2013 Business Plan - Halifax Stanfield International Airport

HALIFAX INTERNATIONAL AIRPORT AUTHORITY - 1 - 2013 BUSINESS PLAN Prepared in December, 2012

2013 Business Plan

STRENGTH THROUGH STRATEGY Building Today for Tomorrow

Prepared in December, 2012

HALIFAX INTERNATIONAL AIRPORT AUTHORITY - i - 2013 BUSINESS PLAN Prepared in December, 2012

TTAABBLLEE OOFF CCOONNTTEENNTTSS

EXECUTIVE SUMMARY ........................................................................................... 1

PLANNING PROCESS .................................................................................................. 1

2013 BUSINESS PLAN ................................................................................................. 2

STRATEGIC OVERVIEW ........................................................................................... 3

MISSION, VISION AND VALUES ................................................................................. 3 BUSINESS STRATEGIES .............................................................................................. 4

2013 PLAN ..................................................................................................................... 5 ECONOMIC OUTLOOK ............................................................................................... 5

Global Economy ................................................................................................... 5 National View ...................................................................................................... 6

Regional View ...................................................................................................... 6

Aviation Industry ................................................................................................. 7

Halifax Stanfield International Airport ............................................................... 8

2013 GOALS ............................................................................................................. 11

FINANCIAL PLAN ...................................................................................................... 13

Revenue ............................................................................................................. 13

Expenses ............................................................................................................ 14 Capital Program ................................................................................................. 14

FINANCIAL SCHEDULES ............................................................................................ 16

Proforma Balance Sheet ................................................................................... 16

Proforma Statement of Operations .................................................................. 17

Proforma Statement of Cash Flows .................................................................. 18

Prepared in December, 2012

A

B

C


EEXXEECCUUTTIIVVEE SSUUMMMMAARRYY

PLANNING PROCESS Halifax International Airport Authority (HIAA) has a four-tiered planning process to guide airport operations and development in the short, medium and long term.

A The 20-year Master Plan serves as a framework to guide the long-term development of the facility to meet the needs of the community, our stakeholders and the industry.

The 10-year Capital and Financial Plan determines HIAA’s infrastructure and funding requirements over the plan timeline.

The Strategic Plan covers a five-year period and includes our Mission, Vision, Values and Goals. It also includes an assessment of the general economic conditions expected to prevail, as well as an evaluation of the current and future state of the aviation industry. The annual Business

Plan draws its direction from the Strategic Plan and creates specific, measurable, actionable, results-oriented, and time-linked objectives to support our long-term strategies.


2013 BUSINESS PLAN The 2013 Business Plan for Halifax International Airport Authority (HIAA) has been developed using the 2013-2017 Strategic Plan, and it sets forth the business strategies and goals for the upcoming fiscal year from both a qualitative and quantitative perspective. The 2013-2017 Strategic Plan was completed in 2012 and will serve as the blueprint to direct airport activities and initiatives over the next five years to assist HIAA in achieving its vision for the Halifax Stanfield International Airport (HSIA).

The theme for the 2013 Business Plan is “Strength through Strategy – Building Today for Tomorrow.”

HIAA’s commitment to operating a safe, secure and efficient facility will remain a priority. During 2013, HIAA will focus on the development of both aeronautical and non-aeronautical revenue. On the aeronautical side, HIAA will concentrate on promoting and growing opportunities with the newly extended runway. Several strategic goals are designed to drive increases in both cargo and passenger volumes through joint partnerships and service offerings. On the non-aeronautical side, there will be a continued focus on diversifying revenue through growth opportunities. This will be accomplished through a commercial development plan and the creation of new concession opportunities. HIAA will also continue to build on its culture of service excellence through “The Stanfield Way” program.

The economic outlook indicates that global economic recovery continues, but has weakened in the last year. As air transportation is a derived demand linked to economic growth, a weakened economy can create uncertainty in demand for air passenger and cargo services to and from Halifax.

Also, factors such as a still-weak financial system in advanced economies, the slow rate of growth in the labour markets, and the continued high levels of unemployment in both the United States

and Europe has the potential to negatively affect the economic recovery.

