Annual Audit Report 2002

Description

______________________________________________________________ PORTLAND INTERNATIONAL AIRPORT (a division of the Port of Portland) REPORT ON AUDIT OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION ______________________________________________________________ FOR THE YEARS ENDED JUNE 30, 2002 AND 2001 Portland International Airport (a division of the Port of Portland) __________ PORTLAND INTERNATIONAL AIRPORT (a division of the Port of Portland) TABLE OF CONTENTS ___________ Page FINANCIAL STATEMENTS: Report of Independent Public Accountants 1 Management’s Discussion and Analysis 3 Balnce Shets 7 Statements of Revenues, Expenses, and Changes in Net Aset 8 Statements of Cash Flows 9 Notes to Financial Statements 10 SUPPLEMENTARY INFORMATION: Combining Balance Sheet 21 Reconciliation of Budgetary Revenues and Expenditures to Income before Contributions and Transfers 22 Schedules of Resources, Expenditures and Transfers (Budgetary Basis): Airport Revenue Fund 23 Airport Revenue Bond Fund 24 Airport Construction Fund 25 PFC Fund 26 PFCBond 27 Schedules of Net Revenues 28 Schedule of Compliance with Ordinance Nos. 155 and 323 Debt ...

Informations

• Publié par: Choim
• Nombre de lectures: 13
• Langue: English

Extrait

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   ______________________________________________________________ PORTLAND INTERNATIONAL AIRPORT  (a division of the Port of Portland)   ______________________________________________________________

REPORT ON AUDIT OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION 

 ______________________________________________________________ FOR THE YEARS ENDED JUNE 30, 2002 AND 2001   ______________________________________________________________

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Portland International Airport

(a division of the Port of Portland) __________ 

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PORTLAND INTERNATIONAL AIRPORT (a division of the Port of Portland)  TABLE OF CONTENTS ___________      FINANCIAL STATEMENTS:   Report of Independent Public Accountants   Managements Discussion and Analysis  Balance Sheets   Statements of Revenues, Expenses, and Changes in  Net Assets   Statements of Cash Flows   Notes to Financial Statements  SUPPLEMENTARY INFORMATION:   Combining Balance Sheet   Reconciliation of Budgetary Revenues and  Expenditures to Income before  Contributions and Transfers   Schedules of Resources, Expenditures and  Transfers (Budgetary Basis):  Airport Revenue Fund  Airport Revenue Bond Fund  Airport Construction Fund  PFC Fund  PFC Bond Fund    Schedules of Net Revenues    Schedule of Compliance with Ordinance Nos. 155 and 323  Debt Service Coverage Requirements   Schedule of Revenue Bond Construction Account  Activity   Schedule of General Account Amount Available for Payment  to Airport Revenue Bond Fund and Ratio to  Revenue Bond Debt Service Requirement   Schedule of Passenger Facility Charge Activity

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Portland International Airport Managements Discussion and Analysis

  The Portland International Airport (Airport) is owned and operated as a separate division by the Port of Portland (Port), a special municipal district created by the Oregon State Legislature. This discussion and analysis pertains to the Airports financial performance and provides an overview of the Airports financial activities for the fiscal year ended June 30, 2002. Please read it in conjunction with the Airport financial statements, which follow this section.   Overview of the Financial Statements: This audit report consists of three parts  managements discussion and analysis (this section), the basic financial statements (including notes), and supplementary information. The report is guided by accounting and reporting principles established by the Governmental Accounting Standards Board (GASB). The basic financial statements are prepared on the accrual basis, similar to a private business, whereby revenues are recognized when earned and expenses are recognized when incurred, regardless of when cash is received or paid. The basic financial statements consist of balance sheets that include the Airports assets, liabilities, and net assets (assets minus liabilities) at year end; statements of revenues, expenses, and changes in net assets, that include all revenues, expenses, and grants received for construction for the year; and statements of cash flows, that show the sources and uses of cash for the year. The financial statements also include notes that explain some of the information in the financial statements and provide more detailed data. Following the financial statements is a section of supplementary information, all of which is required by the GASB or Airport bond ordinances, which further explains and supports the information in the financial statements. Of special significance to readers of the financial statements is that, with certain limited exceptions, Airport monies are restricted by bond ordinances and Federal Aviation Administration regulations for use at the Airport only. Airport net revenues (essentially operating revenues less operating expenses other than depreciation) are largely determined by bond ordinances and contracts with airlines, as more fully explained in Notes 2 and 3 of the financial statements.   Financial Results: The Airports total net assets increased $28.1 million from the prior year, or 10.4 percent; in comparison, last year net assets increased by $43.2 million, or 19.0 percent. The analysis in Table 1 (below) focuses on the changes in the components of net assets of the Airport.  Table 1 Net Assets ($ millions)

