Dallas/Fort Worth International Airport

Ratemaking Overview

Settlement & True-Up

Year-end reconciliation within 4-6 months after fiscal year end

Extraordinary Coverage Protection (ECP)

DFW has Incremental Coverage mechanism: 'Incremental Coverage means the amount, if any, of additional coverage required to be collected in any Fiscal Year in order to satisfy the rate covenants in the Bond Ordinance.' Incremental Coverage is collected and deposited into the Rolling Coverage Account. This is the DFW-style incremental coverage protection — airlines pay additional amounts to meet bond ordinance rate covenants, but it is a defined cost component collected prospectively, not an ex post extraordinary charge. The Revenue Sharing mechanism also provides downside protection: if DFW + Concessions Net Revenues fall below Lower Revenue Sharing Threshold, a Lower Revenue Sharing Threshold Adjustment is created and funds are transferred from Terminal Cost Center to Concessions and/or from Airfield Cost Center to DFW Cost Center (Section 5.7(a)).

Landing Fee Methodology

Landing Fee Rate = (Total Airfield Cost - Other Airfield Revenues) ÷ Total Maximum Approved Landing Weight of all aircraft operations in the Fiscal Year. Total Airfield Cost includes Airfield O&M Expenses, Allocable Indirect Expenses, Allocable DPS Expenses, Allocable Debt Service, Allocable Incremental Coverage, ± Revenue Sharing Adjustment Amount, ± True-Up Amount.

Terminal Rental Rate

Airline Terminal Rental Rate = Net Terminal Cost ÷ Total Airline Leased Space. Net Terminal Cost includes Terminal O&M Expenses, Allocable Indirect, Allocable DPS, Allowable Maintenance Costs, Allocable Debt Service, Allocable Incremental Coverage, minus Revenue Sharing Adjustment Amount, Common Use Turn Fees, FIS Facility Fees, DPS Revenues, Catering Fees, TSA Rents, Concessions O&M Reimbursements, DFW Contribution (upon Terminal F occupancy), and other terminal revenues.

Common Use & Gate Allocation

Additional Bonds Test

Two-part test: (1) Authorized Officer certifications regarding conditions, no default, and authentication order. (2) Either: (i) Airport Consultant report or CFO Certificate projecting Net Revenues ≥ 125% of Debt Service for each of three consecutive FYs beginning with first FY debt service due, plus schedule meets Rate Covenant; OR (ii) CFO Certificate showing Net Revenues for most recent FY or any 12 consecutive months out of most recent 18 months were ≥ 125% of maximum Debt Service scheduled in current or any future FY, plus schedule meets Rate Covenant.

Rate Covenant

Net Revenues = Gross Revenues minus Operation and Maintenance Expenses. Debt Service = Accrued Aggregate Debt Service adjusted for investment earnings and certain deposits. Gross Revenues include Rolling Coverage (25% of aggregate debt service), PFC revenues designated by airport, transfers from PFIC and other sources. Operation and Maintenance Expenses exclude depreciation and amortization. Rate Covenant requires: (1) Gross Revenues ≥ O&M + 1.25x Debt Service + Subordinate Lien Obligations + other amounts; (2) Current Gross Revenues (excluding transfers from Capital Improvements Fund) ≥ O&M + 1.00x Debt Service + Subordinate Lien Obligations + other amounts.

Flow of Funds

All Gross Revenues deposited to Operating Revenue and Expense Fund. Monthly transfers (unless more frequent required) in priority order: (1) Debt Service Fund - Accrued Aggregate Debt Service; (2) Administrative Expenses for Parity Credit Agreements; (3) Debt Service Reserve Fund - up to required amount; (4) Other funds/accounts per Additional Supplemental Ordinance; (5) Subordinate Lien Obligations debt service. Within Operating Revenue and Expense Fund, airport may: (1) Pay O&M Expenses per budget; (2) Set aside 90 days O&M reserve. Remaining funds at FY-end deposited to Capital Improvements Fund (allocated per Airline Use Agreement to Rolling Coverage Account, Joint Capital Account, DFW Capital Account), with authorized officer option to retain in Operating Fund.