2014 IAA CAFR - spreads - web version

Indianapolis, INComprehensive Annual Financial Report

For the Fiscal Years ended December 31, 2014 and 2013

ENHANCE YOUR WORLD

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INDIANAPOLIS AIRPORT AUTHORITY

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2014 COMPREHENSIVE ANNUAL FINANCIAL REPORT

INTRODUCTORY SECTION Mission statement.................................................... 5

Indianapolis Airport Authority Facilities Map ......... 5

Board of Directors .................................................... 8

Organizational Structure ......................................... 9

Executive Management Team ................................. 9

Letter of Transmittal to the Board .......................... 12

Certificate of Achievement for Excellence

in Financial Reporting ......................................... 19

FINANCIAL SECTION Independent Auditors’ Report................................. 23

Management’s Discussion and Analysis ................. 25

Audited financial statements

Balance Sheets ......................................................... 42

Statements of Revenues, Expenses and

Changes in Net Position ..................................... 44

Statements of Cash Flows ........................................ 46

Notes to Financial Statements ................................. 48

Supplementary information

Schedules of Balance Sheet Information ................. 76

Schedules of Revenues, Expenses,

and Changes in Net Position Information ......... 80

Schedules of Operating Revenues ........................... 82

Schedules of Operating Expenses ........................... 84

Schedules of Bond Debt Service

Requirements to Maturity .................................. 88

STATISTICAL SECTION

Financial trend data

Balance Sheets ......................................................... 92

Statements of Revenues, Expenses and Changes

in Net Position .................................................... 94

Changes in Cash and Cash Equivalents ................... 96

Revenue capacity data

Operating Revenues ................................................ 98

Signatory Airline Rates and Charges ....................... 100

Debt capacity data

Outstanding Debt by Type and

Revenue Bond Debt Service Ratios .................... 102

Revenue Bond Debt Service Coverage .................... 104

Operating information

Airline Landing Weight Statistics ............................ 106

Enplaned Passenger Statistics ................................. 108

Number of Airport Employees by

Identifiable Activity ............................................ 110

Schedule of Insurance in Force ................................ 112

Demographic and economic data

Indianapolis Demographic and

Economic Statistics ............................................. 113

Principal Employers in Indianapolis......................... 113

Capital Assets and Other

Airport Information ............................................ 114

CONTENTSCOMPREHENSIVE ANNUAL FINANCIAL REPORT

Fiscal years ended December 31, 2014 and 2013 Indianapolis Airport Authority, Indianapolis, IN

Prepared by the Finance Department, Indianapolis Airport Authority

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INTRODUCTORY SECTION MISSION STATEMENT

INDIANAPOLIS AIRPORT AUTHORITY FACILITIES MAP

Fostering World Class Service to Enhance our Community

Indianapolis International Airport

B Hendricks County Airport

C Eagle Creek Airport

D Metropolitan Airport

E Indianapolis Regional Airport

F Downtown Heliport

Mission Statement

Indianapolis Airport Authority Facilities Map

Board of Directors

Organizational Structure

Executive Management Team

Letter of Transmittal to the Board

Certificate of Achievement

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2014 COMPREHENSIVE ANNUAL FINANCIAL REPORT INDIANAPOLIS AIRPORT AUTHORITY

FOCUS ON CUSTOMER

SERVICE

One key to growing a

vibrant community is having a

world-class transportation system.

In 2014, the Indianapolis International Airport

was recognized as the “Best Airport in

North America” for the fourth time.

By being the gateway to the West, IND is

perfectly situated to serve our community,

the U.S. and the world.