Overall, ongoing economic uncertainty along with reduced airline seat capacity at HSIA in the latter half of 2012 has led to a conservative outlook for HIAA for 2013 in terms of passenger and capacity projections. Passenger growth is budgeted to be 2.2% in 2013.

Operating revenue for 2013 is forecast at $54.7 million, which represents an increase of 5.3% over the 2012 estimated operating revenue. The projection for net Airport Improvement Fee (AIF) revenue is $34.4 million for the year. The increase over 2012 relates mainly to the AIF fee increase from $20 to $25 effective January 1, 2013.

Operating expenses for 2013 are budgeted at $50.5 million. HIAA’s operating margin is budgeted at $4.2 million. The bottom line excess of revenue over expenses is budgeted to be $5.8 million for 2013.

Capital investment in 2013 will concentrate on projects planned for groundside, the air terminal building, airside, and information technology. The total estimated capital investment for 2013 is $53.6 million.


Vision Great people creating

the best airport community in the world

SSTTRRAATTEEGGIICC OOVVEERRVVIIEEWW

MISSION, VISION AND VALUES In 2012, HIAA updated its Mission, Vision and Values as follows:

B Mission

A world-class airport creating prosperity for our region by connecting Atlantic Canada to the world through flight

Values At Halifax International Airport Authority, we are a team with a common vision and mission. The foundation of our vision and mission is built upon our core values. We are committed to these values to guide us in our decisions, actions, and behaviours, to support the success of the organization, each other, and our stakeholders. Integrity We are transparent and behave with integrity. We accept responsibility for our actions and take the initiative to improve our airport every day. Respect We value differences and diversity in individuals. We treat each other and our environment with respect. Inclusive We promote a trusting, open and inclusive environment. We approach each interaction with professionalism and pride and make our airport a welcome place for employees, stakeholders and visitors. Teamwork We celebrate our accomplishments and work together by listening and communicating effectively, building on each other’s strengths and helping each other to grow professionally. Corporate Citizenship We value the communities in which we do business and where we live. We are committed to contributing by providing leadership in economic development and social responsibility.


BUSINESS STRATEGIES As part of the recent update to HIAA’s Strategic Plan, a number of key business strategies have been developed to achieve the new vision and will help guide the organization over the next five years. The business strategies are aligned with key strategic planning documents such as the Master Plan and the 10-year Capital and Financial Plan.


Figure 1 – Global Economic Outlook Forecast - Annual Growth in Real GDP

22001133 PPLLAANN

ECONOMIC OUTLOOK Global Economy1

The global economy has rebounded from the financial crises of 2008. After a dip of -0.6% in 2009, the world economy, as measured by gross domestic product (GDP), posted growth of 5.1% in 2010 and 3.8% in 2011. This was marked by a two-speed recovery where economic activity in advanced economies continued to be slow while emerging and developing economies (e.g., China, India, Brazil) showed much more robust growth.

According to forecasts from the International Monetary Fund (IMF), the world economy is expected to grow at about 3.3% in 2012 and 3.6% in 2013. Emerging and developing economies are expected to continue to lead the recovery with growth of 5.3% in 2012 and 5.6% by 2013, compared to growth of 1.3% and 1.5% respectively for the advanced economies. This

1 International Monetary Fund, World Economic Outlook, Oct. 2012

has implications for the air passenger and cargo markets for HSIA in terms of the source of growth and demand.

Downside risks to these expectations and forecasts include delayed or insufficient policy action that would further escalate the current crises in the Euro zone, along with continued economic weakness in the United States, and the risk that sudden and excessive fiscal austerity will have an adverse impact on the economy. In addition, risks in the emerging and developing economies also exist, including signs of a slowdown in China after years of robust growth.

These global economic uncertainties suggest that the business environment for HIAA may be challenging over the next several years, with the risk of another downturn.