Total Percentage Change 2002 2001 2001-2002 Current and other assets $ 227.8 $ 222.8 2.2% Capital assets 832.4 796.7 4.5%  Total assets 1,060.2 1,019.5 4.0% Long-term debt outstanding 672.2 682.8 (1.6)% Other liabilities 88.9 65.7 35.3%  Total liabilities 761.1 748.5 1.7% Net assets:  Invested in capital assets,  net of related debt 157.9 112.3 40.6%  Restricted 135.4 152.1 (11.0)%  Unrestricted 5.8 6.6 (12.1)% Total net assets $ 299.1 $ 271.0 10.4%   Total net assets of the Airport increased as a result of net income and capital grants. Net assets invested in capital assets, net of related debt, increased by $45.6 million, or 40.6%. This increase was due to capital expansion at the Airport. Restricted net assets decreased by $16.7 million, or 11.0%, primarily as monies restricted for construction were spent to increase net assets invested in capital assets. Unrestricted net 3

Portland International Airport Managements Discussion and Analysis assets  the portion of net assets that can be used to finance day-to-day operations without constraints established by debt covenants or legal requirements  decreased by $0.8 million, or 12.1 percent, during that same time. In comparison, last year unrestricted net assets increased by $1.0 million, or 17.9 percent.  Four main factors caused changes in net assets (Table 2, below) to decline $15.0 million from the prior year. Airline passengers decreased 10.8% as a result of the September 11 attacks and the general economic downturn, causing parking revenues to decline $5.9 million from the prior year. Other revenues, most of which are a function of debt service requirements, increased because of increased debt service. Interest expense and depreciation expense increased significantly, as discussed below.  Table 2 Changes in Net Assets ($ millions)

Total Percentage Change 2002 2001 2001-2002 Revenues: Operating revenues  Charges for services $ 134.7 $ 126.0 6.9%  Other 0.1 0.1 0.0% Nonoperating revenues  Interest revenue 6.8 13.3 (48.9)%  PFC revenue 21.9 18.4 19.0%  Total revenues 163.5 157.8 3.6% Expenses: Operating expenses 111.5 103.1 8.1% Nonoperating expenses 34.6 25.8 34.1%  Total expenses 146.1 128.9 13.3% Income before contributions and transfers 17.4 28.9 (39.8)% Capital contributions 13.9 15.5 (10.3)% Transfers out (3.2) (1.3) 146.2% Increase in net assets $ 28.1 $ 43.1 (34.8)%   Total revenues for the Airport increased $5.7 million, or 3.6%, from the prior year. Total expenses increased approximately $17.2 million, or 13.3%, over the prior year.  Operating revenues increased about $9 million from the prior year. Flight fees and terminal rentals from scheduled airlines increased approximately $16 million, reflecting the impact of bond ordinances and airline contracts, whereas concessions revenues, including parking, decreased by $10 million. The increase of about $8 million in operating expenses was due to approximately $9 million in increased depreciation expense (as a result of the completion of several large construction projects) and increased costs resulting from September 11 and changing security requirements, offset by a reduction in discretionary expenses. Nonoperating revenues at the Airport decreased, due mostly to a reduction in interest income as a result of expenditure of bond proceeds (resulting in less cash on hand to invest) and lower interest rates, offset by increased passenger facility charge (PFC) revenues (as a result of an increase in October 2001 to the PFC rate). At the same time, nonoperating expenses increased by about $9 million, due primarily to a decrease in capitalized interest (which reduces interest expense) in 2002 versus 2001.   Budgetary Highlights: The Ports budget for fiscal 2002, including the budget for the Airport, was adopted by the Port and certified by the Multnomah County Tax Supervising and Conservation Commission (TSCC) in June 2001. The adopted budget for the Airport was not revised during the year. While legally a part of a local government subject to governmental budgeting requirements, the Airport operates much like a business, with expenditure levels driven by business needs. The Airport incurred no budget overexpenditures for

