2014
Budget assumes that Congress will extend this credit again, even though no action is currently
scheduled. If Congress does not extend this credit by the end of FY 2014, DFW will have $0.8
million of budget exposure.
DFW has historically averaged approximately $1.4 million on deicing costs per year. The FY
2014 Budget only includes $1.1 million of deicing costs, leaving a potential exposure of $0.3
million.
In FY 2014, DFW may pursue specific international marketing initiatives as directed by the
Board, up to $5.0 million.
DFW maintains a 90 day reserve on operating expenses. If the above cost exposures
materialize, DFW would also request additional funds to fund the operating reserve.
FY 2014 Debt Service Budget Exposure from Capital Projects
The FY 2014 Budget includes debt service exposure based on assumed completion dates of
capital projects (i.e., date of beneficial occupancy or DBO). Once a project DBOs, DFW begins
to pay debt service on that project. If the actual DBO date is earlier, DFW will pay more debt
service than budgeted. If the actual DBO date is later, DFW will pay less debt service. The
following table includes the major capital projects expected to DBO in FY 2014 and the monthly
debt service that commences with each project.
Capital Project
DART Rail Station
Term B/D Connector
Term B North Stinger
Term A – Section B Parking Garage
W. Airfield Drive
Term B – Section C/Phase 1
Term E – Section C/Phase 2
Term A – Section B/Phase 2
*Includes Coverage
Monthly Debt
Service
(000s)*
$186
79
213
287
95
791
742
645
Budgeted
DBO
Nov-13
Nov-13
Feb-14
Mar-14
Jun-14
Jul-14
Aug-14
Aug-14
Total Airline Cost
Airline cost represents the fees paid to DFW by the passenger and air cargo carriers, primarily
for landing fees and terminal rents. Cost per enplanement (discussed below) is based solely on
passenger airline cost. The FY 2014 Airline Cost Budget of $253.1 million is $36.3 million
(12.5%) less (better) than the FY 2014 Financial Plan primarily due to lower debt service costs
that were anticipated in the Financial Plan.
Airline Costs (Millions)
$350
$300
$250
$200
$150
$100
$50
$0
$289.4
$253.1
$233.7
FY13 Outlook
FY14 Fin'l Plan
FY14 Budget
A walkforward of airline cost and cost per enplanement (CPE) from the FY 2013 Outlook to the
FY 2014 Budget. Over three quarters of the increase is related to debt service and fixed use
agreement items. Variances are explained in the Airlince Cost Centers section.
Airline Cost Walkforward
FY 2013 Outlook
Debt & Use Agreement Items
Joint Capital Contribution
Threshold Adjustment
Total Debt and Use Agreement
Net Operating Expenses
Reduction in Federal Reimbursements
Hardstand Costs
Other Operating Costs
Other Non-Airline Revenues
Total Net Operating Expenses
Air Service Incentive Program
Millions
$233.7
1.3
1.3
4.5
(5.2)
1.9
2.3
$19.4
FY 2014 Budget
$253.1
Actual rates, not in millions
$7.54
10.0
4.0
1.1
15.1
Total Increase
1
1
CPE
$8.04
Passenger Airline Cost per Enplanement (CPE)
CPE Trending at DFW – CPE is defined as total passenger airline cost (i.e., revenue paid to
DFW) divided by the number of enplaned passengers. CPE is a common measure used by the
airline industry. The denominator is enplaned passengers and is used because it is a key
revenue/cost driver for an airline. However, this is not the case for an airport. Airport costs are
based on the facilities and runways maintained. Notwithstanding this issue, DFW (and the
industry) use this indicator as a performance measure.
Airline Cost per Enplanement
$15
$10
$9.25
$8.04
$7.54
$5
$0
FY13 Outlook
FY14 Fin'l Plan
FY14 Budget
The FY 2014 CPE of $8.04 represents an increase of $0.50 (6.6%) from the FY 2013 Outlook.
From the walkforward above, the increase is driven primarily by debt service and fixed Use
Agreement adjustments. The FY 2014 CPE of $8.04 is $1.21 (13.1%) less (better) than the
2014 Financial Plan primarily due to lower debt service.
CPE Benchmarked to Other Airports – DFW’s goal is to have a competitive CPE, preferable
in the first quartile. The following chart benchmarks DFW’s fully loaded CPE with the fully
loaded CPE projections for DFW’s competitive set of 17 large U.S. hub airports (which now
includes the four US Airways hub airports – shown in green) using the latest data available from
ACI surveys from FY 2012. Fully loaded cost is the most meaningful comparison because it
includes most of the costs incurred by airlines to operate at an airport, including what they pay
the airport (light blue), what they pay directly for terminal maintenance and terminal debt service
(dark blue), and an estimate of what costs the airlines incur for delay and taxiing (red).
The chart highlights that DFW’s FY 2012 results were the fourth lowest CPE and remains in the
first quartile for large hub airports. DFW is well-positioned from a cost standpoint compared to
AA’s hubs (shown in red) and the US Airways hub airports (shown in green). The chart also
shows that DFW’s FY 2014 budget compares favorably with the other airports’ results from FY
2012.
DFW’s cost structure will continue to rise with completion of TRIP, however,
management expects the airport to return to the first quartile by 2020 as other airport costs rise
in association with their capital plans.
Note - Before the addition of Charlotte and Phoenix, DFW and Atlanta were the lowest cost
airports in a competitive set of 13 Airports. DFW did not include the US Airways hubs because
they were not true competitive airports. Now that they are part of the merged airline, DFW will
begin to report on these airports in the future.
Fully Loaded Cost per Enplaned Passenger
CLT
2.28 0.07
PHX
ATL
DFW
DFW
5.64
2.34 1.55
MSP
1.27
6.54
$15.28
$18.64
11.40
13.23
DEN
DTW
10.15
IAH
10.13
SFO
0.63
3.24
$25.47
12.10
14.58
$25.74
11.16
3.00
$29.86
10.46
6.00
12.94
$30.49
11.54
25.55
6.00
16.65
$10
$48.20
25.00
26.75
$0
** Excludes gate delays, which are primarily due to airline
actions.
$29.75
13.20
19.40
EWR
JFK
* Estimated Maintenance and Debt Service cost paid directly by
Airlines. Additional direct airline CPE represents an estimate for
airline-specific direct costs divided by airline enplanements.
EWR, JFK, LAK, ORD amounts from 2013 Oliver Wyman study.
$25.23
14.45
13.55
MIA
MIA
LAX
LAX
$25.18
15.64
PHL
Source: 2012 CPEs from ACI Survey. Delay and Taxiing Cost
from Ricondo 2013 study. Other estimates from DFW Finance.
$25.12
10.84
9.54
ORD
$24.58
11.79
14.28
Red text indicates AA Hub/Major Airports
Green text indicates US Hubs/Major Airports
$21.54
10.00
12.79
Delay and Taxiing Cost**
DFW 2014
$20.03
$20.54
7.31
11.54
DCA
BOS
Cost on Airlines' Books*
$18.54
10.73
0.74
Cost on Airport Books
$15.13
9.22
11.39
6.50
SEA
$14.26
11.91
0.27
$20
$30
$40
16.80
$50
$60
$68.55
$70
$80
Net Revenues from DFW Cost Center
The chart compares net revenues from the DFW Cost Center. The FY 2014 net revenues
budget is $91.8 million, a $4.1 million (4.7%) increase from the FY 2013 Outlook. The increase
is primarily attributable to increased parking and concessions revenues. The growth over the
Financial Plan is due to the higher concessions revenues and lower debt service in FY 2014
compared to the Financial Plan. See the DFW Cost Center section for more detail.
$100
Net Revenues from DFW Cost Center
Millions
$91.8
$87.7
$90
$80
$76.7
$68.8
$70
$60
$50
FY12
FY13OL
FY14FP
FY14B
Passengers
The FY 2014 Budget for passengers is 61.2 million, a 1.2 million (2.0%) increase over the FY
2013 Outlook primarily due to the expectation that the economy will continue to slowly recover
and that the merged AA/US airline will continue to expand at DFW. The budget of 61.2 million
is 1.0 million (1.7%) more (better) than assumed in the FY 2014 Financial Plan.
Passenger statistics can be divided
into several categories as shown in
the following table. Originating
passengers begin their trip at DFW.
Destination
passengers
live
elsewhere and fly to DFW for work
or pleasure.
People who travel
through DFW to get to their final
destination
are
connecting
passengers.
Enplanements
represent all passengers boarding a
plane at DFW.
Passengers
Millions
65
60
60.2
61.2
FY13 Outlook
FY14 Fin'l Plan
FY14 Budget
60
55
50
45
40
Better (W orse)
Passengers (Millions)
O riginating
Destination
Connecting
Total Passengers
Enplanem ents
FY13
O utlook
13.3
12.2
34.5
FY14
Fin'l Plan
13.6
12.5
34.1
FY14
Budget
13.9
12.7
34.6
FY14B vs
FY13 O L
0.6
0.5
0.1
FY14B vs.
FY14FP
0.3
0.2
0.5
60.0
60.2
61.2
1.2
1.0
29.7
30.1
30.6
0.6
0.5
Changes in these passenger metrics are important because they are the key revenue drivers for
parking (originating passengers), concessions (enplanements), and rental car (destination
passengers) revenues. See further discussion in the DFW Cost Center section.
Revenues and Expenses Budget Overview
The following table summarizes 102 Fund revenues by cost center and 102 Fund expenses by
cost category with Net Revenues being the amount transferred to the DFW Capital Account.
Millions
Revenues
Airfield Cost Center
Terminal Cost Center
DFW Cost Center
PFCs/CFCs
Total Revenues
Expenses
Operating Expenses
Gross Debt Service
Total Expenses
Net Revenues
Increase (Decrease)
FY14B vs. FY14B vs.
FY13OL
FY14FP
FY13 FY14 Fin'l
Outlook
Plan
FY14
Budget
$138.3
169.6
274.5
155.5
737.9
$143.5
194.2
282.9
130.5
751.1
$138.1
185.6
289.6
129.7
743.1
($0.1)
16.0
15.2
(25.8)
5.2
($5.3)
(8.6)
6.8
(0.8)
(8.0)
360.1
290.0
650.1
368.4
313.9
682.3
368.8
282.5
651.3
8.7
(7.5)
1.2
0.3
(31.4)
(31.0)
$87.7
$68.8
$91.8
$4.0
$23.0
Budgeted terminal revenues for FY 2014 are higher than the FY 2013 Outlook primarily due to
increased costs and debt service in these cost centers. However, terminal revenues are lower
than what was assumed in the FY 2014 Financial Plan primarily because of lower debt service
resulting from a slower TRIP implementation. Budgeted DFW revenues for FY 2014 are higher
than the FY 2013 Outlook primarily due to increases in parking and concessions revenues. See
more detailed information in the Airline Cost Center and DFW Cost Center sections of this
document.
Budgeted Passenger Facility Charge (PFC) and Customer Facility Charge (CFC) revenues are
used to pay eligible debt service. PFC/CFC revenues are lower than the FY 2013 Outlook and
lower than the FY 2014 Financial Plan due to lower eligible debt service compared the Outlook
and lower eligible debt service compared to the Plan. See more discussion on debt service and
use of PFCs/CFCs in the Operating Expense Summary.
FY 2014 Net Revenues are budgeted to be higher than the FY 2013 Outlook because of
increased parking and concessions revenues and a positive impact from DFW’s contribution to
terminals per the Use Agreement offset by increased debt service expenses. The growth over
the Financial Plan is primarily due to lower debt service.
Capital Programs and Debt Financing
DFW has 2 capital accounts, the Joint Capital Account which normally requires both DFW and
airline approval to access funds, and the DFW Capital Account which DFW may use at its sole
discretion. The Joint Capital Account receives funds from natural gas royalties, grants, debt
proceeds, and interest income on the available cash balances. The DFW Capital Account is
funded from net revenues from the DFW Cost Center, grants, debt proceeds (for commercial
development) and interest income.
The largest component of DFW’s capital program is the Terminal Renewal and Improvement
Program (TRIP) in the Joint Capital Account. The TRIP is budgeted at $2.0 billion over the next
5 years (see chart). As of the June 2013 Board, DFW has awarded $988.8 million in contracts
for TRIP. The TRIP is preapproved as part of the Airport’s Use Agreement. Also included in the
Joint Capital Account is $636 million of various other projects which DFW has received airline
majority in interest (MII) approval. These funds will be spent through FY 2018. Additionally,
DFW has a large number of additional capital projects currently underway and funded from the
DFW Capital Account. DFW’s capital program is discussed in more detail in the Capital section
and in the Financial Plan.
Millions
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
Total
Terminal A
$510
Terminal E
$450
Terminal B
$505
Terminal C
$557
Total
$14
$120
$239
$314
$352 $368 $364
$213
$38
$2,021
DFW expects to issue bonds to fund a significant percentage of the TRIP and the other projects
included in the Joint Capital Account. Due to low interest rates, a significant portion of the TRIP
bonds are being sold during FY 2013. Although the financing plans for FY 2014 are still
preliminary, management projects that approximately $500 million of new debt could be issued
during the fiscal year. In addition, certain bonds relating to construction of Skylink and Terminal
D and other projects are planned to be refunded in FY 2013. In FY 2014, two additional
refundings are possible based on interest rates and management’s discretion.
Natural Gas Revenues – The Use Agreement requires natural gas royalties to be deposited
into the Joint Capital Account. Estimated natural gas royalty revenues for FY 2014 are $5.7
million, which is approximately the same amount DFW is forecasted to receive in FY 2013.
