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FY 2012 ADOPTED BUDGET

Financial & Business Planning Department

P.O. Box 619428

DFW Airport, Texas 75261-9428

(re)discover

world-class.

Visit dfwairport.com/redefine

FY 2012 Adopted Budget Introduction

Table of Contents

Introduction DFW’s Vision Statement and Board of Directors.......................................................................... 2 DFW Infrastructure....................................................................................................................... 4 Strategic Plan............................................................................................................................... 6 Recent Significant Events............................................................................................................. 7 New Use Agreement Business Model...........................................................................................8 FY2011 Budget Amendments and Outlook…………………………............................................. 10 Budget Schedule……………………………………………………………………........................... 10

Executive Summary Historical Perspective on the DFW Budget…………...................................................................11 Key Performance Indicator #1 - Total Airline Cost...................................................................... 13 Key Performance Indicator #2 - Cost per Enplanement (CPE)................................................... 14 Key Performance Indicator #3 - Net Revenues from DFW Cost Center..................................... 15 102 Revenue Budget Comparisons and 102 Expense Budget Comparisons............................. 17 Capital Programs and Debt Financing….………….....................................................................19

Airline Cost Centers

Airfield Cost Center Revenues and Expenses............................................................................ 20 Terminal Cost Center Revenues and Rents............................................................................... 22 Transfers - Joint Capital Account Transfer.................................................................................. 23 Transfers - DFW Terminal Contribution...................................................................................... 23

DFW Cost Center

DFW Cost Center Revenues and Expenses............................................................................... 24 Parking Business Unit................................................................................................................. 25 Concessions Business Unit......................................................................................................... 26 Rental Car Center (RAC) Business Unit..................................................................................... 27 Commercial Development Business Unit.................................................................................... 28 Other DFW Revenues................................................................................................................. 29

Operating Expenses

2012 Expense Budget by Major Cost Driver............................................................................... 30 Operating Budget by Category.................................................................................................... 34 Contingency Outside of Rate Base............................................................................................. 37 Net Debt Service Budget............................................................................................................. 37 Positions...................................................................................................................................... 38

Departments

Department Overview and Walkforwards…................................................................................39

Capital Budget Projected Capital – Uses of Cash by Capital Account................................................................ 70 DFW Capital Account….............................................................................................................. 71 Joint Capital Account ................................................................................................................. 72 Consolidated Rental Car Facility/Facility Improvement Corporation…....................................... 78 Grand Hyatt Hotel/PFIC…........................................................................................................... 79


2 DFW International Airport

DFW’s Vision Statement

“DFW International Airport - Connecting the World”

Board of Directors

Francisco Robert W. Jeffrey K. Mayor, Mayor, Hernandez Hsueh Wentworth Mike Betsy Lillie M. Board Chair Vice Chair Secretary Rawlings Price Biggins Fort Worth Dallas Fort Worth Dallas Fort Worth Fort Worth

Betty J. Ben P. Brenda E. Forrest Bernice J. Darlene Culbreath Muro Reyes Smith Washington Freed Dallas Dallas Dallas Dallas Dallas Grapevine

DFW’s Mission Statement

DFW International Airport will provide our Customers outstanding facilities and services,

expanding global access and economic benefits to those we serve.

DFW’s Primary Business Goal

Grow the core business of domestic and international passenger and cargo airline service.



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 located within a four-hour flight time of 95% of the U.S. population and currently ranks third 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 191 destinations worldwide, including 144 nonstop domestic destinations and 47 nonstop international destinations. 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 $16.6 billion of economic impact, supporting 305,000 jobs, and generating $7.6 billion in payroll annually.

DFW Infrastructure Airfield DFW has more operational capacity than any airport in the world with seven runways: two diagonals and five north/south parallels. Four of DFW’s runways are 13,400 feet in length. DFW is prepared for future growth and has the capacity to land the 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 that it is using approximately 50%-60% of its maximum landing capacity at this time. Terminals DFW has five terminals (A, B, C, D, and E) totaling 4.7 million square feet of building space, including 155 aircraft boarding gates, 183 ticket positions, 171 self service kiosks, and 15 security checkpoints. As of June 30, 2011, 6 of the gates were closed for renovation as part of the Terminal Renewal and Improvement Program (TRIP) and 22 were not regularly scheduled, including nine gates in the dormant Terminal E Satellite facility that is connected to Terminal E via a tunnel. Collectively, the airlines averaged 6.5 turns per active gate for the first six months of FY 2011.

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 operate from Terminal E. All international flights operate from DFW’s International Terminal D. Terminal D has 1.6 million square feet and 27 gates. All terminal gate leases expire September 30, 2020 per the terms of a new ten-year Use Agreement recently negotiated with the Airlines. 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 eight bag carousels. The FIS has the capacity to handle approximately 2,800 international customers per hour.

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 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 five terminals in two directions with an average time between terminals of 2 minutes. There are two 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, the Grand Hyatt Hotel, parking lots and the Consolidated Rental Car Facility (RAC). DFW uses 28 buses to shuttle passengers between the terminals and Grand Hyatt; 64 buses between remote and express parking lots and the terminals; 32 buses between employee parking lots and the terminals; and 46 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 and EOC handle an average of 26,400 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; and 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 2011 keeping the same overall structure as its previous Plan. This critical document 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:

VISION STATEMENT

DFW International Airport –Connecting the World

MISSION STATEMENT

DFW International Airport will provide our Customersoutstanding facilities and services, expanding global

access and economic benefits to those we serve.

PRIMARY BUSINESS GOAL

Grow the core business of domestic andinternational passenger and cargo airline service.

KEY DRIVERS/RESULTS:

COST

COMPETITIVE

CUSTOMER

SATISFACTION

OPERATIONAL

EXCELLENCE

EMPLOYEE

ENGAGEMENT

Strategic Objectives

Strategic Initiatives

You’re

Important!

Step

Up!

Own

It!

Reach

Out!

Innovation

Wins!

BELIEFS:

http://www.dfwairport.com/



Recent Significant Events

Grow Core Business

Added 9 new announced and implemented international routes/destinations since October 2010, for a total of 47 international destinations.

Added 8 new announced and implemented domestic routes/destinations since October 2010, for a total of 144 domestic destinations

Initiated a new marketing and public affairs approach for outreach in Australia to support new Qantas service to DFW.

Cost Competitive

Reached agreement on a new ten-year Use Agreement with Airlines that became effective October 1, 2010.

Improved (i.e., grew) Net Revenues from DFW Cost Center from a FY 2011 Budget of $54 million to a FY 2011 Outlook of $63 million by increasing non-airline revenues and containing cost.

Improved (i.e., reduced) Passenger Airline Cost per Enplanement (CPE) from a FY 2011 Budget of $6.80 to a FY 2011 Outlook of $6.74 due primarily to cost containment.

Customer Satisfaction

Increased DFW customer satisfaction scores to highest levels ever with a score of 4.22 based on the Airports Council International (ACI) for the first six months of FY 2011. The prior fiscal year average score was 4.19. This ranks DFW #1 against its peer group of airports that complete the survey.

Completed design of new Parking Control System that will be installed in FY 2012 to replace an aging system and enhance parking product options for customers and streamline payment processes.

Operational Excellence

Began construction on Terminal A as part of DFW’s $1.9 billion Terminal Renewal and Improvement Program (TRIP) that will be implemented over the next six years.

Successfully managed air transportation needs for the Super Bowl in February 2011.

Recognized nationally as leaders in sustainability, energy efficiency, environmental protection, and irregular operations.

Employee Engagement

Increased employee engagement scores (73%) and maintained survey participation (86%), both record highs for DFW.



DFW’s Use Agreement Business Model

The following chart summarizes DFW’s Business Model for FY 2012 based on the Use Agreement. The items highlighted in yellow are the DFW’s primary key performance indicators.

DFW Cost Centers

Airfield Terminal DFW

Misc Airfield Revenues Misc Terminal Rentals DFW Revenues

General Aviation FIS Fees Parking

Fueling Facility Lease Turn Fees Concessions & RAC

TSA Rentals Commercial Development

Conc. Reimbursements Employee & Ground Trans.

Utilities & Interest Income

+/- Transfers/Adjustments +/- Transfers/Adjustments +/- Transfers/Adjustments

+/- True-Up Adjustment + DFW Terminal Contribution - DFW Terminal Contribution

+/- Threshold Adjustments + Joint Capital Acct Transfer +/- Threshold Adjustments

+/- True-Up Adjustment

Less Less Less

Expenses Expenses Expenses (includes Skylink)

Net Debt Service Net Debt Service Net Debt Service

Airline Landing Fees Airline Terminal Rents Net Revs from DFW CC

DFW Capital Account

Joint Capital Account

+ Natural Gas/Sale of Land

- Joint Capital Acct Transfer to

Terminal Cost Center

Divided by: Enplanements

Airline Cost per Enplanement (CPE)


Airline Cost/Revenues to DFW

Annual contributions to

DFW Capital Account:

between $41M and $61.5M

Less: Cargo Landing Fees

Passenger Airline Cost

Airline Cost Centers – Landing fees and terminal rental rates for the Airline Cost Centers are based solely on the net cost to provide these services. At the end of each year, DFW performs a reconciliation or “true-up” such that revenues equal the actual net cost to provide these services. Any difference becomes a “True-Up Adjustment” and is charged or credited to that cost center in the next fiscal year. “Threshold Adjustments,” described in the DFW Cost Center section below, may also impact the Airfield Cost Center. The Terminal Cost Center receives two additional adjustments. The DFW Terminal Contribution is a transfer from the DFW Cost Center to pay for DFW’s share of unleased space in Terminals D and E. The Joint Capital Transfer is made from the Joint Capital Account to the Terminal Cost Center. This transfer was $28 million in FY 2011 (first year of new Use Agreement). It is $24 million in FY 2012, and will be reduced by $4 million each year through FY 2017. DFW Cost Center – DFW receives the benefits of the net revenues from all non-airline business units, plus interest income. The Net Revenues from the DFW Cost Center are transferred annually into the DFW Capital Account. If at the end of the fiscal year, net revenues exceed the “Upper Threshold Amount” ($61.5 million in FY 2012), then DFW shares 75% of the excess net revenues with the airlines as part of the following fiscal year’s “True-Up Adjustment.” If Net Revenues to the DFW Capital Account are budgeted to more than the Upper Threshold,



then the airlines would receive a reduction in landing fees in the current year as a Threshold Adjustment. Conversely, if Net Revenues are budgeted to be under the Lower Threshold Amount ($41 million in FY 2012) then the airlines would pay additional landing fees to cover the shortfall. The Threshold Amounts are adjusted annually for inflation. Capital Accounts - The Use Agreement identifies two capital accounts. The DFW Capital Account is DFW’s discretionary account and is funded primarily from the Net Revenues of the DFW Cost Center. Funds in this account may be used for any legal purpose without prior airline approval. Funds in the Joint Capital Account (JCA) require DFW and airline approval before money can be spent. As part of the Use Agreement, the Airlines have agreed that DFW may debt finance the $1.92 billion (inflated dollars) TRIP plus $220 million for other “Pre-approved” projects. The primary funding source of the JCA is debt financing and natural gas royalties.

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:

Number Fund Description Primary Use

101 Fixed Assets and Long Term Debt Balance Sheet

102 Operating Revenues and Expenses Operations

252 Passenger Facility Charges (PFC) Capital/Debt Service

320s/330s Joint Capital Account and Bond Funds Capital/Debt Service

340s DFW Capital Account and Bond Funds Capital/Debt Service

500-600s Debt Service and Sinking Funds Debt Service

907 Facility Improvement Corporation (FIC) Rental Car Facility

910 Public Facility Improvement Corporation (PFIC) Grand Hyatt Hotel

DFW’s financial statements are issued in conformance with Generally Accepted Accounting Principles (GAAP) and include all 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. Projected cash flows and budgets for the FIC/RAC (907) Fund and PFIC/Grand Hyatt Hotel (910) Fund are also included at the end of this Budget book.

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, PFC’s, 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 2012 Budget Comparisons to Other Periods FY 2011 Budget Amendments – During FY 2011 the Board approved two budget amendments to the FY 2011 Budget which are summarized in the following table. Any reference to the FY 2011 Budget in this budget document relate to the FY 2011 Budget, as amended.

Millions

FY 2011 Approved Budget 564.3$

Approved Changes (and Dates)

Use of Contingency (April 7, 2011) 3.6

Refunding FIC/RAC Bonds (July 7, 2011) 4.5

FY 2011 Budget, as Amended 572.4$

FY 2011 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 2011 Outlook comparisons to provide the best basis for comparison (rather than comparing to the FY 2011 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 2011.

Financial Plan – DFW issued its first ten-year Financial Plan in December 2010. 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 three 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 three KPIs since this was the basis for the Airline Use Agreement. Accordingly, comparisons to the Financial Plan for fiscal year 2012 are included in this Budget Book.

Presentation of Amounts & Prior Years Actuals – The FY 2012 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 2012 presentation.

Budget Schedule

DFW’s fiscal year begins October 1. The FY 2012 Expense Budget was compiled by the departments in May and June 2011, and then reviewed and modified by Executive Staff in June and July 2011. A presentation was made to representatives of the Signatory Airlines on June 23, 2011 with other follow-up review sessions. A “preview” of the FY 2012 Budget was presented to the Board on July 5, 2011. The final recommended Budget will be presented to the Board on July 28, 2011. The Board may approve it that day or consider it further at its regularly scheduled meetings on August 3 and August 5, 2011. The FY 2012 Budget must be submitted to the City Managers of Dallas and Fort Worth by August 15, 2011 with approval of the two City Councils by September 30, 2011.