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Portland International Airport Managements Discussion and Analysis 2002. Capital expenditures for the year were significantly below budget, largely due to delays and deferrals in capital spending as a result of the events of September 11. Other major revenue and expenditure variances were consistent with 2002 versus 2001 actual results discussed earlier.   Capital Assets: At the end of 2002, the Airport had over $832 million invested in a broad range of capital assets. This amount represents a net increase (including additions and deductions) of $35.7 million over last year, as outlined in Table 3 (below).  Table 3 Capital Assets ($ millions)

Total Percentage Change 2002 2001 2001-2002 Land $ 41.6 $ 41.6 0.0% Construction in progress 94.8 303.0 (68.7)% Total capital assets not being depreciated 136.4 344.6 Land improvements 457.7 218.6 109.4% Buildings and equipment 610.5 559.5 9.1% Total capital assets being depreciated 1,068.2 778.1  Less: accumulated depreciation (372.2) (326.0) 14.2% Total capital assets being depreciated, net 696.0 452.1 Airport capital assets, net $ 832.4 $ 796.7 4.5%   This years major capital asset spending included ($ millions):   Terminal expansion south - $33.1 million  Deicing glycol collection system - $15.9 million  Employee parking construction in  Portland International Center - $4.6 million  Extension of Alderwood Road - $3.8 million   Airport Way east landscaping - $3.6 million  Alaska Airlines tenant improvements - $3.0 million  South runway rehabilitation - $2.5 million  Cascade/Airport Way grade separation - $2.4 million  Please see Note 5 of the financial statements for more detailed information of capital asset activity.  The Ports 2003 capital budget estimates spending another $114 million for capital projects at the Airport. Spending at the Airport is primarily slated for improvements to terminal facilities, explosive detection systems and other security improvements, parking facility improvements, ramp and taxiway improvements, and de-icing/glycol runoff control on the airfield. These projects are budgeted to be funded by Airport operating revenues, federal grants, and PFC revenues. 

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Portland International Airport Managements Discussion and Analysis Long-Term Debt:  At the end of 2002, the Airport had $672.2 million in bonds outstanding. This is a decrease from the prior year, as seen in Table 4 (below).  Table 4 Outstanding Long-Term Debt ($ millions) Total Percentage Change 2002 2001 2001-2002 Airport revenue bonds $ 540.1 $ 550.7 (1.9)% PFC revenue bonds 132.1 132.1 0.0% $ 672.2 $ 682.8 (1.6)%   The outstanding amount of Airport revenue bonds decreased by slightly over $10 million as a result of scheduled bond payments. As of the end of fiscal 2002, the Airport revenue bonds were rated AA- by Standard & Poors, which is the highest underlying rating for airport revenue bonds rated by that ratings agency. The balance of PFC revenue bonds remained unchanged, as principal payments are not scheduled to begin until fiscal 2005.  Please see Note 6 of the financial statements for more detailed information of long-term debt activity.   Economic Factors and Next Years Budgets and Rates: As part of the Ports strategic planning and business planning process, regional, national, and global economic trends and forecasts are reviewed and assumptions regarding passenger, cargo, and population growth are coupled with these trends and forecasts to produce the annual budget. The sluggish economy is expected to continue through most of fiscal 2003. Modest growth (approximately 5%) is expected in airline passengers, with volumes expected to reach pre-September 11 levels by fiscal 2005.  Operating revenues for the Airport are projected to increase about 12.5% to $151.6 million, primarily due to increased revenue from airline landing fees, rentals and concessions, and parking operations. Airport operating expenses (excluding depreciation) will increase by about 23.0% to $77.0 million.   Contacting the Ports Financial Management: This financial report is designed to provide users with a general overview of the Airports finances. If you have questions about this report or need additional financial information, contact the Port of Portlands Controllers Office, PO Box 3529, Portland, OR 97208.