FY 2014 Adopted Budget Airline Cost Centers
There are two airline cost centers, the airfield and
the terminal. The airlines pay DFW landing fees to
cover the net cost of the airfield and terminal rents
to cover the net cost to operate and maintain the
terminals. Federal Aviation Administration (FAA)
regulations prohibit an airport from making a profit
on aviation activities. Consequently, the landing
fees and terminal rentals must be set to cover the
anticipated net cost to provide the services only.
At the end of each fiscal year, DFW performs a
reconciliation or true-up of actual costs paid and
revenues received. If there is a variance (i.e., if
revenues collected exceed or are lower than the actual cost), then the Airport provides a credit
or adds an incremental charge in the following fiscal year to settle the difference. DFW
anticipated a better than budget performance in FY 2013; accordingly, the FY 2013 Outlook
includes a $9 million true-up credit for lower landing fees.
Airfield Cost Center
The following table compares Airfield Cost Center revenues and expenditures for the FY 2013
Outlook, the FY 2014 Financial Plan, and the FY 2014 Budget. Note that revenues equal
expenses in this cost center in all periods. Revenue variances to the FY 2013 Outlook are
explained below. See the Operating Expenses section for expenditure variances.
Airfield CC (in Millions)
Revenues
Landing Fees
Transfer from DFW CC
Other
Total Revenues
Expenditures
Operating Expenses
Net Debt Service
Total Expenditures
Net Airfield Revenue
FY14
Budget
Increase (Decrease)
FY14B vs. FY14B vs.
FY13OL
FY14FP
FY13
Outlook
FY14
Fin'l Plan
$109.4
18.5
10.4
138.3
$130.3
2.7
10.5
143.5
$107.6
20.6
9.9
138.1
($1.8)
2.1
(0.4)
(0.1)
($22.7)
18.0
(0.6)
(5.3)
70.8
67.5
138.3
$0.0
74.2
69.2
143.5
$0.0
71.8
66.3
138.1
$0.0
1.1
(1.2)
(0.1)
$0.0
(2.4)
(2.9)
(5.3)
$0.0
Note: FY13 Outlook landing fees includes true-up adjustment of $9M effective June 2013.
The Airfield is a residual cost center with landing fees as the balancer. The following table
compares Airfield Cost Center revenues and expenditures for the FY 2013 Outlook, the FY
2014 Financial Plan, and the FY 2014 Budget showing the landing fee revenues necessary to
cover budgeted net airfield costs.
FY13
FY14
Airfield CC (in Millions)
Outlook Fin'l Plan
Expenditures
Operating Expenses
$70.8
$74.2
Net Debt Service
67.5
69.2
Total Expenditures
138.3
143.4
Revenues
Aircraft Parking
0.2
0.1
Corporate Aviation
1.8
2.0
Fuel Facility
5.5
5.7
DPS
2.8
2.7
Other
0.1
0.0
Transfer from DFW Cost Center
18.5
2.7
Revenues before Landing Fees
28.9
13.2
Landing Fees
$109.4
$130.3
FY14
Budget
Increase (Decrease)
FY14B vs. FY14B vs.
FY13OL
FY14FP
$71.8
66.3
138.1
$1.1
(1.2)
(0.1)
($2.4)
(2.9)
(5.3)
0.1
1.9
5.6
2.3
0.0
20.6
30.6
$107.6
(0.1)
0.1
0.1
(0.5)
(0.0)
2.1
1.7
($1.8)
0.0
(0.1)
(0.1)
(0.4)
0.0
18.0
17.4
($22.7)
Note: FY13 Outlook landing fees includes true-up adjustment of $9M effective June 2013.
Landing Fee Revenues
The FY 2014 landing fees budget is $107.6 million, a decrease of $1.8 million (1.6%) from the
FY 2013 Outlook primarily due to the decreases to net debt service, minimal increases to
operating expenses charged to the airfield, and the increase in the transfer from the DFW Cost
Center.
Other Airfield Revenues
Other airfield revenues include threshold adjustments
transferred from the DFW Cost Center, Corporate
Aviation (CA) fees, the fuel farm fees paid by the
airlines to cover debt service and overhead of the fuel
farm, and DPS revenues. Fuel farm fees increase
annually at the rate of inflation. FY 2014 DPS
revenues decreased compared to the FY 2013
Outlook due to reductions in federal reimbursements
for law enforcement officers and canines.
Landing Fees and Landed Weights
The charts compare landing fees and landed weights for the FY 2012 Actuals, the FY 2013
Outlook, the FY 2014 Financial Plan, and the FY 2014 Budget. The landing fee rate is
assessed per 1,000 pounds of maximum approved landed weight for each specific aircraft as
certified by the FAA. Changes in landed weights will not affect total landing fees because DFW
must charge the airlines collectively for the cost to operate the airfield. Thus, an increase in
landed weights will lower the average landing fee rate, and a decrease in landed weights will
cause the landing fee rate to increase.
Signatory landing fees are budgeted at $2.82 in FY 2014, a $0.05 (1.7%) decrease from the FY
2013 Outlook. This will generate sufficient revenue to pay for budgeted airfield costs. Landing
fees are lower than the FY 2014 Financial Plan by $0.66 (19.0%) due decreases to net debt
service, and higher landed weights.
Landing Fee Rates (per 1,000 lbs.)
$5.00
$4.00
$3.48
$2.98
$2.87
FY12
Actuals
FY13
Outlook
$3.00
$2.82
$2.00
$1.00
$0.00
FY14 Fin'l
Plan
FY14
Budget
Landed Weights
(in Billions)
40
38
37.9
38.0
38.1
36.5
36
34
32
30
FY12 Actual
FY13 Outlook FY14 Fin'l Plan FY14 Budget
Cargo
DFW is recognized by the industry as one
of the top cargo airports in the world. The
Airport’s prime location allows assorted
cargo to reach millions of U.S. customers
by road, while also reaching several
continents by plane in a matter of hours.
More than 50 million consumers can be
reached by truck within 24 hours and
98% of the U.S. population can be
reached via truck within 48 hours or less.
Approximately 7.9% of all landing fees are budgeted to come from cargo aircraft for the FY 2014
Budget.
Terminal Cost Center
The following table compares Terminal Cost Center revenues and expenditures for the FY 2013
Outlook, the FY 2014 Financial Plan, and the FY 2014 Budget. Note that revenues equal
expenses in this cost center in all periods. Revenue variances between the FY 2014 Budget
and the FY 2013 Outlook are explained below. See the Operating Expense section for
expenditure variations.
Te rm ina l C C (in M illio ns)
Re ve nue s
O p e ra ting Re ve nue
Te rm ina l L e a se s
F IS F e e s
Turn F e e s & O ffice Re nts
O the r
To ta l O p e ra ting Re ve nue
Tra nsfe rs
D F W Te rm ina l C o ntrib utio n
Jo int C a p ita l Tra nsfe r
To ta l Tra nsfe rs
To ta l Re ve nue s
E xp e nd iture s
O p e ra ting E xp e nse s
Ne t D e b t S e rvice
To ta l E xp e nd iture s
Ne t Te rm ina l Re ve nue
Incre a se (D e cre a se )
F Y1 4 B vs. F Y1 4 B vs.
F Y1 3 O L
F Y1 4 F P
F Y1 3
O utlo o k
F Y1 4
F in'l P la n
F Y1 4
B ud g e t
$ 1 0 3 .7
2 2 .5
1 1 .0
1 2 .4
1 4 9 .6
$ 1 3 4 .7
1 9 .7
1 1 .9
1 2 .0
1 7 8 .2
$ 1 2 3 .7
1 9 .7
1 3 .1
1 3 .0
1 6 9 .6
$ 2 0 .0
(2 .8 )
2 .2
0 .6
2 0 .0
($ 1 1 .0 )
0 .0
1 .2
1 .1
(8 .6 )
7 .7
2 0 .0
2 7 .7
1 7 7 .4
1 1 .6
1 6 .0
2 7 .6
2 0 5 .8
7 .7
1 6 .0
2 3 .7
1 9 3 .3
(0 .0 )
(4 .0 )
(4 .0 )
1 5 .9
(3 .9 )
(0 .0 )
(3 .9 )
(1 2 .5 )
1 4 6 .6
3 0 .8
1 7 7 .4
$ 0 .0
1 4 7 .7
5 8 .1
2 0 5 .8
$ 0 .0
1 5 1 .3
4 2 .0
1 9 3 .3
$ 0 .0
4 .7
1 1 .2
1 5 .9
$ 0 .0
3 .6
(1 6 .1 )
(1 2 .5 )
$ 0 .0
The Terminal is a residual cost center with terminal leases as the balancer. The table on the
following page compares Terminal Cost Center revenues and expenditures for the FY 2013
Outlook, the FY 2014 Financial Plan, and the FY 2014 Budget showing the terminal lease
revenues necessary to cover budgeted net terminal costs.
Te rm ina l C C (in M illio ns )
E xp e nd iture s
O p e ra ting E xp e ns e s
N e t D e b t S e rvic e
To ta l E xp e nd iture s
R e ve nue s
O p e ra ting R e ve nue
F IS F e e s
Turn F e e s & O ffic e R e nts
O the r
O p e ra ting R e ve nue s
Tra nsfe rs
D F W Te rm ina l C o ntrib utio n
Jo int C a p ita l Tra nsfe r
To ta l Tra ns fe rs
R e ve nue s b e fo re L e a s e s
Te rm ina l L e a s e s N e e d e d
Incre a s e (D e cre a s e )
F Y1 4 B vs . F Y1 4 B vs .
F Y1 3 O L
F Y1 4 F P
F Y1 3
O utlo o k
F Y1 4
F in'l P la n
F Y1 4
B ud g e t
$ 1 4 6 .6
3 0 .8
1 7 7 .4
$ 1 4 7 .7
5 8 .1
2 0 5 .8
$ 1 5 1 .3
4 2 .0
1 9 3 .3
2 2 .5
1 1 .0
1 2 .4
4 5 .9
1 9 .7
1 1 .9
1 2 .0
4 3 .6
1 9 .7
1 3 .1
1 3 .0
4 5 .9
(2 .8 )
2 .2
0 .6
(0 .0 )
7 .7
2 0 .0
2 7 .7
7 3 .6
$ 1 0 3 .7
1 1 .6
1 6 .0
2 7 .6
7 1 .1
$ 1 3 4 .7
7 .7
1 6 .0
2 3 .7
6 9 .6
$ 1 2 3 .7
(0 .0 )
(4 .0 )
(4 .0 )
(4 .1 )
$ 2 0 .0
$ 4 .7
1 1 .2
1 5 .9
$ 3 .6
(1 6 .1 )
(1 2 .5 )
0 .0
1 .2
1 .1
2 .3
(3 .9 )
(0 .0 )
(3 .9 )
(1 .5 )
($ 1 1 .0 )
Terminal Leases
The FY 2014 terminal lease budget is $123.7
million, a $20.0 million (19.3%) increase from the
FY 2013 Outlook due primarily to increases in net
debt service charged to the terminals, operating
costs, and a reduced Joint Capital Transfer.
Terminal lease fees are charged to airlines based
on the budgeted direct and allocated costs to
operate the terminals. Total terminal operations
and maintenance cost, including HVAC and other
utilities for all 5 terminals, are divided by leasable
square feet to calculate an average lease rate per
square foot. American Airlines pays directly for the
maintenance costs of Terminals A and C. These costs are added into the numerator of this
formula to get the fully loaded average rate. American Airlines receives rent credit for their
costs. The amount of the rent credit was negotiated as part of the Use Agreement ($38.6
million in FY 2014).
Average Terminal Rents before Credits
The chart below compares average terminal rents before credits for the FY 2012 Actuals, the
FY 2013 Outlook, the FY 2014 Financial Plan, and the FY 2014 Budget. The increase in the FY
2014 Budget compared to the FY 2013 Outlook is due to increases in net debt service charged
to the terminals, increases in costs, and a reduction of $4 million in the transfer credit from the
Joint Capital Account compared to FY 2013 as described in the Use Agreement.
Average Terminal Rents before Credits
per square foot
$180
$156
$160
$146
$140
$120
$127
$103
$100
$80
$60
$40
FY12 Actuals
FY13 Outlook FY14 Fin'l Plan FY14 Budget
Federal Inspection Services (FIS) Fees
Costs are allocated to the FIS based on its percent share of terminal square footage. The FIS
budget for FY 2014 is $19.7 million, a $2.8 million (12.4%) decrease from the FY 2013 Outlook
due because the FY 2013 rate is overstated in error. The FY 2014 rate is based upon terminal
costs reduced new debt service in the Terminal Cost Center. This reduction was not applied in
FY 2013. The rate for FIS per international passenger clearing customs at DFW is expected to
be $6.95, compared to a rate of $8.63 in FY 2013. International FIS passengers are expected
to be 2.82 million in FY 2014 compared to 2.42 million in FY 2013.
Turn Fees and Office Rents
The turn fees and office rents budget for FY 2014 is $13.1 million, a $2.2 million (20.0%)
increase from the FY 2013 Outlook. Turn fees are paid by airlines for common use gates in
Terminals D and E in lieu of permanently renting space. Per the terms of the Use Agreement,
turn fees must increase at the same percentage as terminal rates. In addition, the number of
turns for FY 2014 is projected to increase 33% compared to FY 2013 due to new air service
from non-signatory carriers and increased hardstand operations.