FY 2012 Adopted Budget Executive Summary


A Historical Perspective on the DFW Budget

DFW’s Board and management team have always focused on being one of the most cost effective airports in North America and the world. Based on our most current survey (shown on page 15), DFW remains one of the lowest cost airports in our competitive set of large US hub airports. DFW has achieved this by employing innovative management, cost containment, and debt strategies, and by focusing on growing non-airline revenues. The following chart provides a historical perspective of DFW’s Total Annual Budget since FY 2001 through the FY 2013 forecast from the DFW Financial Plan.

171 171 179 203 257

331 322 334 321 325 337 352 360 374 112 109 115

125

203

274 295 300 296 261 232 250 252

303

$0

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$300

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01 02 03 04 05 06 07 08 09 10 11OL 12B 12FP 13FP

Fiscal Year

Total Annual BudgetMillions

O&M Costs

Debt Service

CDPConstruction

New Use Agreement

&TRIPTerm D, Skylink, & Term E

284 281 294328

460

606 617634

617586 569

602 619

677

1% CAGR

DFW’s Total FY 2012 Budget of $601.6 million is $4 million less than in FY 2006 and $18 million less than projected in the Financial Plan for FY 2012. The black dashed line, which reflects the change in O&M costs, shows that costs have only risen 1.0% per year on a compound average growth rate (CAGR) since FY 2006, and only 2.3% since FY 2009.

The chart is divided into three distinct periods:

Capital Development Plan (CDP) Construction – This is the period from FY 2001 to FY 2005 when DFW was designing and constructing Terminal D and Skylink.

Terminal D, Skylink and Terminal E – Terminal D and Skylink opened in FY 2005, with FY 2006 being the first full year of service. The significant increase in costs resulted from increased debt service ($2.8 billion in new debt was issued to fund construction) and increased operating costs for Terminal D, Skylink, and Terminal E which had been vacated by Delta Airlines. In FY 2008, after the airlines began to incur significant losses once again, DFW implemented a significant O&M cost reductions and a debt restructuring program. Reductions continued into FY 2011 which was the first year of the new



Use Agreement. One of the primary Use Agreement negotiating goals of the airlines and DFW was to have a significantly lower budget in the first year, FY 2011.

New Use Agreement and Terminal Renewal and Improvement Program (TRIP) FY 2012 is the beginning of a new phase for DFW. DFW developed a ten-year Financial Plan to support the negotiations of the new ten-year Use Agreement that became effective on 10/01/11. The airlines signed the Use Agreement acknowledging that the budget and airline cost would increase significantly due to the following elements:

(1) Completion of the debt restructuring plan. In FY 2009 DFW started implementation of a plan to restructure “Existing Debt” outstanding to save the Airlines $255 million between FY 2009 and FY 2018. This plan, shown in the chart below, was developed specifically to give the airlines relief for a prolonged period of time. Once implemented however, there would be a gradual annual fixed increase in airline debt service payments of $6-8 million before incremental coverage.

122

143 133 131

120

152 149 148 151 156

96

114

98 104 109 114 120

126 131 137

$255

$0

$50

$100

$150

$200

$250

$300

FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18

Debt Restructuring Summary -Airline Cost Portion OnlyMillions

Original Debt Service

Restructured Debt Service

Cummulative Savings

(2) An annual reduction of capital transfers to subsidize terminal rents. The airlines agreed that cash transfer subsidies from the Joint Capital Account would be reduced by $4 million per year, from $28 million in FY 2011 to $0 in FY 2018. Accordingly, airline cost increases $4 million each year through FY 2018.

(3) Issuance and repayment of debt to finance $2.14 billion of new capital projects ($1.92 billion for TRIP plus $220 million for other approved projects). This is by far the largest single reason for increased airline cost over the next decade. The Financial Plan includes the assumption that DFW will issue approximately $2.7 billion over the next seven years. Annual debt service is projected to increase approximately $234 million by FY 2020 per the Financial Plan. The airlines will pay a significant portion of this increase in higher terminal rentals.

In summary, DFW is entering a new period where it will see its cost structure increase significantly over the next six years due primarily to the items mentioned above. Management will continue to seek ways to mitigate other significant expense increases as it has historically demonstrated; but, most of the future increases in DFW’s cost structure are fixed and cannot be avoided unless the Airport discontinues the TRIP. It should be noted that only items (1) and (2) above impact the FY 2012 budget. Item (3) will begin to impact the budget beginning in FY 2013 when debt service on TRIP financings is projected to increase approximately $50 million.



Key Performance Indicators (KPIs)

DFW’s Use Agreement requires management to focus on three strategic goals for its three most important KPIs:

Maintain a competitive Airline Cost

Maintain a competitive Passenger Airline Cost per Enplanement (CPE)

Grow Net Revenues from the DFW Cost Center

The first two performance indicators are driven primarily by cost, but the third performance indicator is also driven by increasing revenues. This places significant importance on growing the “bottom line,” rather than just focusing on the budget or expense side of the equation.

KPI #1 - 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 and fees. CPE (discussed below) is based solely on passenger airline cost). The following chart displays total airline cost from FY 2001 through the FY 2013 projection, highlighting the three distinct periods previously discussed. Airline cost has increased each time DFW entered a new phase and has been held relatively stable since FY 2006. The FY 2012 airline cost budget is $202.5 million, a $4.5 million (2.3%) increase from the FY 2011 Outlook, but $33.5 million (14.2%) lower than in the Financial Plan for FY 2012. The increase in Airline Cost in FY 2012 is primarily due to the $6 million increase in “Existing Debt Service” and; the increase in airline terminal rentals due to the $4 million decrease in cash transfers from the Joint Capital Account (discussed above), somewhat offset by a favorable true-up from FY 2011. Management will set an incentive compensation program target for FY 2012 to reduce airline cost to $198 million or less so that the increase is less than the FY 2011 Outlook.

84 81 83 109

165

265

208 215 215 204 198 203

236 258

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$350

01 02 03 04 05 06 07 08 09 10 11OL 12B 12FP 13FP

Fiscal Year

Total Airline Cost *Millions

Pre-CDP

New Use Agreement

&TRIPTerm D, Skylink & Term E

* As modified for FY11 "True-Up" and Air Service Incentive Payments



The FY 2012 airline cost budget of $202.5 million is based on a rates and charges budget of $221 million less: (1) an estimated FY 2011 “True-Up” credit of $8.3 million that will reduce landing fees paid to the Airport in FY 2012; and (2) $10.2 in Air Service Incentive Program (ASIP) payments to the airlines. DFW reimburses the airlines for landing fees, terminal rentals, marketing and other fees associated with new international and domestic service. ASIP payments to the airlines are made from the DFW Capital Account, but are not reflected as revenue in the 102 Fund. However, these reimbursements do represent a reduction in airline cost in the year paid. These adjustments have been made to all periods shown in the chart.

KPI #2 – 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. This is not the case for an airport however. Airport costs are based on the facilities and runways maintained. Notwithstanding this issue, DFW (and the industry) use this indicator as a performance measure.

The following chart displays CPE from FY 2001 through the FY 2013 Financial Plan projection. CPE has increased each time the Airport has entered a new phase. Over the past six years, DFW has kept CPE within a $1 range. The FY 2012 CPE budget is $6.69, a $0.26 (4.0%) increase due to the increased airline cost factors discussed above. However, CPE is $1.07 (16.0%) lower than projected in the Financial Plan for FY 2012.

3.14 3.35 3.39 3.97

5.91

7.58

6.44 6.85

7.17 6.74

6.43 6.69

7.76 8.24

$0.00

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01 02 03 04 05 06 07 08 09 10 11OL 12B 12FP 13FP

Fiscal Year

Passenger Airline CPE*

Pre-CDP

New Use Agreement

&TRIPTerm D, Skylink & Term E

* As modified for FY11 "True-Up" and Air Service Incentive Payments



CPE Benchmarked to Other Airports – DFW’s goal is to have a competitive CPE. The

preceding chart trends DFW’s performance over time. The following chart benchmarks DFW’s

“fully loaded” CPE with the fully loaded CPE projections for DFW’s competitive set of 13 large

U.S. hub airports using the latest data available from ACI surveys (i.e., FY 2010 actuals).

This chart shows that DFW is well-positioned from a cost standpoint against the competitive set

and that DFW is clearly American Airlines’ lowest cost hub airport (New York-JFK, Chicago –

O’Hare, Los Angeles, and Miami).

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), an estimate of what the airlines pay for delay costs (red), plus estimated fuel taxes and fees (yellow).

KPI #3 - Net Revenues from DFW Cost Center

The chart to the side compares net revenues from the DFW Cost Center. There are no historical comparisons before FY 2011 because this metric was created from the new Use Agreement business model that became effective this past year. The FY 2012 net revenues budget is $58.2 million, a $1.4 million (2.3%) decrease from the FY 2011 Outlook* that excludes one-time revenues and expenses. The decrease is primarily attributable to the expected negative impact of the TRIP on

$54.0

$63.1$59.6

$52.5

$58.2

$20

$30

$40

$50

$60

$70

FY11B FY11OL FY11OL* FY12FP FY12B

Net Revenues from DFW Cost Center Millions

** Excludes one-time revenues and expenses from FY11



concessions and parking revenues (estimated at almost $4.5 million in FY 2011). The growth over the Financial Plan is due to the higher recurring revenues in concessions, parking and rental car business units in FY 2011 and lower costs. See the DFW Cost Center Section from more detail.

Passengers – The FY 2012 Budget for passengers is 57.9 million, a 0.8 million (1.4%) increase over the FY 2011 Outlook primarily due to the expectation that the economy will continue to slowly recover. A more vibrant economic recovery was contemplated in the 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.

FY 2010 FY 2011 FY 2012 FY 2012

Passengers (Ms) Actual Outlook F-Plan Budget $ % $ %

Originating 12.6 12.4 13.0 12.7 0.3 2.2% (0.3) (2.1%)

Destination 11.6 11.4 12.1 11.6 0.2 1.7% (0.5) (4.1%)

Connecting 33.1 33.3 33.7 33.6 0.3 1.0% (0.1) (0.3%)

Total Passengers 57.3 57.1 58.8 57.9 0.8 1.4% (0.9) (1.4%)

Enplanements 28.7 28.5 29.3 28.9 0.4 1.4% (0.4) (1.4%)

Inc(Dec) - 12FPInc(Dec) - 11OL

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.

REMAINDER INTENTIONALLY LEFT BLANK

56.4 57.158.8

57.9

40

45

50

55

60

65

FY10A FY11OL FY12FP FY12B

PassengersMillions



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.

FY 2011 FY 2012 FY 2012

Millions Outlook F-Plan Budget $ % $ %

Revenues

Airfield Cost Center $125.3 $134.7 $131.8 $6.5 5.2% ($2.9) (2.2%)

Terminal Cost Center 127.1 149.7 137.9 10.8 8.5% (11.8) (7.9%)

DFW Cost Center 245.6 246.2 246.2 0.6 0.2% 0.0 0.0%

PFCs/CFCs 134.5 134.2 143.9 9.4 7.0% 9.7 7.3%

Total Revenues 632.6 664.8 659.9 27.3 4.3% (4.9) (0.7%)

Expenses

Operating Expenses 337.3 359.9 351.4 14.1 4.2% (8.5) (2.4%)

Debt Service 232.2 252.4 250.2 18.0 7.8% (2.2) (0.9%)

Total Expenses 569.5 612.3 601.6 32.1 5.6% (10.7) (1.7%)

Net Revenues $63.1 $52.5 $58.2 ($4.8) (7.7%) $5.7 10.9%

Inc(Dec) - FY11OL Inc(Dec) - FY12FP

Budgeted Airfield and Terminal revenues for FY 2012 are higher than the FY 2011 Outlook primarily due to increased costs and debt service in these Cost Centers. However, these revenues are significantly lower than what was assumed in the FY 2012 Financial Plan because the associated costs and debt service are lower than forecast. See more detailed information in the Airline Cost Center section 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 higher than the FY 2011 Outlook and Financial Plan due to higher eligible debt service than plan. See more discussion on debt service and use of PFCs/CFCs in the Operating Expense Summary.

FY 2012 Net Revenues are budgeted to be lower than the FY 2011 Outlook because of one-time revenues received in FY 2011, but significantly higher than the Financial Plan due to lower operating expenses, debt service and increased PFC/CFC revenues.

Annual 102 Budget Comparisons and Walkforward

The following table compares the Annual 102 Fund Budget with the FY 2010 Actual, FY 2011 Budget and FY 2011 Outlook. The Budget request for FY 2012 includes $5 million of contingency outside the rate base. This contingency may only be accessed with Board approval. This is consistent with approach taken in FY 2011.

Annual Budget (millions)

FY 2010

Actual

FY 2011

Budget

FY 2011

Outlook

FY 2012

Budget

Operating Expenses $324.5 $339.5 $337.3 $351.4 $14.1 4.2%

Debt Service 261.0 232.9 232.2 250.2 18.0 7.8%

Total Budget $585.5 $572.4 $569.5 $601.6 $32.1 5.6%

Contingency O/S Rate Base $5.0

Total Budget w/ Contingency $606.6

Inc (Dec) FY12B

vs FY11 OL



Major changes between the FY 2012 Budget and the FY 2011 Outlook and how they impact the DFW Cost Center and the Airline Cost Centers are summarized below. The descriptions of these changes are discussed in the Operating Expenses section.

