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statement of operations and changes in net assets statement of cash flows Year ended December 31, 2002, with comparative figures for 2001 (in thousands of dollars) Year ended December 31, 2002, with comparative figures for 2001 (in thousands of dollars) 2002 2001 $ $ Revenues Terminal and passenger security fees 8,302 8,165 Landing fees 8,102 8,407 Concessions 5,904 6,142 Parking revenues 3,412 3,691 Rentals 2,199 1,538 Other revenue 497 785 28,416 28,728 Airport improvement fees (note 7) 8,695 8,328 37,111 37,056 Operating Expenses Salaries, wages and benefits 11,046 10,634 Materials, services and supplies 6,908 6,867 Amortization 2,561 1,973 General and administrative 2,393 2,981 Property taxes 679 530 23,587 22,985 Excess of revenues over expenses 13,524 14,071 Net assets, beginning of year 21,127 7,056 Net assets, end of year 34,651 21,127 See accompanying notes to the financial statements. 2002 2001 $ $ Operating Activities Excess of revenues over expenses 13,524 14,071 Items not involving cash: Amortization 2,561 1,973 Change in non-cash operating working capital: Increase in accounts receivable (319) (1,205) Decrease in inventories 10 35 Increase in prepaid expenses (105) (27) (Decrease) increase in accounts payable and accrued liabilities (5,098) 7,067 Decrease in deferred revenue (59) (33) Increase in security deposits 571 28 Cash provided by operating activities 11,085 21,909 Investing Activities Expenditures on capital assets (12,369) (35,679) Cash used in investing activities (12,369) (35,679) Financing Activities Increase in long-term debt 3,000 — Repayments of long-term debt (768) (130) Increase in deferred contributions related to capital assets — 6,000 Cash provided by financing activities 2,232 5,870 14 Increase (decrease) in cash 948 (7,900) Cash, beginning of year 1,144 9,044 Cash, end of year 2,092 1,144 See accompanying notes to the financial statements.
notes to financial statements December 31, 2002 (tabular amounts in thousands of dollars) 1. General The Halifax <strong>International</strong> Airport Authority (the “Authority”) was incorporated on November 23, 1995 as a corporation without share capital under Part II of the Canada Corporations Act. On February 1, 2000, the Authority signed a 60-year ground lease with Transport Canada and assumed responsibility for the management, operation and development of the Halifax <strong>International</strong> Airport. Excess revenues over expenses are retained and reinvested in airport operations and development. The Authority is a dynamic and multi-faceted aviation enterprise that provides air access to the world, facilitates personal and business connections and promotes regional economic growth. The Authority is governed by a Board of Directors whose members are nominated by the Halifax Regional Municipality, the Province of Nova Scotia and the Federal Government, as well as the Metropolitan Halifax Chamber of Commerce. The nominated members can also appoint additional members who represent the interests of the community. The Authority is exempt from federal and provincial income tax, federal large corporation tax, and Nova Scotia capital tax. 2. Significant Accounting Policies The Authority’s financial statements have been prepared in accordance with Canadian generally accepted accounting principles. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities at the date of the financial statements and the reported amounts of certain revenues and expenses during the year. Actual results could differ from those estimates. Inventories Inventories consist of materials, parts and supplies and are stated at the lower of cost determined on an average cost basis and estimated replacement cost. Capital assets Capital assets are recorded at cost including interest on funds borrowed for capital purposes, net of contributions and government assistance and are amortized over their estimated useful lives on a straight-line basis as follows: Assets Rate Computer hardware and software 20% - 33% Leasehold improvements 2.5% - 10% Machinery, equipment, furniture and fixtures 5% - 20% Vehicles 5% - 17% Construction in progress is recorded at cost and is transferred to leasehold improvements when the projects are complete and the assets are placed into service. Organization costs Organization costs represent start-up expenditures, including due diligence, engineering studies, and legal fees, incurred by the Authority in advance of the transfer of operations to the Authority from Transport Canada. Organization costs are being amortized to operations on a straight-line basis over a period of three years. Revenue recognition Landing fees, terminal fees, parking revenues and passenger security fees are recognized as the airport facilities are utilized. Concession revenues are recognized on the accrual basis and calculated using agreed percentages of reported concessionaire sales, with specified minimum guarantees where applicable. Rental revenues are recognized over the lives of respective leases, licenses and permits. Airport improvement fees (“AIF”) are recognized when departing passengers board their aircraft as reported by the airlines. Deferred revenue consists primarily of concession revenue for minimum guarantees and license fees received in advance of services being rendered. 15
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Page 3 and 4: a journey to new heights Halifax In
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Page 19 and 20: corporate governance Halifax Intern
Page 21 and 22: oard of directors Bernard Miller, C
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International

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