Other Terminal Revenues
The other terminal revenues budget for FY 2014 is $13.0 million, a $0.6 million (4.8%) increase
from the FY 2013 Outlook. Other terminal revenues include TSA rents, concessions O & M
reimbursements, catering fees, and allocable miscellaneous DPS revenues. Concessionaires
are required to reimburse the Airport (for Terminals B, D and E) and American Airlines (for
Terminals A and C) for the allocated maintenance cost per square foot of the terminals. The
increase in the FY 2014 Budget compared to the FY 2013 Outlook is due to higher non-airline
terminal related revenues offset by reductions in Federal reimbursements for law enforcement
officers and canines.
Transfers - Joint Capital Account Transfer
Per the terms of the Use Agreement, an annual transfer is made from the Joint Capital Account
to the Terminal Cost Center to subsidize terminal rates. The annual transfer was $28 million in
FY 2011 and will be reduced by $4 million each year until it is phased-out completely in FY
2018. Accordingly, the FY 2014 amount is $16 million.
Transfers - DFW Terminal Contribution
Per the terms of the Use Agreement, DFW pays
for a portion of the terminal cost. This amount is
based on DFW’s proportionate share of expenses
for common use and vacant space in the
terminals. From a cost center standpoint, this
contribution is shown as a source of cash in the
Terminal Cost Center and a use of cash for the
DFW Cost Center. DFW can reduce its
contribution to the Terminal Cost Center by
leasing more space to other airlines or tenants
and by reducing costs in the terminals. The DFW
terminal contribution of $7.7 million was unchanged in FY 2014 compared to the FY 2013
Outlook.
Summary of Airline Costs
The following table compares the summary of airline costs for the FY 2013 Outlook, the FY
2014 Financial Plan, and the FY 2014 Budget on a Use Agreement and GAAP (Generally
Accepted Accounting Principles) basis. The difference between the Use Agreement basis and
the GAAP basis is primarily related to prior year true-ups. These true-ups are reflected as a
reduction/addition in airline cost for the Use Agreement in the year that the airlines receive/pay
for the true-up; however for GAAP, these true-ups are reflected in the year earned. Payments
to the airlines for the Air Service Incentive Program (ASIP) are made from the DFW Capital
Account and are accounted as rebates to the airlines for both a Use Agreement and GAAP
basis. These payments are not part of the 102 Fund however.
Airline Revenue/Costs (in Millions)
Landing Fees
FY13
FY14
Outlook Fin'l Plan
FY14
Budget
Increase (Decrease)
FY14B
FY14B
vs.
vs.
FY13OL FY14FP
$108.2
$130.3
$107.6
($0.6)
($22.7)
103.4
134.7
123.1
19.8
(11.5)
FIS Fees
22.5
19.7
19.7
(2.8)
0.0
Turn Fees & Terminal Office Rents
11.0
11.9
13.1
2.2
1.2
0.2
0.1
0.1
(0.1)
0.0
Sub-total Airline Revenue/Cost
245.2
296.6
263.7
Less: ASIP
(12.9)
Terminal Leases
Aircraft Parking
Airline Cost/Revenue post ASIP
Add: Prior year True-up
Less: Current Year True-up
Total Airline Revenue/Cost
232.3
5.2
(3.9)
$233.7
(8.0)
288.6
0.7
0.0
$289.4
18.5
(32.9)
(10.6)
2.3
(2.6)
253.1
20.8
(35.6)
(5.2)
(0.7)
0.0
0.0
$253.1
3.9
$19.4
0.0
($36.3)
Cost Per Enplanement (CPE) Calculation
The following table shows the passenger airline cost per enplanement calculation and compares
the CPE for the FY 2013 Outlook, the FY 2014 Financial Plan, and the FY 2014 Budget. This
KPI only includes passenger-related airline revenues (i.e., costs) and excludes cargo and
general aviation revenues. True-ups are a reduction/addition in airline costs reflected in the year
earned.
Cost Per Enplanement (in Millions)
Passenger Airline Enplanements
Increase (Decrease)
FY14B
FY14B
FY13
FY14
FY14
vs.
vs.
Outlook Fin'l Plan Budget FY13OL FY14FP
(1)
29.7
30.1
30.6
0.9
$245.2
$296.6
$263.7
$18.5
0.5
Passenger Airline Cost per Enplanement
Airline Cost/Revenue
Less: Cargo and GA Landing Fees
($32.9)
(9.5)
(10.9)
(8.9)
0.7
2.0
Add Back: Cargo/GA true-up
0.3
0.0
1.6
1.3
1.6
Sub-total PAX Airline Revenue
236.0
285.7
256.5
20.4
(29.3)
(10.6)
2.3
(2.6)
22.8
(31.9)
Less ASIP - Passenger Airlines
Total PAX Airline Revenue post ASIP
(12.9)
223.1
277.7
245.9
4.9
0.7
0.0
(4.9)
(0.7)
(3.6)
0.0
0.0
3.6
0.0
$224.3
$278.5
$245.9
$21.5
($32.6)
$7.54
$9.25
$8.04
$0.49
($1.22)
Add Back: Prior Year True-Up
Less: Current Year True-Up
Total Passenger Airline Cost/Revenue
(2)
Cost per Enplanement (CPE)
1General
2Actual
Aviation enplanements are excluded from CPE calculation
rates, not in millions
(8.0)
FY 2014 Adopted Budget DFW Cost Center
DFW Cost Center Revenues and Expenses
The table below compares the FY 2013 Outlook, the FY 2014 estimates contained in the FY
2013 Financial Plan, and the FY 2014 Budget for the DFW Cost Center. Net revenues from the
DFW Cost Center are transferred to the DFW Capital Account at the end of the fiscal year. For
FY 2014, 75% of net revenues in excess of $64.3 million are transferred to the Airfield Cost
Center as a “threshold adjustment.” Revenue variances are discussed in the rest of this
section. Expenditure variances are covered in the Operating Expenses section.
DFW Cost Center (in Millions)
FY14
Budget
Variance Better(Worse)
FY14B vs. FY14B vs.
FY13OL
FY14FP
FY13
Outlook
FY14
Fin'l Plan
$116.2
$129.3
$124.1
$7.9
61.6
60.1
66.8
5.2
Revenues
Revenue Management Revenues
Parking
Concessions
Rental Car (RAC)
Commercial Development
Total Revenue Mgmt Revs
Employee Transportation
($5.3)
6.7
29.9
29.5
30.9
1.0
1.4
36.3
244.0
12.6
33.2
252.2
13.2
36.3
258.1
13.5
0.0
14.1
0.9
3.1
5.9
0.3
Taxis and Limos
8.1
8.2
8.5
0.5
0.3
Utilities & Miscellaneous
7.1
6.5
7.1
0.1
0.7
DPS Allocation
1.4
1.3
1.2
(0.3)
(0.2)
Interest Income
1.3
1.4
1.2
(0.1)
(0.2)
274.5
282.9
289.6
15.2
6.8
113.2
30.2
115.1
49.9
114.7
38.7
(1.5)
(8.6)
0.4
11.2
Total Expenditures and Debt Service
143.3
165.0
153.4
(10.1)
11.6
Gross Margin - DFW Cost Center
Total Revenues
Expenditures
Operating Expenses
Net Debt Service
131.1
117.8
136.2
Less: Terminal Contributions
Less: Skylink
7.7
35.6
11.6
37.5
7.7
36.7
0.0
(1.1)
DFW Cost Center Net Revenues
87.8
68.8
91.8
4.0
23.0
18.5
2.7
20.6
2.1
18.0
$69.3
$66.1
$71.2
$1.9
$5.0
Less: Transfer to Airfield Cost Center
Transfer to the DFW Capital Account
5.1
18.3
3.9
0.8
Revenue Management Revenues
DFW’s Revenue Management Division
Revenue Mgmt. Revenue per Enplanement
manages 4 business units that strive to $9.00
maximize
net
revenues
(parking,
$8.43
concessions, rental car, and commercial $8.60
$8.38
$8.20
development). The chart to the right
compares
Revenue
Management $8.20
$7.87
Revenue per Enplanement. This KPI is
$7.80
projected $0.23 higher in the FY 2014
Budget than the FY 2013 Outlook $7.40
because of increased parking capacity,
anticipated parking rate increases, and $7.00
FY12
FY13
FY14
FY14
full year operations of new concessions
Actual
Outlook
Fin'l Plan
Budget
in Section A of Terminal A in FY 2014,
less the negative impact from the TRIP
on those business units’ revenues. More information is included in the business unit write-ups
that follow.
Parking Business Unit
Background – The Parking Business Unit (PBU) is DFW’s most significant source of non-airline
revenue. Customers are charged parking fees based on the length of stay and the parking
facility used. The table below highlights DFW’s parking products, spaces and parking rates.
DFW Parking Space and Rate Summary
Parking Products
Terminal Lots
A (3 structures)
B (3 structures)
C (4 structures)
D (1 structures)
E (3 structures)
Infield (uncovered)
Total Terminals
Express Lots
Remote Lots
Intra-day
Valet
Pass-throughs/Drop-off
Total Public Spaces
Employee Parking
No. of
Parking
Spaces
Post TRIP
Spaces
Closed for Spaces Renovation
(1)
Renovation Available Spaces
FY 2014 Daily Parking Rate
(2)
$18 toll tag; $20 cash or credit card
5,548
3,524
5,781
7,821
4,050
1,842
28,566
7,357
4,864
n/a
n/a
n/a
40,787
7,520
(1,646)
(1,618)
(890)
(1,503)
(618)
(6,275)
(624)
n/a
n/a
n/a
(6,899)
3,902
1,906
5,781
6,931
2,547
1,224
22,291
6,733
4,864
n/a
n/a
n/a
33,888
7,520
7,400
3,524
5,781
7,821
5,600
1,605
31,731
8,572
4,864
n/a
n/a
n/a
45,167
7,520
$11 uncovered; $13 covered
$9 uncovered
$2 to $7 (up to 6 hours)
$25 (uses existing parking facilities)
$1 toll tag; $2 cash (0-30 minutes)
(1) Included in FY 2013 Financial Plan
(2) Includes sales tax.
The Airport is unique from an airport parking perspective because the Airport has parking plazas
on the north and south ends of International Parkway (i.e., the entrances to the Airport), so that
all customers and visitors must go through the plazas to access the Airport. In addition, many
patrons drive through the Airport while traveling from north to south or south to north. These
patrons pay a $1 pass-through/drop-off fee if they have a toll tag and $2 if paying with cash or
credit card for the first 30 minutes.
Intra-Day fees graduate to $7 with daily
rates beginning at 6 hours. Any stay
over 6 hours is considered one full day.
DFW collects a privilege fee of 10% (of
sales) from off-airport parking and valet
providers. The Airport contracts directly
with a third party to provide a DFW
branded valet service. The PBU is also
responsible for busing customers from
the parking lots to the terminals
(Express and Remote products) and
between the terminals (Terminal Link).
The chart below shows the Proposed Vehicle Parking Fees for FY 2014.
Proposed Vehicle Parking Fees
Duration
0 min - 30 min with Tolltag
0 min - 30 min
30 min - 2 hours with Tolltag
30 min - 2 hours
2 - 4 hours
4 - 6 hours
6 - 24 hours with Toll Tag
6 - 24 hours
Terminal
(1)
$1
$2
$2
$3
$5
$7
$18
$20
(2)
Express
Covered
$2
$2
$2
$2
$3
$4
$13
$13
Express
Uncovered
$2
$2
$2
$2
$3
$4
$11
$11
Remote
$1
$1
$1
$1
$2
$3
$9
$9
(1) Including DFW Business Center
(2) All Parking fees, excluding valet parking, include sales tax. The sales tax is based on applicable tax jurisdiction.
FY 2014 Budget – The FY 2014 parking revenue
budget is $124.1 million, a $7.9 million (6.8%)
increase from the FY 2013 Outlook. This reflects
an increase in originating passengers, a $1
increase for remote rates, and a $1 increase for
cash and credit card transactions between 0
minutes - 2 hours for the central terminal area.
The proposed rate increases are expected to
generate incremental revenues of $3.7 million.
The remaining revenues of $4.2 million are based
on growth assumptions for originating passengers
and growth of express parking. Management
believes this to be an aggressive budget with up to $2 million at risk due to the number of closed
terminal parking spaces for TRIP. The terminal budget was not adjusted downward for this
exposure. The FY 2014 Budget is $5.3 million (4.1%) lower the Financial Plan projection due to
postponement of a $1 increase in terminal and express rates due to the delays in adding new
terminal garages.
Parking Revenue per Originating Passenger
$9.80
$9.50
$9.40
$8.95
$9.00
$8.60
$8.72
$8.50
$8.20
$7.80
$7.40
$7.00
FY12
Actual
FY13
Outlook
FY14
Fin'l Plan
FY14
Budget
Parking Revenue per Originating Passenger
The primary drivers for parking revenues are
originating passengers, parking prices, and
average length of stay.
The goal is to
maximize revenue per originating passenger.
The increase in parking revenue per originating
passenger for the FY 2014 Budget versus the
FY 2013 Outlook is due to rate increases and
incremental spaces in express parking. This
KPI is below the Financial Plan projection due
to the deferral of the terminal and express
parking rate increase.
Concessions Business Unit
Background – Terminal concessions primarily consist of food and beverage, retail and duty
free, advertising, and various customer services/amenities. Concessions agreements generally
are for a term of 5 to 10 years and include a Minimum Annual Guarantee (MAG) and
percentage rent. As of June 30, 2013, the Airport had 201 total locations and 128 packages.
Approximately 89% of packages are currently
paying percentage rent. Concessions revenues
also
include
contracts
for
sponsorships,
advertising, and communications services which
generally have periodic or one-time payments that
may be amortized over the life of the contract.