Budget Walkforward (Millions) Total

DFW

CC

Airline

CCs

FY 2011 Outlook $569.5 $209.4 $360.1

Less Savings

Asset Management contract savings (4.0) (1.4) (2.6)

Superbowl costs (2.7) (2.7) (0.0)

Fuel/Energy costs (0.5) (0.1) (0.4)

Total Savings (7.2) (4.2) (3.0)

Increases funded by Other Sources

"Existing Debt" Service and Coverage 15.5 4.5 11.0

RAC/FIC Debt Service 2.6 2.6 0.0

Employee busing - terminal D 1.5 1.5 0.0

Total funded by Other Sources 19.6 8.6 11.0

Other Increases

Pension Plan 2.7 0.7 2.0

Healthcare 1.8 0.3 1.5

Annualization of FY 2011 salaries and merit 2.7 0.7 2.0

FY12 merit pool (3% effective 1/1/12) 2.2 0.6 1.6

International air service support 1.1 0.0 1.1

Parking Business Unit costs 0.7 0.7 0.0

Skylink contract increase 1.0 1.0 0.0

ITS contract increases, net 0.7 0.3 0.4

Deicing filters & equipment 0.6 0.0 0.6

Data center bldg maintenance 0.4 0.2 0.2

Environmental projects 0.3 0.0 0.3

Marketing projects 0.3 0.2 0.1

Cost Center true-up 0.0 (1.0) 1.0

Other net, less than $250,000 each 0.6 0.4 0.2

Total Other Increases 15.1 4.1 11.0

Restore Contingency to $2.5M 2.5 0.9 1.6

3 month Operating Reserve 2.0 0.4 1.6

FY 2012 Budget/Outlook $601.5 $219.2 $382.3



Capital Programs and Debt Financing

DFW has two capital accounts, the Joint Capital Account which 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). The TRIP is funded at $1.92 billion over the next six years. As of June 30, 2011, DFW has awarded $330 million in contracts for TRIP and has realized $7 million of savings. The TRIP is preapproved as part of the Airports Use Agreement. The Airlines also preapproved $220 million to be spent on other capital projects through FY 2016. 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 detail in the Capital section.

DFW expects to issue bonds to fund a significant percentage of the TRIP and the other projects included in the Joint Capital Account. Although the financing plans for FY 2012 are still preliminary, management projects that approximately $500 million of new debt will be issued during the fiscal year. In addition, certain bonds relating to construction of Skylink may be refunded during the fiscal year.

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 2012 are $14 million compared with approximately $12 million in FY 2011. DFW also receives fees for pipeline, property and surface use fees from natural gas drilling and piping activity. These are considered Gross Revenues of the Airport per the Bond Ordinances and are included as Commercial Development revenues in the DFW Cost Center.

FY 2012 Adopted Budget Airline Cost Centers



There are two airline cost centers, one for the airfield and one for the terminals. The airlines pay DFW landing fees to cover the net cost of the airfield and terminal rents to cover the net cost of the terminals. Federal Aviation Administration (FAA) regulations restrict an Airport from making a profit on aviation activities. Consequently, the airfield and terminals must be priced to cover the net cost to provide the services. 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 less than the actual cost), then the Airport provides a credit or charge in the following fiscal year. Based on the FY 2011 Outlook, DFW is expecting to provide a True-Up credit adjustment of approximately $1.4 million to the airlines in FY 2012.

Airfield Cost Center Revenues and Expenses

The following table compares Airfield Cost Center revenues and expenditures for FY 2011 Outlook, FY 2012 Plan, and FY 2012 Budget. Note that revenues equal expenses in this cost center in all periods. Revenue variances to the FY 2011 Outlook are explained below. See the Operating Expenses section for expenditure variances.

FY 2011 FY 2012 FY 2012

Airfield CC (Millions) Outlook F-Plan Budget FY11OL FY12FP

Revenues

Landing Fees $114.9 $123.8 $121.4 $6.5 ($2.4)

Other 10.4 10.9 10.4 0.0 (0.5)

Total Revenues 125.3 134.7 131.8 6.5 (2.9)

Expenditures

Operating Expenses 66.7 70.7 68.0 1.3 (2.7)

Net Debt Service 58.6 64.0 63.8 5.2 (0.2)

Total Expenditures 125.3 134.7 131.8 6.5 (2.9)

Net Airfield Revenue $0.0 $0.0 $0.0 $0.0 $0.0

FY12B Inc (Dec) from

Landing Fee Revenues – The FY 2012 landing fees budget is $121.4 million, an increase of $6.5 million from the FY 2011 Outlook primarily due to increased net debt service charged to the airfield.

Other Airfield Revenues – Other airfield revenues include Corporate Aviation (CA) fees and the fuel farm fees paid by the Airlines to cover debt service and overhead of the fuel farm. Fuel farm fees increase annually at the rate of inflation.



Landing Fees and Landed Weights

The charts compare landing fees and landed weights for FY 2010 Actual, FY 2011 Outlook, the FY 2012 Financial Plan projection and the FY 2012 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.

On a post true-up basis average landing fees will be $3.15 in FY 2012, a $0.04 (1.3%) increase from the FY 2011 Outlook due to an increase in debt service allocable to the airfield. Landing fees are lower than the FY 2012 Financial Plan by $0.16 due to cost containment. The higher landing rate in FY 2010 was due to the different fee calculation under the old residual Use Agreement.

$4.49

$3.11 $3.31 $3.33 $3.15 $3.03

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

FY 2010 Actual

FY 2011 Outlook

FY 2012 Plan

FY 2012 Budget

FY 2012 Post True-

Up

FY 2012 Add'l $4.5M

Savings

Landing Fee Rates (per 1,000 lbs.)

36.3 36.4

37.4

36.5

30.0

32.0

34.0

36.0

38.0

40.0

FY2010 Actual FY2011 Outlook FY2012 Plan FY2012 Budget

Landed WeightsBillions

Cargo

DFW has grown its cargo business over the past ten years and is recognized by the industry as one of the top cargo airports in the world. DFW was named “Best Cargo Airport” in North America by the Air Cargo Excellence Survey in FY 2010 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 8.8% of all landing fees are budgeted to come from cargo aircraft for the FY 2012.



Terminal Cost Center Revenues and Rents

The following table compares Terminal Cost Center revenues and expenditures for FY 2011 Outlook, FY 2012 Plan, and the FY 2012 Budget. Note that revenues equal expenses in this cost center in all periods. Revenue variances between the FY 2012 Budget and the FY 2011 Outlook are explained below. See the Operating Expense section for expenditure variations.

FY 2011 FY 2012 FY 2012

Terminal CC (Millions) Outlook F-Plan Budget FY11OL FY12FP

Revenues

Operating Revenue

Terminal Leases $63.7 $85.6 $74.2 $10.5 ($11.4)

FIS Fees 15.7 18.8 18.7 3.0 (0.1)

Turn Fees & Office Rents 7.6 9.5 8.5 0.9 (1.0)

Other 12.1 11.8 12.5 0.4 0.7

Total Operating Revenue 99.1 125.7 113.9 14.8 (11.8)

Transfers

Terminal Contributions 15.0 15.4 14.7 (0.3) (0.7)

Joint Capital Transfer 28.0 24.0 24.0 (4.0) 0.0

Total Transfers 43.0 39.4 38.7 (4.3) (0.7)

Total Revenues 142.1 165.1 152.6 10.5 (12.5)

Expenditures


Net Debt Service 10.8 20.2 11.7 0.9 (8.5)


Net Terminal Revenue $0.0 $0.0 ($0.0) ($0.0) ($0.0)


Terminal Leases

The FY 2012 terminal lease budget is $74.2 million, a $10.5 million (14.2%) increase from the FY 2011 Outlook due primarily to increased 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 five 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 receives rent credit for their costs. The amount of the rent credit was negotiated as part of the Use Agreement ($36.9 million in FY 2012). There are other terminal rent credits given through FY 2017 for Terminals A & C ($4.86 million per year) and for Terminal E ($0.625 million per year) that were negotiated as part of the use agreement.



Average Terminal Rents before Credits

The chart below compares average terminal rents before credits for FY 2011 Outlook, the FY 2012 Financial Plan and the FY 2012 Budget, pre and post true-up. We did not compare to FY2010 actual due to cost and revenue allocations as a result of the new agreement. The increase in FY 2012 Budget compared to the FY 2011 Outlook is due to increases in costs and a reduction of $4 million in the transfer credit from the joint capital account compared to FY 2011 as described in the use agreement.

$94.95

$114.53

$104.56 $103.25

$60

$70

$80

$90

$100

$110

$120

$130

$140

FY 2011 Outlook FY 2012 Plan FY 2012 Budget FY 2012 Post True-Up

Average Terminal Rents before Creditsper square foot

Federal Inspection Services (FIS) Fees

The FIS budget for FY 2012 is $18.7 million, a $3.0 million (19.1%) increase from the FY 2011 Outlook due to increased terminal costs. Costs are allocated to the FIS based on its percent share of terminal square footage.

Turn Fees

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 that terminal rates increase beginning in FY 2012.

Other - Concessionaire Reimbursements

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.

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 is reduced by $4 million each year until it is phased-out completely in FY 2018. Accordingly, the FY 2012 amount is $24 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.

FY 2012 Adopted Budget DFW Cost Center


DFW Cost Center Revenues and Expenses

The table below compares the FY 2010 Actuals, FY 2011 Outlook, FY 2012 Financial Plan, and the FY 2012 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. If net revenues exceed $61.5 million in FY 2012, then DFW will share 75% of the excess with the airlines in FY 2013 as part of the airfield “True-Up”. Revenue variances are discussed in the rest of this section. Expenditure variances are covered in the Operating Expenses section.

FY 2011 FY 2012 FY 2012

DFW Cost Center (Millions) Outlook F-Plan Budget FY11OL FY12FP

Revenues

Revenue Mgmt Revenues

Parking $106.7 $104.9 $108.1 $1.4 $3.2

Concessions 50.9 46.0 49.0 (1.9) 3.0

Rental Car (RAC) 26.8 27.0 27.6 0.8 0.6

Commercial Development 36.4 36.3 32.7 (3.7) (3.6)

Total Revenue Mgmt Revs 220.7 214.2 217.3 (3.4) 3.1

Employee Transportation 8.2 9.3 11.7 3.6 2.4

Taxis and Limos 7.2 6.6 7.5 0.2 0.9

Utilities & Miscellaneous 5.5 9.0 5.7 0.3 (3.3)

DPS Allocation 1.4 1.2 1.4 0.0 0.2

Interest Income 2.6 5.9 2.5 (0.1) (3.4)

Total Revenues 245.6 246.2 246.2 0.6 0.0

Expenditures


Net Debt Service 28.3 34.1 30.8 2.5 (3.3)

DFW Terminal Contribution 14.8 15.4 14.7 (0.1) (0.7)


Net Revenues from DFW CC $63.1 $52.5 $58.2 ($4.9) $5.7


Revenue Management Revenues

DFW’s Revenue Management Division manages four Business Units that strive to maximize net revenues from the parking, concessions, RAC, and commercial development business units. The chart to the right compares Revenue Management Revenues per Enplanement. This KPI is projected to be $0.21 (2.9%) better than the Financial Plan because of increased parking and concessions revenues; but $0.01 lower than the FY 2011 Outlook (excluding one-time revenues) primarily because of the expected negative impact from the TRIP on concessions and parking revenues in FY 2012. More information is included in the business unit write-ups that follow.

$7.18

$7.73

$7.52

$7.30

$7.51

$6.00

$6.40

$6.80

$7.20

$7.60

$8.00

FY10 Actual

FY11 Outlook

FY11 Outlook*

FY12 F-Plan

FY12 Budget

Revenue Mgmt. Revenue per Enplanement

* Excludes one-time revenues



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 Airport has a total of 40,049 public parking spaces and four different parking products: terminal (25,856 spaces at $18-19 per day); infield lots (2,430 spaces at $18-19 per day); covered and uncovered express lots (7,000 spaces at $10–12 per day); and uncovered remote lots (4,852 spaces at $8 per day, picture shown on left). DFW will add 1,000 new covered parking spaces in the north express lot in the first quarter of FY 2012. However, the A section garage of Terminal A, consisting of 1,677 spaces, will be closed for TRIP renovations.

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 fee if they have a toll tag and $2 if paying with cash. The Airport also has a $1 drop–off fee for times between 8 minutes to 30 minutes and escalating fees up to $7 for times up to six hours. Any stay over six 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. DFW Valet will be priced at $23 per day plus sales tax in FY 2012, a $1 increase from FY 2011. 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).

FY 2012 Budget – The FY 2012 parking revenue budget is $108.1 million, a $1.4 million (1.3%) increase from the FY 2011 Outlook. This reflects an increase in originating passengers less an estimated $2.9 million negative impact from the TRIP (closure of one Terminal A parking garage) and “Connector Project” construction. The FY 2012 budget is $3.2 million (3.1%) higher than the FY 2012 Financial Plan. The PBU assumed a greater negative elasticity of demand from the parking rate increase in FY 2011. This did not materialize, so revenues were higher than expected in the base year and in FY 2012.

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 decrease in FY 2012 Budget versus the FY 2011 Outlook is the assumed negative impact of TRIP on the parking budget. However, this KPI is better than the FY 2012 Financial Plan due to higher revenues in the FY 2011 base year.

$8.22

$8.60

$8.18

$8.52

$7.00

$7.40

$7.80

$8.20

$8.60

$9.00

FY10 Actual

FY11 Outlook

FY12 F-Plan

FY12 Budget

Parking Revenue per Originating Passenger



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 percent rent. At June 30, 2011, the Airport had 219 total locations and 119 packages. Approximately

71% 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 that are not tied directly to enplanements.

During FY 2011, DFW rebid concessions contracts for Terminal A. DFW is planning to open 21 new food and beverage locations and 25 new retail/service locations in Terminal A over the next three years as the phased TRIP construction is completed. DFW will rebid portions of Terminal B and Terminal E concessions in FY 2012 so these locations can be built-out as those terminals undergo renovation. The Airport anticipates that revenues per enplanement will increase substantially as the new concessions open.

FY 2012 Budget – The FY 2012 Concessions Budget is $49.0 million, a $1.9 million (3.7%) decrease from the FY 2011 Outlook due to the net impact of increasing enplanements, less a projected $1.9 million reduction due to TRIP construction and $1.2 million of one-time concessions revenues received in FY 2011 as the result of concession audits. All of the concessions in Terminal A, Section A will be closed for TRIP construction during FY 2012. In addition, sections of Terminal B and E are scheduled to be closed in the last quarter of FY 2012.