C

World Canada US Euro UK Japan Brazil China India2011A 3.8% 2.4% 1.8% 1.4% 0.8% -0.8% 2.7% 9.2% 6.8%2012F 3.3% 1.9% 2.2% -0.4% -0.4% 2.2% 1.5% 7.8% 4.9%2013F 3.6% 2.0% 2.1% 0.2% 1.1% 1.2% 4.0% 8.2% 6.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

According to forecasts from the International

Monetary Fund (IMF), the world economy is

expected to grow at about 3.3% in 2012 and 3.6% in 2013.


National View Canada is an export-oriented economy and highly sensitive to developments in the global economy. Our top trading partners include the United States, China, Mexico, the United Kingdom, and Japan. Although trade with emerging economies such as China has increased in recent years, the United States remains Canada’s largest trading partner, accounting for 62% of trade (74% of exports and 50% of imports) by value.2

Domestically, risks include increases in housing prices and consumer debt. After posting growth of 2.4% in 2011, the IMF expects the Canadian economy to record GDP growth of 1.9% in 2012 and 2.0% in 2013.

As such, developments in that country will have an impact on the Canadian economy. As an export nation with a wealth of natural resources, Canada is also susceptible to world commodity prices, which over the past decade have been driven by demand from emerging markets such as China. Any change in the demand for natural resources will have a marked impact on the Canadian economy.

3

Regional View

The growth of Canada’s national economy has a direct impact on the growth and demand for air passenger and cargo services at HSIA. Furthermore, a significant portion of air passenger and cargo traffic at HSIA is domestic and directly impacted by the health of the national economic environment.

Over the next several years, economic growth in Halifax and Nova Scotia will be driven by major

2 Industry Canada, Trade Data Online Database, Dec.2011 3 International Monetary Fund, World Economic Outlook – Oct. 2012

projects such as the $25 billion federal shipbuilding contract, Deep Panuke natural gas development, and Lower Churchill hydroelectric development. The national shipbuilding contract is expected to generate 11,500 total jobs and $500 to $600 million in wages for Nova Scotia, along with a 2.4% rise in provincial GDP.4

Growth is also expected in sectors such as finance and insurance, other business services, healthcare, aerospace and port transportation, among others. This regional economic growth is expected to drive the demand for air services (e.g., business travel from this activity, increase in leisure travel as economic growth increases disposable income). This growth will come over time; in the near term the provincial economy is expected to post GDP growth of approximately 1.0% in 2012, and rise to 1.7% by 2013 according to the Atlantic

4 Shipsstarthere.ca

The growth of Canada’s national economy has a direct impact on the growth and demand for air

passenger and cargo services at HSIA.


Provinces Economic Council (APEC).5 Forecasts from the Conference Board of Canada show that Halifax’s share of provincial GDP is expected to exceed 50% within five years.6

Income and consumer spending growth are expected to be controlled during 2013 as a result of current weak job growth; however, Newfoundland and Labrador is expected to continue to benefit from strong wage growth.

Aviation Industry The global aviation industry has been faced with a number of challenges over the last several years that have impacted the demand for air services and air passenger traffic; however, the long-term trend has always been continued growth as the industry rebounds. This is due to globalization and the importance of air travel for trade and commerce, along with the increasing demand for tourism worldwide. The long-term outlook for the aviation industry is continued growth.

A key trend which has continued to evolve over the past several decades is the growth of

5 APEC Outlook 2013 – Fall, 2012 6 Greater Halifax Partnership, Halifax Economic Report – Mar. 2012

international air traffic relative to domestic air traffic. In 1990, international air passengers made up 24% of all global air passenger traffic and this increased to roughly 37% in 2011.7

The airline industry is expected to post $4.1 billion in profits for 2012, a slight improvement over previous forecasts, reflecting a drop in oil prices, expected economic growth, and higher airline performance with respect to capacity and load factors.

This trend is expected to continue due to globalization and the increasing accessibility of international travel as a result of economic growth and new aircraft technology. This has important implications for air services development in terms of market opportunities and new routes. Specifically, this suggests that the demand and the growth for international air travel will continue to outpace the growth of domestic travel.