Concessions’ goal is to optimize retail, services,
and food and beverage options for customers to
increase revenue per enplanement; and to grow
new revenue streams from sponsorships,
communications, and advertising not tied directly to
enplanements.
During FY 2013, DFW awarded the concessions in Phase 2 of Terminal E and began bidding
retail locations in Terminal D. Concessions reopened with the TRIP construction for Phase I in
Terminal A Section A which was completed in the second quarter of FY 2013. Phase II TRIP
construction has begun in Terminal A with the closing of Section B in the third quarter of FY
2013. The E satellite was also returned to service with 7 concessionaires supporting the
passengers. The Airport anticipates that revenues per enplanement will increase as new
concessions open.
FY 2014 Budget – The FY 2014 concessions budget is $66.8 million, a $5.2 million (8.4%)
increase from the FY 2013 Outlook due to the net impact of increasing enplanements and the
opening of new concessions in Section A of Terminal A, partially offset by additional terminal
sections under construction. During FY 2014 Terminals A, B, and E will each have a section
closed for TRIP construction. Concession revenues have an exposure of $4 million due to an
assumption that advertising contracts will be renewed in FY 2014.
Concessions Revenue per Enplanement – This is the Concession Business Unit’s most
significant KPI because it measures the amount of revenue earned by DFW from terminal
concessions per enplaned passengers. This is
Concessions Revenue per Enplanement
also a standard metric used by the airport $2.40
$2.18
industry. The $0.11 increase in concessions $2.20
$2.07
$2.00
revenue per enplanement in FY 2014 as $2.00
$1.93
compared to the FY 2013 Outlook is primarily
related to the opening of new concessions in $1.80
Section A of Terminal A that will provide new $1.60
concession offerings to passengers. Revenue $1.40
per enplanement is exceeding the Financial
$1.20
Plan due projections because the impact of
TRIP has been less than originally anticipated $1.00
FY12
FY13
FY14
FY14
and the addition of more concessions square
Actual
Outlook
Fin'l Plan
Budget
footage.
Rental Car Center (RAC) Business Unit
Background – The RAC covers 155 acres and
includes a common building with individual
counters and back office space for each rental
car company. The facility also includes a parking
garage for ready and return car spaces, a bus
maintenance facility, overflow surface parking
areas and individual rental company service sites
including car wash racks, maintenance bays and
fueling systems. The Airport collects ground
lease, percentage rent (10% of sales), and O&M
expenses from the rental car companies. The
ground lease rate increases 3% each year. There
are 6 rental car companies with 11 brands
operating from the RAC, providing a total
available inventory of approximately 25,000 cars. The largest 3 rental car companies and their
market share are Hertz (37%), Avis/Budget (30%), and Enterprise/Vanguard (30%). There are
no major off–airport rental car operations competing with the Airport.
DFW management has very little control over rental car company activities. It assists the RAC
companies where possible and maintains the RAC facility to high standards. Most RAC patrons
are business travelers. RAC sales and DFW revenues tend to follow the economy. DFW
revenues can rise or fall based on the number of DFW destination passengers, the percentage
of destination passengers renting cars, the average stay per renter, and the average daily price
charged for the cars.
FY 2014 Budget – The FY 2014 rental car revenue budget is $30.9 million, a $1 million (3.3%)
increase from the FY 2013 Outlook due to increases in destination passengers projected for FY
2014. The FY 2014 Budget is $1.4 million better than the FY 2014 projection in the FY2013
Financial Plan due to the impact of higher transaction days and a higher average daily rate
assumed in the Plan. All other factors are assumed to stay constant with the FY 2013 Outlook
because management has no control over these factors.
RAC Revenues per Destination Passenger
This KPI measures the amount of percentage
rent paid by the rental car companies to DFW
divided by destination passengers (i.e.,
passengers from other cities that fly to DFW for
business or pleasure). The FY 2014 Budget for
RAC revenues per destination passenger is
projected to be 1.7% higher than the FY 2013
Adjusted Outlook primarily due to an estimated
increase in average stay per renter. The Outlook
was adjusted for a one-time prior period
accounting adjustment of $777,000.
Rental Car Revenue per Destination Passenger
$2.80
$2.60
$2.40
$2.45
$2.32
$2.39
$2.35
FY13 Adj
Outlook*
FY14
F-Plan
$2.43
$2.20
$2.00
$1.80
$1.60
$1.40
FY12
Actual
FY13
Outlook
FY14
Budget
*FY 2013 Outlook Rental Car Revenue per Destination Passenger adjusted for
one-time accounting adjustment of $777K.
Commercial Development Business Unit
Background – The Airport has a
total land mass of 17,207 acres. As
of June 30, 2013, 1,870 acres have
been
commercially
developed.
Management
estimates
that
approximately
4,304
acres
of
additional land is available for future
development.
A
commercial
development land use plan has been
completed and approved by the
Board. Management has also had a
consultant
prepare
a
detailed
feasibility study of the full cost and
benefits of the different development
areas identified in the land use plan.
The Airport focuses primarily on developing land that has airport synergy such as logistics and
warehousing. Any land lease over 40 years requires the approvals of the Cities of Dallas and
Fort Worth.
Commercial development revenues include ground leases, foreign trade zone tariff and facility
rents generated from non-terminal Airport facilities, and property and surface use fees primarily
from natural gas drilling. Multi-year lease agreements are negotiated with tenants on a square
foot or acre basis. Some facilities such as the Hyatt Regency Hotel and Bear Creek Golf Course
also have percentage rent components.
DFW is currently in the development process for the new Southgate Plaza project that will
include restaurants, retail, office, and a select service hotel. Also, a development process is
underway for a new convenience retail project at Founders’ Plaza that will include a fueling
station and food service. Other future development opportunities include land around the new
DART station on the southeast side of the Airport and several industrial, office, and mixed use
commercial sites on the north and south sides of the Airport.
The key drivers for commercial development revenues are acres developed and the average
ground rental rate. Approximately 40% of the ground lease revenue is based on negotiated
rates and 60% on the airport services ground rental rate. The airport services ground rental rate
per acre increases with inflation and will be $26,791 in FY 2014.
FY 2014 Budget – The FY 2014 commercial development revenue budget is $36.3 million is
unchanged from the FY 2013 Outlook. However, there were several revenue increases and
decreases of size. FY 2014 reflects a decrease of $0.7 million in natural gas pipeline fees and
$2.6 million of one-time damage and license fees paid by DART for the I-2 line & I-3. These
reductions are offset by $1 million from three new ground leases, $0.6 million increase in ground
rental rates and damage fees of $1.7 million for the I-3 line.
Other DFW Revenues and Expenses
The fees charged in this category are established to recover costs (except interest income).
Certain categories like taxi fees are regulated such that DFW is supposed to charge break even
prices. Due to the new cost allocation methodologies contained in the Use Agreement, a few of
these cost centers are not fully recovering their costs. Where there are significant differences,
management has elected to manage to a break-even over a number of years to keep price
increases reasonable. There are no year-end reconciliations or true-ups in these cost centers.
Employee Transportation – DFW charges fees to employees for providing transportation from
the parking lots to the terminals. Many times the companies or airlines pay these fees for their
employees. The FY 2014 Budget is $13.5 million, a $0.9 million (7.1%) increase from the FY
2013 Outlook due to rate increases to cover shifts in cost center allocations and the fuel credit
for FY 2012 received in FY 2013.
Taxi, Limo and Shuttle Fees – These fees are paid by taxis, limos, shuttles and other sharedride transportation companies that require airport access to drop-off and pick-up passengers.
The FY 2014 Budget is $8.5 million, a $0.5 million (6.2%) increase from the FY 2013 Outlook
due to increases in access fees, driver permit fees, and operating authority fees in order to
cover costs.
Utilities & Miscellaneous – This revenue category represents fees charged to non-airline
users of utilities, HVAC, trash removal, water, and certain permit and accounting fees. Utility
charges to users are based on the cost to provide the services. The FY 2014 Budget is $7.1
million, a $0.1 million (1.4%) increase from the FY 2013 Outlook due to an increase in code
enforcement fees.
DPS Revenues – The Department of Public Safety
(DPS) receives reimbursements from the TSA for
certain services, and for badging and fire training
services. The FY 2014 Budget is $5.5 million, a
$1.3 million (19.3%) decrease from the FY 2013
Outlook due to a $1.6 million reduction in federal
reimbursements for law enforcement officers and
canines, offset by increased Fire Training Center
revenue based on a full year of operations. DPS
revenues are allocated to the cost centers on the
same basis as DPS expenses.
Interest Income – Interest income includes interest earned on investments from the Operating
Revenue and Expense Fund, the 3 month Operating Reserve, and Debt Service Reserve Fund,
and the Rolling Coverage Account. The FY 2014 interest income budget is $1.2 million, a $0.1
million (7.7%) decrease from the FY 2013 Outlook due to the purchase of securities with shorter
maturities for the purpose of managing TRIP cash flow and to position the airport to take
advantage of anticipated rate increases in the future. The FY 2014 Budget is a $0.2 million
(14.29%) decrease from FY 2014 in the FY 2013 Financial Plan due to slightly lower interest
rates (0.25% in the Financial Plan versus 0.24% in the Budget).
Skylink – Expenses related to Skylink are covered in the DFW Cost Center so that bonds
related to Skylink can remain non-AMT. The FY 2014 Budget is $22.9 million, a $0.7 million
(3.3%) increase from the FY 2013 Outlook due to CPI related contract increases and additional
special inspections.
Terminal Contributions – Per the terms of the Use Agreement, DFW pays terminal cost based
on common use space and its share of vacant leasable space. The FY 2014 Budget is $7.7
million, unchanged compared to the FY 2013 Outlook.
THE REST OF THIS PAGE IS BLANK
FY 2014 Adopted Budget Operating Expenses
FY 2014 Expense Budget by Major Cost Driver
The FY 2014 Budget is $651.3 million, an increase of $1.2 million (0.2%) from the FY 2013
Outlook and a decrease from the FY 2013 Budget of $7.8 million (1.2%). A walkforward
between the FY 2013 Outlook and the FY 2014 Budget follows:
FY13
Outlook
FY14 Fin'l
Plan
Operating Expenses
$360.3
$360.1
$368.4
$368.8
$8.7
$0.3
Gross Debt Service
298.8
290.0
313.9
282.5
(7.5)
(31.4)
Total 102 Fund Expenditures $659.1
Contingency O/S Rate Base
$650.1
$682.3
$651.3
10.0
$1.2
($31.0)
Annual Budget (Millions)
Total Budget w/ Contingency
FY14
Budget
Increase (Decrease)
FY14B
FY14B
vs FY13OL vs FY14FP
FY13
Budget
$661.3
Operating Expense Budget Walkforward
Operating Expenses (in Millions)
FY 2013 Outlook
Budget reductions
Other
Cost center shifts
Restore contingency
Operating reserve
Net Increase in Budget
FY 2014 Expense budget
Total
$360.1
(6.6)
11.0
1.8
1.4
0.0
2.0
(0.9)
8.7
$368.8
DFW
$142.7
(4.3)
5.3
0.0
0.6
0.9
0.8
(0.3)
3.0
$145.7
Airline
$217.4
(2.3)
5.7
1.8
0.8
(0.9)
1.2
(0.6)
5.7
$223.1
Detailed Operating Expense Budget Walkforward
FY 2013 Outlook
Budget reductions
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q
R
Energy rates
Pension/OPEB
Contract increases
Health care
CNG fuel credits
Insurance premiums
Other
Other
Cost center shifts
Restore contingency
Operating reserve
Net Increases
FY 2014 Budget
Total
$360.1
DFW
$142.7
Airline
$217.4
(3.4)
(1.6)
(1.0)
(0.6)
(6.6)
(2.3)
(0.7)
(1.0)
(0.3)
(4.3)
(1.1)
(0.9)
(0.0)
(0.3)
(2.3)
3.9
2.3
2.0
1.0
0.6
0.7
0.5
11.0
1.4
0.7
1.7
0.0
0.2
0.5
0.8
5.3
2.5
1.6
0.3
1.0
0.4
0.2
(0.3)
5.7
1.1
0.7
1.8
0.0
0.0
0.0
1.1
0.7
1.8
0.6
0.8
1.4
7.6
0.0
0.2
0.4
0.6
1.6
0.9
0.4
0.4
0.8
6.0
(0.9)
2.0
(0.9)
1.1
8.7
$368.8
0.8
(0.3)
0.5
3.0
$145.7
1.2
(0.6)
0.6
5.7
$223.1
Note: The reference letters in the previous table are cross-referenced to the variance
explanations in the Expense Comparison by Summary Account discussed further in this section.
A. Demolitions and Other One-time Expenses
($3.4) million
In FY 2013 the DFW Board approved the use of Contingency funds outside the rate base for the
demolishment of the SkyChef Kitchens and a portion of the old AirTran Guideway. Also included
was approval for Thermal Plastic Airfield markings and the widening of the Terminal E-33
checkpoint. These expenses will not recur in FY 2014.
B. Energy, Transportation and Asset Management (ETAM) Projects
($1.6) million
ETAM projected expenses for building assessments, ($0.5 million) dynamic signs, ($0.3 million)
repair of Terminal D graphics, ($0.2 million), TV maintenance ($0.2 million), relocation of light
poles ($0.1 million), and several other smaller projects in FY 2013 that will not recur in FY 2014.
C. Parking Control System Savings
($1.0) million
The implementation of the Parking Control System, scheduled for August 26, 2013, will
generate savings in salaries of $0.7 million and temporary labor of $0.3 million in FY 2014 as
automation will decrease the need for employees in the booths.