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INDIANAPOLIS AIRPORT AUTHORITY BOARD

Michael W. Wells, PresidentPresident, REI Real Estate Services, LLC Years of service: 19, 11 as Board President

Kelly J. Flynn, Vice President Principal Partner, Flynn & Zinkan Realty Company Years of service: 11

Alfred R. Bennett, Secretary President, Bennett Associates Criminal Justice Consulting Firm Years of service: 10

Dr. Philip C. Borst Owner, Shelby Street Animal Clinic President, Indiana Veterinary Medical Assoc. Years of service: 3

Jean Wojtowicz President, Cambridge Capital Management Corp. Years of service: 6

Jack Morton Retired, Information Technology Professional Years of service: 11 Hancock County

Steven C. Dillinger Owner, S.C. Dillinger & Associates Insurance Agency Years of service: 18Hamilton County

Karen Caswelch Vice President, MatterFabBusiness Development Years of service: 3

Brett Voorhies President, Indiana AFL-CIO Years of service: 1

ADVISORY BOARD MEMBERLynn T. Gordon President & CEO, Citizens Bank Years of service: 11 Morgan County

IAA Board of Directors

Mario Rodriguez Executive Director

Jamie LeapSr. Administration Assistant

Maria Wiley Sr. Director of Audit & Compliance

Reid GoldsmithSr. Director of Information Technology

Robert ThomsonSr. Director of

Finance

Michael Medvescek

Sr. Director of Operations

Marsha Stone

Sr. Director of Commercial Enterprise

Joseph Heerens

General Counsel

Shannetta Griffin

Sr. Director of Planning &

Development

James KeoughSr. Director of Human Resources

ORGANIZATIONAL STRUCTURE

Mario Rodriguez Executive Director 1 year of service

Michael Medvescek Sr. Director of Operations 25 years of service

Marsha Stone Sr. Director of Commercial Enterprise 21 years of service

Robert Thomson Sr. Director of Finance 9 years of service

Joseph Heerens General Counsel 5 years of service

Reid Goldsmith Sr. Director of Information Technology 6 years of service

James Keough Sr. Director of Human Resources 4 years of service

Shannetta Griffin Sr. Director of Planning & Development 2 years of service

Maria Wiley Sr. Director of Audit & Compliance 17 years of service

EXECUTIVE MANAGEMENT TEAM


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FOSTERING ECONOMIC

IMPACT

Small Business is the lifeblood

of any town or city. The Indianapolis Airport

Authority believes in supporting local

businesses. IND does its best to

purchase products and services that are based

right here in Indiana. Many of the stores and

restaurants within the airport are local small

businesses looking to reach a

global audience.

Another way IND encourages

business growth is by making prime real estate

available for commercial development.

This in turn will provide an increase in the

area’s tax base to support local schools

and public works. With economic

growth, Indianapolis communities create

new cycles of prosperity.

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7800 Col. H. Weir Cook Memorial Dr. Suite 100 • Indianapolis, Indiana 46241office 317.487.9594 • fax 317.487.5034

June 30, 2015

TO THE MEMBERS OF THE BOARD:The Comprehensive Annual Financial Report (CAFR) of the Indianapolis Airport Authority (Authority or IAA), for the fiscal years ended December 31, 2014 and 2013, is submitted herewith. Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the Authority and its management. To the best of our knowledge and belief, this report, in all material aspects, fairly presents and discloses the Authority’s financial position, results of operations, and cash flows as of and for the years ended December 31, 2014 and 2013, in accordance with the requirements of the accounting principles generally accepted in the United States of America (GAAP).

GAAP requires that management provide a narrative overview and analysis to accompany the financial statements in the form of a Management’s Discussion and Analysis (MD&A). This introductory letter should be read in conjunction with the MD&A, which can be found immediately following the Independent Auditor’s Report on Financial Statements and Supplementary Information in the financial section of the CAFR.

This CAFR has been prepared following the guidelines recommended by the Government Finance Officers Association of the United States and Canada (GFOA). All financial and non-financial information included in this CAFR relates solely to the Authority unless specifically stated otherwise. It is our belief that the accompanying 2014 Comprehensive Annual Financial Report meets program standards, and will be submitted to the Government Finance Officers Association for review.