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ASSETS Current assets:  Cash and cash equivalents (Note 4)  Cash and equity in pooled investments (Note 4)  Receivables, net of allowance for doubtful accounts of   $358,799 3) in 2002 and $287,754 in 2001 (Note  Prepaid insurance and other assets  Total current assets Noncurrent assets:  Restricted assets:  Cash and equity in pooled investments (Note 4)  Receivables  Mortgage receivable  Contract retainage deposits  Total restricted assets  Depreciable properties, net of accumulated depreciation (Note 5)  Nondepreciable properties (Note 5)  Unamortized bond issue costs  Pension assets (Note 7)  Total noncurrent assets Total assets LIABILITIES Current liabilities (payable from current assets):  Accounts payable  Accrued wages, vacation and sick leave pay  Accrued liabilities  Total current liabilities (payable from current assets) Noncurrent liabilities:  Restricted liabilities (payable from restricted assets):  Current portion of long-term debt (Note 6)  Accrued interest payable  Accounts payable  Contract retainage payable  Total restricted liabilities (payable from restricted assets)  Long-term environmental and other accruals (Notes 6, 7 and 9)  Long-term debt (Note 6)  Deferred revenue  Due to Port General Fund (Note 7)  Total noncurrent liabilities  Total liabilities Commitments and contingencies (Note 9) NET ASSETS Invested in capital assets, net of related debt Restricted for capital and debt service Unrestricted  Total net assets Total liabilities and net assets

PORTLAND INTERNATIONAL AIRPORT (a division of the Port of Portland) BALANCE SHEETS _______  June 30, 2002 2001

$ 307,955 5,457,792 5,156,475 1,830,956 12,753,178 165,916,618 6,689,313 890,138 590,712 174,086,781 695,937,172 136,442,394 21,445,017 19,550,344 1,047,461,708 $ 1,060,214,886 $ 2,857,687 2,980,654 1,052,241 6,890,582 17,225,000 17,433,400 4,888,309 1,181,194 40,727,903 3,073,314 654,930,000 36,088,867 19,372,344 754,192,428 761,083,010 157,866,828 135,435,060 5,829,988 299,131,876 $ 1,060,214,886

tsen

$ 171,249 6,815,624 4,343,358 1,810,087 13,140,318 180,347,110 5,610,462 1,027,773 186,985,345 452,054,343 344,591,532 22,690,097 1,006,321,317 $ 1,019,461,635 $ 3,203,168 2,720,987 323,000 6,247,155 10,685,000 15,434,255 7,491,561 168,495 33,779,311 2,735,541 672,155,000 33,583,040 742,252,892 748,500,047 112,224,015 152,102,661 6,634,912 270,961,588 $ 1,019,461,635

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 PORTLAND INTERNATIONAL AIRPORT  (a division of the Port of Portland)  STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS  ________  Year Ended June 30, 2002 2001 $ 134,733,033 $ 126,045,961 84,213 101,906 134,817,246 126,147,867 24,737,152 22,226,127 14,579,737 15,830,406 1,856,296 2,821,895 4,104,298 4,001,628 453,686 402,518 1,658,328 827,578 4,878 63,621 753,429 907,053 618,111 1,588,050 13,355,572 14,158,349 1,354,521 1,283,271 (900,361) (515,199) 62,575,647 63,595,297 72,241,599 62,552,570 48,936,318 39,564,803 23,305,281 22,987,767 (34,124,119) (24,640,022) 6,786,847 13,344,290 (437,493) (1,154,697) (27,774,765) (12,450,429) (4,469,484) 10,537,338 21,912,315 18,384,289 17,442,831 28,921,627 13,912,065 15,480,483 (3,184,608) (1,288,884) 28,170,288 43,113,226 270,961,588 227,848,362 $ 299,131,876 $ 270,961,588

Operating revenues:  Charges for services  Other  Total operating revenues Operating expenses:  Salaries, wages and fringe benefits  Contract, professional and consulting services  Materials and supplies  Utilities  Equipment rentals, fuel and lubricants  Insurance  Rent  Personnel, travel and other management expenses  Equipment repairs  Intra-Port charges and expense allocations  Other  Less expenses for capital projects  Total operating expenses, excluding depreciation  Operating income before depreciation  Depreciation expense  Operating income Nonoperating revenues (expenses):  Interest expense, net of capitalized construction period interest   $2,196,045 in 2002 and $13,107,619 in 2001 of  Interest revenue  Loss on disposal of properties and other, net  Nonoperating revenues (expenses) before passenger facility charges  Income (loss) before passenger facility charges Passenger facility charge revenue  Income before contributions and transfers Capital contributions Transfers out  Change in net assets Total net assets - beginning of year Total net assets - end of year

The accompanying notes are an integral part of these financial statements. 8