fy 2014 adopted budget - dallas/fort worth international ......fy 2014 adopted budget finance...

FY 2014 ADOPTED BUDGET

Finance Department P.O. Box 619428 DFW Airport, Texas 75261-9428

FY 2014 Adopted Budget Introduction

1 DFW International Airport

Table of ContentsIntroduction

DFW’s Vision Statement and Board of Directors.…..................................................................... 2 DFW Infrastructure....................................................................................................................... 4 Strategic Plan................................................................................................................................ 6 DFW's Airline Use Rate Agreement Model................................................................................... 7 DFW Fund Structure………......................................................................................................... 9 FY 2013 Budget Amendments and Outlook……………………………………………………….... 10 Budget Schedule.....………………………………………………………………............................. 11

Executive Summary FY 2014 Key Performance Indicators…...................................................................................... 12 FY 2014 Budget Comparisons and Walkforward……………..…………………………………….. 12 FY 2014 102 Budget Exposures…………………........................................................................ 15 FY 2014 Capital Project Exposures …………………………………………………....................... 16 Passenger Airline Cost per Enplanement (CPE).........................................................................18 Revenues and Expenses Budget Overview…………………………………………………………. 20 Capital Programs and Debt Financing.….………….................................................................... 22

Airline Cost Centers Airfield Cost Center……………………………........................................................................... 23 Terminal Cost Center………………………................................................................................ 26 Transfers - Joint Capital Account Transfer................................................................................. 28 Transfers - DFW Terminal Contribution...................................................................................... 29 Cost Per Enplanement (CPE) Calculation...………………………………………………………... 30

DFW Cost Center DFW Cost Center Revenues and Expenses.............................................................................. 31 Parking Business Unit................................................................................................................. 33 Concessions Business Unit........................................................................................................ 35 Rental Car Center (RAC) Business Unit..................................................................................... 36 Commercial Development Business Unit................................................................................... 37 Other DFW Revenues and Expenses......................................................................................... 38

Operating Expenses FY 2014 Expense Budget by Major Cost Driver......................................................................... 40 Operating Budget by Category................................................................................................... 44 Contingency Outside of Rate Base............................................................................................ 47 Net Debt Service Budget............................................................................................................ 47 Positions..................................................................................................................................... 48

Departments Department Overview and Walkforwards…............................................................................... 49

Capital Budget Projected Capital - Uses of Cash by Capital Account................................................................ 66 DFW Capital Account….............................................................................................................. 68 Joint Capital Account.................................................................................................................. 69 Capital Project-Sources of Cash .............................................................................................. 72



Airport Background

The Dallas/Fort Worth International Airport (the “Airport” or “DFW”) was created by a “Contract and Agreement” between the cities of Dallas, Texas, and Fort Worth, Texas (“the Cities”) on April 15, 1968 for the purpose of developing and operating an airport as a joint venture between the Cities. Although owned by Dallas and Fort Worth, DFW is located within the boundaries of the Cities of Grapevine, Coppell, Irving, Euless, and Fort Worth; and within Dallas and Tarrant Counties.

Source: DFW Airport Information Technology Services/GIS Group



DFW is a located within a four-hour flight time of 95% of the U.S. population and currently ranks fourth among the world’s busiest airports in terms of operations and eighth in terms of passengers. Its central location is the focal point of one of the nation’s largest intermodal hubs, connecting air, rail, and interstate highway systems. DFW currently operates daily passenger flights to 200 destinations worldwide, including 148 nonstop domestic destinations and 52 nonstop international destinations. There are 22 passenger carriers and 17 cargo carriers serving DFW. The Airport is recognized as a premier inland cargo hub, served by major international cargo carriers. According to the Texas Department of Transportation, DFW is the primary economic engine for North Texas, driving $15.7 billion of economic impact, supporting 268,000 jobs, and generating $7.4 billion in payroll annually.

DFW Infrastructure Airfield – DFW has more operational capacity than any airport in the United States with 7 runways: 5 north/south parallels and 2 diagonals. Four of DFW’s runways are 13,400 feet in length. DFW is focused on the future and preparing to handle next generation aircraft, including the Airbus A380. The Airport’s designated hourly capacity arrival/departure flow is approximately 186-193 aircraft operations per hour under reduced instrument flight conditions and approximately 270-279 aircraft operations per hour under optimum visual flight conditions, a condition that prevails approximately 94% of the time. DFW estimates it is using close to 60% of its aircraft operation capacity at this time. Terminals – DFW has 5 terminals (A, B, C, D, and E) totaling 6.3 million square feet of building space, including 155 aircraft boarding gates, 358 ticketing positions with supporting self-service kiosks, and 15 security checkpoints. As of June 30, 2013, 9 of the gates were closed for renovation as part of the Terminal Renewal and Improvement Program (TRIP) and 12 were not regularly scheduled, including 5 gates in the Terminal E Satellite facility that is connected to Terminal E via a tunnel. Collectively, the airlines averaged 6.7 turns per active gate for the first six months of FY 2013.

DFW Terminal Complex

American Airlines operates domestic service in Terminals A and C, and both domestic and international service in Terminal D. American Eagle operates domestic service in Terminals B



and D, and international service in Terminal D. All other domestic flights service in Terminals B and E. All international flights arrive in DFW’s Terminal D. Terminal D has 2.2 million of square feet and 27 gates. All terminal gate leases expire September 30, 2020 per the terms of a ten year Airline Use Agreement which became effective in October 01, 2010. DFW’s Federal Inspection Service (FIS) facilities are located in Terminal D. The Airport’s FIS facility is approximately 406,000 square feet with 60 inspection booths and 8 baggage carousels. DFW is responsible for all of the janitorial and facility maintenance in Terminals B, D and E, and baggage maintenance in Terminals B and E. Most of the maintenance and janitorial functions are contracted out to third parties. Costs associated with maintenance of these facilities are included in DFW’s operating budget. American Airlines is responsible for the majority of the facilities maintenance custodial services and all of the baggage maintenance in Terminals A and C. In Terminal D, they maintain their preferentially leased jet bridges and all of the Terminal D baggage systems. The cost of these maintenance activities are paid directly by American Airlines and not included in DFW’s budget or financial statements.

Transit System – DFW’s people mover system (Skylink) transports passengers and employees between terminals on the secure side. DFW operates 16 to 24 fully automated cars on Skylink during normal operations. Skylink cars circle the 5 terminals in 2 directions, and trains arrive an average of every 2 minutes at each terminal. There are 2 Skylink stations in each terminal. The average customer ride is about 5 minutes. DFW also uses buses to transport passengers and employees between terminals on the non-secure side, as well as to the Grand Hyatt Hotel, parking lots and the Rental Car Center (RAC). DFW uses 29 buses to shuttle passengers between the terminals and Grand Hyatt (Terminal Link); 59 buses between remote and express parking lots and the terminals; 5 buses for various DFW activities and service between the Trinity Railway Express Centerpoint station and the terminals; 32 buses between employee parking lots and the terminals; and 54 buses between the terminals and the RAC. Airport Operations Center/Emergency Operations Center (AOC/EOC) – DFW’s AOC/EOC serves as a single point of contact to centralize communications for DFW’s passengers, guests, tenants, employees, and contractors. This includes the 9-1-1 call management of police, fire and emergency medical response teams and 3-1-1 non-emergency services. The AOC/EOC handles an average of 27,000 and 1,950 calls, respectively, each month.

DFW Controlling Documents In addition to the Contract and Agreement between the Cities, DFW is governed by several other key documents, including the 30th Supplemental Bond Ordinance which modified the original 1968 Concurrent Bond Ordinance (collectively called the Bond Ordinances); and the Use Agreements between DFW and the Signatory Airlines. Collectively, these agreements are called the Controlling Documents. The Controlling Documents define how DFW manages its business affairs. DFW does not collect any local tax revenue to fund its operations. The Controlling Documents require that Gross Revenues of the Airport be deposited into the “102 Revenue and Expense Fund” (102 Fund). Gross Revenues are defined as all Airport revenues and receipts except: bond proceeds; Passenger Facility Charge (PFC) proceeds used to fund capital projects (rather than for debt service); interest earned on unspent bonds; proceeds in the Capital Accounts; PFC receipts; grant proceeds used to fund capital projects; and sale of land or mineral rights, including natural gas royalties.



Strategic Plan DFW updated its Strategic Plan in FY 2012 keeping the same overall structure as its previous Plan, but with some change in strategic focus on:

The initiation of the 8-year, $2.0 billion Terminal Renewal and Improvement Program (TRIP) to renovate and modernize our 4 older terminals.

The impact of global airline alliances on airline and airport competition, and DFW’s increased focus on becoming the most preferred “Super Global Hub” in the world.

A 10–year Airline Use Agreement that redefines DFW’s business model and relationship with the airlines.

An increased emphasis on becoming a “business partner’ with airlines and contractors to provide superior services to DFW’s passenger guests.

An expanded definition of DFW’s primary customer groups beyond the passenger to include airlines and tenants.

A critical shift in focus - that all DFW’s employees either directly or indirectly support our customers.

A financial plan that establishes DFW’s financial targets through FY 2020, to be updated annually.

The Strategic Plan is a critical document that includes DFW’s Vision and Mission Statements and identifies the critical strategies to achieve DFW’s Primary Business Goal of growing the core business of domestic and international passenger and cargo airline service. DFW takes a balanced approach to its Strategic Plan. Management focuses its Key Drivers/Results of being cost competitive, satisfying the customer, and achieving operational excellence, through engaged employees. A copy of DFW’s full Strategic Plan is available at www.dfwairport.com. A schematic of the DFW Strategic Plan follows:



Airline Use Agreement Rate Model The Use Agreement is a hybrid model, whereby the Signatory Airlines pay landing fees and terminal rentals based on the net cost to provide those services, and DFW retains a portion of the net revenues from non-airline business units (e.g., parking) in the DFW Cost Center (DFW CC). The following chart is a summary of the current Airline Use Agreement rate model: 7

DFW Cost Centers

Airfield Terminal DFWExpenses Expenses DFW Revenues (Business Units)

Direct Costs Direct Costs Parking, Concessions, RAC,

DPS and Overhead Allocations DPS and Overhead Allocations Commercial Development,

Debt Service (net of PFCs) Debt Service (net of PFCs) Employee Transp., Taxis,Utilities, and Interest Income

Less: Misc. Airfield Revenues Less: Misc. Terminal Rentals Less: Expenses General Aviation Federal Inspection Fees Direct CostsFueling Facility Lease Turn Fees; TSA Rentals DPS and Overhead Allocations

Concessions Reimbursements Debt Service (net of PFCs)

+/- Transfers/Adjustments +/- Transfers/Adjustments - Transfers/Other - Lower Threshold Adjustment + DFW Terminal Contribution - Skylink Costs + Upper Threshold Adjustment + Annual Capital Transfer - DFW Terminal Contribution+/- True-Up Adjustment +/- True-Up AdjustmentNet Cost = Landing Fees (KPI) Net Cost =Terminal Rentals (KPI)

+/- Threshold Adjustments+/- True-Up Adjustment

Joint Capital Account Coverage Account DFW Capital Account

+ Natural Gas Royalties

+ Sale of Land Proceeds - Annual Capital Transfer to the Terminal Cost Center

Capital Accounts (Capital Improvement Fund)

Funded from existing coverage,plus coverage from New Debt

Service from all three costcenters as debt service

increases

Funded annually from DFW CC. Contributions must be higher than

Lower Threshold and cannot exceed the Upper Threshold.

Operating Revenue and Expense Fund (the 102 Fund)

Airline Cost Centers

KPI = DFW Cost Center Net Revenues

Airline Cost & Airline Cost per Enplanement (KPI)

Net Revenues to the DFW Capital Account (KPI)



Airline Cost Centers – The Airline Cost Centers are cost recovery in nature, such that the amount charged to the airlines equals the cost to provide services, after certain adjustments. Landing fees and terminal rental rates are based on the net cost to operate and maintain the airfield and terminals, respectively. DFW charges the direct operating and maintenance costs for the airfield and terminals, plus allocated Department of Public Safety (DPS) and overhead costs, plus debt service, net of Passenger Facility Charges (PFCs), to each cost center; then, subtracts ancillary revenues generated in these cost centers; and credits or charges certain transfers and/or adjustments (see True-Up Adjustments below). The budgeted landing fee rate is determined by dividing the net cost of the airfield by estimated landed weights. The budgeted average terminal rental rate is determined by dividing the net cost of the terminal cost center divided by leasable square footage. The Use Agreement requires the Airport to charge an equalized terminal rental rate for all 5 terminals. The amount paid by the airlines for landing fees and terminal rent fees less airline incentive payments equals airline cost, which is an airport industry Key Performance Indicator (KPI). Another common industry KPI is passenger airline cost per enplaned passenger or CPE. This KPI for passenger airlines is calculated by dividing the amount paid by passenger airlines for landing fees and terminal rent fees less airline incentive payments (i.e., collectively, airline cost) by the number of enplanements. DFW Cost Center – All non-airline business units, plus interest income, are included in the DFW Cost Center. The DFW Cost Center is also responsible for all costs associated with the Skylink people mover system per the terms of the Use Agreement. The net revenues from this cost center are transferred to the DFW Capital Account providing the net revenues are not lower than the Lower Threshold or not higher than the Upper Threshold. If either of these occur, then a Threshold or True-Up Adjustment is required. One of DFW’s most important KPIs is Net Revenues from the DFW Cost Center. This KPI measures the net revenues generated by DFW’s non-airline business units, after adjusting for the cost of Skylink, and drives the amount of cash flow that can be transferred to the DFW Capital Account each year. Joint Capital Account - Funds in the Joint Capital Account (JCA) require DFW and airline approval before money can be spent. The JCA is funded from the proceeds from natural gas royalties and the sale of land, plus interest income on the account. Supplemental funding for projects paid from the JCA comes from grants and the issuance of debt. Per the terms of the Use Agreement, an Annual Capital Transfer (described below) is made from the JCA to the Terminal Cost Center to lower airline cost through FY 2017. Coverage Account – The Airport established the Coverage Account as part of the new Use Agreement in order to implement rolling coverage. It was initially funded from coverage collected in FY 2010 (the last year of the old Use Agreement). Each year, the Coverage Account is rolled into the 102 Fund as a source of revenue, and then transferred back into the Coverage Account as excess revenue at the end of the year. The Coverage Account must equal 25% of aggregate debt service each year. If new debt is issued, each cost center must generate the incremental coverage required to fund 25% of the new debt service. These incremental coverage amounts are collected in the 102 Fund through rates and charges during the fiscal year. DFW Capital Account – This is DFW’s discretionary account and is funded primarily from the Net Revenues of the DFW Cost Center, plus interest income. Supplemental funding for projects



paid from the DFW Capital Account comes from grants and the issuance of debt. Funds in this account may be used for any legal purpose without prior airline approval. Threshold Adjustments – The Use Agreement established a Lower Threshold and an Upper Threshold for Net Revenues from the DFW Cost Center to limit the amount transferred annually to the DFW Capital Account. If DFW Cost Center Net Revenues are budgeted to be less than the Lower Threshold ($43.0 million in FY 2014), an incremental charge (i.e., a Lower Threshold Adjustment) is collected through landing fees in an amount sufficient to achieve the Lower Threshold amount. Conversely, if DFW Cost Center Net Revenues are budgeted to be greater than the Upper Threshold ($64.3 million in FY 2014), then 75% of the excess is credited to the Airfield Cost Center as an Upper Threshold Adjustment. This reduces budgeted landing fees. The remaining 25% may be retained in the DFW Cost Center and transferred to the DFW Capital Account at the end of the fiscal year. The benefit of the Lower Threshold Adjustment is that it guarantees that DFW will have a minimum level of cash to transfer to the DFW Capital Account so that DFW can replace assets on a timely basis. Conversely, the Upper Threshold limits the Airport’s ability to generate significantly more net revenues and serves to reduce airlines’ costs as non-airline revenues increase. It also places a limit on DFW’s ability to significantly increase its coverage ratios. The Threshold Amounts are adjusted annually for inflation. True-Up Adjustments – At the end of each fiscal year, DFW performs a reconciliation or true-up, such that revenues collected equal the actual net cost to operate and maintain the airfield and the terminals. Any difference becomes a True-Up Adjustment and is either charged or credited to that cost center in the next fiscal year. The True-Up Adjustments for the Airline Cost Centers are applied back to that cost center the following year beginning in January. DFW Cost Center True-Up Adjustments are applied against landing fees beginning in the following January. Annual Capital Transfer – Per the terms of the Use Agreement, an annual transfer is made from the Joint Capital Account to the Terminal Cost Center to reduce the cost of the terminals to the airlines for a period of 7 years. This transfer was $28 million in FY 2011 (first year of the new Use Agreement) and will be $16 million in FY 2014. The transfer will be reduced by $4 million each year through FY 2017 when it will be eliminated. DFW Terminal Contribution – Per the terms of the Use Agreement, an annual transfer is made from the DFW Cost Center to the Terminal Cost Center to pay for DFW’s share of common use and leasable, but unleased space, in Terminals D and E. This amount is $7.7 million in FY 2014.W Cost Centers

DFW’s Fund Structure

Although DFW uses the word “fund” to describe the designation of the source and prospective use of proceeds, DFW is an Enterprise Fund and does not utilize traditional fund accounting commonly used by government organizations. The following table summarizes the primary funds used by DFW:



Number Fund Description Primary Use

101 Fixed Assets and Long Term Debt Capital Assets/Debt

102 Operating Revenues and Expenses Operations

252 Passenger Facility Charges (PFC) Capital/Debt Service

320s/330s Joint Capital Account and Bond Funds Capital/Bond Proceeds

340s DFW Capital Account Capital

500-600s Debt Service and Sinking Funds Principal and Interest

907/910 Public Facility Improvement Corporation (PFIC) Rental Car Facility/Grand Hyatt Hotel DFW’s financial statements are issued in conformance with Generally Accepted Accounting Principles (GAAP) and include all of DFW’s funds, whereas the Annual Budget focuses on revenues and expenses included in the 102 Fund. DFW manages its day-to-day operations primarily through the 102 Fund in accordance with the Controlling Documents.