Independent Audit At the close of each calendar year, an independent firm of certified public accountants audits the Authority’s financial statements. In addition, the Indiana State Board of Accounts retains the right to audit the Authority. In connection with the Authority’s federal financial assistance, a Single Audit (A-133) is performed and reports are issued to the U.S. Department of Transportation (the federal oversight agency), the Federal Aviation Administration, the U.S. Department of Homeland Security, the Transportation Security Administration, and the Indiana State Board of Accounts by the independent certified public accountants under contract to the Authority.

Internal Controls The Authority’s management is responsible for the establishment and maintenance of internal accounting controls that ensure assets are safeguarded and financial transactions are properly recorded and adequately documented. To ensure that the costs of controls do not exceed the benefits obtained, management is required to use cost estimates and judgments to attain reasonable assurance as to the adequacy of such controls. The Authority has established internal controls to fulfill these requirements and these controls are reviewed annually by an external audit firm for applicability, relevance, and effectiveness.

PROFILE OF THE AUTHORITYOrganizational Structure and Governance The Authority is a municipal corporation that was established on January 1, 1962, to own and operate airports in and around Indianapolis, Indiana. More information is included in the Management’s Discussion and Analysis – Authority Powers and Purposes. The Authority administers an airport system comprised of the Indianapolis International Airport (IND), three general

aviation reliever airports, one general aviation airport and one general aviation reliever heliport located in downtown Indianapolis. The Authority is a separate reporting entity and is not a component of Indianapolis’ consolidated government (Unigov) or any other government. You may also refer to Note 1 of the financial statements for more information regarding the financial reporting entity determination under the Government Accounting Standards Board (GASB) Statement No. 14, as amended by GASB Statement No. 61.

The Authority’s Board consists of nine voting members and one non-voting, advisory board member. Each member is appointed to a four-year term.

Accounting/Budgetary Control The Authority consists of a single enterprise fund and its financial statements are presented on the accrual basis of accounting using the economic resources measurement focus. This CAFR, and each of the Authority’s monthly financial statements, use the accrual method preferred for enterprise funds. Annual budgets and monthly budget reports are also prepared using the accrual basis of accounting. The Authority’s annual operating budget is prepared by the IAA Finance Department in concert with management and is ultimately adopted by ordinance upon approval of the Authority Board. The budget is also submitted to the Indianapolis/Marion County City-County Council as part of the review process. The State of Indiana Department of Local Government Finance reviews the budget in the same manner. Public hearings are held at each step of the review process and a notice of said hearings is published in accordance with Indiana law. In addition, a long-term Capital Improvement plan is prepared annually utilizing estimates of future capital improvements and their financial impact. Budgetary control is maintained at the fund, function and department level.

ECONOMIC CONDITIONS AND OUTLOOKState of the Airline Industry 2014 saw the U.S. airline industry post solid results. The changes that U.S. carriers have made since the start of the global recession in 2008 helped the industry make a profit for the fifth year in a row. The biggest change that U.S. passenger airlines have made is the shift in focus from increasing market share to one of boosting shareholder return on investment. The U.S. airline industry has become more nimble in adjusting capacity either upward or downward to seize opportunities or minimize losses.

LETTER OF TRANSMITTAL

Demand for air travel in 2014 grew at a modest pace amid an improving economic environment in the U.S. In 2014, commercial air carrier domestic enplanements were up by 2.1%, while international enplanements were up 3.4%. The system-wide load factor rose to 83.4% (up 0.2 points from 2013). Domestic enplanement market share continued to rise for low-cost, network, and “other” carriers in 2014, while regional carrier share decreased. Improving yields, helped by continued capacity restraint by the carriers, helped boost industry profits in 2014. Data for 2014 shows that the reporting passenger carriers had a combined operating profit of $14.9 billion (compared to a $9.6 billion operating profit for FY 2013).