Concessions Revenue per Enplanement –This is the Concession’s Business Unit most significant KPI since it measures the amount of revenue earned by DFW from terminal concessions per enplaned passengers. This is also a standard metric used by the Airport industry. The decrease in concessions revenue per enplanement in FY 2012 as compared to FY 2011 Outlook (excluding one-time revenues) of $0.04 per enplanement is related primarily to the estimated impact of scheduled TRIP construction in Terminal A, B, and E during FY 2012.

$1.74 $1.73 $1.69

$1.62 $1.65

$1.00

$1.20

$1.40

$1.60

$1.80

$2.00

FY10 Actual

FY11 Outlook

FY11 Outlook*

FY12 F-Plan

FY12 Budget

Concessions Revenue per Enplanement

* Excludes one-time revenues



Rental Car Center (RAC) Business Unit

Background – The RAC covers 155 acres and includes a common rental building with individual counters and back office space for each rental car company, 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 (based on 10% of sales), and O&M expenses from the rental car companies. The ground lease increases 3% each year. There are 9 rental car companies with 10 brands operating from the RAC, with a total available inventory of approximately 25,000 cars. The largest three rental car companies and their market share are Hertz (27%), Avis (22%), and Vanguard (20%). 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 2012 Budget – The FY 2012 Rental Car Revenue Budget is $27.6 million, a $0.8 million (5.5%) increase from the FY 2011 Outlook and $0.6 million better than the FY 2012 Financial Plan due to the increases in destination passengers currently projected for FY 2012. All other factors are assumed to stay constant with the FY 2011 Outlook since 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 2012 Budget for RAC revenues per destination passenger is projected to be the same as the FY 2011 Outlook.

$1.87

$1.98

$1.88

$1.98

$1.50

$1.60

$1.70

$1.80

$1.90

$2.00

$2.10

$2.20

FY10 Actual

FY11 Outlook

FY12 F-Plan

FY12 Budget

Rental Car Revenue per Destination Passenger



Commercial Development Business Unit Background - The Airport has a total landmass of 18,092 acres. As of June 30, 2011, 7,273 acres have been developed and are being used for runways, taxiways, terminals, roads, and commercially developed property. Management estimates that approximately 6,500 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 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, 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 solicitation process for a new Southgate Plaza development that will include restaurants, retail, office and possibly a select service hotel. Also, a solicitation process is underway for a new convenience retail development at Founders’ Plaza that may include a fueling station and food court. 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 $25,625 in FY 2012.

FY 2012 Budget – The FY 2012 Commercial Development Revenue Budget is $32.7 million, a $3.7 million (10.2%) decrease from the FY 2011 Outlook due primarily to net impact of $4.7 million of one-time revenues received during FY 2011 from TXDOT for connector project related surface damage fees, back-rent paid on American Airlines hangars, offset by an increase in average ground rental rates. The FY 2012 Budget includes the assumption that no new acres are developed and paying rent during the fiscal year. The FY 2012 Budget is $3.6 million less than the FY 2012 Financial Plan because of an error in the Financial Plan which double counted the RAC ground lease revenue.



Other DFW Revenues 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 couple of these cost centers are not fully recovering their costs. Where there are significant differences, management has elected to get to break even over a number of years to keep price increases at a reasonable rate. There are no year-end reconciliations or “True-Ups” in these cost centers. Employee Transportation – DFW charges fees to employees who use the terminals for providing transportation from the parking lots to the terminals. Many times the companies or airlines pay these fees for their employees. The FY 2012 Budget is $11.7 million, a $3.6 (43.9%) increase from the FY 2011 Outlook due to the incremental cost associated with busing employees to Terminal D (FY 2012 is first year) and increases in pricing to bring this cost center closer to break even. Taxi, Limo and Shuttle Fees – These fees are paid by taxis, limos, shuttles and other shared-ride transportation companies that require access to the airport to drop-off and pick-up passengers. The FY 2012 Budget is $7.5 million, a $0.2 million (2.7%) increase from the FY 2011 Outlook and is tied to the growth in originating and destination passengers. Utilities & Miscellaneous – This revenue category represents fees charged to non-airline users of utilities, HVAC, trash removal, and water usage, and certain permit and accounting fees. Utility charges to users are based on the cost to provide the services. The FY 2012 Budget is $5.7 million, a $0.3 million (5.5%) increase from the FY 2011 Outlook to help recoup costs that were not fully covered in FY 2011. The FY 2012 Budget is $3.3 million less than the FY 2012 Financial Plan because the cost and fee allocations for this cost center were lowered from the assumptions used in the Financial Plan. DPS Revenues – The Department of Public Safety (DPS) receives revenues from the TSA, badging, fire training and other services. The FY 2012 Budget is $6.6 million, the same as the FY 2011 Outlook. Increased badging revenues will offset a decrease in fire training activity while the fire training center is being renovated. Interest Income – Interest income includes interest earned on investments from the Operating Revenue & Expense Fund, the 3 month Operating Reserve, and Debt Service Reserve Fund, and the Rolling Coverage Account. The FY 2012 interest income budget is $2.5 million and has remained essentially the same as the FY 2011 Outlook as interest rates and cash balances are projected to be consistent with FY 2011. The FY 2012 Budget is $3.4 million decrease from the FY 2012 Financial Plan due to lower interest rates (1.5% in the Financial Plan versus 0.5% in the Budget).

FY 2012 Adopted Budget Operating Expenses


FY 2012 Expense Budget by Major Cost Driver

The FY 2012 Budget is $601.6 million, an increase of $32.1 million (5.6%) from the FY 2011 Outlook. A walkforward between the FY 2011 Outlook and the FY 2012 Budget follows

Annual Budget (millions)

FY 2010

Actual

FY 2011

Budget

FY 2011

Outlook

FY 2012

Budget

Operating Expenses $324.5 $339.5 $337.3 $351.4 $14.1 4.2%

Debt Service 261.0 232.9 232.2 250.2 18.0 7.8%

Total Budget $585.5 $572.4 $569.5 $601.6 $32.1 5.6%

Contingency O/S Rate Base $5.0

Total Budget w/ Contingency $606.6

Inc (Dec) FY12B

vs FY11 OL

Expense Budget walkforward


DFW

CC

Airline

CCs

FY 2011 Outlook $569.5 $209.4 $360.1

Less Savings

A Asset Management contract savings (4.0) (1.4) (2.6)

B Superbowl costs (2.7) (2.7) (0.0)

C Fuel/Energy costs (0.5) (0.1) (0.4)

Total Savings (7.2) (4.2) (3.0)


D "Existing Debt" Service and Coverage 15.5 4.5 11.0

E RAC/FIC Debt Service 2.6 2.6 0.0

F Employee busing - terminal D 1.5 1.5 0.0


Other Increases

G Pension Plan 2.7 0.7 2.0

H Healthcare 1.8 0.3 1.5

I Annualization of FY 2011 salaries and merit 2.7 0.7 2.0

J FY12 merit pool (3% effective 1/1/12) 2.2 0.6 1.6

K International air service support 1.1 0.0 1.1

L Parking Business Unit costs 0.7 0.7 0.0

M Skylink contract increase 1.0 1.0 0.0

N ITS contract increases, net 0.7 0.3 0.4

O Deicing filters & equipment 0.6 0.0 0.6

P Data center bldg maintenance 0.4 0.2 0.2

Q Environmental projects 0.3 0.0 0.3

R Marketing projects 0.3 0.2 0.1

S Cost Center true-up 0.0 (1.0) 1.0

T Other net, less than $250,000 each 0.6 0.4 0.2


U Restore Contingency to $2.5M 2.5 0.9 1.6

V 3 month Operating Reserve 2.0 0.4 1.6




Note: The reference letters in the previous table are a cross-referenced to the variance explanations in the Expense Comparison by Summary Account discussed further in this section.

A. Asset Management Contract Savings ($4.0) million

DFW management continues to find ways to reduce costs to offset some of its cost increases each year. This has been exemplified in asset management over the past year. Terminal and other regular maintenance contracts account for $3.1 million, with the rest of the savings coming from custodial and professional services.

Terminal E Facilities Maintenance ($1,597)

Conveyances (796)

Non-Public Facilities Custodial (539)

Other Services-Professional (428)

Skylink Facilities Maintenance (396)

Other, net (200)

Total ($3,956)

Contract Decreases (000)

B. Superbowl ($2.7) million

In the process of successfully managing the air transportation of the Superbowl, DFW incurred one-time costs. The expenses will not be repeated in FY 2012.

C. Utilities ($0.5) million

Utility expenses will decrease from the FY 2011 outlook due to lower natural gas and electric rates. Electric rates are locked in through February 2013, natural gas rates through September 2012.

D. Existing Debt Service and Coverage $15.5 million

Debt service from Existing Debt (i.e. existing at the time of the new Use Agreement) is scheduled to increase $15.5 million. This increase is offset by $9.9 million in increased PFCs for a net impact on airline cost of $5.6 million in FY 2011. This scheduled debt increase was part of the Use Agreement negotiations agreed to by the airlines.

E. RAC/FIC Debt Service $2.6 million

DFW refunded its RAC/FIC debt in FY 2011. As part of this transaction, debt service is scheduled to increase $2.6 million in FY 2012. This increase is fully offset by CFC revenues transferred from the FIC. The Airlines approved this debt transaction.



F. Employee Busing Terminal D 1.5 million

Currently employees park in terminal D. In order to free up these revenue generating spots and better manage capacity during TRIP, these employees will be relocated to a central parking lot and bused to the terminals. The expenses incurred in busing ($1.2 million in contract costs and $0.3 million in increased fuel) will be covered by increased employee transportation revenue.

G. Pension Plan 2.7 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 2012 contribution has increased $2.7 million due primarily to the change in the investment rate assumption from 8.0% to 7.25% plus the amortization of net actuarial investment losses over the past 5 years.

H. Healthcare 1.8 million

Health care costs, which include medical benefits, long term disability (LTD) short term disability (STD) and life insurance, are increasing in FY 2012 due to health care cost inflation and provisions in the new health care legislation. The budget includes the assumption that employees will pay 18% of healthcare costs in 2012 versus 16% in FY 2011.

I. Annualization of Salaries and Merit $2.7 million

This represents the FY 2012 impact of the merit increase granted in the FY 2011 budget for three months, the annualization impact of those firefighter, security, and other positions that were filled during the year in FY 2011, changes in dates of deferred hires and the extra payroll day for leap year FY 2012.

J. FY 2012 Merit Pool of 3% $2.2 million

The budget includes a merit pool equal to 3.0% of salaries for eligible employees, effective January 1, 2012.

K. International Air Service Support $1.1 million

In support of DFW’s core business, this funding increase (to a total of $1.5 million) will enable highly targeted, region-specific advertising, media relations, government relations and communications strategies, and activities in support of air service development initiatives for imminent, long-term and retention/growth of new international service from DFW. This initiative will also enable cooperative marketing with airline partners servicing Guadalajara, Monterrey and Mexico City. L. Parking Business Unit $0.7 million Parking’s busing costs will increase due to the addition of 1,000 new spaces in the express parking lots. Parking will also have an increase in costs for temporary help during the PCS conversion.



M. Skylink Contract Increase $1.0 million

This new Skylink maintenance and renewal contract was approved by the Board in April, 2011 and included this increase. This increase was assumed in the Financial Plan.

N. ITS Contract Increases $0.7 million

ITS continues to deliver new and expanded services and systems to DFW’s employees, business partners and passengers. The increase in FY 2012 maintenance contracts is the direct result of these planned expansions. The increases are primarily due to contracts associated with security/surveillance, network communications and business reporting.

O. Deicing Membrane Filters and equipment 0.6 million

Membrane filters are used in the reverse osmosis system to treat spent aircraft deicing fluid and require programmed replacement.

P. Data Center Building Maintenance $0.4 million

In FY 2011, DFW opened a new data center. The FY 2012 increase represents the first full year of data center maintenance.

Q. Environmental Projects $0.3 million

This project will provide funding for storm pipe repair, which is necessary to keep contaminants, such as fuel, out of DFW’s storm drainage.

R. Marketing Projects $0.3 million

These projects expand consumer research capabilities given the TRIP revenue impact on key business units and customer satisfaction. Marketing will develop a system to communicate airline changes due to TRIP and a mobile application for smart phones to access parking, concession, and terminal information. S. Cost Center true-up $0.0 million This represents a true-up of DFW’s property and casualty insurance costs. In the past, these costs were charged to indirect expenses and allocated. The majority of these costs applies to the terminals and is directly assigned to the terminals for FY 2012.

T. Other Projects $0.6 million

This represents the net of many small projects and savings in a number of departments throughout DFW. Some examples are: increased training airport wide ($218K) increases in solid waste removal ($152K), an evaluation of the AOC systems ($50K), an AOC software upgrade ($50K), the AOC VMS project ($40K) savings in DPS propane ($168) etc.



U. Restore Contingency $2.5 million

The outlook only contains actual projected expenses. It does not contain any contingency. FY 2012 has the usual $2.5 million in contingency funding in the rate base.

V. 3 Month Operating Reserve $2.0 million

DFW is required to have a 90-day cash reserve for operating expenses. The budget in FY 2012 reflected a $2.0 million increase in the operating reserve because of budgeted expense increases. In FY 2012, the actual reserve needs to be increased by $2.5 million due to a net cost increase of $9.8 million. In a budget to budget comparison, the resulting operating reserve increase is $2.0 million.

Operating Budget by Category

The following tables compare the FY 2011 budget with the FY 2012 budget by expense category. Variance explanations by major cost driver follow in the walkforward.