Basis of Budgeting The 102 Fund Budget is commonly called the Operating Budget, but contains elements that are not expenses under GAAP such as debt service, reserve requirements, and certain expenditures that may be capitalized under GAAP. Capital expenditures are funded through the issuance of Joint Revenue Bonds, grants, PFCs, or through the DFW or Joint Capital Accounts. From a process standpoint, the Board of Directors does not approve an overall capital budget. The Board reviews the capital budget during the Annual Budget process and when it reviews the Financial Plan. The Board does approve all contracts associated with capital projects.

FY 2014 Budget Comparisons to Other Periods FY 2013 Budget – During FY 2013 the Board approved the use of $4.5 million of contingency budgeted outside of the rate base. The FY 2013 Budget as adjusted by contingency is summarized in the following table. Any reference to the FY 2013 Budget in this budget document relates to the FY 2013 Budget, as adjusted by the approved contingency.

MillionsFY 2013 Approved Budget 654.6$ Approved Changes (and Dates)

Demolition of old buildings and guideway (May 2, 2013) 2.9 Roadway pavement repairs (May 2, 2013) 0.4 Thermal Plastic Airfield Markings (May 2, 2013) 0.2 Terminal E Checkpoint (May 2, 2013) 0.2 Operating Reserve (May 2, 2013) 0.9

FY 2013 Budget with approved contingency 659.1$

FY 2013 Outlook – DFW employs continuous forecasting techniques to project revenues and expenses for the full 12 months of the fiscal year (called the Outlook). Most of the tables and charts in this budget document include FY 2013 Outlook comparisons to provide the best basis for comparison (rather than comparing to the FY 2013 Budget). The detailed Outlook in this Budget Book was developed in a bottoms-up process such that every account was reforecast. This was completed in May 2013.



Financial Plan – DFW issued its first 10-year Financial Plan in December 2010 and this plan is updated annually with the latest update in February 2013. This Plan was the basis for the negotiation of the Use Agreement with the airlines and has been linked to DFW’s Strategic Plan to establish long-term goals for the KPIs shown in yellow in the DFW Business Model discussed above (Airline Cost, CPE, and Net Revenues from DFW Cost Center). Management’s long term goal is to achieve or exceed the targets for these KPIs since this was the basis for the Airline Use Agreement. Accordingly, comparisons to the Financial Plan for Fiscal Year 2014 are included in this Budget Book. A complete copy of the 2014 Financial Plan is available at www.dfwairport.com. Presentation of Amounts and Prior Years Actuals – The FY 2014 Budget is presented in tables and charts that are rounded to millions and thousands. Some columns and charts may not appear to add-up or foot due to rounding differences. Certain prior year amounts have been reclassified to reflect the FY 2014 presentation.

Budget Schedule DFW’s fiscal year begins October 1. The FY 2014 Expense Budget was compiled by the various DFW departments in May. and then reviewed and modified by Staff in May and June. Presentations were made to representatives of the Signatory Airlines on May 23, and June 20, 2013, with follow-up information provided. A preview of the FY 2014 Budget was presented to the Board on June 06, 2013. The final recommended Budget was presented to and approved by the Board on July 11, 2013. The FY 2014 Budget must be submitted to the City Managers of Dallas and Fort Worth by August 15, 2013, with approval of the two City Councils by September 30, 2013.

FY 2014 Adopted Budget Executive Summary


FY 2014 Key Performance Indicators

The following table compares the Key Performance Indicators (KPIs) of the FY 2014 Budget with the FY 2013 Outlook and the FY 2014 Financial Plan. Each KPI is discussed further below.

Key Performance IndicatorsFY13

OutlookFY14 Fin'l

PlanFY14

BudgetFY14B vs. FY13OL

FY14B vs. FY14FP

Total 102 Expenditure Budget (Ms) $650.1 $682.3 $651.3 ($1.2) $31.0Airline Costs (Ms) $233.7 $289.4 $253.1 ($19.4) $36.3Airline Cost Per Enplanement (CPE) $7.54 $9.25 $8.04 ($0.50) $1.21DFW Cost Center Net Revenues (Ms) $87.7 $68.8 $91.8 $4.1 $23.0Total Passengers (Ms) 60.0 60.2 61.2 1.2 1.0 Total Landed Weights (Bs) 37.9 38.0 38.1 0.2 0.1

Better (Worse)

FY 2014 Budget Comparisons and Walkforward

The following table compares the Annual 102 Fund Budget (FY 2014 Budget) with the FY 2013 Outlook, the FY 2013 Budget, and FY 2014 Financial Plan. The FY 2014 Budget is $651.3 million, an $7.8 million (1.2%) decrease from the FY 2013 Budget and a $1.2 million (0.2%) increase over the FY 2013 Outlook. The FY 2014 Budget is comprised of operating expenses and debt service. Consistent with prior years, the Budget request also includes an amount of contingency outside the rate base. This contingency may only be accessed with Board approval.

Annual Budget (Millions)FY13

BudgetFY13

OutlookFY14 Fin'l

PlanFY14

BudgetFY14B

vs FY13OLFY14B

vs FY14FP

Operating Expenses $360.3 $360.1 $368.4 $368.8 $8.7 $0.3

Gross Debt Service 298.8 290.0 313.9 282.5 (7.5) (31.4)

Total 102 Fund Expenditures $659.1 $650.1 $682.3 $651.3 $1.2 ($31.0)

Contingency O/S Rate Base 10.0

Total Budget w/ Contingency $661.3

Increase (Decrease)

During the budget process, the planned activity for FY 2014 is reviewed and aligned with DFW’s overall Strategic Plan. Below are some assumptions that were used in preparing the FY 2014 Budget. Cost Cutting Efforts DFW continued its cost cutting efforts and identified $6.6 million of cost reductions in FY 2014 as compared to FY 2013. During FY 2013, DFW demolished $2.9 million of the old people-mover guideway system and several empty buildings. In addition, DFW incurred $0.5 million for terminal and airfield projects. These costs are not budgeted to be incurred in FY 2014. In addition, DFW identified $1.6 million of savings in building assessments and other asset management projects. The new parking control system is projected to generate $1.0 million of salary and temporary labor savings. In addition, energy rates have been locked-in lower rates generating $0.6 million of savings.



Strategic Investments Consistent with the Airport’s Mission Statement and Primary Business Goal to Grow the Core Business the FY 2014 budget includes an investment of $3.3 million for international marketing and public relations to support continued global expansion of air service. AMR and US Airways Merger The merger between AMR and US Airways is pending approval on passing U.S. antitrust review. DFW anticipates the merger will be approved and that it will have a positive long-term impact on DFW operations in FY 2014 and beyond. The FY 2014 Budget includes an assumption that total DFW passengers will grow to approximately 61.2 million, a 1.2 million (2.0%) increase over the FY 2013 Outlook. Terminal Renewal and Improvement Program (TRIP) The TRIP program began in the FY 2011 and will continue through FY 2018 with various construction phases during the timeline. For FY 2014, it is expected that 3 sections of 3 terminals and associated parking garages will be closed. This will require DFW to make significant efforts to maintain customer service and place a constraint on DFW’s ability to grow terminal parking revenues. Also, the phasing and construction activities will result in additional maintenance efforts in the terminals. The opening dates and phasing of TRIP has been slowed in FY 2014 to reflect the latest schedule. This will result in lower debt service when compared to the Financial Plan for FY 2014. Impact of Lower PFCs on Rates and Charges DFW uses PFCs to pay for “eligible” debt service. In past years, DFW had collected more PFCs than could be used to pay eligible debt service. This reverses in FY 2014 as the PFC reserves will be fully utilized in FY 2013. In the above table, ”gross” debt service decreases $7.5 million from FY 2013 to FY 2014. This decrease has been planned for many years. Management has restructured debt over the past few years to minimize the impact on airline rates and charges because management knew that available PFCs would be significantly lower ($25.8 million lower in FY 2014). The net impact of the lower PFCs and lower debt is an increase in “net debt service” and the rate base of approximately $18.8 million. This can be seen clearly in the walkforward of Airline Cost and the DFW Cost Center.



Major changes between the FY 2014 Budget and the FY 2013 Outlook and how they impact the DFW Cost Center and the Airline Cost Centers are summarized below. Operating expenses increase by $8.7 million (2.4%) from the FY 2013 Outlook. Of this increase, $5.7 million relates to the Airline Cost Centers, and $3.0 million relates to the DFW Cost Center. Explanations of the change in the walkforward are discussed in the Operating Expenses section.

Budget Category (in Millions) Total DFW AirlineFY 2013 Outlook $360.1 $142.7 $217.4Budget reductions

Demolitions & other (one time) (3.4) (2.3) (1.1)Energy, Trans. & Asset Mgt. Projects (1.6) (0.7) (0.9)Parking Control System savings (1.0) (1.0) (0.0)Energy rates (0.6) (0.3) (0.3)

Total budget reductions (6.6) (4.3) (2.3)Merit & fixed increases

Merit, Annualization & Vacancies 3.9 1.4 2.5Pension/OPEB 2.3 0.7 1.6Contract increases 2.0 1.7 0.3Hardstand operations 1.0 0.0 1.0Health care 0.6 0.2 0.4CNG fuel credits 0.7 0.5 0.2Insurance premiums 0.5 0.8 (0.3)

Total merit & fixed increases 11.0 5.3 5.7Volume driven increases

Partially restore deicing budget 1.1 0.0 1.1Terminal Maint. Increase (TRIP) 0.7 0.0 0.7

Total volume driven increases 1.8 0.0 1.8Other

Marketing initiatives 0.6 0.2 0.4Other 0.8 0.4 0.4

Total other increases 1.4 0.6 0.8Operating expense increases 7.6 1.6 6.0

Cost center shifts 0.0 0.9 (0.9)Contingency & reserves

Restore contingency 2.0 0.8 1.2Operating reserve (0.9) (0.3) (0.6)

Total contingency & reserves 1.1 0.5 0.6Net Increases 8.7 3.0 5.7FY 2014 Budget $368.8 $145.7 $223.1



FY 2014 102 Budget Exposures

The FY 2014 Budget includes several exposure items that could result in DFW not obtaining its revenue and expense budget targets. The total exposure for FY 2014 is estimated at $20.0 million. If the CEO Contingency of $2 million is not sufficient to cover this exposure, management may request that the Board approve the use of the $10 million of contingency outside the rate base. Following is a summary of the major exposure items in the FY 2014 Budget.

RevenuesConcessions Advertising Not Under Contract $4.0Parking Revenues 2.0Total Revenue Exposures 6.0

ExpensesOvertime for U.S. Customs & Border Protection 3.0AA Training/Reservations Debt Service 1.5Incremental Hard Stand Activities 1.0CNG Fuel Credit - Congressional Extension 0.8Normal Deicing weather 0.3Marketing Intiatives 5.0Operating reserve 2.4Total Expense Exposures 14.0

Total Exposures $20.0

In prior years, the budget did not include revenues for business that was not under contract at the time the budget was developed. This was changed in FY 2014. The FY 2014 budget includes $4 million of advertising revenues that are not currently under contract. If these contracts do not materialize, DFW will be challenged to achieve its concessions revenue budget. In addition, the parking revenues budget carries an exposure of an estimated $2 million. It is not clear if the Airport will be able to achieve its planned parking revenue growth given the limited parking capacity due to TRIP construction. However, management was aggressive with its projections. DFW has several exposure items from a cost perspective. DFW has requested to participate in a limited federal program where DFW could reimburse the U.S. Customs & Border Protection Agency (CBP) for overtime for its agents up to $3 million per year. This action is in response to recent increases in wait times for arriving international passengers that clear customs. DFW has not included any funds in the budget for this program because it is not certain if CBP authorization will be granted. If it does, management will request the use of contingency. As part of American Airline’s (AA) emergence from bankruptcy, DFW agreed to finance renovations of their leased training facility. It is currently unclear if or when AA will begin this work, so it has not been included in the budget. If AA begins and completes this work before the start of the year, the debt service budget would need to be increased $1.5 million.



Due to the significant growth of international service, DFW has begun hardstanding aircraft at peak times during the day. The budget assumes a modest increase in hardstanding operations over the FY 2013 Outlook. However, management estimates that there may be as much as $1.0 million of cost exposure if significant new flights are added during peak times, or if new wide-body flights are added (e.g., to China). Although this is a positive development from a business perspective, the budget would need to be increased if this occurs. In FY 2013, Congress approved a CNG fuel credit through December 2013. The FY 2014 Budget assumes that Congress will extend this credit again, even though no action is currently scheduled. If Congress does not extend this credit by the end of FY 2014, DFW will have $0.8 million of budget exposure. DFW has historically averaged approximately $1.4 million on deicing costs per year. The FY 2014 Budget only includes $1.1 million of deicing costs, leaving a potential exposure of $0.3 million. In FY 2014, DFW may pursue specific international marketing initiatives as directed by the Board, up to $5.0 million. DFW maintains a 90 day reserve on operating expenses. If the above cost exposures materialize, DFW would also request additional funds to fund the operating reserve.

FY 2014 Debt Service Budget Exposure from Capital Projects

The FY 2014 Budget includes debt service exposure based on assumed completion dates of capital projects (i.e., date of beneficial occupancy or DBO). Once a project DBOs, DFW begins to pay debt service on that project. If the actual DBO date is earlier, DFW will pay more debt service than budgeted. If the actual DBO date is later, DFW will pay less debt service. The following table includes the major capital projects expected to DBO in FY 2014 and the monthly debt service that commences with each project.

Capital Project

Monthly Debt Service (000s)*

Budgeted DBO

DART Rail Station $186 Nov-13Term B/D Connector 79 Nov-13Term B North Stinger 213 Feb-14Term A – Section B Parking Garage 287 Mar-14W. Airfield Drive 95 Jun-14Term B – Section C/Phase 1 791 Jul-14Term E – Section C/Phase 2 742 Aug-14Term A – Section B/Phase 2 645 Aug-14

*Includes Coverage



Total Airline Cost

Airline cost represents the fees paid to DFW by the passenger and air cargo carriers, primarily for landing fees and terminal rents. Cost per enplanement (discussed below) is based solely on passenger airline cost. The FY 2014 Airline Cost Budget of $253.1 million is $36.3 million (12.5%) less (better) than the FY 2014 Financial Plan primarily due to lower debt service costs that were anticipated in the Financial Plan.

$233.7

$289.4$253.1

$0

$50

$100

$150

$200

$250

$300

$350

FY13 Outlook FY14 Fin'l Plan FY14 Budget

Airline Costs (Millions)

A walkforward of airline cost and cost per enplanement (CPE) from the FY 2013 Outlook to the FY 2014 Budget. Over three quarters of the increase is related to debt service and fixed use agreement items. Variances are explained in the Airlince Cost Centers section.