Worldwide air cargo demand increased by 4.6%, assisted by continued lower fuel prices. U.S. air carriers, experienced flat growth in 2014. Although domestic cargo volumes gained 2.3% in 2014, those advances were offset with international cargo volumes dropping by 1.2%. U.S. air cargo saw a shift towards shipping more cargo on commercial airlines than all-cargo operators. Commercial airline belly cargo saw a 7.0% increase in 2014 volumes, while all-cargo operators saw a 1.8% decrease in their volumes.

STATE OF INDIANAPOLIS AIRPORT AUTHORITY Passenger and Cargo Volume 2014 passenger volume at IND experienced a slight increase of 2.0% from 2013 to 7.4 million passengers. IND averaged 132 daily departures in 2014, down 2.8% from 2013, while capacity increased 2.2% to 12,554 average daily seats. Six of the airport’s signatory airlines improved their traffic numbers from 2013 with American (12.0%), US Airways (3.7%), and United (1.0%) posting the largest 2014 increases at IND. Frontier posted the only signatory airline decline in passenger enplanements at IND during 2014 with a decline of almost ten thousand passengers (-7.9%).

Overall cargo volume at Indianapolis International showed a slight increase in 2014 at nearly 1.1 million tons, an increase of 0.8% compared to the previous year. FedEx remained the largest contributor of cargo volume at 97.4%, followed by Cargolux at 1.8%.

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MAJOR INITIATIVES & DEVELOPMENT

Local Economic Catalyst In 2014, the IAA announced an initiative to stimulate the local economy by putting land back onto local tax rolls. The Authority will divest or lease portions of its 9,000 acres, allowing new opportunities for economic development groups, businesses, and neighbors. This initiative has the potential to generate $1.7 million in annual tax revenues for the local communities, schools, and other public services. During this redevelopment process, the IAA will continue to work in accordance with local residents, businesses, community leaders, and municipal officers in order to optimize community growth and development.

IND Solar Farm IAA announced that IND is now home to the largest airport-based solar farm in the world. The two-phased expansion project, which began in 2011, is now complete and fully operational. The 86-acre solar farm is comprised of 76,228 sun-tracking panels and is responsible for producing more than 31 million kilowatt hours of electric energy (17.50 MW AC or 22.25 MW DC power), enough to power more than 3,200 homes each year.

As a result, Urbanful, a magazine recognizing evolving cities in America, has named the Indianapolis International Airport one of America’s greenest airports. The IND Solar Farm and Urbanful’s recognition reflect the IAA’s longtime commitment to sustainability and integrating environmental, economic and community concerns into its decision making.

TSA Safety Film Features IND During September, the Transportation Security Administration (TSA) and the Authority worked together to create a training video which will be used to train TSA personnel and other airport stakeholders nationwide. IND emergency responders had the opportunity to participate in a variety of training scenarios, enhancing their safety regulations and procedures. The Indianapolis Airport Authority will continue to develop and strengthen its partnership with TSA, while maintaining the highest standard of safety for all Indianapolis travelers.

AWARDS AND ACKNOWLEDGEMENTSAs a result of IAA’s goal to “Foster World Class Service to Enhance our Community”, 2014 was another award-winning year for IND.

Accessibility Award Mayor Greg Ballard and members of the Mayor’s Advisory Council recognized the Indianapolis International Airport staff for their commitment to providing accessible transportation for Indianapolis travelers. This annual award is part of the Indianapolis Access and Inclusion Awards, which honors businesses and individuals that strive to make Indy a disability-friendly city. IAA is honored to be chosen for this prestigious award and will continue to seek innovative ways to create a more accommodating travel experience at IND.

Excellence in Performance Award For the third consecutive year and the fourth time overall, Airports Council International (ACI) named IND 2014’s Best Airport in North America as part of its prestigious annual Airport Service Quality (ASQ) awards for performance excellence. The ASQ program has become the world’s leading airport passenger satisfaction benchmark with over 300 airports participating. The ASQ Awards recognize and reward airports based on ACI’s ASQ passenger satisfaction surveys and their commitment to continuous improvement of the passenger experience.

