Detroit Metropolitan Wayne County Airport

Ratemaking Overview

Settlement & True-Up

Monthly settlement with annual true-up adjustment

Extraordinary Coverage Protection (ECP)

Article III.I.4: Not later than 150th day of each Fiscal Year, Lessor furnishes Mid-Year Projection reflecting actual Bond Debt Service, O&M Expenses, Revenue Requirement, and revenues received. If projection indicates overpayment or underpayment of aggregate Activity Fees at existing rates, Lessor revises Projection and adjusts rates for remainder of Fiscal Year to conform to Mid-Year Projection. This is a mid-year rate adjustment mechanism, NOT a true residual ECP where airport can unilaterally charge airlines to meet bond coverage — rates are adjusted prospectively based on updated projections.

Landing Fee Methodology

Activity Fee calculated as Approved Maximum Landing Weight (in thousand pounds) multiplied by Activity Fee Rate. Rate calculated to generate Revenue Requirement after crediting all terminal rentals, shared use fees, concession/parking revenue, and other revenues.

Terminal Rental Rate

North Terminal Rental = Square feet of Preferential North Terminal Space × North Terminal Rental Rate. Rate = Cost of North Terminal / Total sq ft of Preferential North Terminal Space leased to Signatory Airlines (excluding member-only clubs). Cost of North Terminal = O&M Expenses + Bond Debt Service allocated to North Terminal Cost Center - Other Available Moneys - International Facilities Use Fees - North Terminal Rental Revenue - North Terminal Authority-Controlled Airline Space Revenues - North Terminal Shared Use Fees.

Common Use & Gate Allocation

Additional Bonds Test

Two-part test: (1) Historical: Airport Consultant report projecting Revenues and Revenue Fund balances plus Other Available Moneys and capitalized interest for first 3 full Operating Years after completion of projects funded by new bonds, sufficient to satisfy Rate Covenant. Alternatively, CFO certificate (with independent auditor report) that Net Revenues plus Other Available Moneys for most recent audited Operating Year were not less than 125% of Debt Service on Outstanding Senior Lien Bonds plus proposed new bonds for that period. (2) No Event of Default must exist. (3) Bond Counsel opinion that new issuance won't impair tax-exempt status of Outstanding Bonds. Refunding Bonds exempt if principal and interest do not exceed refunded bonds by more than 20% in any Operating Year.

Rate Covenant

Authority covenants to fix, charge and collect rates, fees, rentals and charges sufficient to produce Revenues in each Operating Year at least sufficient to provide for (i) payment of Operation and Maintenance Expenses; (ii) together with PFC proceeds deposited with Trustee, amounts needed to make deposits to Bond Fund; and (iii) together with Other Available Moneys and unencumbered Revenue Fund cash balance, amounts needed for deposits to Junior Lien Bond Fund, O&M Reserve Fund, Renewal and Replacement Fund, Discretionary Fund, Airport Development Fund, and an amount not less than 25% of Debt Service on Senior Lien Bonds during such Operating Year.

Flow of Funds

Revenues deposited to Revenue Fund, then transferred in priority order: (i) Monthly to O&M Fund for next month's O&M expenses; (ii) Monthly to Bond Fund (1/6th interest, 1/12th principal); (iii) Restore Bond Reserve Account if deficient; (iv) Monthly to Junior Lien Bond Fund (1/6th interest, 1/12th principal); (v) Swap payments; (vi) Restore Junior Lien Bond Reserve if deficient; (vii) Quarterly to O&M Reserve Fund (1/48th annual O&M) until Operating Reserve Amount on deposit; (viii) Quarterly to Renewal & Replacement Fund ($125K) until $2.5M on deposit; (ix) Quarterly to Airport Discretionary Fund ($87,500); (x) Quarterly to Airport Development Fund (per agreements); (xi) Quarterly to Rebate Fund (Code Section 148(f) compliance).