FY 2010 FY 2011 FY 2011 FY 2012 FY 2012

Operating Budget (millions) Actual Budget Outlook Budget F-Plan

Salaries & Wages $107.6 $113.4 $110.0 $115.2 $117.7 $5.2 ($2.5)

Benefits 60.3 55.6 57.2 61.5 61.5 4.3 0.0

Contract Services 104.5 111.2 114.3 112.9 115.4 (1.4) (2.5)

Utilities 29.5 28.7 28.0 27.5 29.9 (0.5) (2.4)

Equipment & Supplies 13.1 12.7 13.0 14.1 13.3 1.1 0.8

Insurance 4.6 4.9 4.3 4.6 5.1 0.3 (0.5)

Fuels 3.5 4.0 4.0 4.3 4.2 0.3 0.1

General, Admin & Other 4.8 6.1 6.2 6.4 6.4 0.2 (0.0)

Contingency 0.0 2.5 0.0 2.5 2.5 2.5 0.0

Total Operating Budget 327.9 339.1 337.0 348.9 356.0 11.9 (7.1)

Operating Reserve (3.5) 0.4 0.4 2.5 3.9 2.1 (1.4)

Budget including Operating Reserve $324.4 $339.5 $337.4 $351.4 $359.9 $14.0 ($8.5)

Outlook F-Plan

Inc (Dec) FY12B vs

REMAINDER LEFT INTENTIONALLY BLANK



Budget Walkforward (millions) Sals Bens Conts Supp Util Fuels Ins G & A Cont Op Res Total

FY 2011 Outlook $110.0 $57.1 $114.3 $13.0 $28.0 $4.0 $4.3 $6.2 $0.0 $0.4 $337.4

Major cost reductions

A Asset Mgt Contracts (4.0) (4.0)

B Superbowl (2.7) (2.7)

C Utilities (0.5) (0.5)

Total Savings 0.0 0.0 (6.7) 0.0 (0.5) 0.0 0.0 0.0 0.0 0.0 (7.2)

Major cost increases

F Employee Busing - terminal D 1.5 1.5

G Pension Plan 2.7 2.7

H Healthcare 1.8 1.8

I Annualization of Salaries & Merit 2.7 2.7

J FY 2012 Merit pool (3%) 2.2 2.2

K International air service support 1.1 1.1

L Parking Business Unit 0.7 0.7

M Skylink contract increase 1.0 1.0

N ITS contract increases 0.7 0.7

O Membrane filter & equipment 0.6 0.6

P Data center bldg maintenance 0.4 0.4

Q Environmental projects 0.3 0.3

R Marketing projects 0.3 0.3

S Cost center true-up 0.0 0.0

T Other, net 0.3 (0.3) 0.1 0.3 0.3 0.2 0.7

U Restore contingency to $2.5 million 2.5 2.5

V Three month operating reserve 2.0 2.0

Total increases 5.2 4.4 5.3 1.1 0.0 0.3 0.3 0.2 2.5 2.0 21.2

FY 2012 proposed Budget $115.2 $61.5 $112.9 $14.1 $27.5 $4.3 $4.6 $6.4 $2.5 $2.5 $351.4



Salaries and Wages

The FY 2012 salaries and wages budget is $115.2 million, a $5.2 million (4.7%) increase over the FY 2011 Outlook of $110.0 million due to a 3.0% merit pool of $2.2 million, annualization of headcount hired in FY 2011 and previously granted merit of $1.9 million, differences in deferred hiring of $0.4 million and an extra day in FY 2012 account for $0.3 million, and increases in management incentive programs of $0.4 million. The budget includes funding for an incentive compensation plan as reviewed by the Boards Compensation Committee. It will be based on DFW’s achievement of its certain organizational goals and initiatives that will be developed and published in November 2012. The plan is also based on individual performance. Benefits

The FY 2012 benefits budget is $61.5 million, a $4.4 million (7.7%) increase from FY 2011 due to a $2.7 million increase for retirement and a $1.8 million increase for health care costs. Contract Services

The FY 2012 contract services budget is $112.9 million, a $1.4 million (1.2%) decrease from the FY 2011 outlook of $114.3 million due to contract savings of $4.0 million, and the elimination of one-time Superbowl expenses of $2.7 million, somewhat offset by contract increases of $5.3 million, contract saving and increases are discussed above. Equipment and Supplies

The FY 2012 equipment and supplies budget is $14.1 million, a $1.1 million (8.5%) increase from the FY 2011 outlook of $13.0 million primarily due to increases in expenses for deicing filters of $0.6 million and data center maintenance of $0.4 million. Utilities

The FY 2012 utilities budget is $27.5 million, a $0.5 million (1.8%) decrease from the FY 2011 outlook of $28.0 million due to decreases in electricity ($0.4 million) and natural gas ($0.1 million) rates for FY 2012. Fuels

The FY 2012 fuels budget is $4.3 million, a $0.3 million (7.5%) increase from the FY 2011 outlook due to increased costs for employee busing, which will be covered by higher revenues. Insurance

The FY 2012 insurance budget is $4.6 million, a $0.3 million (7.0%) increase from the FY 2011 outlook of $4.3 million due to increased premiums. General and Administrative (G&A)

The FY 2012 general and administrative budget is $6.4 million, a $0.2 million (3.2%) increase from the FY 2011 outlook of $6.2 million due to increase business development activity and training costs.



Contingency

The budget includes $2.5 million of contingency inside the rate base to be spent at the CEOs discretion for projects that come up during the fiscal year.

Operating Reserve DFW is required to have a 90-day cash reserve for operating expenses. The budget in FY 2012 reflected a $2.0 million increase in the operating reserve because of budgeted expense increases. In FY 2012, the actual reserve needs to be increased by $2.5 million due to a net cost increase of $9.8 million. In a budget to budget comparison, the resulting operating reserve increase is $2.0 million.

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 provides management an incentive to budget costs more accurately. Contingency outside the rate base is $5.0 million in FY 2012, which is the same as the FY 2011 budget. This allows management the opportunity to make investments in DFW cost centers during the year, if management foresees that DFW Revenues will exceed the projections included in the budget. Management must obtain Board of Director approval prior to using this contingency.

Net Debt Service Budget

The FY 2012 debt service budget is $250.2 million, an $18.1 million (7.8%) increase from the FY 2011 outlook as shown in the table below.

Debt Service Components Outlook F-Plan

Existing Debt Service $228.4 $228.4 $239.3 $243.9 $15.5 $4.6

RAC Debt Service 3.8 3.8 0.0 6.3 2.6 6.3

New Debt Service 0.0 0.0 13.1 0.0 0.0 (13.1)

Total Debt Service 232.2 232.2 252.4 250.2 18.1 (2.2)

Less: PFCs 130.7 130.7 134.2 137.6 6.9 3.4

Less CFCs 3.8 3.8 0.0 6.3 2.6 6.3

Total FC's 134.5 134.5 134.2 143.9 9.5 9.7

Net Debt Service $97.7 $97.7 $118.2 $106.3 $8.6 ($11.9)

FY11

Budget

FY11

Outlook

FY12

F-Plan

FY12

Budget

Inc (Dec) FY 12B vs



Positions The following table summarizes the total number of operating and capital positions assumed in the FY 2012 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.

FY 2012 FY 2012

Positions FY 2011 Additions Budget

Operating 1,894 (12) 1,882

Capital 109 3 112

Total 2,003 (9) 1,994

The new positions consist of a net reduction of 20 positions in Parking due to the PCS implementation, somewhat offset by the addition of 5 positions in ITS, (4 of which will enable some insourcing, the other will aid in the Business Intelligence rollout) 3 positions in ADE which are capitalized, 2 communications managers in Public Affairs, and 1 engineer in Energy & Transportation Management. REMAINDER LEFT INTENTIONALLY BLANK

FY 2012 Adopted Budget Departments


Overview

DFW is organized into Divisions (managed by EVPs) which are comprised of Departments (managed by VPs). Each departmental page includes a summary of the department’s major functions and a walkforward of the FY 2012 Budget by major cost driver. The following table is a budget comparison by department.

FY 2010 FY 2011 FY 2012

Department/Division Actuals Outlook Budget

Asset Management $69,230 $69,198 $66,616 ($2,582) (3.7%)

Energy & Transportation Mgmt 55,827 56,390 59,123 2,733 4.8%

Public Safety 52,083 56,377 59,913 3,536 6.3%

Airport Operations 9,464 9,860 10,558 698 7.1%

Environmental Affairs 4,538 4,872 5,202 330 6.8%

Planning 1,454 1,931 2,084 153 7.9%

Airport Development 124 387 294 (93) (23.9%)

Operations 192,720 199,014 203,790 4,776 2.4%

Customer Service 10,546 11,118 11,360 243 2.2%

Marketing Services 4,550 5,775 6,588 813 14.1%

Parking 37,143 37,788 40,875 3,087 8.2%

Concessions 2,021 2,266 2,823 557 24.6%

Commercial Development 1,961 2,447 2,302 (144) (5.9%)

Revenue Management 56,220 59,392 63,948 4,555 7.7%

Human Resources 4,270 5,246 5,248 2 0.0%

Procurement & Materials Mgmt 4,316 4,901 5,220 319 6.5%

Internal Communications 794 792 968 176 22.3%

Business Diversity & Develop 1,009 1,166 1,310 144 12.4%

Risk Management 7,035 6,827 7,498 671 9.8%

Administration & Diversity 17,425 18,931 20,244 1,313 6.9%

Aviation Real Estate 1,407 1,357 1,517 160 11.8%

Information Technology 28,120 29,912 32,252 2,341 7.8%

Treasury 1,243 1,338 1,250 (88) (6.6%)

Finance 5,572 5,751 5,839 88 1.5%

Finance and ITS 36,343 38,358 40,858 2,500 6.5%

Public Affairs 2,924 4,211 5,272 1,061 25.2%

Air Service Development 2,196 2,500 2,717 216 8.6%

Legal 2,070 2,144 2,042 (102) (4.8%)

Audit Services 2,042 1,928 2,252 323 16.8%

Executive Office 3,373 3,385 3,074 (311) (9.2%)

Contingency 2,500 2,500

Non Departmental 9,113 7,538 4,689 (2,849) (37.8%)

Total Operating Expenses $324,427 $337,402 $351,384 $13,983 4.1%

Inc (Dec)

FY11OL to FY12B

Department/Division Budget Comparison

(In Thousands)



Expense Budget Walkforward


DFW

CC

Airline

CCs

FY 2011 Outlook $569.5 $209.4 $360.1

Less Savings

A Asset Management contract savings (4.0) (1.4) (2.6)

B Superbowl costs (2.7) (2.7) (0.0)

C Fuel/Energy costs (0.5) (0.1) (0.4)

Total Savings (7.2) (4.2) (3.0)


D "Existing Debt" Service and Coverage 15.5 4.5 11.0

E RAC/FIC Debt Service 2.6 2.6 0.0

F Employee busing - terminal D 1.5 1.5 0.0


Other Increases

G Pension Plan 2.7 0.7 2.0

H Healthcare 1.8 0.3 1.5

I Annualization of FY 2011 salaries and merit 2.7 0.7 2.0

J FY12 merit pool (3% effective 1/1/12) 2.2 0.6 1.6

K International air service support 1.1 0.0 1.1

L Parking Business Unit costs 0.7 0.7 0.0

M Skylink contract increase 1.0 1.0 0.0

N ITS contract increases, net 0.7 0.3 0.4

O Deicing filters & equipment 0.6 0.0 0.6

P Data center bldg maintenance 0.4 0.2 0.2

Q Environmental projects 0.3 0.0 0.3

R Marketing projects 0.3 0.2 0.1

S Cost Center true-up 0.0 (1.0) 1.0

T Other net, less than $250,000 each 0.6 0.4 0.2


U Restore Contingency to $2.5M 2.5 0.9 1.6

V 3 month Operating Reserve 2.0 0.4 1.6


The letters above are referenced on the individual department pages.



Asset Management Asset Management (AM) manages DFW’s physical infrastructure assets. Services include facilities maintenance, commissioning/retro-commissioning of physical assets, infrastructure/ facility management, solid waste management, and customer support. The department ensures the safe and efficient operation of a world class airport through core business activities of maintenance, repair, renewal, operation, and special support. Budget Comparison and Walkforward

FY 2010 FY 2011 FY 2012

Actuals Outlook Budget

Expenses (000s)

Salaries & Wages $8,479 $9,649 $9,655

Benefits 4,330 4,669 5,451

Contract Services 48,150 47,029 43,145

Equipment & Other Supplies 6,746 6,265 6,520

Utilities 1,373 1,455 1,607

General, Administrative, & Other 153 130 238

Total Expenses $69,230 $69,198 $66,616

Walkforward from FY2011 Outlook

(000s) Reference

FY 2011 Outlook $69,198

Salaries & Wages (181) T

Merit 187 J

Benefits 783 G, H

Contract Services (3,885) A

Equipment & Other Supplies 254 P, T

Utilities 152 T

General, Administrative, & Other 107 T

Total FY 2012 Proposed Budget $66,616



Energy & Transportation Management Energy & Transportation Management (E&TM) manages DFW’s utility services and transportation systems infrastructure. Services include energy management, thermal energy production and distribution, potable water and sanitary sewer system operation, pretreatment plant operation, spent aircraft deicing fluid collection, and storage system operation, Skylink system operation and vehicle fleet maintenance. The department ensures the safe and efficient operation of a world class airport through core business activities of maintenance, repair, renewal and operation based on sustainable principles. Budget Comparison and Walkforward

FY 2010 FY2011 FY 2012


Expenses (000s)

Salaries & Wages $6,974 $7,133 $7,496

Benefits 3,312 3,603 4,183



Utilities 26,513 24,755 24,194


Total Expenses $55,827 $56,390 $59,123


(000s) Reference

FY 2011 Outlook $56,390

Salaries & Wages 213 I

Merit 150 J

Benefits 580 G,H

Contract Services 989 M

Equipment, Supplies 1,356 O, T

Utilities (562) C





Department of Public Safety (DPS) It is the mission of the DFW Airport Department of Public Safety to ensure the protection of life and property through the effective and efficient delivery of professional public safety services to the airport community. The Police Divisions provide law enforcement support for passenger pre-board security screening at terminal checkpoints and inside/outside of the terminals; criminal investigation; disseminate intelligence information; prosecute criminal cases; provide ancillary services in support of law enforcement; record processing; and evidence tracking. The Fire Divisions provide aircraft rescue fire fighting response, structural fire response, hazardous material mitigation, emergency medical response, fire code inspection, assistance in code development, reviews all facility construction plans, develops and delivers fire safety education and investigates all fires.