Outstanding Snow Management Award While more than 50 inches of snow fell on IND during the winter of 2013-2014, the airport’s dedicated snow team worked diligently to keep the airfield open and operating safely throughout the winter season. As a result of their efforts, IND was awarded the Balchen / Post award for Medium Commercial airports for the third time since the program’s inception 38 years ago. The Balchen / Post award is awarded annually to U.S. airports leading the industry in improved snow and ice control. All categories of airports compete for these awards and recommendations may come from the traveling public, airlines, pilots, or anyone in the aviation community. IND is grateful for the dedicated employees who kept the airport open inside and out during this record-breaking season. This award is a direct reflection of their diligent efforts, steadfast commitment, and unwavering dedication.

Airport Concession Indianapolis International was again recognized for its world-class concessions program among small U.S. airports (those with less than four million enplaned passengers) in 2014. Airport Revenue News (ARN), a monthly trade magazine, awarded the IAA a first-place ranking in the following categories:

• Best Overall Concession Program – four-time recipient

• Best Concessions Program Design – four-time recipient

• Best Concessions Management Team – three-time recipient

• Best Customer Service – three-time recipient

IND has won ARN’s Best Airport & Concession Awards in five of the last six years since the terminal was opened in the fall of 2008. IND will continue to offer world-class customer service and customer options to all travelers, making their experience at Indianapolis International Airport positive and memorable.

Best Airport in America Condé Nast Traveler, a national travel publication, also recognized IND as the Best Airport in America for 2014. The title “Best Airport in America” is awarded to the facility with the best functionality, design, and general ease of use, and is decided upon by the publication’s readers. IND’s security checkpoints have allowed Indianapolis travelers to efficiently pass through TSA safety procedures and onto their concourse. Once inside their concourse, travelers are able to experience some of Indy’s favorite cuisine. With continual support from the local community and airport staff, IND consistently works to elevate the travel experience by maintaining a safe, clean and dependable facility.

Certificate of Achievement The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the Indianapolis Airport Authority for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended December 31, 2013. This was the 32nd consecutive year that the Authority has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized CAFR. This report must satisfy both accounting

principles generally accepted in the United States of America and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. Management believes our current Comprehensive Annual Financial Report continues to meet the Certificate of Achievement Program requirements, and will be submitted to the GFOA to determine its eligibility for another certificate.

Acknowledgments The timely completion of this report could not be accomplished without the assistance and dedication of many individuals. The IAA acknowledges the assistance of BKD, LLP, Certified Public Accountants and the Indianapolis Airport Authority staff for their assistance in making this financial presentation possible.

Appreciation is also expressed to the Authority Board members for their continued support of accounting and reporting in accordance with accounting principles generally accepted in the United States of America.

Respectfully submitted,

Robert Thomson Treasurer and Senior Director of Finance

With its Midwest location, IND understands how important agriculture is to

the local economy and to food that is produced for the U.S. and the world.

There is a growing threat to our food supply – the vanishing populations

of honey bees. Without honey bees, which are crucial to pollinating fruits, nuts and

vegetables in our diets, our nation could lose $15 billion worth of crops

which could impact our food security. The Indianapolis Airport Authority is committed

to sustainability and is setting up a honey bee apiary within 2,000 acres of

protected habitat land at IND.

By working with local nonprofit organizations, such as the White Lick Beekeepers Association,

IND is doing its part to support the honey bee population and to bring attention to the critical problem of disappearing honey bees.

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FOCUS ON LONG-TERM

SUSTAINABILITY

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Art and culture feed the soul

and is used to express humanity, tell stories

and communicate new points of view.

Art enhances lives and touches hearts.

The Indianapolis Airport Authority supports

local visionaries by providing them a

global stage for their works and performances

to enhance the experience of our visitors.

IND proudly presents the works of

these artists, musicians and performers

to show the world the wonderful

talent Indiana has to offer.