8

7 International Air Transportation Association (IATA)

However, the financial performance of airlines varies considerably by region, country and individual air carrier. In general, North America and European air carriers have struggled while carriers in the Asia Pacific have posted relatively stronger financial

8 International Air Transportation Association (IATA), Financial Forecast, Sept. 2012

Figure 2 - Atlantic Canada Economic Outlook Forecast - Annual Growth in Real GDP


The long-term outlook for the aviation industry is

continued growth.

results. This is consistent with the growth of emerging markets in Asia. Also, low cost carriers have tended to perform better than traditional/legacy air carriers. An improvement in the financial performance of the global aviation industry will facilitate air services development, but regional and air carrier type differences will need to be taken into account when assessing potential opportunities.

Fuel accounts for approximately 25%9

Consideration must also be given to the new and changing types of aircraft and related market opportunities. New aircraft can offer lower costs, smaller capacities and longer ranges that could be beneficial to smaller markets and also create more non-stop routes.

of total airline costs. As costs rise and fluctuate, airlines may adjust capacity, which in turn affects the airport business. An increase in air services and capacity helps the airport business by generating revenue opportunities (e.g. landing fees) while a decline in capacity has the opposite effect.

9 Airlines for America

Halifax Stanfield International Airport Passenger Activity HSIA is served by 18 scheduled and charter passenger air carriers which provide services to a network of 46 destinations, including 16 in Canada, 13 in the United States and 17 in international markets including Europe and the Caribbean.

In 2011, air passenger traffic at HSIA reached a record of nearly 3.6 million enplaned/deplaned (E/D) passengers, and is forecast to increase by 1% in 2012. Approximately 80% of passenger traffic is domestic, followed by 11% transborder and 9% international. We anticipate an increase in passenger traffic for 2013 of 2.2%, reaching 3.7 million passengers annually.


We anticipate an increase in passenger traffic for 2013 of 2.2%, reaching 3.7 million passengers annually.

Figure 3 – HSIA’s Current Non-Stop Destinations

Figure 4 - Overview HSIA Passenger Traffic * Denotes forecast passenger traffic.


Cargo Activity Air cargo at HSIA includes both mail and commercial shipments carried in the belly-hold of passenger aircraft and freighters.

Cargo traffic at HSIA reached 29,262 metric tonnes in 2011 and is forecast to be approximately 29,300 metric tonnes in 2012. Major air exports via HSIA include seafood, electric parts and machinery, and industrial

equipment. The runway extension is expected to facilitate further growth of air cargo business opportunities at HSIA by allowing service from larger freighters.

Cargo traffic for 2013 is expected to be 30,472 metric tonnes, which represents an increase of 4% over the 2012 forecast.

Figure 5 – HSIA Air Cargo Traffic * Denotes forecast cargo activity

25000

26000

27000

28000

29000

30000

31000

2009 2010 2011 2012* 2013*

Met

ric T

onne

s


2013 GOALS “Excellence is not a destination; it is a continuous journey that never ends.” - Brian Tracy The following goals were established in the 2013-2017 Strategic Plan and flow from the key business strategies.

Safety, Security & Environmental Excellence Exercise high levels of safe work practices throughout

HIAA and foster work safety in the HSIA community. Continue to enhance the highest level of airport security. Enhance standards of environmental stewardship and

increase awareness in the HSIA community.

Professional Excellence Implement revised recruitment and retention strategies. Improve current succession and workforce planning

processes. Sustain positive labour relations.

Air Service Growth Increase passenger and cargo volumes. Increase passenger and cargo destinations.

Non-Aeronautical Revenue Growth Develop and begin implementing a commercial

development plan to facilitate the growth of an Airport City at HSIA.

Influence key government stakeholders to provide zoning, regulation and adequate services to support airport operations and growth.

Generate revenue growth through the provision of services to external parties.

Increase air terminal building concessions revenue. Increase air terminal building advertising revenue. Advocate Arrivals Duty Free as part of Airport Duty Free

Operators Coalition.


2013 GOALS (cont’d)

Culture of Superior Service Improve customer satisfaction levels.

Integrate The Stanfield Way into existing HSIA programs.

Expand and diversify Tartan Team volunteer host program.