Airline Cost Walkforward Millions CPE1

FY 2013 Outlook $233.7 $7.54Debt & Use Agreement Items

Debt Service (net of PFCs) 10.0Joint Capital Contribution 4.0Threshold Adjustment 1.1

Total Debt and Use Agreement 15.1

Net Operating ExpensesReduction in Federal Reimbursements 1.3Hardstand Costs 1.3Other Operating Costs 4.5Other Non-Airline Revenues (5.2)

Total Net Operating Expenses 1.9

Air Service Incentive Program 2.3

Total Increase $19.4

FY 2014 Budget $253.1 $8.041Actual rates, not in millions



Passenger Airline Cost per Enplanement (CPE) CPE Trending at DFW – CPE is defined as total passenger airline cost (i.e., revenue paid to DFW) divided by the number of enplaned passengers. CPE is a common measure used by the airline industry. The denominator is enplaned passengers and is used because it is a key revenue/cost driver for an airline. However, this is not the case for an airport. Airport costs are based on the facilities and runways maintained. Notwithstanding this issue, DFW (and the industry) use this indicator as a performance measure.

$7.54$9.25

$8.04

$0

$5

$10

$15


Airline Cost per Enplanement

The FY 2014 CPE of $8.04 represents an increase of $0.50 (6.6%) from the FY 2013 Outlook. From the walkforward above, the increase is driven primarily by debt service and fixed Use Agreement adjustments. The FY 2014 CPE of $8.04 is $1.21 (13.1%) less (better) than the 2014 Financial Plan primarily due to lower debt service. CPE Benchmarked to Other Airports – DFW’s goal is to have a competitive CPE, preferable in the first quartile. The following chart benchmarks DFW’s fully loaded CPE with the fully loaded CPE projections for DFW’s competitive set of 17 large U.S. hub airports (which now includes the four US Airways hub airports – shown in green) using the latest data available from ACI surveys from FY 2012. Fully loaded cost is the most meaningful comparison because it includes most of the costs incurred by airlines to operate at an airport, including what they pay the airport (light blue), what they pay directly for terminal maintenance and terminal debt service (dark blue), and an estimate of what costs the airlines incur for delay and taxiing (red).

The chart highlights that DFW’s FY 2012 results were the fourth lowest CPE and remains in the first quartile for large hub airports. DFW is well-positioned from a cost standpoint compared to AA’s hubs (shown in red) and the US Airways hub airports (shown in green). The chart also shows that DFW’s FY 2014 budget compares favorably with the other airports’ results from FY 2012. DFW’s cost structure will continue to rise with completion of TRIP, however, management expects the airport to return to the first quartile by 2020 as other airport costs rise in association with their capital plans.

Note - Before the addition of Charlotte and Phoenix, DFW and Atlanta were the lowest cost airports in a competitive set of 13 Airports. DFW did not include the US Airways hubs because they were not true competitive airports. Now that they are part of the merged airline, DFW will begin to report on these airports in the future.



26.75

25.55

12.94

19.40

13.55

14.58

10.13

10.15

9.54

14.28

12.79

11.54

13.23

6.50

6.54

2.34

5.64

2.28

25.00

6.00

6.00

3.00

3.24

0.63

0.74

1.27

1.55

0.27

0.07

16.80

16.65

11.54

10.46

13.20

11.16

12.10

14.45

15.64

10.84

11.79

10.00

7.31

11.40

10.73

11.39

9.22

11.91

$68.55

$48.20

$30.49

$29.86

$29.75

$25.74

$25.47

$25.23

$25.18

$25.12

$24.58

$21.54

$20.54

$18.64

$18.54

$15.28

$15.13

$14.26

$0 $10 $20 $30 $40 $50 $60 $70 $80

JFK

EWR

LAX

MIA

ORD

SFO

IAH

PHL

DTW

BOS

DCA

DEN

SEA

MSP

DFW

ATL

PHX

CLT

Fully Loaded Cost per Enplaned Passenger

Cost on Airport Books

Cost on Airlines' Books*

Delay and Taxiing Cost**

Red text indicates AA Hub/Major AirportsGreen text indicates US Hubs/Major Airports

Source: 2012 CPEs from ACI Survey. Delay and Taxiing Cost from Ricondo 2013 study. Other estimates from DFW Finance.

* Estimated Maintenance and Debt Service cost paid directly by Airlines. Additional direct airline CPE represents an estimate for airline-specific direct costs divided by airline enplanements. EWR, JFK, LAK, ORD amounts from 2013 Oliver Wyman study.

** Excludes gate delays, which are primarily due to airline actions.

DFW

LAX

ORD

MIA

JFK

PHX

DCA

PHL

CLT

Net Revenues from DFW Cost Center

The chart compares net revenues from the DFW Cost Center. The FY 2014 net revenues budget is $91.8 million, a $4.1 million (4.7%) increase from the FY 2013 Outlook. The increase is primarily attributable to increased parking and concessions revenues. The growth over the Financial Plan is due to the higher concessions revenues and lower debt service in FY 2014 compared to the Financial Plan. See the DFW Cost Center section for more detail.

$76.7

$87.7

$68.8

$91.8

$50

$60

$70

$80

$90

$100

FY12 FY13OL FY14FP FY14B

Net Revenues from DFW Cost Center Millions

DFW 2014 $20.03



60 60.2 61.2

40

45

50

55

60

65


PassengersMillions

Passengers The FY 2014 Budget for passengers is 61.2 million, a 1.2 million (2.0%) increase over the FY 2013 Outlook primarily due to the expectation that the economy will continue to slowly recover and that the merged AA/US airline will continue to expand at DFW. The budget of 61.2 million is 1.0 million (1.7%) more (better) than assumed in the FY 2014 Financial Plan. Passenger statistics can be divided into several categories as shown in the following table. Originating passengers begin their trip at DFW. Destination passengers live elsewhere and fly to DFW for work or pleasure. People who travel through DFW to get to their final destination are connecting passengers. Enplanements represent all passengers boarding a plane at DFW.

FY13 FY14 FY14 FY14B vs FY14B vs.

Passengers (Millions) Outlook Fin'l Plan Budget FY13 OL FY14FP

Originating 13.3 13.6 13.9 0.6 0.3

Destination 12.2 12.5 12.7 0.5 0.2

Connecting 34.5 34.1 34.6 0.1 0.5

Total Passengers 60.0 60.2 61.2 1.2 1.0

Enplanements 29.7 30.1 30.6 0.6 0.5

Better (W orse)

Changes in these passenger metrics are important because they are the key revenue drivers for parking (originating passengers), concessions (enplanements), and rental car (destination passengers) revenues. See further discussion in the DFW Cost Center section.



Revenues and Expenses Budget Overview

The following table summarizes 102 Fund revenues by cost center and 102 Fund expenses by cost category with Net Revenues being the amount transferred to the DFW Capital Account.

MillionsFY13

OutlookFY14 Fin'l

PlanFY14


FY14B vs. FY14FP

RevenuesAirfield Cost Center $138.3 $143.5 $138.1 ($0.1) ($5.3)Terminal Cost Center 169.6 194.2 185.6 16.0 (8.6)DFW Cost Center 274.5 282.9 289.6 15.2 6.8PFCs/CFCs 155.5 130.5 129.7 (25.8) (0.8)

Total Revenues 737.9 751.1 743.1 5.2 (8.0)Expenses

Operating Expenses 360.1 368.4 368.8 8.7 0.3Gross Debt Service 290.0 313.9 282.5 (7.5) (31.4)

Total Expenses 650.1 682.3 651.3 1.2 (31.0)

Net Revenues $87.7 $68.8 $91.8 $4.0 $23.0

Increase (Decrease)

Budgeted terminal revenues for FY 2014 are higher than the FY 2013 Outlook primarily due to increased costs and debt service in these cost centers. However, terminal revenues are lower than what was assumed in the FY 2014 Financial Plan primarily because of lower debt service resulting from a slower TRIP implementation. Budgeted DFW revenues for FY 2014 are higher than the FY 2013 Outlook primarily due to increases in parking and concessions revenues. See more detailed information in the Airline Cost Center and DFW Cost Center sections of this document.

Budgeted Passenger Facility Charge (PFC) and Customer Facility Charge (CFC) revenues are used to pay eligible debt service. PFC/CFC revenues are lower than the FY 2013 Outlook and lower than the FY 2014 Financial Plan due to lower eligible debt service compared the Outlook and lower eligible debt service compared to the Plan. See more discussion on debt service and use of PFCs/CFCs in the Operating Expense Summary.

FY 2014 Net Revenues are budgeted to be higher than the FY 2013 Outlook because of increased parking and concessions revenues and a positive impact from DFW’s contribution to terminals per the Use Agreement offset by increased debt service expenses. The growth over the Financial Plan is primarily due to lower debt service.



Capital Programs and Debt Financing

DFW has 2 capital accounts, the Joint Capital Account which normally requires both DFW and airline approval to access funds, and the DFW Capital Account which DFW may use at its sole discretion. The Joint Capital Account receives funds from natural gas royalties, grants, debt proceeds, and interest income on the available cash balances. The DFW Capital Account is funded from net revenues from the DFW Cost Center, grants, debt proceeds (for commercial development) and interest income.

The largest component of DFW’s capital program is the Terminal Renewal and Improvement Program (TRIP) in the Joint Capital Account. The TRIP is budgeted at $2.0 billion over the next 5 years (see chart). As of the June 2013 Board, DFW has awarded $988.8 million in contracts for TRIP. The TRIP is preapproved as part of the Airport’s Use Agreement. Also included in the Joint Capital Account is $636 million of various other projects which DFW has received airline majority in interest (MII) approval. These funds will be spent through FY 2018. Additionally, DFW has a large number of additional capital projects currently underway and funded from the DFW Capital Account. DFW’s capital program is discussed in more detail in the Capital section and in the Financial Plan.

Millions FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Total

Terminal A $510

Terminal E $450

Terminal B $505

Terminal C $557

Total $14 $120 $239 $314 $352 $368 $364 $213 $38 $2,021

DFW expects to issue bonds to fund a significant percentage of the TRIP and the other projects included in the Joint Capital Account. Due to low interest rates, a significant portion of the TRIP bonds are being sold during FY 2013. Although the financing plans for FY 2014 are still preliminary, management projects that approximately $500 million of new debt could be issued during the fiscal year. In addition, certain bonds relating to construction of Skylink and Terminal D and other projects are planned to be refunded in FY 2013. In FY 2014, two additional refundings are possible based on interest rates and management’s discretion.

Natural Gas Revenues – The Use Agreement requires natural gas royalties to be deposited into the Joint Capital Account. Estimated natural gas royalty revenues for FY 2014 are $5.7 million, which is approximately the same amount DFW is forecasted to receive in FY 2013.

FY 2014 Adopted Budget Airline Cost Centers


Airline Cost Centers

There are two airline cost centers, the airfield and the terminal. The airlines pay DFW landing fees to cover the net cost of the airfield and terminal rents to cover the net cost to operate and maintain the terminals. Federal Aviation Administration (FAA) regulations prohibit an airport from making a profit on aviation activities. Consequently, the landing fees and terminal rentals must be set to cover the anticipated net cost to provide the services only. At the end of each fiscal year, DFW performs a reconciliation or true-up of actual costs paid and revenues received. If there is a variance (i.e., if revenues collected exceed or are lower than the actual cost), then the Airport provides a credit or adds an incremental charge in the following fiscal year to settle the difference. DFW anticipated a better than budget performance in FY 2013; accordingly, the FY 2013 Outlook includes a $9 million true-up credit for lower landing fees.

Airfield Cost Center

The following table compares Airfield Cost Center revenues and expenditures for the FY 2013 Outlook, the FY 2014 Financial Plan, and the FY 2014 Budget. Note that revenues equal expenses in this cost center in all periods. Revenue variances to the FY 2013 Outlook are explained below. See the Operating Expenses section for expenditure variances.

FY13 FY14 FY14 FY14B vs. FY14B vs.Airfield CC (in Millions) Outlook Fin'l Plan Budget FY13OL FY14FP

RevenuesLanding Fees $109.4 $130.3 $107.6 ($1.8) ($22.7)Transfer from DFW CC 18.5 2.7 20.6 2.1 18.0Other 10.4 10.5 9.9 (0.4) (0.6)

Total Revenues 138.3 143.5 138.1 (0.1) (5.3)Expenditures

Operating Expenses 70.8 74.2 71.8 1.1 (2.4)Net Debt Service 67.5 69.2 66.3 (1.2) (2.9)

Total Expenditures 138.3 143.5 138.1 (0.1) (5.3)Net Airfield Revenue $0.0 $0.0 $0.0 $0.0 $0.0

Note: FY13 Outlook landing fees includes true-up adjustment of $9M effective June 2013.

Increase (Decrease)

The Airfield is a residual cost center with landing fees as the balancer. The following table compares Airfield Cost Center revenues and expenditures for the FY 2013 Outlook, the FY 2014 Financial Plan, and the FY 2014 Budget showing the landing fee revenues necessary to cover budgeted net airfield costs.



FY13 FY14 FY14 FY14B vs. FY14B vs.Airfield CC (in Millions) Outlook Fin'l Plan Budget FY13OL FY14FP

ExpendituresOperating Expenses $70.8 $74.2 $71.8 $1.1 ($2.4)Net Debt Service 67.5 69.2 66.3 (1.2) (2.9)

Total Expenditures 138.3 143.4 138.1 (0.1) (5.3)Revenues

Aircraft Parking 0.2 0.1 0.1 (0.1) 0.0Corporate Aviation 1.8 2.0 1.9 0.1 (0.1)Fuel Facility 5.5 5.7 5.6 0.1 (0.1)DPS 2.8 2.7 2.3 (0.5) (0.4)Other 0.1 0.0 0.0 (0.0) 0.0Transfer from DFW Cost Center 18.5 2.7 20.6 2.1 18.0

Revenues before Landing Fees 28.9 13.2 30.6 1.7 17.4

Landing Fees $109.4 $130.3 $107.6 ($1.8) ($22.7)

Note: FY13 Outlook landing fees includes true-up adjustment of $9M effective June 2013.

Increase (Decrease)

Landing Fee Revenues

The FY 2014 landing fees budget is $107.6 million, a decrease of $1.8 million (1.6%) from the FY 2013 Outlook primarily due to the decreases to net debt service, minimal increases to operating expenses charged to the airfield, and the increase in the transfer from the DFW Cost Center.

Other Airfield Revenues

Other airfield revenues include threshold adjustments transferred from the DFW Cost Center, Corporate Aviation (CA) fees, the fuel farm fees paid by the airlines to cover debt service and overhead of the fuel farm, and DPS revenues. Fuel farm fees increase annually at the rate of inflation. FY 2014 DPS revenues decreased compared to the FY 2013 Outlook due to reductions in federal reimbursements for law enforcement officers and canines.

Landing Fees and Landed Weights

The charts compare landing fees and landed weights for the FY 2012 Actuals, the FY 2013 Outlook, the FY 2014 Financial Plan, and the FY 2014 Budget. The landing fee rate is assessed per 1,000 pounds of maximum approved landed weight for each specific aircraft as certified by the FAA. Changes in landed weights will not affect total landing fees because DFW must charge the airlines collectively for the cost to operate the airfield. Thus, an increase in landed weights will lower the average landing fee rate, and a decrease in landed weights will cause the landing fee rate to increase.



Signatory landing fees are budgeted at $2.82 in FY 2014, a $0.05 (1.7%) decrease from the FY 2013 Outlook. This will generate sufficient revenue to pay for budgeted airfield costs. Landing fees are lower than the FY 2014 Financial Plan by $0.66 (19.0%) due decreases to net debt service, and higher landed weights.

$2.98 $2.87$3.48

$2.82

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

FY12Actuals

FY13Outlook

FY14 Fin'lPlan

FY14Budget

Landing Fee Rates (per 1,000 lbs.)

36.5

37.9 38.0 38.1

30

32

34

36

38

40

FY12 Actual FY13 Outlook FY14 Fin'l Plan FY14 Budget

Landed Weights(in Billions)

Cargo

DFW is recognized by the industry as one of the top cargo airports in the world. The Airport’s prime location allows assorted cargo to reach millions of U.S. customers by road, while also reaching several continents by plane in a matter of hours. More than 50 million consumers can be reached by truck within 24 hours and 98% of the U.S. population can be reached via truck within 48 hours or less. Approximately 7.9% of all landing fees are budgeted to come from cargo aircraft for the FY 2014 Budget.