D. Energy Rates
($0.6) million
ETAM has locked in lower rates for electricity through March
2015. Electricity rates will drop from $0.0742 to $0.0645 per
KWH, reducing electricity costs by $800K in FY 2014. These
savings are somewhat offset by an increase in natural gas rates.
Natural gas rates will rise from $3.44 to $4.075 per MMBTU,
increasing costs by $200K in FY 2014. The natural gas rates are
locked in until September 2014.
E. Merit, Annualization and Vacancy Factor
$3.9 million
This represents the FY 2013 impact of the merit increase granted in the FY 2013 Budget for 3
months, the proposed merit pool of 3% effective January 1, 2014, and changes in the vacancy
factor from an average 5.2% in FY 2013 to an average 5.0% in FY 2014. The change in
vacancy factor is based on experience in FY 2013.
F. Pension/OPEB
$2.3 million
The funding requirements for the defined benefit retirement plan and other post-employment
benefits (OPEB) are actuarially determined for DFW each year. The FY 2014 contribution for
the defined benefit plans has increased $3.8 million due primarily to the amortization of actuarial
investment losses from 2008 over the past 5 years. This increase is offset by a decrease of $1.5
million in OPEB costs for FY 2014 which resulted from better than expected claims experience.
G. Contract Increases
$2.0 million
Contract increases are comprised of $1.1 million to employee, terminal link, and express busing
contracts due to inflation and the planned movement of more employees from Terminal D; $0.6
million of Skylink maintenance & inspections due to inflation and the every-other-year cycle of
inspections, and $0.3 million of increased asbestos testing contracts to meet future project
demand for new commercial development projects.
H. Hardstand Operations
$1.0 million
Due to a lack of international gates in Terminal D during peak arrival times, DFW will have to
hardstand more operations in 2014. Hardstand operations are expected to increase to an
average of 5 per day in FY2014. Costs include maintenance on equipment such as Cobuses,
mobile passenger jet bridges, portable water carts, pre-conditioned air units and ground power
units, contract personnel to drive the buses, and fuel for the buses and equipment.
Management estimates that there is an additional $1.0 million in cost exposure if one additional
wide body or 3 additional narrow body flights are added in the peak.
I. Health Care
$0.6 million
Health care costs, which include medical benefits, long term disability, short term disability and
life insurance are increasing in FY 2014 due to healthcare cost increases of 4%. The Budget
includes the assumption that employees will continue to pay 20% of health care costs in FY
2014.
J. CNG Fuel Credits
$0.7 million
Fuel credits of $0.50 per gallon for CNG were authorized by Congress in FY 2013, retroactive to
2012. Therefore, in FY 2013, DFW recorded two years of CNG credits. In FY 2014, the budget
assumes this credit will be approved again. The FY 2014 budget assumes that Congress will
renew the credits. If they do not, DFW has approximately $800,000 of budget exposure.
K. Insurance
$0.5 million
Insurance costs will increase in FY 2014 due to claims
experience and increased value of buildings, primarily due to
TRIP improvements in the terminals and new parking garages.
The value of DFW’s assets has increased by $500 million yearover-year.
L. Partially Restore Deicing Budget
$1.1 million
FY 2013 was an abnormally mild winter and had almost no deicing activity. Normal winters
usually cost $1.4 million for filters, deicing fluid and rock salt. Rather than restoring the deicing
budget to average levels of $1.4 million, DFW has only budgeted $1.1 million for FY 2014. The
remaining $300,000 is an exposure item for the fiscal year.
M. Terminal Maintenance Increase (TRIP)
$0.7 million
TRIP operations have increased the need for activities such as restoring electric power and
checking systems after shutdowns, etc. to ensure business continuity in the terminals. This
budget will provide sufficient funds to provide the incremental services during construction.
N. Marketing Initiatives
$0.6 million
These initiatives include the “Thanks Again” customer rewards program providing airline miles
for on-Airport purchases, host responsibilities for the Aerotropolis and International Parking
Institute conferences, and marketing support for the Fire Training Research Center. There are
no incremental international marketing initiatives above current levels in the Budget. The Board
may want to pursue specific international marketing opportunities in FY 2014. Additional
Contingency dollars outside the rate base were added to accommodate this possibility.
O. Other
$0.8 million
This category includes the net increases and decreases from many small projects such as
LiveWell incentives ($198K), legal costs ($230K), uniforms ($98K), and badging supplies
($117K). Savings include repair of retaining wall caps ($100K), replacement of fuel pumps
($80K), and repair of concrete drainage at waste facility ($80K).
P. Cost Centers Shifts
$0.0 million
Management reviews projected expenditures as part of the annual budget process to ensure
they are charged to the proper cost center. Approximately $900,000 of expenses are being
reallocated from the Airfield and Terminals Cost Centers to the DFW Cost Center as part of the
FY 2014 Budget. The largest component of this relates to print shop expenses that are more
correctly charged to the DFW Cost Center.
Q. Restore CEO Contingency
$2.0 million
DFW budgets have historically contained a CEO contingency ranging from $2.5 million to $1.75
million. The CEO contingency is included in the rate base and may be used by the CEO without
Board approval. It is recommended that the CEO contingency be $2 million in FY 2014.
R. 3 Month Operating Reserve
($0.9) million
DFW is required to have a 90-day cash reserve for operating expenses. In FY 2014, the actual
reserve needs to be increased by $2.3 million due to a net cost increase of $8.9 million. In FY
2013 it was an increase of $3.2 million, thus a decrease of $0.9 million. If DFW needs to access
any contingency, the operating reserve (25%) will also need to be increased.
Operating Budget by Category
The following tables compare the FY 2013 Outlook with the FY 2014 Budget by expense
category. Variance explanations by major cost driver follow in the walkforward.
Increase (Decrease)
FY13
FY14
FY14 FY14B vs. FY14B vs.
Operating Budget (in Millions) Outlook Fin'l Plan Budget FY13OL FY14 F Plan
Salaries & Wages
$114.4 $115.3 $118.4
$4.1
$3.1
Benefits
58.7
59.6
61.8
3.1
2.3
Contract Services
128.5
127.8
127.0
(1.6)
(0.9)
Utilities
25.6
25.9
25.0
(0.6)
(0.9)
Equipment & Supplies
14.4
15.2
15.8
1.5
0.6
Insurance
5.3
5.4
5.8
0.5
0.4
Fuels
3.1
4.3
3.8
0.7
(0.4)
General, Admin & Other
6.9
8.6
6.8
(0.1)
(1.8)
Contingency
0.0
2.5
2.0
2.0
(0.5)
Subtotal
356.9
364.6
366.5
9.6
1.9
Operating Reserve
3.2
3.8
2.3
(0.9)
(1.5)
Total Budget
$360.1 $368.4 $368.8
$8.7
$0.4
A
B
C
D
F
G
H
I
J
K
L
M
N
O
P
Q
R
Fuels Ins
G & A Cont
Op Res Total
Budget Walkforward (millions) Sals Bens Conts Supp Util
FY 2013 Outlook
114.4 58.7 128.5 14.4 25.6
3.1
5.3
6.9
0.0
3.2 360.1
Major cost reductions
Demolitions
(3.4)
(3.4)
ETAM Projects
(1.6)
(1.6)
PCS Savings
(0.7)
(0.3)
(1.0)
Energy Rates
(0.6)
(0.6)
Total Savings
(0.7) 0.0
(5.3)
0.0 (0.6)
0.0
0.0
0.0
0.0
0.0
(6.6)
Major cost increases
Merit, Annualization & Vacancy
3.9
3.9
Pension/OPEB
2.3
2.3
Contract increases
2.0
2.0
1.0
1.0
Healthcare
0.6
0.6
CNG fuel credits
0.7
0.7
Insurance premiums
0.5
0.5
Partially restore deicing
1.1
1.1
0.7
0.7
0.6
0.6
Other
0.8 0.2
(0.5)
0.4
(0.1)
0.8
Restore Contingency
2.0
2.0
Three month operating reserve
(0.9) (0.9)
Total increases
4.7 3.1
3.8
1.4
0.0
0.7
0.5 (0.1)
2.0
(0.9) 15.3
FY 2014 proposed budget
118.4 61.8 127.0 15.8 25.0
3.8
5.8
6.8
2.0
2.3 368.8
Salaries and Wages
The FY 2014 salaries and wages budget is $118.4
million, a $4.0 million (3.5%) increase from the FY
2013 Outlook of $114.4 million due to a 3.0% merit
pool of approximately $2.7 million, annualization of
previously granted merit of $0.9 million, PCS savings
of $0.7 million and net vacancy factor and other
changes of $0.7 million. The Budget includes funding
for an incentive compensation plan as reviewed by
the Board’s Executive Compensation Committee. It
will be based on DFW’s achievement of certain
organizational goals and initiatives that will be
developed and published in November 2013. The plan is also based on individual performance.
Benefits
The FY 2014 benefits budget is $61.8 million, a $3.1 million (5.3%) increase from the FY 2013
Outlook of $58.7 million. This is due to increased Pension/OPEB contributions of $2.3 million,
Health care cost increases of $0.6 million and Social Security and other net increases of $0.2
million.
Contract Services
The FY 2014 contract services budget is $127.0 million,
a $1.5 million (1.2%) decrease from the FY 2013 Outlook
of $128.5 million due to cost reduction in one time
demolition projects ($3.4 million) and reductions in asset
management projects ($1.6 million) such as building
assessments, dynamic signs, Terminal D graphics repair,
etc. These are somewhat offset by increases in contracts
($2.0 million) such as Terminal Link, Employee and
Express Busing, Skylink operations and inspections,
asbestos testing, etc. and increased costs for hardstand operations ($1.0 million) increased
costs for TRIP maintenance ($0.7 million) and marketing initiatives ($0.6 million) for Thanks
Again and the Aerotropolis and parking conferences.
Equipment and Supplies
The FY 2014 equipment and supplies budget is $15.8 million, a $1.4 million (10.4%) increase
from the FY 2013 Outlook of $14.4 million primarily due to the partial restoration of the deicing
budget ($1.1 million) and other small items such as uniforms and badging supplies.
Utilities
The FY 2014 utilities budget is $25.0 million, a $0.6 million (2.3%) decrease from the FY 2013
Outlook of $25.6 million due to decreases in electricity ($0.8 million); somewhat offset by an
increase in natural gas ($0.2 million) costs for FY 2014.
Fuels
The FY 2014 fuels budget is $3.8 million, a $0.7 million (22.6%) increase from the FY 2013
Outlook of $3.1 million due to a reduction in CNG tax credits. In FY 2013, congress authorized a
rebate that was for a two year period. The FY 2014 Budget only includes a rebate for one year.
Insurance
The FY 2014 insurance budget is $5.8 million, a $0.5 million (9.4%) increase from the FY 2013
Outlook of $5.3 million primarily due to increased premiums based on claims experience and
the value of DFW’s assets, due to TRIP improvements and the new parking garages.
General and Administrative (G&A)
The FY 2014 general and administrative budget is $6.8 million, a $0.1 million (0.9%) decrease
from the FY 2013 Outlook of $6.9 million due to lower travel expenses.
Contingency
The FY 2014 Budget includes $2.0 million of contingency inside the rate base to be spent at the
CEO’s discretion for projects and unforeseen events that come up during the fiscal year.
Operating Reserve
DFW is required to have a 90-day cash reserve for operating expenses. This is the amount
necessary to fund the reserve.
Contingency Outside of Rate Base
Beginning in FY 2010, DFW began to add contingency outside of the rate base to the budget.
This is done so that the airlines do not have to pay for the contingency during the year in the
rate base, but provides management with flexibility should costs rise unexpectedly and an
incentive to budget costs more accurately. Contingency outside the rate base is $10.0 million in
FY 2014. This allows management to make investments in the DFW cost center or to pursue
marketing initiatives if revenues become available. Management must obtain Board of Directors’
approval prior to using this contingency.
Net Debt Service Budget
The FY 2014 debt service budget is $152.8 million, an $18.2 million (13.5%) increase from the
FY 2013 Outlook and a $30.6 million (16.7%) decrease from the FY 2014 Financial Plan as
shown in the table below.
Debt Service (in Millions)
Debt Service and Coverage
Pre-TRIP Debt Service
TRIP Debt Service1
PFIC Related Debt Service
Less Interest Income
Gross Debt Service and Coverage
Offsets to Debt Service
PFCs for Pre-TRIP Debt Service
PFIC Transfers
Total Offsets
Net Debt Service Paid by Rate Base
1
FY13
Outlook
FY14
Fin'l Plan
FY14
Budget
Increase (Decrease)
FY14B vs.
FY14B vs.
FY13OL
FY14FP
$254.4
$225.9
$219.9
($34.5)
($6.0)
16.1
19.6
(0.2)
$290.0
69.7
18.3
0.0
$313.9
44.6
18.2
(0.2)
$282.5
28.5
(1.4)
(0.0)
($7.5)
(25.2)
(0.0)
(0.2)
($31.4)
135.8
19.6
155.5
$134.5
112.3
18.3
130.5
$183.4
111.5
18.2
129.7
$152.8
(24.3)
(1.4)
(25.7)
$18.2
(0.8)
(0.0)
(0.8)
($30.6)
Shown net of Capitalized Interest
The Net Debt Service increase of $18.2 million over the FY 2013 Outlook is primarily due to the
increase in TRIP debt service partially offset by savings in refinancing in pre-TRIP debt service.
The increase in TRIP debt service is a result of capital projects being completed in FY 2013 and
FY 2014 and debt service beginning for those projects. TRIP debt service is not PFC eligible.