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FOCUS ON COMMUNITY

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FINANCIAL SECTION Independent Auditor’s Report

Management’s Discussion and Analysis Audited Financial Statements Supplementary Information

Independent Auditor's Report

To the Members of the Board Indianapolis Airport Authority Indianapolis, Indiana

We have audited the accompanying basic financial statements, which are comprised of balance sheets as of December 31, 2014 and 2013, and the related statements of revenues, expenses and changes in net position and of cash flows for the years then ended and the related notes to the basic financial statements, as listed in the table of contents, of Indianapolis Airport Authority (Authority).

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

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MANAGEMENT’S DISCUSSION AND ANALYSIS December 31, 2014 | (Unaudited)

The following discussion and analysis of the financial

performance and activity of the Indianapolis Airport

Authority (Authority) is to provide an introduction

and overview that users need to interpret the financial

statements of the Authority as of and for the years ended

December 31, 2014 and 2013. This discussion has

been prepared by management and should be read in

conjunction with the financial statements and the notes

thereto, which follow this section.

AUTHORITY POWERS AND PURPOSES

In 1962, the City Council of the City of Indianapolis (City),

the Mayor of the City and the County Council of Marion

County (County) created the Authority pursuant to the

Authority Act as a municipal corporation, separate from

the City and the County. The Authority Act authorizes

the Authority to own and operate public airports. The

Authority is empowered to do all things necessary or

reasonably incident to carrying out the purposes of

the Authority Act, including the power to: (i) acquire,

establish, construct, improve, equip, maintain, control,

lease and regulate municipal airports, landing fields and

other air navigation facilities, either inside or outside the

County; (ii) manage and operate airports, landing fields

and other air navigation facilities acquired or maintained

by the Authority; (iii) adopt a schedule of reasonable

charges and collect them from all users of facilities and

services within the County; (iv) lease all or any part of an

airport, landing field or any buildings or other structures,

and fix, charge and collect rentals, tolls, fees and charges

to be paid for the use of the whole or a part of the

airports, landing fields or other air navigation facilities by

aircraft landing there and for the servicing of the aircraft;

(v) make rules and regulations, consistent with laws

regarding air commerce, for management and control of

its airports, landing fields, air navigation facilities and other

property under its control; and (vi) incur indebtedness in

accordance with the Authority Act.

The operations of the Authority depend heavily on

revenues received from airlines serving Indianapolis

International Airport. Airlines are given the option

to sign an Agreement and Lease of Premises (Airline

Agreement), which sets forth rates and charges for use

of Authority assets and which utilizes a residual rate-

making methodology. The residual nature of the Airline

Agreement essentially requires the airlines to assume

certain financial risks to guarantee the Airport has sufficient

revenue to cover all operating and capital borrowing costs.

In return, the Authority has less autonomy over capital

asset development decisions in that the airlines have the

ability to delay and, in certain instances, veto certain

proposed capital improvement projects at the Airport. As

of December 31, 2014, seven passenger carriers and two

cargo carriers represent the Signatory Airlines.

The Authority and the Signatory Airlines negotiated

a new Airline Agreement in 2010. This new Airline

Agreement was approved by the Authority Board on

October 15, 2010 and is effective from January 1, 2011

through December 31, 2015. Airlines that sign the Airline

Agreement are subject to favorable Signatory rates, as

opposed to the Authority’s Non-Signatory rates.

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Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Indianapolis Airport Authority as of December 31, 2014 and 2013, and the changes in its financial position and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and pension information listed in the table of contents be presented to supplement the basic financial statements. Such information, although not part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements and other knowledge we obtained during our audits of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information

Our audits were conducted for the purpose of forming an opinion on the financial statements that collectively comprise the Authority's basic financial statements. The supplementary information listed in the table of contents, is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements as a whole.

Other Information

Our audits were conducted for the purpose of forming an opinion on the basic financial statements as a whole. The Introductory and Statistical Sections listed in the table of contents is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it.