Terminal Cost Center

The following table compares Terminal Cost Center revenues and expenditures for the FY 2013 Outlook, the FY 2014 Financial Plan, and the FY 2014 Budget. Note that revenues equal expenses in this cost center in all periods. Revenue variances between the FY 2014 Budget and the FY 2013 Outlook are explained below. See the Operating Expense section for expenditure variations.

FY13 FY14 FY14 FY14B vs. FY14B vs.

Term inal C C (in M illions) Outlook F in'l P lan B udget FY13OL FY14FP

RevenuesOperating Revenue

Terminal Leases $103.7 $134.7 $123.7 $20.0 ($11.0)F IS Fees 22.5 19.7 19.7 (2.8) 0.0Turn Fees & Office Rents 11.0 11.9 13.1 2.2 1.2Other 12.4 12.0 13.0 0.6 1.1

Tota l Operating Revenue 149.6 178.2 169.6 20.0 (8.6)Transfers

D FW Terminal C ontribution 7.7 11.6 7.7 (0.0) (3.9)Joint C apita l Transfer 20.0 16.0 16.0 (4.0) (0.0)

Tota l Transfers 27.7 27.6 23.7 (4.0) (3.9)Tota l Revenues 177.4 205.8 193.3 15.9 (12.5)E xpenditures

Operating E xpenses 146.6 147.7 151.3 4.7 3.6Net D ebt S ervice 30.8 58.1 42.0 11.2 (16.1)

Tota l E xpenditures 177.4 205.8 193.3 15.9 (12.5)

Net Terminal Revenue $0.0 $0.0 $0.0 $0.0 $0.0

Increase (D ecrease)

The Terminal is a residual cost center with terminal leases as the balancer. The table on the following page compares Terminal Cost Center revenues and expenditures for the FY 2013 Outlook, the FY 2014 Financial Plan, and the FY 2014 Budget showing the terminal lease revenues necessary to cover budgeted net terminal costs.



F Y13 F Y14 F Y14 F Y14B vs. F Y14B vs.

Term ina l C C (in M illions) Outlook F in'l P lan B udget F Y13OL F Y14F PE xpend itures

Opera ting E xpenses $146.6 $147.7 $151.3 $4.7 $3.6Net D ebt S ervice 30.8 58.1 42.0 11.2 (16 .1)

Tota l E xpenditures 177.4 205.8 193.3 15.9 (12 .5)Revenues

Opera ting RevenueF IS F ees 22.5 19.7 19.7 (2 .8 ) 0 .0Turn F ees & Office Rents 11.0 11.9 13.1 2 .2 1 .2Other 12 .4 12.0 13.0 0 .6 1 .1

Opera ting Revenues 45.9 43.6 45.9 (0 .0 ) 2 .3Transfers

D F W Term ina l C ontribution 7 .7 11.6 7 .7 (0 .0 ) (3 .9 )Jo int C apita l Transfer 20 .0 16.0 16.0 (4 .0 ) (0 .0 )

Tota l Transfers 27.7 27.6 23.7 (4 .0 ) (3 .9 ) Revenues be fore Leases 73.6 71.1 69.6 (4 .1 ) (1 .5 )

Term ina l Leases Needed $103.7 $134.7 $123.7 $20.0 ($11.0)

Increase (D ecrease)

Terminal Leases

The FY 2014 terminal lease budget is $123.7 million, a $20.0 million (19.3%) increase from the FY 2013 Outlook due primarily to increases in net debt service charged to the terminals, operating costs, and a reduced Joint Capital Transfer. Terminal lease fees are charged to airlines based on the budgeted direct and allocated costs to operate the terminals. Total terminal operations and maintenance cost, including HVAC and other utilities for all 5 terminals, are divided by leasable square feet to calculate an average lease rate per square foot. American Airlines pays directly for the maintenance costs of Terminals A and C. These costs are added into the numerator of this formula to get the fully loaded average rate. American Airlines receives rent credit for their costs. The amount of the rent credit was negotiated as part of the Use Agreement ($38.6 million in FY 2014).

Average Terminal Rents before Credits

The chart below compares average terminal rents before credits for the FY 2012 Actuals, the FY 2013 Outlook, the FY 2014 Financial Plan, and the FY 2014 Budget. The increase in the FY 2014 Budget compared to the FY 2013 Outlook is due to increases in net debt service charged to the terminals, increases in costs, and a reduction of $4 million in the transfer credit from the Joint Capital Account compared to FY 2013 as described in the Use Agreement.



$103

$127

$156$146

$40

$60

$80

$100

$120

$140

$160

$180

FY12 Actuals FY13 Outlook FY14 Fin'l Plan FY14 Budget

Average Terminal Rents before Creditsper square foot

Federal Inspection Services (FIS) Fees

Costs are allocated to the FIS based on its percent share of terminal square footage. The FIS budget for FY 2014 is $19.7 million, a $2.8 million (12.4%) decrease from the FY 2013 Outlook due because the FY 2013 rate is overstated in error. The FY 2014 rate is based upon terminal costs reduced new debt service in the Terminal Cost Center. This reduction was not applied in FY 2013. The rate for FIS per international passenger clearing customs at DFW is expected to be $6.95, compared to a rate of $8.63 in FY 2013. International FIS passengers are expected to be 2.82 million in FY 2014 compared to 2.42 million in FY 2013.

Turn Fees and Office Rents

The turn fees and office rents budget for FY 2014 is $13.1 million, a $2.2 million (20.0%) increase from the FY 2013 Outlook. Turn fees are paid by airlines for common use gates in Terminals D and E in lieu of permanently renting space. Per the terms of the Use Agreement, turn fees must increase at the same percentage as terminal rates. In addition, the number of turns for FY 2014 is projected to increase 33% compared to FY 2013 due to new air service from non-signatory carriers and increased hardstand operations.

Other Terminal Revenues

The other terminal revenues budget for FY 2014 is $13.0 million, a $0.6 million (4.8%) increase from the FY 2013 Outlook. Other terminal revenues include TSA rents, concessions O & M reimbursements, catering fees, and allocable miscellaneous DPS revenues. Concessionaires are required to reimburse the Airport (for Terminals B, D and E) and American Airlines (for Terminals A and C) for the allocated maintenance cost per square foot of the terminals. The increase in the FY 2014 Budget compared to the FY 2013 Outlook is due to higher non-airline terminal related revenues offset by reductions in Federal reimbursements for law enforcement officers and canines.

Transfers - Joint Capital Account Transfer

Per the terms of the Use Agreement, an annual transfer is made from the Joint Capital Account to the Terminal Cost Center to subsidize terminal rates. The annual transfer was $28 million in FY 2011 and will be reduced by $4 million each year until it is phased-out completely in FY 2018. Accordingly, the FY 2014 amount is $16 million.



Transfers - DFW Terminal Contribution

Per the terms of the Use Agreement, DFW pays for a portion of the terminal cost. This amount is based on DFW’s proportionate share of expenses for common use and vacant space in the terminals. From a cost center standpoint, this contribution is shown as a source of cash in the Terminal Cost Center and a use of cash for the DFW Cost Center. DFW can reduce its contribution to the Terminal Cost Center by leasing more space to other airlines or tenants and by reducing costs in the terminals. The DFW terminal contribution of $7.7 million was unchanged in FY 2014 compared to the FY 2013 Outlook.

Summary of Airline Costs

The following table compares the summary of airline costs for the FY 2013 Outlook, the FY 2014 Financial Plan, and the FY 2014 Budget on a Use Agreement and GAAP (Generally Accepted Accounting Principles) basis. The difference between the Use Agreement basis and the GAAP basis is primarily related to prior year true-ups. These true-ups are reflected as a reduction/addition in airline cost for the Use Agreement in the year that the airlines receive/pay for the true-up; however for GAAP, these true-ups are reflected in the year earned. Payments to the airlines for the Air Service Incentive Program (ASIP) are made from the DFW Capital Account and are accounted as rebates to the airlines for both a Use Agreement and GAAP basis. These payments are not part of the 102 Fund however.

Airline Revenue/Costs (in Millions)FY13

OutlookFY14

Fin'l PlanFY14

Budget

FY14B vs.

FY13OL

FY14B vs.

FY14FP

Landing Fees $108.2 $130.3 $107.6 ($0.6) ($22.7)

Terminal Leases 103.4 134.7 123.1 19.8 (11.5)

FIS Fees 22.5 19.7 19.7 (2.8) 0.0

Turn Fees & Terminal Office Rents 11.0 11.9 13.1 2.2 1.2

Aircraft Parking 0.2 0.1 0.1 (0.1) 0.0

Sub-total Airline Revenue/Cost 245.2 296.6 263.7 18.5 (32.9)

Less: ASIP (12.9) (8.0) (10.6) 2.3 (2.6)

Airline Cost/Revenue post ASIP 232.3 288.6 253.1 20.8 (35.6)

Add: Prior year True-up 5.2 0.7 0.0 (5.2) (0.7)

Less: Current Year True-up (3.9) 0.0 0.0 3.9 0.0

Total Airline Revenue/Cost $233.7 $289.4 $253.1 $19.4 ($36.3)

Increase (Decrease)



Cost Per Enplanement (CPE) Calculation

The following table shows the passenger airline cost per enplanement calculation and compares the CPE for the FY 2013 Outlook, the FY 2014 Financial Plan, and the FY 2014 Budget. This KPI only includes passenger-related airline revenues (i.e., costs) and excludes cargo and general aviation revenues. True-ups are a reduction/addition in airline costs reflected in the year earned.

Cost Per Enplanement (in Millions)FY13

OutlookFY14

Fin'l PlanFY14

Budget

FY14B vs.

FY13OL

FY14B vs.

FY14FP

Passenger Airline Enplanements(1)29.7 30.1 30.6 0.9 0.5

Passenger Airline Cost per Enplanement

Airline Cost/Revenue $245.2 $296.6 $263.7 $18.5 ($32.9)

Less: Cargo and GA Landing Fees (9.5) (10.9) (8.9) 0.7 2.0

Add Back: Cargo/GA true-up 0.3 0.0 1.6 1.3 1.6

Sub-total PAX Airline Revenue 236.0 285.7 256.5 20.4 (29.3)

Less ASIP - Passenger Airlines (12.9) (8.0) (10.6) 2.3 (2.6)

Total PAX Airline Revenue post ASIP 223.1 277.7 245.9 22.8 (31.9)

Add Back: Prior Year True-Up 4.9 0.7 0.0 (4.9) (0.7)

Less: Current Year True-Up (3.6) 0.0 0.0 3.6 0.0

Total Passenger Airline Cost/Revenue $224.3 $278.5 $245.9 $21.5 ($32.6)

Cost per Enplanement (CPE)(2)$7.54 $9.25 $8.04 $0.49 ($1.22)

1General Aviation enplanements are excluded from CPE calculation

2Actual rates, not in millions

Increase (Decrease)

FY 2014 Adopted Budget DFW Cost Center


DFW Cost Center Revenues and Expenses

The table below compares the FY 2013 Outlook, the FY 2014 estimates contained in the FY 2013 Financial Plan, and the FY 2014 Budget for the DFW Cost Center. Net revenues from the DFW Cost Center are transferred to the DFW Capital Account at the end of the fiscal year. For FY 2014, 75% of net revenues in excess of $64.3 million are transferred to the Airfield Cost Center as a “threshold adjustment.” Revenue variances are discussed in the rest of this section. Expenditure variances are covered in the Operating Expenses section.

FY13 FY14 FY14 FY14B vs. FY14B vs.

DFW Cost Center (in Millions) Outlook Fin'l Plan Budget FY13OL FY14FP

Revenues

Revenue Management Revenues

Parking $116.2 $129.3 $124.1 $7.9 ($5.3)

Concessions 61.6 60.1 66.8 5.2 6.7

Rental Car (RAC) 29.9 29.5 30.9 1.0 1.4

Commercial Development 36.3 33.2 36.3 0.0 3.1

Total Revenue Mgmt Revs 244.0 252.2 258.1 14.1 5.9

Employee Transportation 12.6 13.2 13.5 0.9 0.3

Taxis and Limos 8.1 8.2 8.5 0.5 0.3

Utilities & Miscellaneous 7.1 6.5 7.1 0.1 0.7

DPS Allocation 1.4 1.3 1.2 (0.3) (0.2)

Interest Income 1.3 1.4 1.2 (0.1) (0.2)

Total Revenues 274.5 282.9 289.6 15.2 6.8

Expenditures

Operating Expenses 113.2 115.1 114.7 (1.5) 0.4

Net Debt Service 30.2 49.9 38.7 (8.6) 11.2

Total Expenditures and Debt Service 143.3 165.0 153.4 (10.1) 11.6

Gross Margin - DFW Cost Center 131.1 117.8 136.2 5.1 18.3

Less: Terminal Contributions 7.7 11.6 7.7 0.0 3.9

Less: Skylink 35.6 37.5 36.7 (1.1) 0.8

DFW Cost Center Net Revenues 87.8 68.8 91.8 4.0 23.0

Less: Transfer to Airfield Cost Center 18.5 2.7 20.6 2.1 18.0

Transfer to the DFW Capital Account $69.3 $66.1 $71.2 $1.9 $5.0

Variance Better(Worse)



Revenue Management Revenues DFW’s Revenue Management Division manages 4 business units that strive to maximize net revenues (parking, concessions, rental car, and commercial development). The chart to the right compares Revenue Management Revenue per Enplanement. This KPI is projected $0.23 higher in the FY 2014 Budget than the FY 2013 Outlook because of increased parking capacity, anticipated parking rate increases, and full year operations of new concessions in Section A of Terminal A in FY 2014, less the negative impact from the TRIP on those business units’ revenues. More information is included in the business unit write-ups that follow.

$7.87

$8.20 $8.38 $8.43

$7.00

$7.40

$7.80

$8.20

$8.60

$9.00

FY12Actual

FY13Outlook

FY14Fin'l Plan

FY14Budget

Revenue Mgmt. Revenue per Enplanement



Parking Business Unit

Background – The Parking Business Unit (PBU) is DFW’s most significant source of non-airline revenue. Customers are charged parking fees based on the length of stay and the parking facility used. The table below highlights DFW’s parking products, spaces and parking rates.

The Airport is unique from an airport parking perspective because the Airport has parking plazas on the north and south ends of International Parkway (i.e., the entrances to the Airport), so that all customers and visitors must go through the plazas to access the Airport. In addition, many patrons drive through the Airport while traveling from north to south or south to north. These patrons pay a $1 pass-through/drop-off fee if they have a toll tag and $2 if paying with cash or credit card for the first 30 minutes. Intra-Day fees graduate to $7 with daily rates beginning at 6 hours. Any stay over 6 hours is considered one full day.

DFW collects a privilege fee of 10% (of sales) from off-airport parking and valet providers. The Airport contracts directly with a third party to provide a DFW branded valet service. The PBU is also responsible for busing customers from the parking lots to the terminals (Express and Remote products) and between the terminals (Terminal Link).

Parking Products

No. of Parking Spaces

Spaces Closed for Renovation

Spaces Available

Post TRIP Renovation

Spaces(1) FY 2014 Daily Parking Rate(2)

Terminal Lots $18 toll tag; $20 cash or credit cardA (3 structures) 5,548 (1,646) 3,902 7,400 B (3 structures) 3,524 (1,618) 1,906 3,524 C (4 structures) 5,781 - 5,781 5,781 D (1 structures) 7,821 (890) 6,931 7,821 E (3 structures) 4,050 (1,503) 2,547 5,600

Infield (uncovered) 1,842 (618) 1,224 1,605 Total Terminals 28,566 (6,275) 22,291 31,731 Express Lots 7,357 (624) 6,733 8,572 $11 uncovered; $13 coveredRemote Lots 4,864 - 4,864 4,864 $9 uncoveredIntra-day n/a n/a n/a n/a $2 to $7 (up to 6 hours)Valet n/a n/a n/a n/a $25 (uses existing parking facilities)Pass-throughs/Drop-off n/a n/a n/a n/a $1 toll tag; $2 cash (0-30 minutes)Total Public Spaces 40,787 (6,899) 33,888 45,167

Employee Parking 7,520 7,520 7,520

(1) Included in FY 2013 Financial Plan

(2) Includes sales tax.

DFW Parking Space and Rate Summary



The chart below shows the Proposed Vehicle Parking Fees for FY 2014.