For the FY 2014 Budget, there will be 3 sections of 3 terminals and 3 terminal parking garages
closed and 3 sections of 3 terminals opening. Pre-TRIP debt service has decreased by $10.2
million (net of PFCs) primarily due to better than expected interest rates on refinancing of debt.
In addition, there is a one-time benefit in FY 2014 pre-TRIP debt service of over $5 million from
excess incremental coverage.
Positions
The following table summarizes the total number of operating and capital positions assumed in
the FY 2014 Budget. Operating positions are paid out of the 102 Fund. Salaries of capital
positions are capitalized and paid from the capital accounts. A summary of positions by
department is included at the end of the Department section.
FY13
FY14
FY14
Positions Budget Reductions Budget
Operating
1,802
Capital
112
Total
1,914
(5)
0
(5)
1,797
112
1,909
The change in the number of positions consists of a reduction of ten positions in Parking
Operations, offset by the addition of a corporate aviation concierge and a corporate aviation rep
in General Aviation, two field service technicians in the Field Services Group in ITS and a
diversity manager in Human Resources, for a net reduction of five.
FY 2014 Adopted Budget Departments
Department Overview and Walkforwards
DFW is organized into Divisions, which are comprised of Departments. Each Division page
includes a summary of the Division’s major functions and a walkforward of the FY 2014 Budget
by major cost driver. The following table is a budget comparison by Department, in millions.
FY13
Outlook
$122,871
59,964
11,052
4,947
2,282
$201,115
FY14
Budget
$124,329
63,537
11,246
5,359
2,211
$206,683
Better
(Worse)
FY14B vs
FY13OL
($1,459)
(3,573)
(194)
(413)
70
($5,568)
Parking
Concessions
Customer Service Department
Marketing Services Department
Revenue Management
47,159
2,969
2,229
8,588
8,418
$69,364
46,880
3,289
2,404
9,520
9,135
$71,228
280
(320)
(175)
(932)
(716)
($1,863)
Human Resources
Procurement & Materials Mgmt.
Business Diversity & Development
Risk Management
Administration and Diversity
6,382
4,320
1,299
8,632
$20,634
6,625
4,475
1,327
9,436
$21,862
(243)
(154)
(27)
(804)
($1,228)
Information Technology Services
Finance Department
Treasury Management
Aviation Real Estate
Air Service Development
CFO/Airline Business and Technolo
34,110
6,175
1,311
1,540
2,296
$45,432
35,979
6,580
1,380
1,441
2,302
$47,682
(1,869)
(405)
(69)
99
(6)
($2,251)
5,514
489
2,551
2,336
4,052
0
8,587
$360,076
6,107
598
2,367
2,399
3,988
2,000
3,881
$368,795
(593)
(109)
184
(62)
64
(2,000)
4,706
($8,719)
1
Energy, Transportation, & Asset Mgmt.
Public Safety
Operations
Environmental Affairs Department
Planning Department
Operations
Public Affairs
Airport Development
Legal
Audit Services
Executive Office
Contingency
Non-Departmental
Total Operating Expenses
1
FY13 Outlook was adjusted to reflect the transfer of functions from Parking ($0.4M reductions
to Finance ($0.4 million increase) and for the transfer of Print Services from PMM
to the departments
Expense Budget Walkforward
FY 2013 Outlook
Budget reductions
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q
R
Energy rates
Pension/OPEB
Contract increases
Health care
CNG fuel credits
Insurance premiums
Other
Other
Cost center shifts
Restore contingency
Operating reserve
Net Increases
FY 2014 Budget
Total
$360.1
DFW
$142.7
Airline
$217.4
(3.4)
(1.6)
(1.0)
(0.6)
(6.6)
(2.3)
(0.7)
(1.0)
(0.3)
(4.3)
(1.1)
(0.9)
(0.0)
(0.3)
(2.3)
3.9
2.3
2.0
1.0
0.6
0.7
0.5
11.0
1.4
0.7
1.7
0.0
0.2
0.5
0.8
5.3
2.5
1.6
0.3
1.0
0.4
0.2
(0.3)
5.7
1.1
0.7
1.8
0.0
0.0
0.0
1.1
0.7
1.8
0.6
0.8
1.4
7.6
0.0
0.2
0.4
0.6
1.6
0.9
0.4
0.4
0.8
6.0
(0.9)
2.0
(0.9)
1.1
8.7
$368.8
0.8
(0.3)
0.5
3.0
$145.7
1.2
(0.6)
0.6
5.7
$223.1
Operations Division
Energy, Transportation and Asset Management (ETAM)
ETAM manages DFW’s physical infrastructure assets and services to include energy
management, thermal energy production and distribution, potable water and sanitary sewer
system operation, pretreatment plant operation, spent aircraft deicing fluid collection, storage
system operation, Skylink system operation and vehicle fleet maintenance. Services include
facilities
maintenance,
commissioning/retro-commissioning
of
physical
assets,
infrastructure/facility management, solid waste management, and customer support.
Department of Public Safety (DPS)
The Department of Public Safety ensures the protection of life and property through the effective
and efficient delivery of professional public safety services to the airport community to include
Police, Fire and Special Services.
Airport Operations
Airport Operations is responsible for managing airside and landside operations, ground
transportation, Corporate Aviation and technical training. Airport Operations ensures the
continuous availability of aviation support services and facilities for efficient and safe operations.
Environmental Affairs
Environmental Affairs implements comprehensive environmental compliance programs
throughout DFW Airport, which includes support to the National Environmental Policy Act and
the Federal Aviation Administration; regulatory and technical guidance to DFW departments,
tenants, and contractors engaging in activities subject to environmental laws, regulations, rules,
and enforcement agency policy; and management of a compliance-focused Environmental
Management System and 21 core compliance programs as well as the Noise Compatibility
Office.
Planning
Planning is responsible for directing and coordinating the overall planning activities of DFW
including facilities, airfield, and transportation/roadway planning, and for directing DFW’s
signage program.
Budget Comparison and Walkforward
Operations Division
(in thousands)
FY13
Outlook
Asset Management
$122,870
Public Safety
59,964
Operations
11,052
Planning
2,282
4,947
Total Operations Division
201,115
FY14
Budget
$124,329
63,537
11,246
2,211
5,359
206,683
Salaries & Wages
Benefits
Contract Services
Insurance
Utilities
Administrative
Total Operations Division
$65,451
34,393
67,199
15,346
0
23,087
1,206
$206,683
$63,995
31,896
66,374
13,948
0
23,644
1,258
$201,115
Walkforward from FY 2013 Outlook
Reference
FY 2013 Outlook
$201,115
Salaries and Wages
1,456
E
Benefits
2,497
F, I
Contract Services
825
B, G, P
1,398
J, L, P
Utilities
(557)
D
Administrative
(52)
P
Total Proposed FY 2014 Budget $206,683
Revenue Management Division
Customer Service
The Customer Service Department oversees the Ambassador Volunteer Program, Ground
Transportation Service, Rental Car Center (RAC), and Terminal Management. All areas of
Customer Service focus on meeting public demands, safety, security, and guest relations to
allow for improved satisfaction and operational efficiency.
Marketing Services
Marketing Services is responsible for developing and executing DFW’s trade and consumer
marketing plans in order to drive increased revenues and new airline business and for ensuring
that a consistent brand image is portrayed to every one of DFW’s audiences.
Parking Operations
Parking Operations consists of Operations, Customer Relations, and Busing. Parking
Operations is responsible for parking products, pricing, service delivery and reporting, handling
customer feedback, monitoring electronic parking transactions, billing, and providing
transportation services to DFW Remote Lots, Trinity Railway Express, Terminal Link, Express
Parking and the Employee Shuttle.
Concessions
The Concessions Department is responsible for the management and administration of all
passenger-related concessions and associated revenues within the airport terminals, RAC,
telecommunications, and selected airport properties outside the terminals.
The Commercial Development Department plans, develops, markets and leases airline
hangars, air-cargo and logistics facilities, hotels, gas/convenience stores, and commercially
available land at DFW. Commercial Development also evaluates and implements business
opportunities that diversify DFW’s revenue stream.
Revenue Management Division
(in thousands)
FY13
Outlook
Customer Service
$8,588
Marketing Services
8,418
Parking
47,159
Concessions
2,969
2,229
Total Revenue Mgt Division
69,364
Salaries & Wages
Benefits
Contract Services
Insurance
Utilities
Administrative
Total Revenue Mgt Division
$20,535
11,669
34,216
1,536
0
0
1,408
$69,364
FY14
Budget
$9,520
9,135
46,880
3,289
2,404
71,228
$20,396
11,860
35,599
1,968
0
0
1,404
$71,228
Reference
FY 2013 Outlook
$69,364
Salaries & Wages
(139)
C, E
Benefits
191
F, I
Contract Services
1,383 C, G, H, O
432
P
Administrative
(4)
P
Total FY 2014 Proposed Budget
$71,228
Administration and Diversity Division
Business Diversity and Development
The Business Diversity & Development Department (BDDD) is responsible for administering the
Board’s Disadvantaged and Minority/Women-owned Business Enterprise Programs. BDDD has
the overall responsibility to administer, monitor and enforce the DBE and M/WBE policies,
standards and procedures.
Human Resources
Human Resources’ (HR) primary functions are to develop and implement programs to enhance
the effectiveness of the workforce. HR is responsible for consulting and advising management
on employee relations issues, including employee corrective action, complaints, and grievances;
assisting employees with concerns; and developing and administering policies and procedures
to ensure compliance with federal and state regulations. HR also has responsibility for
coordinating the recruitment and staffing activities of DFW. HR also manages and provides
strategic direction for DFW Airport’s internal communication and diversity programs. HR is
responsible for writing and managing the content, messaging, and distribution of all employee
communications, in order to educate employees on key DFW Airport initiatives, and create
communication vehicles to inform staff of business news and recognize the efforts of DFW
Airport employees.
Procurement & Materials Management
Procurement & Materials Management (PMM) provides DFW-wide centralized procurement,
materials management, and reprographic services. PMM manages professional services
contracts/procurements and P-card program, and prepares Official Board Actions (OBAs) for
Board meetings. The Central Warehouse provides central receipt, financial and physical
management of inventory, management of excess and obsolete property, and provides DFWwide mail service. Print Services provides centralized reproduction, printing, and binding
services for departments within the Airport.
Risk Management
Risk Management identifies, analyzes and evaluates exposures, intervenes with loss prevention
measures that reduce costs, and ensures compliance with applicable laws and regulations.
Areas of general administration include liability claims management, safety training,
management of self-funded, fully insured, and partial claims programs involving property and
casualty liability, general liability, errors and omissions, employment liability, fiduciary/fidelity
exposures, contractual review/interpretation, breach of contract, auto liability, driver safety and
workers’ compensation liability, and short/long term disability. Risk Management also oversees
both the DFW health and wellness program, LiveWell, and the newly created Integrated
Disability Management program.
Administration and Diversity Division
(in thousands)
FY13
FY14
Outlook
Budget
Business Diversity & Development
$1,299
$1,327
Human Resources
6,382
6,625
Procurement & Materials Mgt
4,320
4,475
Risk Mgt
8,632
9,436
Total Admin & Diversity Division
$20,633 $21,862
Salaries & Wages
Benefits
Contract Services
Insurance
Utilities
Administrative
Total Admin & Diversity Division
FY 2013 Outlook
Salaries and Wages
Benefits
Contract Services
Insurance
Administrative
$6,783
4,364
2,460
580
5,297
0
1,149
$20,633
$7,090
4,536
2,692
563
5,821
0
1,160
$21,862
Reference
$20,633
307
172
232
(17)
524
11
$21,862
E
F, I
P
P
K
P
CFO/Airline Business and Technology Division
Information Technology Services (ITS) is responsible for delivering technology solutions to DFW
and is divided into 4 sections. Enterprise Systems is responsible for the development and
maintenance of technology solutions for DFW human resources, procurement, fixed asset,
parking, data architecture, and public safety systems. Systems Operations is responsible for
the development, implementation, maintenance, and administration of the voice and data
communications infrastructure, desktop and server computing environments, and data base
administration. Business Solutions is responsible for the development and implementation of
executive decision support systems, records management, CADD/GIS, web development, and
the implementation of work-flow technologies. Terminal Systems is responsible for the
development and maintenance of life safety systems, security systems, and passenger service
systems.
Finance
Finance is comprised of 3 groups: Accounting, Financial Planning, and Capital Planning.
Accounting is responsible for financial reporting, general ledger accounting, internal controls,
revenue collections, accounts payable, accounts receivable, payroll, and fixed assets. Financial
Planning is responsible for developing and monitoring DFW’s Operating Budget and Outlook for
revenues and expenses. This group is also responsible for establishing DFW’s rates, fees and
charges, and performing departmental financial analysis. In addition, Financial Planning
analyzes DFW’s business units to determine profitability, implementation of activity based
costing, project analysis, process improvement and management methodologies for proper
allocations of revenues and expenses. Capital Planning is responsible for developing and
monitoring DFW’s Capital Budget and forecast.
Treasury/Cash Management
Treasury/Cash Management is responsible for providing strategic financial management for the
Airport. This includes overseeing debt issuance/management, cash management, banking
relations, DFW investments, retirement fund investments, and grants and PFC administration.
Aviation Real Estate serves as the liaison between the Airport and the tenants of all passenger
terminals and aviation-related facilities, including air cargo and hangars. Through permits and
leases, Aviation Real Estate manages the contractual relationship with the tenants. The
department is also responsible for aviation facilities’ strategic planning, with the goal of
maximizing efficiency within the terminals and other aviation facilities.