Special Services Divisions provide security services to the Air Operations Area, passenger terminals and the Airport Administration building, emergency management & planning, security identification, and access devices as well as 9-1-1 alarm monitoring and public safety radio dispatch services. Budget Comparison and Walkforward

FY 2010 FY 2011 FY 2012


Expenses (000s)

Salaries & Wages $34,199 $37,145 $37,887

Benefits 14,231 15,512 18,277



Utilities 11 11 15


Total Expenses $52,083 $56,377 $59,913


(000s) Reference

FY 2011 Outlook $56,377

Salaries & Wages 265 I, T

Merit 477 J

Benefits 2,765 G,H

Contract Services 20 T

Equipment & Other Supplies (38) T

Utilities 4 T





Airport Operations Airport Operations is responsible for managing airside and landside operations, ground transportation, Corporate Aviation and technical training. The overall goal of Operations is to ensure the continuous availability of aviation support services and facilities for efficient and safe operations. Through this department, a clear line of responsibility for operational decisions is available to all DFW tenants, concessionaires, and service consumers 24 hours per day. The Airport Operations Center (AOC) serves as DFW’s central point of communications and provides real-time situational awareness of day to day operations and emergency events impacting DFW operational capability. The AOC provides a central point for DFW information, work and service requests processing, as well as, detailed reporting of DFW business operations on a 24/7 basis; comprehensive logistical support during emergencies and direct support to DFW’s Emergency Operations Center (EOC) when activated. Airfield Operations is responsible for ensuring the airfield is managed and maintained in compliance with Code of Federal Regulations - CFR139. This includes safety, security, and training associated with activities on the airfield and managing the General Aviation business.

Ground Transportation regulates commercial transportation service providers operating at the Airport and monitors standards to ensure that the safest, highest quality and best-managed transportation services are readily available to the traveling public. Ground Transportation also administers the parking citation appeal hearing and collection processes. Budget Comparison and Walkforward

FY 2010 FY 2011 FY 2012


Expenses (000s)

Salaries & Wages $5,469 $5,564 $5,770

Benefits 2,759 2,980 3,252

Contract Services 645 498 666

Equipment & Other Supplies 557 777 806


Total Expenses $9,464 $9,860 $10,558


(000s) Reference

FY 2011 Outlook $9,860


Merit 112 J

Benefits 271 G,H


Equipment & Other Supplies 29 T





Environmental Affairs Environmental Affairs implements comprehensive environmental compliance programs throughout DFW Airport; advises the Board of Directors, Executive and Senior Staff, and department personnel regarding the mission critical priorities of pollution prevention, source reduction, waste minimization, and continuous improvement; provides regulatory and technical guidance to DFW departments, tenants, and contractors engaging in activities subject to environmental laws, regulations, rules, and enforcement agency policy; and manages a compliance-focused Environmental Management System and twenty one core compliance programs. The Planning Section provides support to capital development projects by conducting required environmental analyses responsive to the National Environmental Policy Act and Federal Aviation Administration requirements. The Noise Compatibility Office operates and maintains the noise and flight track monitoring system; addresses community concerns; provides public outreach and ensures compliance with applicable aircraft noise-related laws, regulations, and conditions contained in DFW’s Final Environmental Impact Statement. Budget Comparison and Walkforward

FY 2010 FY 2011 FY 2012

Actuals Budget Budget

Expenses (000s)

Salaries & Wages $1,765 $1,800 $1,747

Benefits 854 962 1,050




Total Expenses $4,538 $4,872 $5,202


(000s) Reference



Merit 42 J

Benefits 88 G,H

Contract Services 290 Q


General, Administrative, & Other 0




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. Facility Planning ensures that development activities are consistent with DFW’s Development Plan and are undertaken in a timely manner in order to satisfy demand and articulates strategic direction for DFW capacity expansion by continuously updating DFW’s Master Plan, including all terminal facilities. Airfield Planning provides strategic direction on planning DFW’s runway, taxiway, and airspace systems. Close coordination is maintained with the Federal Aviation Administration (FAA) to ensure that all applicable regulations and directives are properly maintained and addressed in all future plans. Transportation/Roadway Planning develops the DFW Board’s long-term ground transportation plans to improve DFW circulation, regional access, rail transit service, and parking. Transportation/Roadway Planning ensures that development of the regional transportation system recognizes and addresses the needs of DFW patrons and employees for improved facilities.

Budget Comparison and Walkforward

FY 2010 FY 2011 FY 2012


Expenses (000s)

Salaries & Wages $648 $847 $1,124

Benefits 322 319 497




Total Expenses $1,454 $1,931 $2,084


(000s) Reference



Merit 20 J

Benefits 179 G,H

Contract Services (285) T


General, Administrative, & Other 0




Airport Development and Engineering (ADE) Airport Development & Engineering (ADE) has overall responsibility for the efficient, economical design and construction of facility development and major rehabilitation projects at DFW. ADE 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 Code Compliance all costs related to ADE are funded by the 301 Fund, not the 102 Fund. The Airport Development & Engineering Department is broken down into six sections:

VP Office – Airport Development & Engineering

Building / Structural (Vertical) Engineering & Construction The Building/Structural (Vertical) Engineering & Construction section is responsible for managing all aspects of the programming, design, and implementation of vertical construction and rehabilitation projects. Sections are comprised of Architects, Professional Engineers, Project Managers, Construction Managers and support staff.

Civil/Airfield (Flat) Engineering & Construction The Civil/Airfield (Flat) Engineering & Construction section is responsible for managing all aspects of the programming, design and implementation of civil and airfield (flat) construction and rehabilitation projects. Sections are comprised of Architects, Professional Engineers, Project Managers, Construction Managers and support staff.

Project Administration The Project Administration section provides administrative and analytical support, estimating, budgeting, trend analysis, contract administration, project schedule administration, and resource projections in support of the Building/Structural (Vertical) Engineering & Construction section and the Civil/Airfield (Flat) Engineering & Construction section. Sections are comprised of Administrators, Accountants, Scheduling and Estimating Professionals and support staff.

Survey The Survey section provides boundary surveys, topographic surveys, as-built and design surveys, and other land surveying services in support of the Building / Structural (Vertical) Engineering & Construction sections, the Civil/Airfield (Flat) Engineering & Construction section, the Commercial Development Department and the Operations Department. This section is comprised of a Land Surveyor, Survey Technicians, Survey Party Chiefs, and Land Survey Instrument Operators.



Airport Development and Engineering (ADE) Continued

Code Compliance The Code Compliance section is responsible for enforcing DFW Airport’s design criteria and building standards in assuring compliance to the code and standards for tenant and DFW Airport development projects and the remainder of expenses are being transferred to capital. This section is comprised of Building Official, Engineers, Inspectors, and support staff. This budget reflects the work on non-Airport related projects. The remaining expenses are reflected in the Capital Fund. Budget Comparison and Walkforward

FY 2010 FY 2011 FY 2012


Expenses (000s)

Salaries & Wages $102 $249 $188

Benefits 45 125 96



Utilities - - 3

General, Administrative, & Other (75) 6 2

Total Expenses $124 $387 $294


(000s) Reference

FY 2011 Outlook $387


Merit 20 J

Benefits (29) T


Equipment & Other Supplies - T

Utilities 3 T

General, Administrative, & Other (4) T

Total FY 2012 Proposed Budget $294



Customer Service DFW’s Customer Service Department oversees the Ambassador Volunteer Program, Ground Transportation Service, Rental Car Center (RAC), and Terminal Management. Ambassadors are located throughout the terminals offering assistance responding to inquiries regarding airport services, facilities, flight assistance, tourism and general information. Ground Transportation service consists of Guest Assistants, located curbside at each terminal to provide taxicabs which are safe and reliable, information, and address special transportation services or needs. Ground Transportation Agents and Shift Supervisors support Guest Assistants and the traveling public by ensuring that curbside operations meet public demands. The team monitors parking zones and enforces parking regulations including unattended curbside vehicles. The Terminal Management team is a critical link between tenant airlines, contractors, concessions and essential stakeholders to insure compliance of DFW Airport Board expectations. Safety, security, guest relations, gate scheduling and ramp operations for Terminal D, service recovery, cleanliness and facility maintenance compose the multi-layered levels of oversight provided by Terminal Management. Established in 1994, the Rental Car Center provides a modern consolidated facility that increased parking capacity, improved customer service and operational efficiency.

Budget Comparison and Walkforward

FY 2010 FY 2011 FY 2012


Expenses (000s)

Salaries & Wages $5,420 $5,537 $5,311

Benefits 2,846 3,110 3,319




Total Expenses $10,546 $11,118 $11,360


(000s) Reference

FY 2011 Outlook $11,118


Merit 117 J

Benefits 209 G,H







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 to DFW. Marketing Services is charged with conducting and analyzing customer research in order to highlight consumer perceptions and behavior changes that could be impacting DFW’s non-airline revenues. In response to the identifiable needs and wants of its customers, Marketing Services then develops a marketing plan that utilizes advertising, website, interactive communications, and promotions to try to influence behavior change to the benefit of DFW’s revenue stream. In order to attract airlines and air service to DFW, Marketing Services is also responsible for developing an aggressive marketing program that utilizes advertising, direct mail, interactive communications, promotions, and trade shows. This group also works on cooperative advertising with eligible airlines that provide service from DFW in order to promote new service and ensure its long-term viability in the DFW marketplace. The brand image is an important part of DFW’s strategic marketing efforts. Marketing Services is responsible for ensuring that a consistent brand image is portrayed to every one of DFW’s audiences. These efforts are achieved by providing brand orientation information to internal departments and external groups. Budget Comparison and Walkforward

FY 2010 FY 2011 FY 2012


Expenses (000s)

Salaries & Wages $1,117 $1,131 $1,175





Total Expenses $4,550 $5,775 $6,588


(000s) Reference



Merit 27 J

Benefits 21 G,H

Contract Services 747 K,R






Parking Operations Parking Operations is responsible for parking products, pricing, service delivery and reporting. Parking negotiates various business agreements in order to better manage costs, improve customer service and increase revenues. The management team develops and implements new programs, working with Marketing to promote products that will increase customer satisfaction and generate the greatest value for DFW Airport. The Parking Operations section is responsible for the collection and security of revenue generated from on-Airport parking; providing parking information; executing marketing promotions; and ensuring the proper operation of all parking-related equipment, systems, and facilities. Customer Relations handles customer feedback and monitors all electronic parking transactions for accuracy, administering billing changes as necessary. The Busing section, which is staffed by DFW employees, provides transportation services to DFW Remote Lots and the Trinity Railway Express. The Contract Busing group is responsible for monitoring thecontracted transportation services for Terminal Link, Express Parking and Employee Shuttle. Budget Comparison and Walkforward

FY 2010 FY 2011 FY 2012


Expenses (000s)

Salaries & Wages $13,821 $12,390 $12,256

Benefits 7,672 8,084 8,762




Total Expenses $37,143 $37,788 $40,875


(000s) Reference

FY 2011 Outlook $37,788


Merit 250 J

Benefits 678 G,H

Contract Services 2,335 F,L






Concessions The Concessions department is responsible for the management and administration of all passenger-related concessions and related revenues within the airport terminals, rental car revenue, telecommunication, and selected airport properties outside the terminals including the hotels and gas/convenience stores. Budget Comparison and Walkforward

FY 2010 FY 2011 FY 2012


Expenses (000s)

Salaries & Wages $1,289 $1,289 $1,655





Total Expenses $2,021 $2,266 $2,823


(000s) Reference



Merit 30 J

Benefits 131 G,H







Commercial Development The Commercial Development Department plans, develops, markets and leases airline hangars, air-cargo and logistics facilities and commercially available land at DFW. Commercial Development also evaluates and implements business opportunities that diversify DFW’s revenue stream. Budget Comparison and Walkforward

FY 2010 FY 2011 FY 2012


Expenses (000s)

Salaries & Wages $1,235 $1,229 $1,214





Total Expenses $1,961 $2,447 $2,302


(000s) Reference


Salaries & Wages (46) I

Merit 30 J

Benefits (14) G,H







Human Resources Human Resources (HR) provides a full array of services to support DFW’s mission, the CEO’s priorities, management, and employees. The 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; and assisting employees with concerns. In addition, HR develops and administers policies and procedures to ensure compliance with federal and state regulations. HR also has responsibility for coordinating the recruitment and staffing activities of DFW. Compensation and benefit programs are designed and implemented to meet workforce needs in a fiscally responsible manner competitive with the marketplace. These programs cover health and welfare benefits, and all other benefits including retirement plans. In the area of organizational development, HR is responsible for developing, implementing, and managing DFW’s training and development program including DFW’s core curriculum, career development, and performance management. HR is also responsible for administering the Human Resources Information System (HRIS), PeopleSoft, and maintaining all personnel records and reports. Budget Comparison and Walkforward

FY 2010 FY 2011 FY 2012


Expenses (000s)

Salaries & Wages $1,995 $2,248 $2,235

Benefits 1,066 1,162 1,251

Contract Services 693 1,149 1,043



Total Expenses $4,270 $5,246 $5,248


(000s) Reference



Merit 54 J

Benefits 89 G,H







Procurement

Procurement & Materials Management (PMM) provides DFW-wide centralized procurement, materials management, and reprographic services in accordance with federal, state, local laws/regulations and DFW policies. 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 DFW-wide mail service. Print Services provides centralized reproduction, printing, and binding services for departments within the Airport. Budget Comparison and Walkforward

FY 2010 FY 2011 FY 2012


Expenses (000s)

Salaries & Wages $2,319 $2,312 $2,442

Benefits 1,054 1,230 1,319




Total Expenses $4,316 $4,901 $5,220


(000s) Reference



Merit 52 J

Benefits 89 G,H


Eq & Supplies 31 T





Internal Communications and Diversity

Internal Communications and Diversity manages and provides strategic direction for DFW Airport’s internal communication and diversity programs. The Internal Communications team is responsible for writing and managing the content, messaging, and distribution of all employee communications. One of the key objectives of Internal Communications is to create awareness and educate employees on key DFW Airport initiatives, as well as, manage and create communication vehicles to inform staff of business news and recognize the efforts of DFW Airport employees.