Duration Terminal (1)Express Covered

Express Uncovered Remote

0 min - 30 min with Tolltag $1 $2 $2 $10 min - 30 min $2 $2 $2 $130 min - 2 hours with Tolltag $2 $2 $2 $130 min - 2 hours $3 $2 $2 $12 - 4 hours $5 $3 $3 $24 - 6 hours $7 $4 $4 $36 - 24 hours with Toll Tag $18 $13 $11 $96 - 24 hours $20 $13 $11 $9(1) Including DFW Business Center

(2) All Parking fees, excluding valet parking, include sales tax. The sales tax is based on applicable tax jurisdiction.

Proposed Vehicle Parking Fees(2)

FY 2014 Budget – The FY 2014 parking revenue budget is $124.1 million, a $7.9 million (6.8%) increase from the FY 2013 Outlook. This reflects an increase in originating passengers, a $1 increase for remote rates, and a $1 increase for cash and credit card transactions between 0 minutes - 2 hours for the central terminal area. The proposed rate increases are expected to generate incremental revenues of $3.7 million. The remaining revenues of $4.2 million are based on growth assumptions for originating passengers and growth of express parking. Management believes this to be an aggressive budget with up to $2 million at risk due to the number of closed terminal parking spaces for TRIP. The terminal budget was not adjusted downward for this exposure. The FY 2014 Budget is $5.3 million (4.1%) lower the Financial Plan projection due to postponement of a $1 increase in terminal and express rates due to the delays in adding new terminal garages.

Parking Revenue per Originating Passenger The primary drivers for parking revenues are originating passengers, parking prices, and average length of stay. The goal is to maximize revenue per originating passenger. The increase in parking revenue per originating passenger for the FY 2014 Budget versus the FY 2013 Outlook is due to rate increases and incremental spaces in express parking. This KPI is below the Financial Plan projection due to the deferral of the terminal and express parking rate increase.

$8.50 $8.72

$9.50

$8.95

$7.00

$7.40

$7.80

$8.20

$8.60

$9.00

$9.40

$9.80

FY12Actual

FY13Outlook

FY14Fin'l Plan

FY14Budget

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 percentage rent. As of June 30, 2013, the Airport had 201 total locations and 128 packages.

Approximately 89% of packages are currently paying percentage rent. Concessions revenues also include contracts for sponsorships, advertising, and communications services which generally have periodic or one-time payments that may be amortized over the life of the contract. Concessions’ goal is to optimize retail, services, and food and beverage options for customers to increase revenue per enplanement; and to grow new revenue streams from sponsorships, communications, and advertising not tied directly to enplanements.

During FY 2013, DFW awarded the concessions in Phase 2 of Terminal E and began bidding retail locations in Terminal D. Concessions reopened with the TRIP construction for Phase I in Terminal A Section A which was completed in the second quarter of FY 2013. Phase II TRIP construction has begun in Terminal A with the closing of Section B in the third quarter of FY 2013. The E satellite was also returned to service with 7 concessionaires supporting the passengers. The Airport anticipates that revenues per enplanement will increase as new concessions open.

FY 2014 Budget – The FY 2014 concessions budget is $66.8 million, a $5.2 million (8.4%) increase from the FY 2013 Outlook due to the net impact of increasing enplanements and the opening of new concessions in Section A of Terminal A, partially offset by additional terminal sections under construction. During FY 2014 Terminals A, B, and E will each have a section closed for TRIP construction. Concession revenues have an exposure of $4 million due to an assumption that advertising contracts will be renewed in FY 2014.

Concessions Revenue per Enplanement – This is the Concession Business Unit’s most significant KPI because it measures the amount of revenue earned by DFW from terminal concessions per enplaned passengers. This is also a standard metric used by the airport industry. The $0.11 increase in concessions revenue per enplanement in FY 2014 as compared to the FY 2013 Outlook is primarily related to the opening of new concessions in Section A of Terminal A that will provide new concession offerings to passengers. Revenue per enplanement is exceeding the Financial Plan due projections because the impact of TRIP has been less than originally anticipated and the addition of more concessions square footage.

$1.93

$2.07 $2.00

$2.18

$1.00

$1.20

$1.40

$1.60

$1.80

$2.00

$2.20

$2.40

FY12Actual

FY13Outlook

FY14Fin'l Plan

FY14Budget

Concessions Revenue per Enplanement



Rental Car Center (RAC) Business Unit Background – The RAC covers 155 acres and includes a common building with individual counters and back office space for each rental car company. The facility also includes a parking garage for ready and return car spaces, a bus maintenance facility, overflow surface parking areas and individual rental company service sites including car wash racks, maintenance bays and fueling systems. The Airport collects ground lease, percentage rent (10% of sales), and O&M expenses from the rental car companies. The ground lease rate increases 3% each year. There are 6 rental car companies with 11 brands operating from the RAC, providing a total available inventory of approximately 25,000 cars. The largest 3 rental car companies and their market share are Hertz (37%), Avis/Budget (30%), and Enterprise/Vanguard (30%). There are no major off–airport rental car operations competing with the Airport.

DFW management has very little control over rental car company activities. It assists the RAC companies where possible and maintains the RAC facility to high standards. Most RAC patrons are business travelers. RAC sales and DFW revenues tend to follow the economy. DFW revenues can rise or fall based on the number of DFW destination passengers, the percentage of destination passengers renting cars, the average stay per renter, and the average daily price charged for the cars. FY 2014 Budget – The FY 2014 rental car revenue budget is $30.9 million, a $1 million (3.3%) increase from the FY 2013 Outlook due to increases in destination passengers projected for FY 2014. The FY 2014 Budget is $1.4 million better than the FY 2014 projection in the FY2013 Financial Plan due to the impact of higher transaction days and a higher average daily rate assumed in the Plan. All other factors are assumed to stay constant with the FY 2013 Outlook because management has no control over these factors. RAC Revenues per Destination Passenger This KPI measures the amount of percentage rent paid by the rental car companies to DFW divided by destination passengers (i.e., passengers from other cities that fly to DFW for business or pleasure). The FY 2014 Budget for RAC revenues per destination passenger is projected to be 1.7% higher than the FY 2013 Adjusted Outlook primarily due to an estimated increase in average stay per renter. The Outlook was adjusted for a one-time prior period accounting adjustment of $777,000.

$2.32 $2.45

$2.39 $2.35 $2.43

$1.40

$1.60

$1.80

$2.00

$2.20

$2.40

$2.60

$2.80

FY12Actual

FY13Outlook

FY13 AdjOutlook*

FY14F-Plan

FY14Budget

Rental Car Revenue per Destination Passenger

*FY 2013 Outlook Rental Car Revenue per Destination Passenger adjusted for one-time accounting adjustment of $777K.



Commercial Development Business Unit Background – The Airport has a total land mass of 17,207 acres. As of June 30, 2013, 1,870 acres have been commercially developed. Management estimates that approximately 4,304 acres of additional land is available for future development. A commercial development land use plan has been completed and approved by the Board. Management has also had a consultant prepare a detailed feasibility study of the full cost and benefits of the different development areas identified in the land use plan. The Airport focuses primarily on developing land that has airport synergy such as logistics and warehousing. Any land lease over 40 years requires the approvals of the Cities of Dallas and Fort Worth. Commercial development revenues include ground leases, foreign trade zone tariff and facility rents generated from non-terminal Airport facilities, and property and surface use fees primarily from natural gas drilling. Multi-year lease agreements are negotiated with tenants on a square foot or acre basis. Some facilities such as the Hyatt Regency Hotel and Bear Creek Golf Course also have percentage rent components. DFW is currently in the development process for the new Southgate Plaza project that will include restaurants, retail, office, and a select service hotel. Also, a development process is underway for a new convenience retail project at Founders’ Plaza that will include a fueling station and food service. Other future development opportunities include land around the new DART station on the southeast side of the Airport and several industrial, office, and mixed use commercial sites on the north and south sides of the Airport. The key drivers for commercial development revenues are acres developed and the average ground rental rate. Approximately 40% of the ground lease revenue is based on negotiated rates and 60% on the airport services ground rental rate. The airport services ground rental rate per acre increases with inflation and will be $26,791 in FY 2014. FY 2014 Budget – The FY 2014 commercial development revenue budget is $36.3 million is unchanged from the FY 2013 Outlook. However, there were several revenue increases and decreases of size. FY 2014 reflects a decrease of $0.7 million in natural gas pipeline fees and $2.6 million of one-time damage and license fees paid by DART for the I-2 line & I-3. These reductions are offset by $1 million from three new ground leases, $0.6 million increase in ground rental rates and damage fees of $1.7 million for the I-3 line.



Other DFW Revenues and Expenses The fees charged in this category are established to recover costs (except interest income). Certain categories like taxi fees are regulated such that DFW is supposed to charge break even prices. Due to the new cost allocation methodologies contained in the Use Agreement, a few of these cost centers are not fully recovering their costs. Where there are significant differences, management has elected to manage to a break-even over a number of years to keep price increases reasonable. There are no year-end reconciliations or true-ups in these cost centers. Employee Transportation – DFW charges fees to employees for providing transportation from the parking lots to the terminals. Many times the companies or airlines pay these fees for their employees. The FY 2014 Budget is $13.5 million, a $0.9 million (7.1%) increase from the FY 2013 Outlook due to rate increases to cover shifts in cost center allocations and the fuel credit for FY 2012 received in FY 2013. Taxi, Limo and Shuttle Fees – These fees are paid by taxis, limos, shuttles and other shared-ride transportation companies that require airport access to drop-off and pick-up passengers. The FY 2014 Budget is $8.5 million, a $0.5 million (6.2%) increase from the FY 2013 Outlook due to increases in access fees, driver permit fees, and operating authority fees in order to cover costs. Utilities & Miscellaneous – This revenue category represents fees charged to non-airline users of utilities, HVAC, trash removal, water, and certain permit and accounting fees. Utility charges to users are based on the cost to provide the services. The FY 2014 Budget is $7.1 million, a $0.1 million (1.4%) increase from the FY 2013 Outlook due to an increase in code enforcement fees.

DPS Revenues – The Department of Public Safety (DPS) receives reimbursements from the TSA for certain services, and for badging and fire training services. The FY 2014 Budget is $5.5 million, a $1.3 million (19.3%) decrease from the FY 2013 Outlook due to a $1.6 million reduction in federal reimbursements for law enforcement officers and canines, offset by increased Fire Training Center revenue based on a full year of operations. DPS revenues are allocated to the cost centers on the same basis as DPS expenses. Interest Income – Interest income includes interest earned on investments from the Operating Revenue and Expense Fund, the 3 month Operating Reserve, and Debt Service Reserve Fund, and the Rolling Coverage Account. The FY 2014 interest income budget is $1.2 million, a $0.1 million (7.7%) decrease from the FY 2013 Outlook due to the purchase of securities with shorter maturities for the purpose of managing TRIP cash flow and to position the airport to take advantage of anticipated rate increases in the future. The FY 2014 Budget is a $0.2 million (14.29%) decrease from FY 2014 in the FY 2013 Financial Plan due to slightly lower interest rates (0.25% in the Financial Plan versus 0.24% in the Budget).



Skylink – Expenses related to Skylink are covered in the DFW Cost Center so that bonds related to Skylink can remain non-AMT. The FY 2014 Budget is $22.9 million, a $0.7 million (3.3%) increase from the FY 2013 Outlook due to CPI related contract increases and additional special inspections. Terminal Contributions – Per the terms of the Use Agreement, DFW pays terminal cost based on common use space and its share of vacant leasable space. The FY 2014 Budget is $7.7 million, unchanged compared to the FY 2013 Outlook.

THE REST OF THIS PAGE IS BLANK

FY 2014 Adopted Budget Operating Expenses


FY 2014 Expense Budget by Major Cost Driver The FY 2014 Budget is $651.3 million, an increase of $1.2 million (0.2%) from the FY 2013 Outlook and a decrease from the FY 2013 Budget of $7.8 million (1.2%). A walkforward between the FY 2013 Outlook and the FY 2014 Budget follows:

Annual Budget (Millions)FY13

BudgetFY13

OutlookFY14 Fin'l

PlanFY14

BudgetFY14B

vs FY13OLFY14B

vs FY14FP

Operating Expenses $360.3 $360.1 $368.4 $368.8 $8.7 $0.3

Gross Debt Service 298.8 290.0 313.9 282.5 (7.5) (31.4)

Total 102 Fund Expenditures $659.1 $650.1 $682.3 $651.3 $1.2 ($31.0)

Contingency O/S Rate Base 10.0

Total Budget w/ Contingency $661.3

Increase (Decrease)

Operating Expense Budget Walkforward

Operating Expenses (in Millions) Total DFW AirlineFY 2013 Outlook $360.1 $142.7 $217.4

Budget reductions (6.6) (4.3) (2.3)Merit & fixed increases 11.0 5.3 5.7Volume driven increases 1.8 0.0 1.8Other 1.4 0.6 0.8Cost center shifts 0.0 0.9 (0.9)Restore contingency 2.0 0.8 1.2Operating reserve (0.9) (0.3) (0.6)Net Increase in Budget 8.7 3.0 5.7

FY 2014 Expense budget $368.8 $145.7 $223.1



Detailed Operating Expense Budget Walkforward

Budget Category (in Millions) Total DFW AirlineFY 2013 Outlook $360.1 $142.7 $217.4Budget reductions

A Demolitions & other (one time) (3.4) (2.3) (1.1)B Energy, Trans. & Asset Mgt. Projects (1.6) (0.7) (0.9)C Parking Control System savings (1.0) (1.0) (0.0)D Energy rates (0.6) (0.3) (0.3)


E Merit, Annualization & Vacancies 3.9 1.4 2.5F Pension/OPEB 2.3 0.7 1.6G Contract increases 2.0 1.7 0.3H Hardstand operations 1.0 0.0 1.0I Health care 0.6 0.2 0.4J CNG fuel credits 0.7 0.5 0.2K Insurance premiums 0.5 0.8 (0.3)


L Partially restore deicing budget 1.1 0.0 1.1M Terminal Maint. Increase (TRIP) 0.7 0.0 0.7


N Marketing initiatives 0.6 0.2 0.4O Other 0.8 0.4 0.4


P Cost center shifts 0.0 0.9 (0.9)Contingency & reserves

Q Restore contingency 2.0 0.8 1.2R Operating reserve (0.9) (0.3) (0.6)


Note: The reference letters in the previous table are cross-referenced to the variance explanations in the Expense Comparison by Summary Account discussed further in this section. A. Demolitions and Other One-time Expenses ($3.4) million In FY 2013 the DFW Board approved the use of Contingency funds outside the rate base for the demolishment of the SkyChef Kitchens and a portion of the old AirTran Guideway. Also included was approval for Thermal Plastic Airfield markings and the widening of the Terminal E-33 checkpoint. These expenses will not recur in FY 2014.