Implement processes and adapt facilities to minimize barriers within our facility resulting in a seamless airport experience.

Facilities & Service Improvements

Deliver a capital program that optimizes the airport experience, supports growth, and improves efficiency and productivity.

Improve the processes and systems used to manage infrastructure data and to support delivery of infrastructure initiatives and ongoing operations.

Deliver enterprise business solutions by leveraging airport technology.


FINANCIAL PLAN

This section provides supporting data on the 2013 Business Plan’s revenue and expense budget. It addresses the way in which the financial component of the plan links to the goals, allowing HIAA to achieve its stated objectives. The financial plan for HIAA is summarized as follows:

2013 2012Budget Forecast

($ millions) ($ millions)

Operations Revenues 54.7 51.9 Expenses 50.5 46.6 Operating Margin 4.2 5.3

Other Revenue and Expenses Airport Improvement Fee (net) 34.4 27.0 Investment Revenue 0.3 0.8 Interest Expense 14.3 14.7 Depreciation and Amortization 18.8 16.8

Capital Program Expenditures 53.6 45.6

Total long-term debt as at Dec. 31 283.4 283.5

Figure 6 – Financial Plan Summary

Revenue During 2012, HIAA experienced a slight reduction in airline seat capacity that impacted operating revenue. HIAA’s 2013 plan outlines an operating revenue budget of $54.7 million, which represents an increase of 5.3% over the 2012 forecast revenue of $51.9 million. The Airport Improvement Fee (AIF) rate will increase from $20 to $25 effective January 1, 2013, resulting in AIF revenue that is budgeted to be $34.4 million. Interest revenue of $300k is estimated from the investment of surplus funds.

On the aeronautical side, when considering Transport Canada aviation forecasts and other related information available as of October 2012, total HSIA passenger traffic for 2013 is projected to increase from the 2012 forecast levels by 2.2%. This includes an increase of 1.9% in scheduled passenger aircraft movements

over 2012. To give perspective, this represents an increase in passenger seat capacity of approximately 50 seats per day and is equivalent to the arrival and departure of one regional jet per day. In 2013, aeronautical revenue is anticipated to increase by 6.4% over the 2012 forecast. This includes an increase in Aircraft Landing Fees and General Terminal Fees by 2% effective January 1, 2013. Also included are the increases in common use fees charged to air carriers, which are based on expected costs to deliver the services and forecast aircraft seat capacity.

Non-aeronautical revenue is budgeted to increase by 4.1% in 2013 over the forecast for 2012 and includes parking, concession, rental and other revenues.

The parking revenue budgeted for 2013 represents an increase of 3.6% or $409k over the 2012 forecast. The forecast revenue from


2013 CAPITAL PROGRAM SUMMARY($millions)

Groundside 10.0

Air Terminal Building 25.0

Airside 10.9

Information Technology 2.2

Minor/Maintenance Capital 5.5

TOTAL CAPITAL EXPENDITURE 53.6

2013 CAPITAL PROGRAM SUMMARY($millions)

Groundside 10.0

Air Terminal Building 25.0

Airside 10.9

Information Technology 2.2

Minor/Maintenance Capital 5.5

TOTAL CAPITAL EXPENDITURE 53.6

the operation of the public parking lots assumes there will be no changes to the operation of the parking facilities during 2013.

Concession revenue for 2013 indicates a 2.4% increase over the 2012 revenue forecast. This increase relates to new retail concessions expected in 2013. Concession revenue includes ground transportation for which budgeted revenue activities are expected to decrease 2.7% due to the conclusion of agreements with two motor coach carriers that ceased operations in the latter half of 2012.

Expenses Total operating expenses budgeted for 2013 are $50.5 million, which represents an increase of 8.2% or $3.8 million over the 2012 forecast expenses.

The total interest to be paid in 2013 on HIAA’s Series A and Series C bond issues at an annual interest rate of 5.503% and 4.888% respectively is $14.9 million.