Air Service Development is responsible for developing and implementing both the
comprehensive air service strategy as well as the marketing programs designed to attract new
entrants, domestic and international carriers to DFW. In addition, Air Service Development
encourages existing DFW carriers to both enter into new markets as well as to increase service
in markets which are already served. Increases in air service either through new entrant
carriers, or via existing carriers provide substantial economic benefit for the Dallas/Fort Worth
Metroplex.
Air Service Development focuses on both domestic and international passenger and cargo
airlines, respectively. This section is responsible for formulating strategic plans that include
targeting top target markets and airlines, monitoring airline business trends, targeting potential
airline services, and presenting business case presentations for target airlines to review.
Through the business case presentations, Air Service Development promotes DFW by
highlighting its numerous advantages and world-class facilities, and provides analytical
demonstrations of the viability of the DFW market for new airlines and new service.
CFO/Airline Business & Technology
(in thousands)
FY13
FY14
Outlook Budget
ITS
$34,110 $35,979
Finance
6,175
6,580
Treasury
1,311
1,380
2,296
2,302
1,540
1,441
Total CFO Division
45,432
47,682
Salaries & Wages
Benefits
Contract Services
Insurance
Utilities
Administrative
Total CFO Division
$17,262
7,958
15,821
1,451
0
1,925
1,015
$45,432
$17,851
8,789
16,429
1,672
0
1,889
1,053
$47,682
Reference
FY 2013 Outlook
$45,432
Salaries and Wages
589
E, P
Benefits
831
F, I
Contract Services
608
G, P
221
P
Utilities
(36)
P
Administrative
38
P
Total FY 2014 Proposed Budget $47,682
Public Affairs Division
The Public Affairs Division is responsible for Board of Directors, community, government and
media relations for DFW Airport related to local, regional, state, national and international
matters. In this role, the Division is responsible for communications with the Board, DFW’s
owner and host cities, media responsiveness, crisis communications and issues management,
as well as leading and articulating DFW’s communications and legislative agendas. The Division
is responsible for relationship-management with external audiences, including North Texas
government entities, the Texas State Legislature, members of the U.S. Congress, and local and
international chambers of commerce, convention & visitors bureaus, business-to-business
communications and advocacy for airline route decisions. The Division also leads special events
planning, dignitary visits and protocol, and DFW and aviation education community and
leadership initiatives in its role as lead department for external communications.
Public Affairs Division
(in thousands)
FY13
Outlook
Salaries & Wages
$1,335
Benefits
544
Contract Services
2,194
40
Insurance
0
Utilities
0
Administrative
1,401
Total Public Affairs Division
$5,514
Walkforward from 2013 Outlook
FY 2013 Outlook
Salaries & Wages
Benefits
Contract Services
Administrative
FY14
Budget
$1,465
540
2,611
39
0
0
1,452
$6,107
Reference
$5,514
130
(4)
417
(1)
51
$6,107
E
F, I
O
P
P
Airport Development
Airport Development has overall responsibility for the efficient, economical design and
construction of facility development and major rehabilitation projects at DFW. Airport
development also provides technical support services and/or personnel to other departments at
DFW as needed in fulfilling DFW’s mission. With the exception of Airport Development’s Code
Compliance activities, all costs are funded by the 301 fund, not the 102 fund. Costs are
increasing in FY 2014 primarily due to increased anticipated permit fee revenues.
Airport Development
(in thousands)
FY13
Outlook
Salaries & Wages
$353
Benefits
113
Contract Services
3
11
Utilities
0
Administrative
8
Total Airport Development
$489
FY 2013 Outlook
Salaries & Wages
Benefits
Contract Services
Utilities
Administrative
FY14
Budget
$395
203
0
0
0
0
$598
Reference
$489
41
90
(3)
(11)
0
(8)
$598
E
F, I
P
P
P
P
Legal
The Legal Department is responsible for providing advice and counsel to the Airport Board and
Staff and for overseeing the prosecution and defense of litigation involving DFW Airport. Legal
Department attorneys are provided by the Dallas and Fort Worth City Attorney’s Offices in
accordance with the 1968 Contract and Agreement.
Legal
(in thousands)
Salaries & Wages
Benefits
Contract Services
Administrative
Total Legal
FY 2013 Outlook
Salaries & Wages
Benefits
Contract Services
Administrative
FY13
Outlook
$218
113
2,152
10
58
$2,551
FY14
Budget
$280
118
1,920
11
39
$2,367
Reference
$2,551
62
5
(232)
1
(19)
$2,367
E
F, I
P
P
P
Audit Services
The Department of Audit Services is an independent appraisal function that reviews and
evaluates DFW activities as a service to the Board of Directors and management. The
Department of Audit Services reports directly to the Board of Directors through the
Finance/Audit Committee. The Department performs work contributing to the safeguarding of
assets; economical and efficient use of resources; accomplishment of established objectives
and goals; compliance with laws, regulations, and DFW policies; and the reliability and integrity
of information used by decision-makers.
Audit Services
(in thousands)
FY13
Outlook
Salaries & Wages
$1,301
Benefits
590
Contract Services
348
26
Insurance
0
Utilities
0
Administrative
72
Total Audit Services
$2,337
FY 2013 Outlook
Salaries & Wages
Benefits
Contract Services
Administrative
FY14
Budget
$1,407
605
315
25
0
0
46
$2,399
Reference
$2,337
106
15
(33)
(1)
(26)
$2,399
E
F, I
P
P
P
Executive Office
The Chief Executive Officer, as the chief administrator and executive officer of the DFW Airport
Board, recommends policies to the Board of Directors for the planning, constructing,
maintaining, operating and regulating of DFW. The Chief Executive Officer, along with the
Executive Staff (5 Executive Vice Presidents and support staff), oversees the implementation of
adopted policies and is responsible for conducting monthly and special meetings with the Board
of Directors. This budget also includes salaries and wages of support staff for the CEO and
Executive Staff.
Executive Office
(in thousands)
FY13
Outlook
Salaries & Wages
$2,268
Benefits
848
Contract Services
367
36
Insurance
0
Utilities
0
Administrative
532
Total Executive Office
$4,052
FY 2013 Outlook
Salaries & Wages
Benefits
Contract Services
Administrative
FY14
Budget
$2,293
980
200
42
0
0
472
$3,988
Reference
$4,052
25
132
(167)
6
(60)
$3,988
E
F, I
P
P
P
Total Airport Non-Departmental
The Total Airport Non-Departmental budget reflects the change in Operating Reserve, payroll
accruals, and salary and benefits savings that are recognized at a Board-wide, rather than a
departmental, level. The differences in Salaries & Wages and Benefits from FY 2013 to FY 2014
are largely due to the one time salary and Benefit adjustments that were made in this section for
the FY 2013 Outlook. The change in contract services is due to building demolitions and other
one time projects.
DFW Non-Departmental
(in thousands)
FY13
Outlook
Salaries & Wages
($163)
Benefits
502
Contract Services
5,050
Operating Reserve
3,197
Total Non-Departmental
$8,587
FY 2013 Outlook
Salaries & Wages
Benefits
Contract Services
Operating Reserve
FY14
Budget
$1,800
(200)
0
2,281
$3,881
Reference
8,587
1,963
(702)
(5,050)
(916)
$3,881
P
F, I
A, P
S
Position Walkforward
FY13
FY 14
Division/Department/Section
Budget Transfers Changes Budget
Executive Office
10
10
Public & Gov't Affairs
19
19
Legal
5
5
Audit Services
15
15
Airport Development
98
98
Administration & Diversity
Human Resources
28
7
1
36
Internal Communications & Diversity
7
(7)
0
Procurement & Materials Mgmt
40
40
19
19
Risk Management
Business Development & Diversity
10
10
Total Admin & Diversity
104
0
1
105
CFO, Airline Business and Technology
8
8
Finance
50
4
54
8
8
Treasury Management
9
9
142
2
144
Total Finance & ITS
217
4
2
223
Revenue Management
Customer Service
47
47
Marketing Services
19
19
16
16
Parking Operations
314
(6)
(10)
298
Concessions
21
2
23
Total Revenue Management
417
(4)
(10)
403
Operations
Airport Operations
116
2
118
Asset Management
181
181
Department of Public Safety
562
562
128
128
Energy & Transportation Mgmt
28
28
Planning
14
14
Total Operations
1,029
0
2
1,031
Total DFW
1,914
0
(5)
1,909
FY 2014 Adopted Budget Capital Budget
Capital Budget
DFW has 2 capital accounts in its Construction and Improvement Fund: the DFW Capital
Account and the Joint Capital Account. The DFW Capital Account is DFW’s discretionary
account. It may be used for any legal purpose and does not require airline approval. DFW uses
this fund for renewals and replacements and other discretionary projects. Funding for the DFW
Capital Account is transferred from the net revenues from the DFW Cost Center, interest
income, grants, and bond proceeds for commercial development projects.
The Joint Capital Account requires airline approval for money to be spent. DFW has received
airline approval for $2.02 billion of bond funding for the Terminal Renewal and Improvement
Program (TRIP), $121 million for terminal gate expansion and conversion projects, and $220
million for other “pre-approved” projects related to Airfield, Roadway/Rail, Utilities, Parking, and
various other projects. DFW also received airline approval for $294.7 million of additional new
projects, including $176.7 million for a new parking garage at Terminal A, $40 million for
replacement of terminal windows, $32 million reimbursement for TRIP programming costs, $36
million of capital reimbursables for Natural Gas and ADE Overhead through the end of the
current Use Agreement, and various other projects, for a total of $2.66 billion of approved
projects (see table for details on following page – “MII Approvals Since New Use Agreement”).
Funding for this account comes from bond proceeds, natural gas royalties, sale of land
proceeds, grants, and interest income. The Use Agreement provides for a Joint Capital Account
Transfer of $16 million in FY 2014 to the Terminal Cost Center to subsidize terminal rentals.
This transfer will be reduced by $4 million each year until it is totally phased out in FY 2018.
Projected Capital – Uses of Cash by Capital Account
DFW projects to spend approximately $842.3 million on capital expenditures in FY 2014 as
summarized in the following chart.
FY 2014 Projected Capital Expenditures ($842.3M)
Joint Capital
Account
Transfer to 102
Fund
$16.0
DFW Capital
Account
$234.7
Joint Capital
Account - TRIP
$351.5
Joint Capital
Account - NonTRIP
$240.0
*$110.4M is debt financed for Commercial Development and other projects.
The following table summarizes total projected capital expenditures for projects to be in
progress during FY 2014.
Capital Budget (Millions)
DFW Capital Account
Joint Capital Acccount
TRIP
Non-TRIP
Transfers to 102
Total Capital
Actual Forecast
FY 2012 FY 2013
72.1
100.4
Active Projects in FY 2014
Prior
Projected Future
Total
Years
FY 2014
Years
Budget
87.7
234.7
534.8
857.2
236.9
71.0
24.0
312.3
170.0
20.0
686.9
165.1
44.0
$404.0
$602.8
$983.7
351.5
240.0
16.0
982.8
210.5
24.0
2,021.3
615.6
112.0
$842.3 $1,752.1 $3,606.1
The following table summarizes the airline MII approvals that DFW Airport has received thus far,
including those projects in the new Use Agreement.
MII Approvals Since New Use Agreement Item#
Project Name
MII funding approvals for Capital Projects:
1
TRIP (base scope)
2
TRIP (cost/scope increase to base ‐ Term B BHS)
TRIP Programming Cost Reimbursement
3
4
TRIP: Terminal A, B, C, & E Window Replacement
5
TRIP: Funding of Design costs for add'l Add/Alt projects
6
TRIP: Natural Gas Lines (Term B, C, & E only)
7
$220M Pre‐Approved Capital Projects
N. Express Covered Parking Expansion (1,000 spaces)
8
9
Term D North Extension (B/D Connector ‐ 3 Int'l gates)
10 Terminal B North Stinger (10 add'l gates)
11 Term D South Extension (4 add'l gates)
12 Aircraft Operation Area (AOA) Snow/Ice Removal Equipment
13 Skylink Bond Issuance
14 Terminal A Parking Garage Reconstruction (All sections)
15 1W Parking Expansion for Employee Parking 16 Aircraft Design Group VI Gating Solutions (Design Only)
17 FY11 ADE Overhead (JCA non‐bond funded)
18 FY11 Natural Gas Reimbusables (JCA non‐bond funded)
19 FY12 ADE Overhead (JCA non‐bond funded)
20 FY12 Natural Gas Reimbusables (JCA non‐bond funded)
21 FY13 ‐ FY20 Natural Gas Reimbursables (JCA non‐bond funded)
22 Terminal Electric Vault Replacement
23 Snow & Ice Facility Modifications
24 N.Express Public Covered Parking Expansion (phase 2)
25 TRIP Annual Transition Costs (NTE $2M/yr through 2017) 26 Terminal A Concession Loading Dock
27 Terminal D Hardstand Equip for International Ops
28 Central Terminal Area Strategy Study (Phase 1 & 2)
29 FY13 ‐ FY20 ADE Overhead (annual NTE through FY20)
30 DPS Station #1 Rehab/Expansion (partial design only)
31 Reimb TRIP Contingency for Term A & B
$'s in Millions
MII APPROVALS ‐ CAPITAL PROJECTS
$2,657.7
Other MII funding approvals unrelated to Capital Projects:
26 RAC/Facility Improvement Corp (FIC) Bond Refunding
MII APPROVALS ‐ OTHER
$112.0
$112.0
TOTAL MII APPROVALS ‐ CAPITAL PROJECTS + OTHER
$2,769.7
$1,922.0
17.5
32.0
40.0
2.0
4.0
220.0
14.0
21.0
40.0
60.0
9.5
1.0
176.7
0.0
0.5
2.7
1.7
2.7
1.5
11.2
9.2
0.857
5.5
14.0
4.0
1.9
2.0
28.0
1.0
11.2
The following table shows cash flow projections, gross of grant reimbursements, for the DFW
capital projects. New projects are highlighted in blue and are subject to change.