B. Energy, Transportation and Asset Management (ETAM) Projects ($1.6) million ETAM projected expenses for building assessments, ($0.5 million) dynamic signs, ($0.3 million) repair of Terminal D graphics, ($0.2 million), TV maintenance ($0.2 million), relocation of light poles ($0.1 million), and several other smaller projects in FY 2013 that will not recur in FY 2014. C. Parking Control System Savings ($1.0) million The implementation of the Parking Control System, scheduled for August 26, 2013, will generate savings in salaries of $0.7 million and temporary labor of $0.3 million in FY 2014 as automation will decrease the need for employees in the booths. D. Energy Rates ($0.6) million ETAM has locked in lower rates for electricity through March 2015. Electricity rates will drop from $0.0742 to $0.0645 per KWH, reducing electricity costs by $800K in FY 2014. These savings are somewhat offset by an increase in natural gas rates. Natural gas rates will rise from $3.44 to $4.075 per MMBTU, increasing costs by $200K in FY 2014. The natural gas rates are locked in until September 2014. E. Merit, Annualization and Vacancy Factor $3.9 million This represents the FY 2013 impact of the merit increase granted in the FY 2013 Budget for 3 months, the proposed merit pool of 3% effective January 1, 2014, and changes in the vacancy factor from an average 5.2% in FY 2013 to an average 5.0% in FY 2014. The change in vacancy factor is based on experience in FY 2013. F. Pension/OPEB $2.3 million The funding requirements for the defined benefit retirement plan and other post-employment benefits (OPEB) are actuarially determined for DFW each year. The FY 2014 contribution for the defined benefit plans has increased $3.8 million due primarily to the amortization of actuarial investment losses from 2008 over the past 5 years. This increase is offset by a decrease of $1.5 million in OPEB costs for FY 2014 which resulted from better than expected claims experience. G. Contract Increases $2.0 million Contract increases are comprised of $1.1 million to employee, terminal link, and express busing contracts due to inflation and the planned movement of more employees from Terminal D; $0.6 million of Skylink maintenance & inspections due to inflation and the every-other-year cycle of inspections, and $0.3 million of increased asbestos testing contracts to meet future project demand for new commercial development projects. H. Hardstand Operations $1.0 million Due to a lack of international gates in Terminal D during peak arrival times, DFW will have to hardstand more operations in 2014. Hardstand operations are expected to increase to an average of 5 per day in FY2014. Costs include maintenance on equipment such as Cobuses, mobile passenger jet bridges, portable water carts, pre-conditioned air units and ground power



units, contract personnel to drive the buses, and fuel for the buses and equipment. Management estimates that there is an additional $1.0 million in cost exposure if one additional wide body or 3 additional narrow body flights are added in the peak. I. Health Care $0.6 million Health care costs, which include medical benefits, long term disability, short term disability and life insurance are increasing in FY 2014 due to healthcare cost increases of 4%. The Budget includes the assumption that employees will continue to pay 20% of health care costs in FY 2014. J. CNG Fuel Credits $0.7 million Fuel credits of $0.50 per gallon for CNG were authorized by Congress in FY 2013, retroactive to 2012. Therefore, in FY 2013, DFW recorded two years of CNG credits. In FY 2014, the budget assumes this credit will be approved again. The FY 2014 budget assumes that Congress will renew the credits. If they do not, DFW has approximately $800,000 of budget exposure. K. Insurance $0.5 million Insurance costs will increase in FY 2014 due to claims experience and increased value of buildings, primarily due to TRIP improvements in the terminals and new parking garages. The value of DFW’s assets has increased by $500 million year-over-year. L. Partially Restore Deicing Budget $1.1 million FY 2013 was an abnormally mild winter and had almost no deicing activity. Normal winters usually cost $1.4 million for filters, deicing fluid and rock salt. Rather than restoring the deicing budget to average levels of $1.4 million, DFW has only budgeted $1.1 million for FY 2014. The remaining $300,000 is an exposure item for the fiscal year. M. Terminal Maintenance Increase (TRIP) $0.7 million TRIP operations have increased the need for activities such as restoring electric power and checking systems after shutdowns, etc. to ensure business continuity in the terminals. This budget will provide sufficient funds to provide the incremental services during construction. N. Marketing Initiatives $0.6 million These initiatives include the “Thanks Again” customer rewards program providing airline miles for on-Airport purchases, host responsibilities for the Aerotropolis and International Parking Institute conferences, and marketing support for the Fire Training Research Center. There are no incremental international marketing initiatives above current levels in the Budget. The Board may want to pursue specific international marketing opportunities in FY 2014. Additional Contingency dollars outside the rate base were added to accommodate this possibility.



O. Other $0.8 million This category includes the net increases and decreases from many small projects such as LiveWell incentives ($198K), legal costs ($230K), uniforms ($98K), and badging supplies ($117K). Savings include repair of retaining wall caps ($100K), replacement of fuel pumps ($80K), and repair of concrete drainage at waste facility ($80K). P. Cost Centers Shifts $0.0 million Management reviews projected expenditures as part of the annual budget process to ensure they are charged to the proper cost center. Approximately $900,000 of expenses are being reallocated from the Airfield and Terminals Cost Centers to the DFW Cost Center as part of the FY 2014 Budget. The largest component of this relates to print shop expenses that are more correctly charged to the DFW Cost Center. Q. Restore CEO Contingency $2.0 million DFW budgets have historically contained a CEO contingency ranging from $2.5 million to $1.75 million. The CEO contingency is included in the rate base and may be used by the CEO without Board approval. It is recommended that the CEO contingency be $2 million in FY 2014. R. 3 Month Operating Reserve ($0.9) million DFW is required to have a 90-day cash reserve for operating expenses. In FY 2014, the actual reserve needs to be increased by $2.3 million due to a net cost increase of $8.9 million. In FY 2013 it was an increase of $3.2 million, thus a decrease of $0.9 million. If DFW needs to access any contingency, the operating reserve (25%) will also need to be increased.

Operating Budget by Category

The following tables compare the FY 2013 Outlook with the FY 2014 Budget by expense category. Variance explanations by major cost driver follow in the walkforward.

FY13 FY14 FY14 FY14B vs. FY14B vs.Operating Budget (in Millions) Outlook Fin'l Plan Budget FY13OL FY14 F PlanSalaries & Wages $114.4 $115.3 $118.4 $4.1 $3.1Benefits 58.7 59.6 61.8 3.1 2.3Contract Services 128.5 127.8 127.0 (1.6) (0.9)Utilities 25.6 25.9 25.0 (0.6) (0.9)Equipment & Supplies 14.4 15.2 15.8 1.5 0.6Insurance 5.3 5.4 5.8 0.5 0.4Fuels 3.1 4.3 3.8 0.7 (0.4)General, Admin & Other 6.9 8.6 6.8 (0.1) (1.8)Contingency 0.0 2.5 2.0 2.0 (0.5)

Subtotal 356.9 364.6 366.5 9.6 1.9Operating Reserve 3.2 3.8 2.3 (0.9) (1.5)

Total Budget $360.1 $368.4 $368.8 $8.7 $0.4

Increase (Decrease)



Budget Walkforward (millions) Sals Bens Conts Supp Util Fuels Ins G & A Cont Op Res TotalFY 2013 Outlook 114.4 58.7 128.5 14.4 25.6 3.1 5.3 6.9 0.0 3.2 360.1Major cost reductions

A Demolitions (3.4) (3.4)B ETAM Projects (1.6) (1.6)C PCS Savings (0.7) (0.3) (1.0)D Energy Rates (0.6) (0.6)

Total Savings (0.7) 0.0 (5.3) 0.0 (0.6) 0.0 0.0 0.0 0.0 0.0 (6.6)Major cost increases

F Merit, Annualization & Vacancy 3.9 3.9G Pension/OPEB 2.3 2.3H Contract increases 2.0 2.0I Hardstand operations 1.0 1.0J Healthcare 0.6 0.6K CNG fuel credits 0.7 0.7L Insurance premiums 0.5 0.5M Partially restore deicing 1.1 1.1N Terminal Maint. Increase (TRIP) 0.7 0.7O Marketing initiatives 0.6 0.6P Other 0.8 0.2 (0.5) 0.4 (0.1) 0.8Q Restore Contingency 2.0 2.0R Three month operating reserve (0.9) (0.9)

Total increases 4.7 3.1 3.8 1.4 0.0 0.7 0.5 (0.1) 2.0 (0.9) 15.3FY 2014 proposed budget 118.4 61.8 127.0 15.8 25.0 3.8 5.8 6.8 2.0 2.3 368.8

Salaries and Wages The FY 2014 salaries and wages budget is $118.4 million, a $4.0 million (3.5%) increase from the FY 2013 Outlook of $114.4 million due to a 3.0% merit pool of approximately $2.7 million, annualization of previously granted merit of $0.9 million, PCS savings of $0.7 million and net vacancy factor and other changes of $0.7 million. The Budget includes funding for an incentive compensation plan as reviewed by the Board’s Executive Compensation Committee. It will be based on DFW’s achievement of certain organizational goals and initiatives that will be developed and published in November 2013. The plan is also based on individual performance. Benefits The FY 2014 benefits budget is $61.8 million, a $3.1 million (5.3%) increase from the FY 2013 Outlook of $58.7 million. This is due to increased Pension/OPEB contributions of $2.3 million, Health care cost increases of $0.6 million and Social Security and other net increases of $0.2 million.



Contract Services The FY 2014 contract services budget is $127.0 million, a $1.5 million (1.2%) decrease from the FY 2013 Outlook of $128.5 million due to cost reduction in one time demolition projects ($3.4 million) and reductions in asset management projects ($1.6 million) such as building assessments, dynamic signs, Terminal D graphics repair, etc. These are somewhat offset by increases in contracts ($2.0 million) such as Terminal Link, Employee and Express Busing, Skylink operations and inspections, asbestos testing, etc. and increased costs for hardstand operations ($1.0 million) increased costs for TRIP maintenance ($0.7 million) and marketing initiatives ($0.6 million) for Thanks Again and the Aerotropolis and parking conferences. Equipment and Supplies The FY 2014 equipment and supplies budget is $15.8 million, a $1.4 million (10.4%) increase from the FY 2013 Outlook of $14.4 million primarily due to the partial restoration of the deicing budget ($1.1 million) and other small items such as uniforms and badging supplies. Utilities The FY 2014 utilities budget is $25.0 million, a $0.6 million (2.3%) decrease from the FY 2013 Outlook of $25.6 million due to decreases in electricity ($0.8 million); somewhat offset by an increase in natural gas ($0.2 million) costs for FY 2014. Fuels The FY 2014 fuels budget is $3.8 million, a $0.7 million (22.6%) increase from the FY 2013 Outlook of $3.1 million due to a reduction in CNG tax credits. In FY 2013, congress authorized a rebate that was for a two year period. The FY 2014 Budget only includes a rebate for one year. Insurance The FY 2014 insurance budget is $5.8 million, a $0.5 million (9.4%) increase from the FY 2013 Outlook of $5.3 million primarily due to increased premiums based on claims experience and the value of DFW’s assets, due to TRIP improvements and the new parking garages. General and Administrative (G&A) The FY 2014 general and administrative budget is $6.8 million, a $0.1 million (0.9%) decrease from the FY 2013 Outlook of $6.9 million due to lower travel expenses. Contingency The FY 2014 Budget includes $2.0 million of contingency inside the rate base to be spent at the CEO’s discretion for projects and unforeseen events that come up during the fiscal year. Operating Reserve DFW is required to have a 90-day cash reserve for operating expenses. This is the amount necessary to fund the reserve.



Contingency Outside of Rate Base Beginning in FY 2010, DFW began to add contingency outside of the rate base to the budget. This is done so that the airlines do not have to pay for the contingency during the year in the rate base, but provides management with flexibility should costs rise unexpectedly and an incentive to budget costs more accurately. Contingency outside the rate base is $10.0 million in FY 2014. This allows management to make investments in the DFW cost center or to pursue marketing initiatives if revenues become available. Management must obtain Board of Directors’ approval prior to using this contingency.

Net Debt Service Budget

The FY 2014 debt service budget is $152.8 million, an $18.2 million (13.5%) increase from the FY 2013 Outlook and a $30.6 million (16.7%) decrease from the FY 2014 Financial Plan as shown in the table below.

Debt Service (in Millions)FY13

OutlookFY14

Fin'l PlanFY14


FY14B vs. FY14FP

Debt Service and CoveragePre-TRIP Debt Service $254.4 $225.9 $219.9 ($34.5) ($6.0)

TRIP Debt Service1 16.1 69.7 44.6 28.5 (25.2)PFIC Related Debt Service 19.6 18.3 18.2 (1.4) (0.0)Less Interest Income (0.2) 0.0 (0.2) (0.0) (0.2)

Gross Debt Service and Coverage $290.0 $313.9 $282.5 ($7.5) ($31.4)

Offsets to Debt ServicePFCs for Pre-TRIP Debt Service 135.8 112.3 111.5 (24.3) (0.8)PFIC Transfers 19.6 18.3 18.2 (1.4) (0.0)

Total Offsets 155.5 130.5 129.7 (25.7) (0.8)Net Debt Service Paid by Rate Base $134.5 $183.4 $152.8 $18.2 ($30.6)

1Shown net of Capitalized Interest

Increase (Decrease)

The Net Debt Service increase of $18.2 million over the FY 2013 Outlook is primarily due to the increase in TRIP debt service partially offset by savings in refinancing in pre-TRIP debt service. The increase in TRIP debt service is a result of capital projects being completed in FY 2013 and FY 2014 and debt service beginning for those projects. TRIP debt service is not PFC eligible. For the FY 2014 Budget, there will be 3 sections of 3 terminals and 3 terminal parking garages closed and 3 sections of 3 terminals opening. Pre-TRIP debt service has decreased by $10.2 million (net of PFCs) primarily due to better than expected interest rates on refinancing of debt. In addition, there is a one-time benefit in FY 2014 pre-TRIP debt service of over $5 million from excess incremental coverage.



Positions The following table summarizes the total number of operating and capital positions assumed in the FY 2014 Budget. Operating positions are paid out of the 102 Fund. Salaries of capital positions are capitalized and paid from the capital accounts. A summary of positions by department is included at the end of the Department section.

PositionsFY13

BudgetFY14

ReductionsFY14

Budget

Operating 1,802 (5) 1,797

Capital 112 0 112

Total 1,914 (5) 1,909

The change in the number of positions consists of a reduction of ten positions in Parking Operations, offset by the addition of a corporate aviation concierge and a corporate aviation rep in General Aviation, two field service technicians in the Field Services Group in ITS and a diversity manager in Human Resources, for a net reduction of five.

FY 2014 Adopted Budget Departments


Department Overview and Walkforwards DFW is organized into Divisions, which are comprised of Departments. Each Division page includes a summary of the Division’s major functions and a walkforward of the FY 2014 Budget by major cost driver. The following table is a budget comparison by Department, in millions.

FY131 FY14 Outlook Budget

Energy, Transportation, & Asset Mgmt. $122,871 $124,329 ($1,459)Public Safety 59,964 63,537 (3,573)Operations 11,052 11,246 (194)Environmental Affairs Department 4,947 5,359 (413)Planning Department 2,282 2,211 70

Operations $201,115 $206,683 ($5,568)

Parking 47,159 46,880 280Concessions 2,969 3,289 (320)Commercial Development 2,229 2,404 (175)Customer Service Department 8,588 9,520 (932)Marketing Services Department 8,418 9,135 (716)

Revenue Management $69,364 $71,228 ($1,863)

Human Resources 6,382 6,625 (243)Procurement & Materials Mgmt. 4,320 4,475 (154)Business Diversity & Development 1,299 1,327 (27)Risk Management 8,632 9,436 (804)

Administration and Diversity $20,634 $21,862 ($1,228)

Information Technology Services 34,110 35,979 (1,869)Finance Department 6,175 6,580 (405)Treasury Management 1,311 1,380 (69)Aviation Real Estate 1,540 1,441 99Air Service Development 2,296 2,302 (6)

CFO/Airline Business and Technolo $45,432 $47,682 ($2,251)

Public Affairs 5,514 6,107 (593)Airport Development 489 598 (109)Legal 2,551 2,367 184Audit Services 2,336 2,399 (62)Executive Office 4,052 3,988 64Contingency 0 2,000 (2,000)Non-Departmental 8,587 3,881 4,706

Total Operating Expenses $360,076 $368,795 ($8,719)1FY13 Outlook was adjusted to reflect the transfer of functions from Parking ($0.4M reductions

to Finance ($0.4 million increase) and for the transfer of Print Services from PMM to the departments

Better (Worse)

FY14B vs FY13OL



Expense Budget Walkforward

Budget Category (in Millions) Total DFW Airline

FY 2013 Outlook $360.1 $142.7 $217.4

Budget reductions

A Demolitions & other (one time) (3.4) (2.3) (1.1)B Energy, Trans. & Asset Mgt. Projects (1.6) (0.7) (0.9)C Parking Control System savings (1.0) (1.0) (0.0)D Energy rates (0.6) (0.3) (0.3)


E Merit, Annualization & Vacancies 3.9 1.4 2.5F Pension/OPEB 2.3 0.7 1.6G Contract increases 2.0 1.7 0.3H Hardstand operations 1.0 0.0 1.0I Health care 0.6 0.2 0.4J CNG fuel credits 0.7 0.5 0.2K Insurance premiums 0.5 0.8 (0.3)


L Partially restore deicing budget 1.1 0.0 1.1M Terminal Maint. Increase (TRIP) 0.7 0.0 0.7


N Marketing initiatives 0.6 0.2 0.4O Other 0.8 0.4 0.4


P Cost center shifts 0.0 0.9 (0.9)Contingency & reserves

Q Restore contingency 2.0 0.8 1.2R Operating reserve (0.9) (0.3) (0.6)




Operations Division

Energy, Transportation and Asset Management (ETAM) ETAM manages DFW’s physical infrastructure assets and services to include energy management, thermal energy production and distribution, potable water and sanitary sewer system operation, pretreatment plant operation, spent aircraft deicing fluid collection, storage system operation, Skylink system operation and vehicle fleet maintenance. Services include facilities maintenance, commissioning/retro-commissioning of physical assets, infrastructure/facility management, solid waste management, and customer support. Department of Public Safety (DPS) The Department of Public Safety ensures the protection of life and property through the effective and efficient delivery of professional public safety services to the airport community to include Police, Fire and Special Services. Airport Operations Airport Operations is responsible for managing airside and landside operations, ground transportation, Corporate Aviation and technical training. Airport Operations ensures the continuous availability of aviation support services and facilities for efficient and safe operations. Environmental Affairs Environmental Affairs implements comprehensive environmental compliance programs throughout DFW Airport, which includes support to the National Environmental Policy Act and the Federal Aviation Administration; regulatory and technical guidance to DFW departments, tenants, and contractors engaging in activities subject to environmental laws, regulations, rules, and enforcement agency policy; and management of a compliance-focused Environmental Management System and 21 core compliance programs as well as the Noise Compatibility Office. Planning Planning is responsible for directing and coordinating the overall planning activities of DFW including facilities, airfield, and transportation/roadway planning, and for directing DFW’s signage program.