Capital Program Significant investments have been made to meet the demands of future air traffic growth, improve the level of service to the traveling public, and maximize revenue potential. The Master Plan, completed in 2011, analyzed the current operational capacity against forecast demand and identified short-term capital needs to address existing shortfalls. Projects to address these needs were outlined in the 10-year Capital and Financial Plan. In 2013, projects are planned for groundside, the air terminal building, airside, and information technology that are driven by the above mentioned plans.

The 2013 Capital Program consists of the continuation of a number of significant capital projects that started in 2012 along with the first phases of construction of the infrastructure necessary to support the commercial development of the groundside property.

The expansion of the groundside road network to support the strategic development of

commercial properties is anticipated to begin with a realignment and extension to the outbound section of Bell Boulevard. This new section of roadway will allow for the creation of new leasable commercial lots.

In the air terminal building, baggage processing improvements will be implemented in the domestic/international and transborder areas. Once complete, these changes will also facilitate further development and passenger processing improvements in both check-in halls.

On the airside, the Runway 05-23 Extension Program, which received funding support from the federal and provincial governments, will be completed in 2013. On November 15, 2012, the extended runway was available for operation, and work in 2013 will be focused on new inset lights that will be installed along the centerline of Taxiway Alpha to extend the low visibility route. Another airside initiative in 2013 will see a section of the airfield at the intersection of the two main runways restored. Three fire fighting vehicles are also scheduled to be replaced in 2013.

Groundside A total expenditure of $10.0 million is forecast for groundside improvements in 2013 as follows:

Bell Boulevard Extension Implementation of the Commercial Development Plan is anticipated to begin with the reconfiguration of Bell Boulevard and associated roads to create new revenue generating development lots. Underground

Figure 7 – Capital Program Summary


services for water, storm water, and sanitary sewer will also be installed to facilitate servicing of the lots.

Air Terminal Building A total expenditure of $25.0 million is forecast for the air terminal building as follows:

Check-In and Passenger Processing Improvements The new baggage handling systems and screening equipment which were designed in 2012 will be installed and commissioned in the domestic/international and transborder baggage halls through a joint effort with Canadian Air Transport Security Authority (CATSA). The new baggage systems will take advantage of the new screening equipment being deployed by CATSA to provide significantly improved baggage processing capacity and enhanced security. Construction will begin in the domestic and international check-in hall to improve passenger processing. Renovations at the south end of the terminal will improve passenger circulation and upgrade the façade to be architecturally consistent with the remainder of the terminal. New passenger processing space will be created in the transborder check-in hall when the screening equipment is relocated to the baggage hall.

Airside The forecast expenditure in 2013 related to HSIA’s airside is $10.9 million and includes:

Runway 05-23 Extension Runway 05-23 was extended to its new length of 10,500 feet in 2012. In 2013, new inset lights will be installed along the centerline of Taxiway

Alpha to extend the low visibility route to and from the threshold of Runway 05.

Airside Restoration - Intersection The pavement at the intersection of the two runways will be restored as part of a continued effort to maintain the condition of the surface areas on the runways.

Firefighting Vehicle Replacement Two new crash trucks, which were ordered in 2012, will be delivered in 2013 and a new structural response vehicle will also be ordered for delivery in 2013. These vehicles will replace three aging vehicles in the fleet of firefighting equipment. The replacement vehicles will ensure that emergency response services continue to provide full response capabilities at all times.

Information Technology A total of $2.2 million is forecast for information technology improvements in 2013. Investments in enterprise systems upgrades will continue with additional enhancements and expanded project scope necessary to improve the way information is managed throughout HIAA. It will also address some significant systems that are reaching the end of their planned life cycle.

Minor/Maintenance Capital Projects The balance of the capital funding requirements for 2013 is $5.5 million and consists of minor capital projects categorized as new initiatives, minor works, capital acquisitions, and mobile equipment replacement. It also includes the preliminary design for the 2014 capital program and 2012 carryover projects.


