City and County of Denver Municipal Airport System ANNUAL ...

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City and County of Denver Municipal Airport System MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) December 31, 2010 and 2009 In order to understand some of the variances in the Airport System financial statement changes, the analysis below explains the increase in revenues. The Airport System’s activities increased in all areas as described below for the year ended December 31, 2010 as compared to 2009 (in thousands): Percentage 2010 2009 change Enplanements 26,134 25,128 4.0 % Passengers 52,209 50,167 4.1 % Aircraft operations (1) 635 612 3.8 % Cargo (in pounds) 555,186 494,763 12.2 % Landed weight (in tons) 33,275 32,695 1.8 % (1) Aircraft operations are takeoffs, landings, or other communications with the control tower. The Airport System’s activities decreased in all areas as described below for the year ended December 31, 2009 as compared to 2008 (in thousands): Percentage 2009 2008 change Enplanements 25,128 25,650 (2.0) % Passengers 50,167 51,245 (2.1) % Aircraft operations (1) 612 625 (2.1) % Cargo (in pounds) 494,763 553,459 (10.6) % Landed weight (in tons) 32,695 33,251 (1.7) % (1) Aircraft operations are takeoffs, landings, or other communications with the control tower. 2010/2009 Operating revenues increased by $36.9 million, or 6.5% from $564.5 million in 2009 to $601.4 million in 2010, primarily due to increases in facility rentals, landing, aviation fuel tax, other sales and charges, and non airline revenue concession, parking and car rental. Landing fees increased by $10.0 million, or 9.0%, which is attributable to the increase in landing fee rates per 1,000 pounds landed weight from $3.40 for signatory and $4.08 for non-signatory airlines in 2009 to $3.62 for signatory and $4.30 for nonsignatory airlines in 2010. Facility rentals increased by $4.8 million, or 2.1%, which is attributable to an increase in non-preferential use fees and baggage fees and offset by the increase in year-end revenue credit. Concession revenues between 2010 and 2009 increased by $2.3 million, or 5.6%, primarily due to the increase in passenger traffic. Additionally, there was an increase in spend rate per enplaned passenger from $9.62 in 2009 to $9.87 in 2010. Parking revenue increased by $8.8 million, or 7.7%, is attributable to the increase in originating and destination (O & D) traffic and an increase in parking rates in July of 2009 of $1.00 for the economy and shuttle parking lots. 14
City and County of Denver Municipal Airport System MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) December 31, 2010 and 2009 Car rental revenues increased $1.2 million or 2.8%, to $44.2 million due to an increase in O&D passenger traffic. Total passenger traffic increased 4.1% for the year ended December 31, 2010; O & D passenger increased 2.9%. Aviation fuel tax increased in 2010 by $6.8 million, or 40.5%, due to increased in fuel prices and flight operations. Other sales and charges increased by $3.0 million or 25.7% due to an increase in natural resources related to the purchase of the oil and gas wells this year which was offset by a decrease in charges to tenants for utilities and trash, interest and miscellaneous revenues. 2009/2008 Operating revenues increased by $23.7 million, or 4.4% from $540.8 million in 2008 to $564.5 million in 2009, primarily due to increase in facility rentals and landing fees, which is offset by a decrease in concession, car rental, parking and aviation fuel tax. Landing fees increased by $15.6 million, or 16.5%, which is attributable to the increase in landing fee rates per 1,000 pounds landed weight from $2.68 for signatory and $3.20 for non-signatory airlines in 2008 to $3.40 for signatory and $4.08 for non-signatory airlines in 2009. Facility rentals increased by $28.7 million, or 14.5% with the increase being primarily attributable to the Airport 2009 yearend revenue credit, which was $29.3 million, thus not meeting the $40.0 million cap for the first time in several years. Additionally, there was an increase in space rent and preferential use. Concession revenues between 2009 and 2008 decreased by $1.2 million, or 2.9%, primarily due to the decrease in passenger traffic. Additionally, there was a decrease in spend rate per enplaned passenger from $9.71 in 2008 to $9.62 in 2009. Parking revenue declined $4.4 million, or 3.7%, which is attributable to the decrease in originating and destination (O & D) traffic that was partly offset by a rate increase effective July 1, 2009. Car rental revenues decreased $2.6 million or 5.8%, to $43.0 million due to a decrease in O&D passenger traffic. Total passenger traffic decreased 2.1% for the year ended December 31, 2009; O & D passenger declined 5.0%. Aviation fuel tax decreased in 2009 by $10.1 million, or 37.6%, due to the decrease in fuel price and usage. Other sales and charges decreased by $2.1 million or 15.4% due to the decrease in price of natural resources (oil and gas), thus reflecting the decrease in oil and gas prices from record highs in 2008. Operating Expenses Before Depreciation and Amortization (In thousands) 2010 2009 2008 Operating expenses before depreciation and amortization Personnel services $ 112,230 $ 116,540 $ 114,288 Contractual services 172,492 166,469 166,299 Repair and maintenance projects 105,943 69,975 67,737 Maintenance, supplies, and materials 19,200 26,533 25,505 Total operating expenses before depreciation and amortization $ 409,865 $ 379,517 $ 373,829 15
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