Budget Comparison and Walkforward

FY13 FY14Outlook Budget

Asset Management $122,870 $124,329Public Safety 59,964 63,537Operations 11,052 11,246Planning 2,282 2,211Environmental Affairs 4,947 5,359

Total Operations Division 201,115 206,683

Salaries & Wages $63,995 $65,451Benefits 31,896 34,393Contract Services 66,374 67,199Equipment & Supplies 13,948 15,346Insurance 0 0Utilities 23,644 23,087Administrative 1,258 1,206

Total Operations Division $201,115 $206,683

Walkforward from FY 2013 Outlook ReferenceFY 2013 Outlook $201,115

Salaries and Wages 1,456 EBenefits 2,497 F, IContract Services 825 B, G, PEquipment & Supplies 1,398 J, L, PUtilities (557) DAdministrative (52) P

Total Proposed FY 2014 Budget $206,683

Operations Division (in thousands)



Revenue Management Division

Customer Service The Customer Service Department oversees the Ambassador Volunteer Program, Ground Transportation Service, Rental Car Center (RAC), and Terminal Management. All areas of Customer Service focus on meeting public demands, safety, security, and guest relations to allow for improved satisfaction and operational efficiency. Marketing Services Marketing Services is responsible for developing and executing DFW’s trade and consumer marketing plans in order to drive increased revenues and new airline business and for ensuring that a consistent brand image is portrayed to every one of DFW’s audiences. Parking Operations Parking Operations consists of Operations, Customer Relations, and Busing. Parking Operations is responsible for parking products, pricing, service delivery and reporting, handling customer feedback, monitoring electronic parking transactions, billing, and providing transportation services to DFW Remote Lots, Trinity Railway Express, Terminal Link, Express Parking and the Employee Shuttle. Concessions The Concessions Department is responsible for the management and administration of all passenger-related concessions and associated revenues within the airport terminals, RAC, telecommunications, and selected airport properties outside the terminals. Commercial Development The Commercial Development Department plans, develops, markets and leases airline hangars, air-cargo and logistics facilities, hotels, gas/convenience stores, and commercially available land at DFW. Commercial Development also evaluates and implements business opportunities that diversify DFW’s revenue stream.





Customer Service $8,588 $9,520Marketing Services 8,418 9,135Parking 47,159 46,880Concessions 2,969 3,289Commercial Development 2,229 2,404

Total Revenue Mgt Division 69,364 71,228

Salaries & Wages $20,535 $20,396Benefits 11,669 11,860Contract Services 34,216 35,599Equipment & Supplies 1,536 1,968Insurance 0 0Utilities 0 0Administrative 1,408 1,404

Total Revenue Mgt Division $69,364 $71,228


Salaries & Wages (139) C, EBenefits 191 F, IContract Services 1,383 C, G, H, OEquipment & Supplies 432 PAdministrative (4) P

Total FY 2014 Proposed Budget $71,228

Revenue Management Division(in thousands)



Administration and Diversity Division Business Diversity and Development The Business Diversity & Development Department (BDDD) is responsible for administering the Board’s Disadvantaged and Minority/Women-owned Business Enterprise Programs. BDDD has the overall responsibility to administer, monitor and enforce the DBE and M/WBE policies, standards and procedures. Human Resources Human Resources’ (HR) primary functions are to develop and implement programs to enhance the effectiveness of the workforce. HR is responsible for consulting and advising management on employee relations issues, including employee corrective action, complaints, and grievances; assisting employees with concerns; and developing and administering policies and procedures to ensure compliance with federal and state regulations. HR also has responsibility for coordinating the recruitment and staffing activities of DFW. HR also manages and provides strategic direction for DFW Airport’s internal communication and diversity programs. HR is responsible for writing and managing the content, messaging, and distribution of all employee communications, in order to educate employees on key DFW Airport initiatives, and create communication vehicles to inform staff of business news and recognize the efforts of DFW Airport employees. Procurement & Materials Management Procurement & Materials Management (PMM) provides DFW-wide centralized procurement, materials management, and reprographic services. PMM manages professional services contracts/procurements and P-card program, and prepares Official Board Actions (OBAs) for Board meetings. The Central Warehouse provides central receipt, financial and physical management of inventory, management of excess and obsolete property, and provides DFW-wide mail service. Print Services provides centralized reproduction, printing, and binding services for departments within the Airport. Risk Management Risk Management identifies, analyzes and evaluates exposures, intervenes with loss prevention measures that reduce costs, and ensures compliance with applicable laws and regulations. Areas of general administration include liability claims management, safety training, management of self-funded, fully insured, and partial claims programs involving property and casualty liability, general liability, errors and omissions, employment liability, fiduciary/fidelity exposures, contractual review/interpretation, breach of contract, auto liability, driver safety and workers’ compensation liability, and short/long term disability. Risk Management also oversees both the DFW health and wellness program, LiveWell, and the newly created Integrated Disability Management program.





Business Diversity & Development $1,299 $1,327Human Resources 6,382 6,625Procurement & Materials Mgt 4,320 4,475Risk Mgt 8,632 9,436

Total Admin & Diversity Division $20,633 $21,862

Salaries & Wages $6,783 $7,090Benefits 4,364 4,536Contract Services 2,460 2,692Equipment & Supplies 580 563Insurance 5,297 5,821Utilities 0 0Administrative 1,149 1,160

Total Admin & Diversity Division $20,633 $21,862


Salaries and Wages 307 EBenefits 172 F, IContract Services 232 PEquipment & Supplies (17) PInsurance 524 KAdministrative 11 P


Administration and Diversity Division(in thousands)



CFO/Airline Business and Technology Division Information Technology Services Information Technology Services (ITS) is responsible for delivering technology solutions to DFW and is divided into 4 sections. Enterprise Systems is responsible for the development and maintenance of technology solutions for DFW human resources, procurement, fixed asset, parking, data architecture, and public safety systems. Systems Operations is responsible for the development, implementation, maintenance, and administration of the voice and data communications infrastructure, desktop and server computing environments, and data base administration. Business Solutions is responsible for the development and implementation of executive decision support systems, records management, CADD/GIS, web development, and the implementation of work-flow technologies. Terminal Systems is responsible for the development and maintenance of life safety systems, security systems, and passenger service systems. Finance Finance is comprised of 3 groups: Accounting, Financial Planning, and Capital Planning. Accounting is responsible for financial reporting, general ledger accounting, internal controls, revenue collections, accounts payable, accounts receivable, payroll, and fixed assets. Financial Planning is responsible for developing and monitoring DFW’s Operating Budget and Outlook for revenues and expenses. This group is also responsible for establishing DFW’s rates, fees and charges, and performing departmental financial analysis. In addition, Financial Planning analyzes DFW’s business units to determine profitability, implementation of activity based costing, project analysis, process improvement and management methodologies for proper allocations of revenues and expenses. Capital Planning is responsible for developing and monitoring DFW’s Capital Budget and forecast. Treasury/Cash Management Treasury/Cash Management is responsible for providing strategic financial management for the Airport. This includes overseeing debt issuance/management, cash management, banking relations, DFW investments, retirement fund investments, and grants and PFC administration. Aviation Real Estate Aviation Real Estate serves as the liaison between the Airport and the tenants of all passenger terminals and aviation-related facilities, including air cargo and hangars. Through permits and leases, Aviation Real Estate manages the contractual relationship with the tenants. The department is also responsible for aviation facilities’ strategic planning, with the goal of maximizing efficiency within the terminals and other aviation facilities. Air Service Development Air Service Development is responsible for developing and implementing both the comprehensive air service strategy as well as the marketing programs designed to attract new entrants, domestic and international carriers to DFW. In addition, Air Service Development encourages existing DFW carriers to both enter into new markets as well as to increase service in markets which are already served. Increases in air service either through new entrant



carriers, or via existing carriers provide substantial economic benefit for the Dallas/Fort Worth Metroplex. Air Service Development focuses on both domestic and international passenger and cargo airlines, respectively. This section is responsible for formulating strategic plans that include targeting top target markets and airlines, monitoring airline business trends, targeting potential airline services, and presenting business case presentations for target airlines to review. Through the business case presentations, Air Service Development promotes DFW by highlighting its numerous advantages and world-class facilities, and provides analytical demonstrations of the viability of the DFW market for new airlines and new service.



ITS $34,110 $35,979Finance 6,175 6,580Treasury 1,311 1,380Air Service Development 2,296 2,302Aviation Real Estate 1,540 1,441

Total CFO Division 45,432 47,682

Salaries & Wages $17,262 $17,851Benefits 7,958 8,789Contract Services 15,821 16,429Equipment & Supplies 1,451 1,672Insurance 0 0Utilities 1,925 1,889Administrative 1,015 1,053

Total CFO Division $45,432 $47,682


Salaries and Wages 589 E, PBenefits 831 F, IContract Services 608 G, PEquipment & Supplies 221 PUtilities (36) PAdministrative 38 P


CFO/Airline Business & Technology(in thousands)



Public Affairs Division

The Public Affairs Division is responsible for Board of Directors, community, government and media relations for DFW Airport related to local, regional, state, national and international matters. In this role, the Division is responsible for communications with the Board, DFW’s owner and host cities, media responsiveness, crisis communications and issues management, as well as leading and articulating DFW’s communications and legislative agendas. The Division is responsible for relationship-management with external audiences, including North Texas government entities, the Texas State Legislature, members of the U.S. Congress, and local and international chambers of commerce, convention & visitors bureaus, business-to-business communications and advocacy for airline route decisions. The Division also leads special events planning, dignitary visits and protocol, and DFW and aviation education community and leadership initiatives in its role as lead department for external communications.



Salaries & Wages $1,335 $1,465Benefits 544 540Contract Services 2,194 2,611Equipment & Supplies 40 39Insurance 0 0Utilities 0 0Administrative 1,401 1,452

Total Public Affairs Division $5,514 $6,107

Walkforward from 2013 Outlook ReferenceFY 2013 Outlook $5,514

Salaries & Wages 130 EBenefits (4) F, I Contract Services 417 OEquipment & Supplies (1) PAdministrative 51 P


Public Affairs Division(in thousands)



Airport Development Airport Development has overall responsibility for the efficient, economical design and construction of facility development and major rehabilitation projects at DFW. Airport development also provides technical support services and/or personnel to other departments at DFW as needed in fulfilling DFW’s mission. With the exception of Airport Development’s Code Compliance activities, all costs are funded by the 301 fund, not the 102 fund. Costs are increasing in FY 2014 primarily due to increased anticipated permit fee revenues.



Salaries & Wages $353 $395Benefits 113 203Contract Services 3 0Equipment & Supplies 11 0Utilities 0 0Administrative 8 0

Total Airport Development $489 $598

Walkforward from 2013 Outlook ReferenceFY 2013 Outlook $489

Salaries & Wages 41 EBenefits 90 F, IContract Services (3) PEquipment & Supplies (11) PUtilities 0 PAdministrative (8) P

Total FY 2014 Proposed Budget $598

Airport Development (in thousands)



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.



Salaries & Wages $218 $280Benefits 113 118Contract Services 2,152 1,920Equipment & Supplies 10 11Administrative 58 39

Total Legal $2,551 $2,367


Salaries & Wages 62 EBenefits 5 F, IContract Services (232) PEquipment & Supplies 1 PAdministrative (19) P


Legal(in thousands)



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.



Salaries & Wages $1,301 $1,407Benefits 590 605Contract Services 348 315Equipment & Supplies 26 25Insurance 0 0Utilities 0 0Administrative 72 46

Total Audit Services $2,337 $2,399


Salaries & Wages 106 EBenefits 15 F, IContract Services (33) PEquipment & Supplies (1) PAdministrative (26) P


Audit Services(in thousands)



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.



Salaries & Wages $2,268 $2,293Benefits 848 980Contract Services 367 200Equipment & Supplies 36 42Insurance 0 0Utilities 0 0Administrative 532 472

Total Executive Office $4,052 $3,988


Salaries & Wages 25 EBenefits 132 F, IContract Services (167) PEquipment & Supplies 6 PAdministrative (60) P


Executive Office(in thousands)



Total Airport Non-Departmental The Total Airport Non-Departmental budget reflects the change in Operating Reserve, payroll accruals, and salary and benefits savings that are recognized at a Board-wide, rather than a departmental, level. The differences in Salaries & Wages and Benefits from FY 2013 to FY 2014 are largely due to the one time salary and Benefit adjustments that were made in this section for the FY 2013 Outlook. The change in contract services is due to building demolitions and other one time projects.



Salaries & Wages ($163) $1,800Benefits 502 (200)Contract Services 5,050 0Operating Reserve 3,197 2,281

Total Non-Departmental $8,587 $3,881

Walkforward from 2013 Outlook ReferenceFY 2013 Outlook 8,587

Salaries & Wages 1,963 PBenefits (702) F, IContract Services (5,050) A, POperating Reserve (916) S


DFW Non-Departmental(in thousands)



Position Walkforward

FY13 FY 14Division/Department/Section Budget Transfers Changes BudgetExecutive Office 10 10Public & Gov't Affairs 19 19Legal 5 5Audit Services 15 15Airport Development 98 98Administration & Diversity

Human Resources 28 7 1 36Internal Communications & Diversity 7 (7) 0Procurement & Materials Mgmt 40 40Risk Management 19 19Business Development & Diversity 10 10

Total Admin & Diversity 104 0 1 105CFO, Airline Business and Technology

Aviation Real Estate 8 8Finance 50 4 54Treasury Management 8 8Air Service Development 9 9Information Technology Services 142 2 144

Total Finance & ITS 217 4 2 223Revenue Management

Customer Service 47 47Marketing Services 19 19Commercial Development 16 16Parking Operations 314 (6) (10) 298Concessions 21 2 23

Total Revenue Management 417 (4) (10) 403Operations

Airport Operations 116 2 118Asset Management 181 181Department of Public Safety 562 562Energy & Transportation Mgmt 128 128Environmental Affairs 28 28Planning 14 14

Total Operations 1,029 0 2 1,031Total DFW 1,914 0 (5) 1,909

FY 2014 Adopted Budget Capital Budget


Capital Budget DFW has 2 capital accounts in its Construction and Improvement Fund: the DFW Capital Account and the Joint Capital Account. The DFW Capital Account is DFW’s discretionary account. It may be used for any legal purpose and does not require airline approval. DFW uses this fund for renewals and replacements and other discretionary projects. Funding for the DFW Capital Account is transferred from the net revenues from the DFW Cost Center, interest income, grants, and bond proceeds for commercial development projects.

The Joint Capital Account requires airline approval for money to be spent. DFW has received airline approval for $2.02 billion of bond funding for the Terminal Renewal and Improvement Program (TRIP), $121 million for terminal gate expansion and conversion projects, and $220 million for other “pre-approved” projects related to Airfield, Roadway/Rail, Utilities, Parking, and various other projects. DFW also received airline approval for $294.7 million of additional new projects, including $176.7 million for a new parking garage at Terminal A, $40 million for replacement of terminal windows, $32 million reimbursement for TRIP programming costs, $36 million of capital reimbursables for Natural Gas and ADE Overhead through the end of the current Use Agreement, and various other projects, for a total of $2.66 billion of approved projects (see table for details on following page – “MII Approvals Since New Use Agreement”). Funding for this account comes from bond proceeds, natural gas royalties, sale of land proceeds, grants, and interest income. The Use Agreement provides for a Joint Capital Account Transfer of $16 million in FY 2014 to the Terminal Cost Center to subsidize terminal rentals. This transfer will be reduced by $4 million each year until it is totally phased out in FY 2018.

Projected Capital – Uses of Cash by Capital Account

DFW projects to spend approximately $842.3 million on capital expenditures in FY 2014 as summarized in the following chart.