Indianapolis, Indiana April 6, 2015

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2014 2013 Variance

Enplaned passengers 1 3,686,245 3,598,718 2.4%

Landed weight (1,000 lb. units)

Passenger airlines 4,280,224 4,274,786 0.1%

Cargo airlines 5,356,686 5,275,642 1.5%

Total landed weights 9,636,910 9,550,428 0.9%

Aircraft operations 148,899 153,382 -2.9%

1– Includes domestic air carriers, international air carriers and air taxi/commuter flights

Airport Operations Activity & Financial Highlights

Airport Operations Activity

• In 2014, the number of enplaned passengers was 2.4%

higher than 2013. The increase from 2013 is primarily

attributed to a more robust local economy, including an

improving job market and competitive airfares driven

by increased air travel in both the business and leisure

passenger markets. Improved airline profitability was

influenced by decreasing fuel prices, which set the stage

to keep airfares down and resulted in airlines adding

additional seat capacity to meet increasing demand for

air travel.

• Passenger airlines accounted for approximately 44% of

total landed weight at the Authority in 2014, 45% in

prior year; cargo airlines accounted for the other 56%

during 2014 and 55% in 2013. Passenger airline landed

weight increased by 0.1% in 2014 from prior year;

cargo airline landed weight increased 1.5% from prior

year. FedEx continued to impact the growth in 2014

cargo landed weights with a shift in operating a higher

mix of wide-body cargo aircraft at the Indianapolis

International Airport (IND).

• Aircraft operations represent landings and takeoffs for

air carrier, air taxi and commuter, general aviation and

military operations. This activity decreased 2.9% over

the prior year. The largest decreases came from drops

in military and general aviation aircraft activity.

Authority Financial Highlights

• The Authority experienced a decrease in total assets of

approximately $52.6 million during 2014. This decrease

can be attributed to a number of changes in the balance

sheet including the normal decrease in capital assets

due to depreciation and a decrease in cash and cash

equivalents.

• Total liabilities decreased $37.4 million in 2014. This

change is primarily attributable to the reduction of bond

debt.

• The 2014 decrease in net position was $5.3 million

compared to a decrease of $2.0 million for 2013. 2014

resulted in a loss from operations of $13.7 million,

which is a $2.7 million decrease in the loss from

operations of $16.4 million in 2013. Net nonoperating

revenues (expenses) reflected an increase in net revenue

from 2013 of $1.4 million, driven by the reduction in

interest expense and the gain on disposal of capital

assets. Capital contributions, grants and charges

decreased by $7.3 million, primarily due to a decrease

in contributions from lessees of $9.4 million, and an

increase in federal and state grants of $2.0 million

from 2013.

Overview of Financial Statements The Authority only engages in business-type activities.

These are activities that are intended to recover all or a

significant portion of their costs through user fee charges

to external parties for goods or services. The Authority

reports its business-type activities in a single enterprise

fund, meaning that its activities are operated and reported

like a private-sector business.

The Authority’s financial report includes comparative

Balance Sheets, Statements of Revenues, Expenses and

Changes in Net Position and Statements of Cash Flows.

Also included are notes to the financial statements that

provide more detailed data. These financial statements

are prepared in accordance with accounting principles

generally accepted in the United States of America as

promulgated by the Governmental Accounting Standards

Board (GASB).

The net position of the Authority is comprised of these

categories:

• Net investment in capital assets – reflects the Authority’s

investment in capital assets (e.g. land, buildings,

machinery and equipment), less any related debt used

to acquire those assets that is still outstanding. The

Authority uses these capital assets to provide services to

the public; consequently, these assets are not available

for future spending.

• Restricted – represent resources that are subject to

external restrictions on how they may be used.

• Unrestricted – represent resources that may be used to

meet the Authority’s ongoing obligations to the public

and creditors.