FINANCIAL SCHEDULES Halifax International Airport Authority PROFORMA BALANCE SHEET as at December 31 ($000’s)

2013 2012 ASSETS BUDGET FORECAST

Current Assets Cash and Short Term Investments 31,229 52,464 Accounts Receivable 5,250 5,000 Other 1,805 1,745

Total Current Assets 38,284 59,209

Long-Term Assets Debt Service Reserve Fund 7,427 7,427 Capital Assets 364,600 338,508 Accrued Pension Asset 5,734 5,185

Total Long-Term Assets 377,761 351,120

TOTAL ASSETS 416,045 410,329

LIABILITIES and EQUITY

Current Liabilities Accounts Payable & Accrued Liabilities 21,934 21,481 Current Portion of Long -Term Debt 80 80 Contractors' Holdbacks 2,500 2,100 Security Deposits 1,900 1,825 Deferred Revenue 965 2,022 Total Current Liabilities 27,379 27,508

Long-Term Liabilities Long-Term Debt 283,330 283,308 Due to Transport Canada 160 242 Less: Current Portion (80) (80) Total Long-Term Liabilities 283,410 283,470

TOTAL LIABILITIES 310,789 310,978

EQUITY IN CAPITAL ASSETS 105,256 99,351

TOTAL LIABILITIES and EQUITY 416,045 410,329


Salaries & Benefits

24.6%$20.5M

Depreciation22.5%

$18.8MInterest17.1%

$14.3M

Services, Materials &

Supplies20.7%

$17.3M

G & A6.0%

$5.0M

Ground Lease Rent7.3%

$6.1M

Realty Taxes1.8%

$1.5M

2013 Total Expenses = $83.5M

Parking 13.2%

$11.8M

Other3.7%

$3.3M

Aeronautical32.6%

$29.0M

Non Aeronautical 28.9%

$25.9M

Concessions12.0%

$10.8M

AIF38.5%

$34.4M

2013 Total Revenues = $89.3M

FINANCIAL SCHEDULES Halifax International Airport Authority PROFORMA STATEMENT OF OPERATIONS for the year ended December 31 ($000’s)

Revenue Distribution Expense Distribution

2013 2012BUDGET FORECAST

REVENUES Aeronautical 29,092 27,351 Parking 11,770 11,362 Concessions 10,768 10,511 Other 3,021 2,689 Investment Revenue 300 776 Airport Improvement Fee 34,415 26,974

TOTAL REVENUES 89,366 79,663

EXPENSES Salaries, Wages & Benefits 20,555 18,807 General and Administrative 4,978 4,501 Materials, Supplies & Services 17,333 16,547 Realty Taxes 1,468 1,461 Ground Lease Rent 6,137 5,315 Interest Expense 14,292 14,659 Depreciation and Amortization 18,778 16,778

TOTAL EXPENSES 83,541 78,068

EXCESS REVENUES OVER EXPENSES 5,825 1,595

NET ASSETS (Jan 1) 99,351 97,676

Amortization of deferred financing costs 80 80

NET ASSETS (Dec 31) 105,256 99,351


FINANCIAL SCHEDULES Halifax International Airport Authority PROFORMA STATEMENT OF CASH FLOWS for the year ended December 31 ($000’s)

2013 2012

BUDGET FORECAST

CASH BALANCE JANUARY 1 52,464 66,937

OPERATING ACTIVITIES Excess Revenues over Expenses excluding Non-Cash Items 24,134 17,224 Adjustment for Changes in Working Capital (439) 3,166 Total Operating Activities 23,695 20,390

FINANCING ACTIVITIES Transport Canada Rent Deferral (80) (80) Deferred Contribution from the Province of Nova Scotia - 917 Total Financing Activities (80) 837

INVESTING ACTIVITIES Expenditures on Capital Assets (44,850) (35,700) Total Investing Activities (44,850) (35,700)

Increase (Decrease) in Cash & Cash Equivalents (21,235) (14,473)

CASH & CASH EQUIVALENTS AS AT DECEMBER 31 31,229 52,464

Halifax International Airport Authority 1 Bell Boulevard,

Enfield, Nova Scotia, Canada B2T 1K2

Tel: 902.873.4422 Fax: 902.873.4750

www.flyhalifax.com

2013 Business Plan - Halifax Stanfield International Airport

Documents