DFW CAPITAL ACCOUNT (In Millions)
Project Name
Terminal E Parking Garage (section C- Phase 2)
Southgate: DFW Consolidated HQ
Terminal E Garage Roadway/Curbside Improvements
Rehabilitate Airfield Pavements FY13
Southgate: Infrastructure
Air Service Incentive Plan (ASIP) & Marketing Rebates
Coppell Industrial (Phase I)
Founders Plaza (Phase I)
Other Discretionary (Annual)
Terminal D Parking Guidance System
Terminal D Annual Capital Renewal
Rehabilitate Airfield Lighting Systems FY13
Mid-Cities Bridge
Replace Express Vans
Structural Fire Truck Replacement
Replace Employee Buses
Reclaimed Water System Phase I
Renewal/Replacement Skylink Systems, Facilities, & Guideways
FY13 General Vehicle Replacement
Replace Heavy Equipment
IT Terminal Sys: Term D BHS Replace Headend
FY07 AA Term Imprvmnt Prgm - Term Restroom Rehab A, B & C
Landside Roadway Slope Stability and Erosion Repair
Rehabilitate Industrial Wastewater (IW) System
Repair Roadway Sign Posts
Terminal D Life Safety (PA/VE)
Automated Passport Control System (Phase 1)
Rehab Central Terminal Area (CTA) Storm Sewers @ 1W
IT Business Solutions: Business Intelligence
TSA Checked Bag Resolution Areas - (Term A, B, C, D)
IT Business Solutions: Replace Computer-Aided Dispatch (CAD)
FY08 Restore Pre-Conditioned Air (PCA) Terminal E
Rehabilitate the Pre-Treatment Plant (PTP) Clarifiers
IT Terminal Sys: EVIDS Replacements
IT Terminal Sys: CUSS/CUTE refresh
Replace Potable Water Revenue Meters
Projects <1M
TOTAL DFW CAPITAL ACCOUNT
Prior
Years
.1
4.6
.0
2.3
1.3
8.2
.1
.2
4.7
.0
3.2
.0
.0
3.6
.5
1.3
4.8
3.4
2.5
2.0
.0
1.9
7.1
.6
.0
.0
10.9
.5
.0
.1
.5
.4
.0
.0
.5
.0
.6
.0
.1
.0
.4
FY14
36.7
32.8
12.0
9.6
9.5
9.8
7.9
7.8
6.8
5.7
5.0
4.0
3.9
3.8
3.1
3.0
2.7
2.2
2.2
2.1
2.1
2.0
1.9
1.7
1.6
1.5
1.3
1.3
1.3
1.2
1.2
1.2
1.2
1.1
1.1
1.0
1.0
1.0
1.0
1.0
1.0
Future
Years
16.3
12.2
5.1
2.4
3.5
31.7
1.4
.0
5.1
16.2
130.0
.5
59.3
.0
.1
18.4
.0
8.6
27.9
.0
20.5
.0
.0
.0
8.9
5.4
.9
.7
.3
.0
1.2
.0
.2
.9
.5
3.3
.0
.0
10.6
.6
.6
5.3
$87.7
12.9
$234.7
25.7
$534.8
The following projects will be funded from the Joint Capital Account during FY 2014. Spend
amounts are gross of grant reimbursements.
JOINT CAPITAL ACCOUNT (In Millions)
Prior
Years
FY14
Future
Years
$686.9
$351.5
$982.8
$686.9
$351.5
$982.8
Non-TRIP:
Employee Parking Garage (Term B Infield)
Term A Garage Reconstruction (section B)
Term A Garage Reconstruction (section C)
Term B North Stinger
T/W "Lima" Reconstruct Airfield Taxiway
W Airfield Dr & Mid-Cities Rd
Term D North Ext (B-D Connector)
Elevated Water Tower (2.5 MG)
DART Rail Station @ Term A
Parking Control System (PCS)
Rehabilitate Landside Roads & Bridges Ph 2
Rehab & Reconfigure Water Pump Stations
ITS Radio System Expansion
GSE: FY14 - FY17 Hardstand Equip: Cobus
DPS Station #1 Reconstruction/Expansion
Rehab Energy Plaza - Utility Vault
Employee Parking Garage: Other Related Improvements
TRIP Transition: Business Continuity Program
North/South Toll Plaza & Parking Admin Bldg
Rehab Spent Aircraft Deicing Fluid System Yr 1
Replace E. Airfield Dr Sanitary Sewer Lift Station
Rehab ESP Thermal System (Install 2 300 Ton Chillers)
Rehab AOA Storm Sewers
ADE Overhead
Aircraft Design Group VI T/W "Y" Bridges
Rehab Open Storm Channels FY14/15
Oil and Gas Lease Reimbursables
.0
15.6
.0
20.4
.9
3.3
13.1
1.1
29.5
18.5
.0
.0
.3
.0
.7
.0
.0
2.0
30.9
.1
.5
.0
.0
.3
.2
.0
1.1
50.2
48.6
24.4
19.6
14.5
11.8
7.9
7.0
6.1
6.0
4.5
4.2
3.7
2.7
2.4
2.4
2.4
2.0
1.9
1.8
1.6
1.6
1.5
1.5
1.3
1.1
1.1
$32.1
$1.7
$41.4
$0.0
$35.7
$2.9
$0.0
$4.1
$0.0
$0.0
$1.3
$4.0
$6.3
$1.1
$17.9
$2.5
$1.9
$4.7
$0.0
$0.1
$0.0
$1.4
$1.5
$14.4
$12.9
$1.0
$10.3
Projects <1M
26.7
6.4
11.3
Project Name
Terminal Renewal and Improvement Program (TRIP)
TOTAL JOINT CAPITAL ACCOUNT (TRIP)
TOTAL JOINT CAPITAL ACCOUNT (NON-TRIP)
TOTAL JOINT CAPITAL ACCOUNT
$165.1
$852.0
$240.0
$210.5
$591.6 $1,193.2
TOTAL JOINT + DFW CAPITAL ACCOUNT
$939.7
$826.3 $1,728.1
Capital Project Approval Process
In FY 2010, DFW management developed a 10-year capital plan as the basis for negotiating the
Use Agreement. The FY 2014 projects from the list on the prior page were derived from that
plan. Most of the new projects are officially in a “planning status.” When the project manager is
ready to initiate the project, a detailed capital worksheet is prepared including alternatives, and
presented to the Capital Committee for review and approval. Executive Management approval
is required for projects over prescribed limits. Projects on this list may be modified or eliminated
if planning assumptions on costs and benefits do not materialize upon more detailed analysis. It
is possible that new projects may arise during the fiscal year due to the dynamic nature of an
airport. This “just-in-time” capital planning process provides flexibility to manage the process
most effectively. From a process standpoint, the Board of Directors does not approve an overall
capital budget. Instead, the Board reviews projects to be funded with bond proceeds before the
bonds are sold and reviews individual capital projects as contracts for those projects are
brought to the Board for approval.
Major Capital Project Descriptions
There are several major capital initiatives included in the FY 2014 Capital Budget including:

Terminal Renewal and Improvement Program (TRIP) – As DFW’s domestic terminals
approach end of useful life, a major rehabilitation/ redevelopment program is underway
for Terminals A, B, C and E. The current budget is $2.02 billion (inflated dollars). The
first terminal section, Terminal A – Section A, was
completed in March 2013 with the second phase
scheduled for completion near the end of FY 2014.
Construction is currently underway for Terminal B –
Section C, and Terminal E – Section C, both of
which are also anticipated to be completed during
FY 2014. Total program completion is scheduled for
2018. Approximately $351.5 million is anticipated
to be spent during FY 2014.

Parking Expansion – Parking capacity at Terminal A will be expanded by approximately
52% through the reconstruction of a new more efficient parking facility with
approximately 7,700 spaces to replace the prior parking structure and implement
roadway improvements. This garage is being constructed in 3 phases, lasting
approximately 1 year per phase. Section A/phase 1 of this new parking garage, along
with the associated roadway improvements opened in March 2013. Section B/phase 2
is scheduled for completion in FY 2014. Also, a reconstruction of Terminal E – section B
and C is planned which will increase parking capacity by 51%, as well as improve the
associated roadways to alleviate traffic congestion in front of Terminal E. Approximately
$121.6 million is anticipated to be spent during FY 2014 on these new parking projects.

Employee Parking Garages – DFW is planning a consolidation of various employee
surface parking lots, which currently requires a busing operation to/from DFW Airport’s 5
terminals, into 2 employee parking garages to be located at the infield of Terminal B and
E. The infield locations are within walking distance to the terminals and Terminal
Link/Skylink transportation for those employees working in terminals other than B and E.
Approximately $52.6 million is anticipated to be spent during FY 2014 on this project.

Terminal Gate Expansion and Conversion – Additional gate capacity is planned in
Terminals D and B to meet increased demand. Projects include the conversion of 3
domestic gates between Terminals D and B to accommodate international flights,
construction of a new 10-gate terminal extension on the north side of Terminal B, and
future potential gate expansion south of Terminal D. These projects were pre-approved
in the Use Agreement. The Terminal B North Expansion and B/D Connector are both
under construction with the B/D Connector scheduled to go into service during FY 2014.
Forecasted demand will require additional gate capacity expansion, primarily for
international arrivals, which is currently being analyzed as part of a holistic Central
Terminal Area study to identify the timing and location of future gate expansion. Current
and near-term forecasted international flights are also requiring interim hardstand
operations until additional contact gates can be constructed. Additionally, DFW Airport
is anticipating the need to accommodate new large aircraft (A-380/747-800) from foreign
flag carriers at Terminal D and cargo carriers in west cargo. Design at gate D16 for an
A-380 jetbridge and associated terminal modifications have been completed in
anticipation of this demand. Approximately $27.5 million is anticipated to be spent
during FY 2014.

Taxiway “L” Reconstruction – As part of DFW’s ongoing airfield pavements rehabilitation
program, a $51 million project ($20.4 million net of AIP grants) is planned to reconstruct
a major east side taxiway which has reached the end of useful life. Design has already
been completed using 75% AIP grant funding. Construction, contingent on award of an
FY 2013 AIP Discretionary grant, is scheduled to begin during FY 2014. Approximately
$14.5 million ($5.8 million net of grants) is anticipated to be spent during FY 2014.

DART Rail Station – DFW Airport’s rail station is being constructed adjacent to Terminal
A to accommodate DART’s rail line coming into the north end of DFW Airport. DART’s
Beltline rail station on DFW Airport has already been put into service and is providing
interim shuttle van service to Terminal A until December 2014 when DART’s rail line will
tie into DFW’s rail station. This project is timed to be finished in advance of DART’s
plan to complete the rail construction to DFW Airport in 2014. Approximately $6.1 million
is anticipated to be spent during FY 2014.

Roadway Improvements – Landside roadway improvements are being made to West
Airfield Drive and Mid-Cites Boulevard to widen from 2 lanes to 4 lanes to accommodate
increased traffic, particularly for current West Cargo tenants. Part of the Mid-Cities
roadway project includes construction of a bridge over Bear Creek to eliminate roadway
closures during flood events. Additionally, various landside roadway improvements are
planned at numerous locations throughout the Airport to rehabilitate roadway sections
which are reaching the end of useful life. Approximately $16.3 million is anticipated to
be spent during FY 2014.

Commercial Development and Other – Several locations are planned for Commercial
Development, including Founders’ Plaza off SH114/SH121 to include 2 car dealerships,
Coppell Industrial off I-635, and Southgate at the southern portion of DFW Airport
adjacent to the RAC. The Southgate development includes construction of a DFW
Airport consolidated Corporate Headquarters, including a parking garage, as well as a
Hyatt Place Hotel, Post Office, and 3 restaurants. Approximately $58.6 million is
anticipated to be spent during FY 2014.
Capital Projects - Sources of Cash
DFW’s capital programs are funded from a variety of sources as shown in the following chart.
FY 2014 Capital Sources of Cash
$842.3 Million
Debt
$686.8
Natural Gas
Royalties
$5.8
Interest
Income
$3.9
Cash Flow
Adjustment
$60.0
Grants
$31.9
Carryover
Cash
Balances
$53.9
The following table highlights the walkforward of DFW’s capital funds.
Airport Capital Funds Walkforward
(In Millions)
Joint
Capital
$1,626.4
DFW
Capital
$106.4
Total
$1,732.8
$10.0
576.4
5.8
3.6
$595.7
22.0
110.4
.3
$132.7
31.9
686.8
5.8
3.9
$728.4
($591.6)
$60.0
(16.0)
(547.6)
(234.7)
(234.7)
(826.3)
60.0
(16.0)
(782.3)
Total Ending Cash Balance
Add: Cash From DFW Cost Center *
$1,674.5
.0
$4.4
71.2
$1,678.9
71.2
Ending Cash (9/30/14)
$1,674.5
$75.5
$1,750.1
Capital Walkforward
Beginning Cash (10/1/13)
Sources of Funds:
Grants
Debt
Natural Gas Royalties
Interest Income
Total Sources
Less:
Capital Uses
Cash Flow Adjustment
Joint Capital Account Transfer to 102
Total Uses
* FY13 O&M DFW Cost Center Outlook to be received in DFW Capital Acct in first
Quarter FY14

fy 2014 adopted budget

Transcription

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