Joint Capital Account - TRIP

$351.5

Joint Capital Account - Non-

TRIP$240.0

DFW Capital Account$234.7

Joint Capital Account

Transfer to 102 Fund$16.0

FY 2014 Projected Capital Expenditures ($842.3M)

*$110.4M is debt financed for Commercial Development and other projects.



The following table summarizes total projected capital expenditures for projects to be in progress during FY 2014.

Actual Forecast Prior Projected Future TotalCapital Budget (Millions) FY 2012 FY 2013 Years FY 2014 Years BudgetDFW Capital Account 72.1 100.4 87.7 234.7 534.8 857.2Joint Capital Acccount

TRIP 236.9 312.3 686.9 351.5 982.8 2,021.3Non-TRIP 71.0 170.0 165.1 240.0 210.5 615.6Transfers to 102 24.0 20.0 44.0 16.0 24.0 112.0

Total Capital $404.0 $602.8 $983.7 $842.3 $1,752.1 $3,606.1

Active Projects in FY 2014

The following table summarizes the airline MII approvals that DFW Airport has received thus far, including those projects in the new Use Agreement.

Item# Project Name $'s in Millions

MII funding approvals for Capital Projects:

1 TRIP (base scope) $1,922.0

2 TRIP (cost/scope increase to base ‐ Term B BHS) 17.5

3 TRIP Programming Cost Reimbursement 32.0

4 TRIP: Terminal A, B, C, & E Window Replacement 40.0

5 TRIP: Funding of Design costs for add'l Add/Alt projects 2.0

6 TRIP: Natural Gas Lines (Term B, C, & E only) 4.0

7 $220M Pre‐Approved Capital Projects 220.0

8 N. Express Covered Parking Expansion (1,000 spaces) 14.0

9 Term D North Extension (B/D Connector ‐ 3 Int'l gates) 21.0

10 Terminal B North Stinger (10 add'l gates) 40.0

11 Term D South Extension (4 add'l gates) 60.0

12 Aircraft Operation Area (AOA) Snow/Ice Removal Equipment 9.5

13 Skylink Bond Issuance 1.0

14 Terminal A Parking Garage Reconstruction (All sections) 176.7

15 1W Parking Expansion for Employee Parking 0.0

16 Aircraft Design Group VI Gating Solutions (Design Only) 0.5

17 FY11 ADE Overhead (JCA non‐bond funded) 2.7

18 FY11 Natural Gas Reimbusables (JCA non‐bond funded) 1.7

19 FY12 ADE Overhead (JCA non‐bond funded) 2.7

20 FY12 Natural Gas Reimbusables (JCA non‐bond funded) 1.5

21 FY13 ‐ FY20 Natural Gas Reimbursables (JCA non‐bond funded) 11.2

22 Terminal Electric Vault Replacement 9.2

23 Snow & Ice Facility Modifications 0.857

24 N.Express Public Covered Parking Expansion (phase 2) 5.5

25 TRIP Annual Transition Costs (NTE $2M/yr through 2017) 14.0

26 Terminal A Concession Loading Dock 4.0

27 Terminal D Hardstand Equip for International Ops 1.9

28 Central Terminal Area Strategy Study (Phase 1 & 2) 2.0

29 FY13 ‐ FY20 ADE Overhead (annual NTE through FY20) 28.0

30 DPS Station #1 Rehab/Expansion (partial design only) 1.0

31 Reimb TRIP Contingency for Term A & B 11.2

MII APPROVALS ‐ CAPITAL PROJECTS $2,657.7

Other MII funding approvals unrelated to Capital Projects:

26 RAC/Facility Improvement Corp (FIC) Bond Refunding $112.0

MII APPROVALS ‐ OTHER $112.0

TOTAL MII APPROVALS ‐ CAPITAL PROJECTS + OTHER $2,769.7

MII Approvals Since New Use Agreement



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

DFW CAPITAL ACCOUNT (In Millions) Prior FutureProject Name Years FY14 Years

Terminal E Parking Garage (section C- Phase 2) .1 36.7 16.3

Southgate: DFW Consolidated HQ 4.6 32.8 12.2

Terminal E Garage Roadway/Curbside Improvements .0 12.0 5.1

Rehabilitate Airfield Pavements FY13 2.3 9.6 2.4

Southgate: Infrastructure 1.3 9.5 3.5

Air Service Incentive Plan (ASIP) & Marketing Rebates 8.2 9.8 31.7

Coppell Industrial (Phase I) .1 7.9 1.4

Founders Plaza (Phase I) .2 7.8 .0

Rehabilitate Airfield Pavements FY12 4.7 6.8 5.1

Rehabilitate Airfield Pavements FY14 .0 5.7 16.2

Other Discretionary (Annual) 3.2 5.0 130.0

Terminal D Parking Guidance System .0 4.0 .5

Terminal D Annual Capital Renewal .0 3.9 59.3

Rehabilitate Airfield Lighting Systems FY13 3.6 3.8 .0

Mid-Cities Bridge .5 3.1 .1

Replace Express Vans 1.3 3.0 18.4


Structural Fire Truck Replacement 3.4 2.2 8.6

Replace Employee Buses 2.5 2.2 27.9

Reclaimed Water System Phase I 2.0 2.1 .0

Renewal/Replacement Skylink Systems, Facilities, & Guideways .0 2.1 20.5


Rehabilitate Airfield Pavements FY11 7.1 1.9 .0

FY13 General Vehicle Replacement .6 1.7 .0

Replace Heavy Equipment .0 1.6 8.9

IT Terminal Sys: Term D BHS Replace Headend .0 1.5 5.4

FY07 AA Term Imprvmnt Prgm - Term Restroom Rehab A, B & C 10.9 1.3 .9

Landside Roadway Slope Stability and Erosion Repair .5 1.3 .7

Rehabilitate Industrial Wastewater (IW) System .0 1.3 .3

Repair Roadway Sign Posts .1 1.2 .0

Terminal D Life Safety (PA/VE) .5 1.2 1.2

Automated Passport Control System (Phase 1) .4 1.2 .0

Rehab Central Terminal Area (CTA) Storm Sewers @ 1W .0 1.2 .2

IT Business Solutions: Business Intelligence .0 1.1 .9

TSA Checked Bag Resolution Areas - (Term A, B, C, D) .5 1.1 .5

IT Business Solutions: Replace Computer-Aided Dispatch (CAD) .0 1.0 3.3

FY08 Restore Pre-Conditioned Air (PCA) Terminal E .6 1.0 .0

Rehabilitate the Pre-Treatment Plant (PTP) Clarifiers .0 1.0 .0

IT Terminal Sys: EVIDS Replacements .1 1.0 10.6

IT Terminal Sys: CUSS/CUTE refresh .0 1.0 .6

Replace Potable Water Revenue Meters .4 1.0 .6

Projects <1M 5.3 12.9 25.7TOTAL DFW CAPITAL ACCOUNT $87.7 $234.7 $534.8



The following projects will be funded from the Joint Capital Account during FY 2014. Spend amounts are gross of grant reimbursements.

JOINT CAPITAL ACCOUNT (In Millions) Prior FutureProject Name Years FY14 Years

Terminal Renewal and Improvement Program (TRIP) $686.9 $351.5 $982.8

TOTAL JOINT CAPITAL ACCOUNT (TRIP) $686.9 $351.5 $982.8

Non-TRIP:Employee Parking Garage (Term B Infield) .0 50.2 $32.1Term A Garage Reconstruction (section B) 15.6 48.6 $1.7Term A Garage Reconstruction (section C) .0 24.4 $41.4Term B North Stinger 20.4 19.6 $0.0T/W "Lima" Reconstruct Airfield Taxiway .9 14.5 $35.7 W Airfield Dr & Mid-Cities Rd 3.3 11.8 $2.9Term D North Ext (B-D Connector) 13.1 7.9 $0.0Elevated Water Tower (2.5 MG) 1.1 7.0 $4.1DART Rail Station @ Term A 29.5 6.1 $0.0Parking Control System (PCS) 18.5 6.0 $0.0Rehabilitate Landside Roads & Bridges Ph 2 .0 4.5 $1.3Rehab & Reconfigure Water Pump Stations .0 4.2 $4.0ITS Radio System Expansion .3 3.7 $6.3GSE: FY14 - FY17 Hardstand Equip: Cobus .0 2.7 $1.1DPS Station #1 Reconstruction/Expansion .7 2.4 $17.9Rehab Energy Plaza - Utility Vault .0 2.4 $2.5Employee Parking Garage: Other Related Improvements .0 2.4 $1.9TRIP Transition: Business Continuity Program 2.0 2.0 $4.7North/South Toll Plaza & Parking Admin Bldg 30.9 1.9 $0.0Rehab Spent Aircraft Deicing Fluid System Yr 1 .1 1.8 $0.1Replace E. Airfield Dr Sanitary Sewer Lift Station .5 1.6 $0.0Rehab ESP Thermal System (Install 2 300 Ton Chillers) .0 1.6 $1.4Rehab AOA Storm Sewers .0 1.5 $1.5ADE Overhead .3 1.5 $14.4Aircraft Design Group VI T/W "Y" Bridges .2 1.3 $12.9Rehab Open Storm Channels FY14/15 .0 1.1 $1.0Oil and Gas Lease Reimbursables 1.1 1.1 $10.3

Projects <1M 26.7 6.4 11.3

TOTAL JOINT CAPITAL ACCOUNT (NON-TRIP) $165.1 $240.0 $210.5TOTAL JOINT CAPITAL ACCOUNT $852.0 $591.6 $1,193.2

TOTAL JOINT + DFW CAPITAL ACCOUNT $939.7 $826.3 $1,728.1



Capital Project Approval Process

In FY 2010, DFW management developed a 10-year capital plan as the basis for negotiating the Use Agreement. The FY 2014 projects from the list on the prior page were derived from that plan. Most of the new projects are officially in a “planning status.” When the project manager is ready to initiate the project, a detailed capital worksheet is prepared including alternatives, and presented to the Capital Committee for review and approval. Executive Management approval is required for projects over prescribed limits. Projects on this list may be modified or eliminated if planning assumptions on costs and benefits do not materialize upon more detailed analysis. It is possible that new projects may arise during the fiscal year due to the dynamic nature of an airport. This “just-in-time” capital planning process provides flexibility to manage the process most effectively. From a process standpoint, the Board of Directors does not approve an overall capital budget. Instead, the Board reviews projects to be funded with bond proceeds before the bonds are sold and reviews individual capital projects as contracts for those projects are brought to the Board for approval.

Major Capital Project Descriptions

There are several major capital initiatives included in the FY 2014 Capital Budget including:

Terminal Renewal and Improvement Program (TRIP) – As DFW’s domestic terminals approach end of useful life, a major rehabilitation/ redevelopment program is underway for Terminals A, B, C and E. The current budget is $2.02 billion (inflated dollars). The first terminal section, Terminal A – Section A, was completed in March 2013 with the second phase scheduled for completion near the end of FY 2014. Construction is currently underway for Terminal B – Section C, and Terminal E – Section C, both of which are also anticipated to be completed during FY 2014. Total program completion is scheduled for 2018. Approximately $351.5 million is anticipated to be spent during FY 2014.

Parking Expansion – Parking capacity at Terminal A will be expanded by approximately 52% through the reconstruction of a new more efficient parking facility with approximately 7,700 spaces to replace the prior parking structure and implement roadway improvements. This garage is being constructed in 3 phases, lasting approximately 1 year per phase. Section A/phase 1 of this new parking garage, along with the associated roadway improvements opened in March 2013. Section B/phase 2 is scheduled for completion in FY 2014. Also, a reconstruction of Terminal E – section B and C is planned which will increase parking capacity by 51%, as well as improve the associated roadways to alleviate traffic congestion in front of Terminal E. Approximately $121.6 million is anticipated to be spent during FY 2014 on these new parking projects.

Employee Parking Garages – DFW is planning a consolidation of various employee surface parking lots, which currently requires a busing operation to/from DFW Airport’s 5 terminals, into 2 employee parking garages to be located at the infield of Terminal B and E. The infield locations are within walking distance to the terminals and Terminal Link/Skylink transportation for those employees working in terminals other than B and E. Approximately $52.6 million is anticipated to be spent during FY 2014 on this project.



Terminal Gate Expansion and Conversion – Additional gate capacity is planned in Terminals D and B to meet increased demand. Projects include the conversion of 3 domestic gates between Terminals D and B to accommodate international flights, construction of a new 10-gate terminal extension on the north side of Terminal B, and future potential gate expansion south of Terminal D. These projects were pre-approved in the Use Agreement. The Terminal B North Expansion and B/D Connector are both under construction with the B/D Connector scheduled to go into service during FY 2014. Forecasted demand will require additional gate capacity expansion, primarily for international arrivals, which is currently being analyzed as part of a holistic Central Terminal Area study to identify the timing and location of future gate expansion. Current and near-term forecasted international flights are also requiring interim hardstand operations until additional contact gates can be constructed. Additionally, DFW Airport is anticipating the need to accommodate new large aircraft (A-380/747-800) from foreign flag carriers at Terminal D and cargo carriers in west cargo. Design at gate D16 for an A-380 jetbridge and associated terminal modifications have been completed in anticipation of this demand. Approximately $27.5 million is anticipated to be spent during FY 2014.

Taxiway “L” Reconstruction – As part of DFW’s ongoing airfield pavements rehabilitation program, a $51 million project ($20.4 million net of AIP grants) is planned to reconstruct a major east side taxiway which has reached the end of useful life. Design has already been completed using 75% AIP grant funding. Construction, contingent on award of an FY 2013 AIP Discretionary grant, is scheduled to begin during FY 2014. Approximately $14.5 million ($5.8 million net of grants) is anticipated to be spent during FY 2014.

DART Rail Station – DFW Airport’s rail station is being constructed adjacent to Terminal A to accommodate DART’s rail line coming into the north end of DFW Airport. DART’s Beltline rail station on DFW Airport has already been put into service and is providing interim shuttle van service to Terminal A until December 2014 when DART’s rail line will tie into DFW’s rail station. This project is timed to be finished in advance of DART’s plan to complete the rail construction to DFW Airport in 2014. Approximately $6.1 million is anticipated to be spent during FY 2014.

Roadway Improvements – Landside roadway improvements are being made to West Airfield Drive and Mid-Cites Boulevard to widen from 2 lanes to 4 lanes to accommodate increased traffic, particularly for current West Cargo tenants. Part of the Mid-Cities roadway project includes construction of a bridge over Bear Creek to eliminate roadway closures during flood events. Additionally, various landside roadway improvements are planned at numerous locations throughout the Airport to rehabilitate roadway sections which are reaching the end of useful life. Approximately $16.3 million is anticipated to be spent during FY 2014.

Commercial Development and Other – Several locations are planned for Commercial Development, including Founders’ Plaza off SH114/SH121 to include 2 car dealerships, Coppell Industrial off I-635, and Southgate at the southern portion of DFW Airport adjacent to the RAC. The Southgate development includes construction of a DFW Airport consolidated Corporate Headquarters, including a parking garage, as well as a Hyatt Place Hotel, Post Office, and 3 restaurants. Approximately $58.6 million is anticipated to be spent during FY 2014.



Capital Projects - Sources of Cash

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

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

Joint DFW

Capital Walkforward Capital Capital TotalBeginning Cash (10/1/13) $1,626.4 $106.4 $1,732.8Sources of Funds:

Grants $10.0 22.0 31.9Debt 576.4 110.4 686.8Natural Gas Royalties 5.8 - 5.8Interest Income 3.6 .3 3.9

Total Sources $595.7 $132.7 $728.4Less:

Capital Uses ($591.6) (234.7) (826.3)Cash Flow Adjustment $60.0 60.0Joint Capital Account Transfer to 102 (16.0) - (16.0)

Total Uses (547.6) (234.7) (782.3)

Total Ending Cash Balance $1,674.5 $4.4 $1,678.9Add: Cash From DFW Cost Center * .0 71.2 71.2

Ending Cash (9/30/14) $1,674.5 $75.5 $1,750.1

* FY13 O&M DFW Cost Center Outlook to be received in DFW Capital Acct in first

Quarter FY14

Airport Capital Funds Walkforward(In Millions)

Grants$31.9

Debt$686.8

Natural Gas Royalties

$5.8

Interest Income

$3.9

Cash Flow Adjustment

$60.0

Carryover Cash

Balances$53.9

FY 2014 Capital Sources of Cash$842.3 Million