Diversity programs at DFW are designed to ensure that the Airport’s workforce reflects the cultural diversity of the community and our customers. The team is responsible for the design and development of all Diversity training, mentoring programs and cultural awareness events. It also supports the Diversity Leadership Council and Employee Resource Groups in achieving DFW’s Key Results, by increasing employee engagement and fostering an inclusive work environment. In addition, the Diversity staff monitors and manages distribution of DFW’s workforce demographic reports to identify hiring opportunities and works closely with Human Resources on recruiting and retention strategies, to support a diverse workforce. The staff also is responsible for the design and distribution of DFW’s Affirmative Action Plan for Veterans and Persons with Disabilities, Vets-100 report and other reports related to Diversity. Budget Comparison and Walkforward

FY 2010 FY 2011 FY 2012


Expenses (000s)






Total Expenses $794 $792 $968


(000s) Reference

FY 2011 Outlook $792


Merit 6 J

Benefits 24 T




Total FY 2012 Proposed Budget $968



Business Diversity and Development Business Diversity & Development Department (BDDD) is responsible for administering the Board’s Disadvantaged and Minority/Women-owned Business Enterprise (DBE & M/WBE) Programs. BDDD has the overall responsibility to administer, monitor and enforce the DBE and M/WBE policies, standards and procedures as well as govern the implementation, interpretation and application of the business process in a manner to achieve the DBE and M/WBE Program goals and objectives. It is charged with increasing the opportunities to involve DBE and M/WBE firms by creating a level playing field on which DBE and M/WBE firms can compete fairly for DFW’s Board contracts, subcontracts, purchases, third party contracts, and concessions. Budget Comparison and Walkforward

FY 2010 FY 2011 FY 2012


Expenses (000s)






Total Expenses $1,009 $1,166 $1,310


(000s) Reference



Merit 14 J

Benefits 35 G,H







Risk Management Risk Management’s primary objective is to manage risks to DFW International Airport. This include identifying, analyzing and evaluating exposures, intervening with loss prevention measures that reduce, mitigate or transfer costs, and ensuring compliance with all applicable laws and regulations. Areas of general administration include liability claims management, safety training, management of self-funded, fully insured, and partial claims administered programs involving areas of 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 in an effort to develop preventative health and wellness programs that impact positive behavioral changes, as well as, enhance productivity and absence management issues involving family medical leave, short and long term disability, and workers’ compensation. Budget Comparison and Walkforward

FY 2010 FY 2011 FY 2012


Expenses (000s)


Benefits 1,026 1,022 1,197



Insurance 4,590 4,292 4,561


Total Expenses $7,035 $6,826 $7,498


(000s) Reference



Merit 13 J

Benefits 175 G,H



Insurance 269 T





Aviation Real Estate

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. Budget Comparison and Walkforward

FY 2010 FY 2011 FY 2012


Expenses (000s)






Total Expenses $1,407 $1,357 $1,517


(000s) Reference



Merit 17 J

Benefits 40 G,H







Information Technology Services Information Technology Services (ITS) is responsible for delivering technology solutions to DFW and is divided into four sections. Enterprise Systems is responsible for the development, and maintenance of technology solutions for DFW human resource, 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 for life safety systems, security systems and passenger service systems. Budget Comparison and Walkforward

FY 2010 FY 2011 FY 2012


Expenses (000s)

Salaries & Wages $9,095 $9,266 $10,403

Benefits 3,765 4,283 5,126



Utilities 1,553 1,752 1,701


Total Expenses $28,120 $29,912 $32,252


(000s) Reference

FY 2011 Outlook $29,912


Merit 218 J

Benefits 842 G,H

Contract Services, Net 1,002 N

Eq & Supplies (639) N,T

Utilities (51) T


Total FY 2012 Proposed Budget $32,2521 Insourcing 5 positions



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. Budget Comparison and Walkforward

FY 2010 FY 2011 FY 2012


Expenses (000s)






Total Expenses $1,243 $1,338 $1,250


(000s) Reference



Merit 13 J

Benefits 7 G,H







Finance Finance is comprised of three 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 Outlooks for revenue and expenses. This group is also responsible for establishing DFW’s rates, fees and charges and performing departmental financial analysis. Financial Planning also 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. Budget Comparison and Walkforward

FY 2010 FY2011 FY 2012


Expenses (000s)

Salaries & Wages $3,738 $3,582 $3,672

Benefits 1,612 1,771 1,871




Total Expenses $5,572 $5,751 $5,839


(000s) Reference



Merit 77 J

Benefits 100 G,H


Eq & Supplies (2) T





Public Affairs

The Public Affairs Division is responsible for Board of Directors, community, government and media relations for DFW International Airport for 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 Chamber 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. Budget Comparison and Walkforward

FY 2010 FY 2011 FY 2012

Actuals Budget Budget

Expenses (000s)

Salaries & Wages $834 $1,330 $1,547


Contract Services 774 1,274 2,148


General, Administrative, & Other 901 1,088 899

Total Expenses $2,924 $4,211 $5,272


(000s) Reference



Merit 24 J

Benefits 158 G,H

Contract Services 874 K,T






Air Service Development In order to expand the economic benefits for Dallas, Fort Worth, and the region, DFW works to aggressively develop and grow the airport’s air service core business. 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 entrant, domestic and international, carriers to DFW. In addition, Air Service Development also 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. As with the larger global economy, the aviation industry is undergoing significant transformation as it faces new cost challenges. Global Airlines are reducing capacity and flight operations and, as such, DFW’s Air Service Development department is working within an increasingly competitive environment where other destinations are becoming more aggressive in competing for the same scarce resource, scheduled air service. Air Service Development focuses on both domestic and international passenger and cargo airlines, respectively. These sections are responsible for formulating strategic plans that include 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. Budget Comparison and Walkforward

FY 2010 FY 2011 FY 2012


Expenses (000s)

Salaries & Wages $684 $872 $1,048





Total Expenses $2,196 $2,500 $2,717


(000s) Reference


Salary 164 I

Merit 12 J

Benefits 34 G,H







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. Budget Comparison and Walkforward

FY 2010 FY 2011 FY 2012


Expenses (000s)






Total Expenses $2,070 $2,144 $2,042


(000s) Reference



Merit 5 J

Benefits (42) G,H







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. Budget Comparison and Walkforward

FY 2010 FY 2011 FY 2012


Expenses (000s)

Salaries & Wages $1,184 $1,035 $1,341





Total Expenses $2,042 $1,928 $2,252


(000s) Reference



Merit 27 J

Benefits 88 G,H







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. Budget Comparison and Walkforward

FY 2010 FY 2011 FY 2012


Expenses (000s)

Salaries & Wages $2,237 $2,137 $1,919





Contingency 0 0 2,500

Total Expenses $3,373 $3,385 $5,574


(000s) Reference


Salaries & Wages (264) I,T

Merit 47 J

Benefits (90) G,H




Contingency 2,500 U


Note: Some Contingency money in FY 2011 has been assigned to various

departments.



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 departmental level. Budget Comparison and Walkforward

FY 2010 FY 2011 FY 2012


Expenses (000s)

Salaries & Wages $1,768 $61 $1,659

Benefits 10,851 3,298 490

Contract Services - 3,700 -

General, Administrative, & Other - - 23

a5801001 Operating Reserve ($3,506) 479 2,517

Total Expenses $9,113 $7,538 $4,689


(000s) Reference


Salaries & Wages 1,598 T

Benefits (2,808) G,H,T

Contract Services (3,700) B,T


Operating Reserve 2,038 V


Note: Non-Departmental contained the year end pension contribution in FY 2010

Non-Departmental also contians payroll accruals, management and executive incentive

plans and various Board wide adjustments to the Outlooks, particularly in the salary

and benefit categories.



Position Walkforward

Division/Department/Section 2011

New

Personnel

Total

FY 2012Executive Office 10 10Public & Gov't Affairs 14 2 16Legal 4 4Audit Services 15 15Air Service Development 9 9Administration & Diversity

Human Resources 28 28Internal Communications & Diversity 6 6Procurement & Materials Mgmt 41 41Risk Management 17 17Business Development & Diversity 11 11

Total Admin & Diversity 103 103Finance & ITS

Aviation Real Estate 8 8Finance 50 50Treasury Management 8 8Information Technology Services 128 5 133

Total Finance & ITS 194 5 199Revenue Management

Customer Service 124 124Marketing Services 18 18Commercial Development 17 17Parking Operations 357 (20) 337Concessions 18 18

Total Revenue Management 534 (20) 514Operations

Airport Operations 113 113Asset Management 181 181Department of Public Safety 563 563Energy & Transportation Mgmt 126 1 127Environmental Affairs 28 28Planning 14 14Airport Development 95 3 98

Total Operations 1,120 4 1,124Total DFW 2,003 (9) 1,994

FY 2012 Position Summary

FY 2012 Adopted Budget Capital Budget


Capital Budget DFW has two 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; however as part of the new Agreement, the Airlines have agreed to fund the $1.92 billion Terminal Renewal and Improvement Program and $234 million of other “pre-approved” projects from this Capital Account. This includes $14 million for expansion of the North Express parking, which was approved subsequent to the Use Agreement. Additional projects were added to the $234 million “pre-approved” projects list, pending MII approval. These additional projects include parking capacity expansion in Terminal A, consolidation of employee parking at 4E, and relocation of South Express to 5E. 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 $24 million in FY 2012 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 after FY 2018.

Projected Capital – Uses of Cash by Capital Account

DFW projects to spend approximately $655.6 million on capital expenditures in FY 2012 as summarized in the following chart.

Joint Capital Account - TRIP

$381.4Joint Capital Account - Non-

TRIP$132.8

DFW Capital Account$117.4

Joint Capital AccountTransfers

to 102$24.0

FY 2012 Projected Capital Expenditures

$655.6 Million



The following table summarizes total projected capital expenditures for projects to be in

progress during FY 2012.

Actual Forecast Prior Projected Future Total

Capital Budget (millions) FY 2010 FY 2011 Years FY 2012 Years Budget

DFW Capital Account 129.6 153.1 147.9 117.4 444.0 709.4

Joint Capital Acccount

TRIP 8.3 136.4 144.7 381.4 1,395.9 1,922.0

Non-TRIP 4.8 22.1 26.9 132.8 382.4 542.1

Total Capital $142.7 $311.6 $319.5 $631.6 $2,222.3 $3,173.5

Active Projects in FY 2012

The following table shows cash flow projections for the DFW capital projects. New projects are highlighted in blue and are subject to change.

DFW CAPITAL ACCOUNT Prior Future

Project Name Years FY12 Years

Air Service Incentive Plan (ASIP) $5.0 $10.2 $42.6

Rehabilitate Airfield Pavements FY12 1.2 8.8 4.4

ARFF Truck Replacement .0 7.5 32.2

Other Discretionary (To-Be-Determined) 2.1 5.0 105.0

Rehabilitate Airfield Pavements FY2011 2.3 4.4 .0

Rehabilitate Airfield Lighting Systems FY12 .6 4.3 2.1

Business Continuity Program Mgmt Svcs 1.0 3.0 11.1

FY08 Rehab Landside Pavements 2.3 2.9 .0

ADE Overhead (annual) .0 2.7 29.6

Replace Terminal Link Vans .3 2.6 13.6

Rehab Lighting & Pavement-West Airfield FY10 7.6 2.3 .0

Terminal D BHS Improvements .0 2.3 .5

Term B Jet Bridge Cooling/Heating .0 2.2 .0

Structural Fire Trucks 3.4 2.2 8.6

Replace Computerized Parking Control System (CPCS) 15.1 2.2 .0

Replace Potable Water Revenue Meters .1 2.1 .0

Founders Plaza Phase I & II (SS, Storm, Roads) DD#2 .0 2.0 6.9

Natural Gas Lines to Term A, B, C, and E .1 1.9 1.4

CCTV System Head-End Expansion 3.4 1.8 .0

Rehabilitate Airfield Lighting Systems FY11 1.1 1.7 .0

FY07 Refurbish Fire System Components .0 1.5 .1

Facility Renewal .0 1.5 13.5

Business Intelligence Program 1.9 1.5 .9

Replace Heavy Equipment .9 1.3 8.4

Facility Renewal - Former Kitty Hawk HQ Building .0 1.3 .0

Replace Express Vans 2.2 1.3 17.4

Replace General Purpose Vehicles .7 1.1 7.0

AODB/RMS Replacement .6 1.0 .2

Renew Roofing & Waterproofing FY08 3.3 1.0 .0

FY07 Replace Roofing and Waterproofing 3.5 1.0 .0

Projects < 1M 89.3 32.7 138.4

TOTAL DFW CAPITAL ACCOUNT $147.9 $117.4 $444.0



The following projects will be funded from the Joint Capital Account during FY 2012.

JOINT CAPITAL ACCOUNT Prior Future

Project Name Years FY12 Years

Terminal Renewal/Improvement Program (TRIP) $144.7 $381.4 $1,395.9

TOTAL JOINT CAPITAL ACCOUNT (TRIP) $144.7 $381.4 $1,395.9

Non-TRIP:

Fire Training Center Rehab $5.2 $19.3 $1.7

DART Rail Station & Bus Transfer Facility (excl T platform) 3.0 13.3 19.3

Parking Control System (PCS) 5.8 12.0 3.6

Term D North Ext (sterile corridor, pending MII) 0.0 10.9 7.1

North/South Toll Plaza & Parking Admin Bldg 2.2 10.9 8.1

Terminal A Section B Parking Garage GTC (pending MII) 0.0 10.3 118.2

Radio Simulcast System Expansion 0.2 8.7 2.4

North Express (1W) Parking Expansion (rec'd MII approval) 6.1 7.9 0.0

Terminal Window Replacements (pending MII) 0.0 6.0 34.0

W Airfield Dr & Mid-Cities Rd (construction) 0.0 5.6 7.9

Elevated Water Tower (EWT) 0.0 5.5 6.0

Terminal B North Stinger (pending MII > $10M) 0.0 4.4 39.6

Relocate South Express to 5E (pending MII) 0.0 2.6 11.8

Reconstruct Airfield Taxiway ("Lima") [AIP 75% ] pending MII 0.0 2.5 29.8

Rehabilitate Parking Lots 0.0 2.0 2.5

A-380 Jetbridge, Terminal, Ramp, Fueling (pending MII) 0.0 1.9 3.1

Rehab Open Storm Channels 0.0 1.7 8.3

NE/NW Cargo VCP Remediation 0.7 1.3 1.9

Relocate Employee Bus Staging Area to 6E (pending MII) 0.4 1.1 0.0

Oil and Gas Lease Reimbursables (pending MII) 1.3 1.0 11.0

Rehabilitate Spent Aircraft Deicing Fluid System 0.0 1.0 14.7

Consolidated Employee Parking @ 4W (pending MII) 0.0 1.0 3.2

Rehab Stations 2, 3, 4, & West Wing #1 0.0 0.5 1.5

Rehabilitate Landside Roads & Bridges 0.0 0.4 32.5

Term D Ramp Mods - Facilities Maint Space (pending MII) 0.0 0.4 1.2

Remote Parking Facility Rehabilitation 0.0 0.2 2.6

Rehabilitate ESP Thermal System (Install Two 300 Ton Chillers) 0.0 0.2 2.8

Infrastructure for New Parking Collection System 2.1 0.1 0.0

Rehabilitate Energy Plaza - Utility Vault 0.0 0.1 4.8

Rehabilitate AOA Storm Sewers 0.0 0.1 2.9

TOTAL JOINT CAPITAL ACCOUNT (NON-TRIP) $26.9 $132.8 $382.4

TOTAL JOINT CAPITAL ACCOUNT $171.6 $514.2 $1,778.3

TOTAL JOINT + DFW CAPITAL ACCOUNT $319.5 $631.6 $2,222.3



Capital Project Approval Process

In FY 2010, DFW management developed a ten-year capital plan as the basis for negotiating the Use Agreement. The FY 2012 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, they prepare a detailed capital worksheet including alternatives and present this to the Capital Committee for review and approval. Executive Management approval is required for projects over a certain limit. 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 come-up 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 2012 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 planned for terminals A, B, C and E. The budget is $1.92 billion (inflated dollars). Design is nearly complete for Terminal A, with construction currently underway for the first phase of Terminal A. Total program completion is scheduled for 2017. Approximately $381.4 million is anticipated to be spent during FY 2012.

Parking Expansion – Parking capacity at Terminal A will be expanded through the addition of a new more efficient parking facility or the renovation of the existing parking structure in the middle of Terminal A. Additional parking projects include: 1,000 new covered parking spaces at the north express parking lot, consolidated employee parking, and the relocation of south express to 5E. Approximately $21.8 million is anticipated to be spent during FY 2012 on these new parking projects.

Parking Control System and Parking Infrastructure Renewal – As DFW’s current parking system, toll booths and related infrastructure reach end of useful life and has surpassed its original design capacity, a major renewal is planned to design and install a new Parking Control System which will be capable of accommodating emerging business requirements and enhanced functionality. Additionally, the current north and south parking toll plazas and administration buildings will be renovated. Approximately $23 million is anticipated to be

spent during FY 2012.



Terminal Gate Expansion and Conversion – Additional gate capacity is planned in Terminal D and B due to 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 construction of gates in a terminal extension south of Terminal D. These projects were pre-approved in the Use Agreement and are in the Programming and Schematic Design phase.

DART Rail Station – A rail station is under design to be located between Terminals A and B to accommodate DART’s rail line coming into the north end of DFW Airport. This project is timed to coincide with DART’s plan to complete the rail construction to DFW Airport. Approximately $13.3M is anticipated to be spent during FY 2012.

Capital Projects - Sources of Cash

DFW’s capital programs are funded from a variety of sources as shown in the following chart.

Grants$31.9

Debt$500.8

Natural Gas Royalties

$14.4

Interest Income

$0.2

Cash Flow Adjustment

$29.4

Carryover Cash

Balances$78.9

FY 2012 Capital Sources of Cash

$655.6 Million



The following table highlights the walk forward of DFW’s capital funds.

Joint DFW

Capital Walkforward (millions) Capital Capital Total

Beginning Cash (10/1/11) $349.9 $38.1 $387.9

Sources of Funds:

Grants $15.6 16.2 31.9

Debt 498.5 2.2 500.8

Debt (reimbursement) .0 .0 .0

Natural Gas Royalties 14.4 - 14.4

Interest Income .0 .2 .2

Total Sources $528.6 $18.7 $547.3

Less:

Capital Uses ($514.2) (117.4) (631.6)

Cash Flow Adjustment 33.2 29.4 62.6

Joint Capital Account Transfer to 102 (24.0) - (24.0)

Total Uses (505.0) (88.1) (593.0)

Add: Cash From DFW Cost Center - 60.8 60.8

Ending Cash (9/30/12) $373.5 $29.5 $403.0

Airport Capital Funds Walkforward

(In Millions)



New Debt Issuances

DFW projects to borrow approximately $500 million during FY 2012, primarily to fund the TRIP and other major capital projects. DFW expects to issue approximately $250 million of bonds in February and an additional $250 million near the end of the fiscal year. Interest will be capitalized on these bonds until the date of beneficial occupancy in FY 2013 and beyond.

Existing Debt Restructuring DFW developed a ten-year Financial Plan to support the negotiations of the new ten-year Use Agreement that became effective on 10/01/11. The airlines signed the Use Agreement acknowledging that the budget and airline cost would increase $6-8 million per year in the coming years due to that restructuring (see page 12 in the Executive Summary for year by year debt service comparison). By restructuring the Airports “Existing Debt” Outstanding, DFW devised a way to save the Airlines $255 million between FY 2009 and FY 2018. This plan, shown in chart below, was developed specifically to give the airlines relief for a prolonged period of time.

$0

$50

$100

$150

$200

$250

$300

09 10 11 12 13 14 15 16 17 18

Fiscal Year

Cumulative Airline Cost Savings from Refundings (Ms)

FY09 Refunding

FY11/12 Refundings

FY13 Refundings

The plan was formulated in FY 2009 but would take through FY 2013 to complete. The FY 2009 refunding achieved approximately half of the savings. The FY 2011/12 refundings will achieve an additional $90 million of savings, and the FY 2013 refundings will save the final amount. The Board and Cities have already authorized up to $1.5 billion in bonds to be refunded in FY 2011 and FY 2012 providing they are complete by May 2012.



Grant Funds - Airport Improvement Program

Airport Improvement Program (AIP) grants are issued by the FAA on an annual basis for entitlement and discretionary purposes. Entitlements are funds allocated to airports based on passenger and cargo enplanements. Airports compete for and are awarded discretionary funds based on a priority system administered by the FAA. The following table highlights the FAA entitlement and discretionary funds projected to be outstanding in FY 2011.

Grant

Number Award Date

Grant

Amount

Prior

Years

Balance

9/30/11

Proj. FY

2012

Balance

9/30/12

Entitlement

100-11 24-Mar-11 $4,054 $0 $4,054 $2,027 $2,027

Total Entitlement 4,054 0 4,054 2,027 2,027

Discretionary

96-10 12-Aug-10 500 0 0 0 0

98-11 24-Sep-10 17,229 2,000 15,229 15,229 0

Total Discretionary 17,729 2,000 15,229 15,229 0

Totals $21,783 $2,000 $19,283 $17,256 $2,027

Federal AIP Grant Summary (000's)

Grant Drawdowns

The FY 2011 entitlement grant requested funding for the following projects:

Project AIP DFW Total Cost

Rehab Runway 18R/36L (1)

2,315$ 790$ 3,105$

Rehab Airfield Pavements 17L/35R (2)

5,602 2,925 8,527

Rehab Lighting & Pavements-West (2)

5,122 2,546 7,668

Rehab Surface Painted Holding Signs (2)

287 199 486

Total 13,326$ 6,460$ 19,786$

2011 AIP Grant Application

(In 000's)

(1)

Rehabilitation of Runway 18R/36L is an American Recovery and Reinvestment Act (ARRA) of 2009 grant.

(2) These projects will be in two separate FY 2010 grants due to FAA funding.



Consolidated Rental Car Facility/Facility Improvement Corporation

In March 2000, DFW Airport consolidated the North and South Rental Car Facilities into a single consolidated facility just south of the South Remote Parking lot. This facility was constructed with two Facility Improvement Corporation (FIC) bond sales totaling $159.6M (Series 1998 and 1999). These bonds were secured solely by a $4 transaction fee per daily car rental which is also used to pay for RAC capital projects. In June 2011, these bonds were defeased for the remaining $112 million and new bonds were issued (Series 2011A) by DFW Airport at a lower interest rate, resulting in $12 million in NPV savings. In January 2008, DFW and the Rental Car Companies entered into an agreement whereby DFW will begin collecting a Customer Transaction Charge (CTC), to cover the maintenance and operating expenses of the RAC bus fleet which was previously paid by the Rental Car Companies. The current CTC fee is $2.20 per transaction day and will be adjusted to collect actual costs. Approximately half of the forecasted FY 2011 capital expenditures are for replacement of eight (8) RAC buses. This is a continuation of a phased replacement of 46 original buses which have been in service since the RAC opened in 2000. This bus fleet replacement program entails conversion to cleaner burning Compressed Natural Gas (CNG) to further DFW’s efforts to achieve the highest level of environmental leadership.

2010 2011 2011 2012

RAC Accounts (000's) Actual Outlook Budget Budget

Transaction Days 4,178 4,614 4,169 4,658

Beginning Cash Balance $26,813 $15,851 $10,124 $22,764

Revenues:

$4 Customer Facility Charge 16,712 18,458 16,676 18,634

$2.20 Customer Transp. Charge 9,242 10,152 9,172 10,248

Investment Earnings 41 37 187 88

FIC Reserve Accts Closeout 8,005

TERP grant for CNG buses 1,520 1,300 0

Gross Revenue 25,995 38,171 27,334 28,970

Expenses:

Busing Operations Expense (7,769) (10,152) (9,172) (9,501)

Total Expenses (7,769) (10,152) (9,172) (9,501)

Net Income from Operations 18,226 28,019 18,162 19,469

Less: Debt Service Expense (14,690) (14,681) (12,951) (7,682)

Less: Capital Expenditures (14,415) (6,368) (6,251) (1,436)

Less: Administrative Fees (82) (57) (62) (62)

Income after Debt Service & Capex (10,962) 6,913 (1,101) 10,289

Ending Cash Balance $15,851 $22,764 $9,023 $33,053



Grand Hyatt Hotel/PFIC In July 2005 DFW Airport opened a 298 room Grand Hyatt Hotel located on top of DFW Airport’s new International Terminal D. This $62.3M hotel was financed through the Public Facility Improvement Corporation (PFIC) in 2001. The PFIC was created by the Airport Board to provide financing and management for the Grand Hyatt Hotel. Debt service incurred from construction of the Grand Hyatt is funded from Hotel operating profits. In the event Hotel revenues are insufficient to cover debt service, DFW Airport’s Discretionary DFW Capital Account will guarantee any shortfalls. The Airport Board is required under the PFIC Rules and Regulations to approve the annual budget. The annual budget for FY 2012 is as follows: As specified in the Trust Indenture for the PFIC, the distribution of net revenues generated from the Grand Hyatt operations, flows to three (3) DFW-controlled accounts. The following table shows projected cash balances of those funds:

Grand Hyatt Owners Cash Walkforward (000's)

Surplus

Redemption FF&E Capital Total

Est. Beginning Cash Balance - October 1, 2011 $14,224 $1,440 $2,815 $18,478

Net Operating Income from Grand Hyatt * 3,904 3,904

FF&E Cash Flow Distribution (5% of Revenues) (1,312) 1,312 0

Capital Cash Flow Distribution (2% of Revenues) (525) 525 0

Less: Debt Service (4,670) (4,670)

Less: FY12 FF&E Expenditures (est) * (733) (733)

Less: FY12 Capital Expenditures (est) * (7,558) 0 (7,558)

Add: Investment Earnings 48 8 15 72

Ending Cash Balance (September 30, 2012) $4,112 $2,027 $3,355 $9,494

* Estimated - Hyatt has not yet completed their budget for FY2012

As DFW’s Grand Hyatt Hotel has only been open since 2005, only minor FF&E and Capital expenditures have been needed thus far. The Hotel’s first renovation is currently underway and $5.4 million of total budget of $13 million has been spent to date. Current and forecasted funding balances are projected to be sufficient to meet all future Capital and FF&E hotel needs