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BALANCE SHEETS

The Balance Sheets present the financial position of the Authority at the end of the fiscal year and include all assets and

liabilities of the Authority. The net position of the Authority represents the difference between total assets and total

liabilities and is an indicator of the current fiscal health of the Authority. A summarized comparison of the Authority’s

assets, liabilities and net position at December 31, 2014, 2013 and 2012 follows:

2014 2013 2012

(Table Amount in Thousands)

Current assets - unrestricted $ 34,045 $ 31,260 $ 30,562

Current assets - restricted 55,220 63,511 51,009

Noncurrent assets

Capital assets, net 1,958,582 2,024,932 2,077,729

Other noncurrent assets 192,446 173,187 208,089

Total assets 2,240,293 2,292,890 2,367,389

Deferred outflows of resources 57,452 47,476 80,795

Total assets and deferred outflows

of resources $ 2,297,745 $ 2,340,366 $ 2,448,184

Current liabilities - payable from unrestricted $ 8,169 $ 7,956 $ 8,130

Current liabilities - payable from restricted 80,670 86,434 78,986

Noncurrent liabilities - payable from restricted 1,164,718 1,196,537 1,309,616

Total liabilities 1,253,557 1,290,927 1,396,732

Net position

Net investment in capital assets 868,463 883,951 884,122

Restricted 113,374 107,822 97,267

Unrestricted 62,351 57,666 70,063

Total net position 1,044,188 1,049,439 1,051,452

Total liabilities and net position $ 2,297,745 $ 2,340,366 $ 2,448,184

2014 to 2013 Comparative Balance Sheets Unrestricted current assets increased $2.8 million, which

is attributable to an increase of $2.8 million in grants

receivable. The decrease in restricted current assets of

$8.3 million primarily reflects a $9.4 million decrease in

restricted cash and cash equivalents.

Total noncurrent assets decreased by $47.1 million. This

change is primarily attributable to a $23.7 million increase

in restricted investments and a $76.4 million decrease in

depreciable capital assets.

Total deferred outflows of resources increased by $10.0

million, the result of an increase in the accumulated

changes in fair values of hedging derivative instruments of

$15.4 million and the amortization of deferred losses on

the refunding of bonds of $5.4 million.

Total current liabilities decreased by $5.6 million. The

current portion of debt and accrued interest on debt

decreased by $5.5 million. Total noncurrent liabilities

decreased $31.8 million, attributable to a decrease in the

value of the interest rate swap agreements of $30.2 million

and a decrease in bonds payable and other debt in the

amount of $62.0 million.

2013 to 2012 Comparative Balance Sheets Unrestricted current assets increased $0.7 million, which

is attributable to an increase of $1.0 million in grants

receivable and a decrease of $0.3 million in various other

receivables and deferred revenue. The increase in restricted

current assets of $12.5 million primarily reflects a $13.3

million increase in restricted cash and cash equivalents.

Total noncurrent assets decreased by $87.7 million. This

change is primarily attributable to a $12.6 million decrease

in unrestricted investments and a $52.4 million decrease

in depreciable capital assets. In addition, there was a

$14.5 million decrease in the value of the forward delivery

purchase agreements.

Total deferred outflows of resources decreased by $33.3

million, the result of a decrease in the accumulated

changes in fair values of hedging derivative instruments of

$29.9 million and the amortization of deferred losses on

the refunding of bonds of $3.4 million.

Total current liabilities increased by $7.3 million. The

current portion of debt and accrued interest on debt

increased by $8.8 million, accrued interest on debt

decreased by $1.1 million, and accounts payable from

restricted assets decreased $0.4 million. Total noncurrent

liabilities decreased $113.1 million, attributable to a

decrease in the value of the interest rate swap agreements

of $44.5 million and a decrease in bonds payable and

other debt in the amount of $68.6 million.

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2014 to 2013 Comparative Statements of Revenues, Expenses and Changes in Net Position The Statements of Revenues, Expenses and Changes in Net Position reflect the operating activity of the Authority for

the year using the accrual basis of accounting, similar to private sector companies. The change in net position is an

indicator of whether the overall fiscal condition of the Authority has improved or worsened during the year. The change

in net position for the years ended December 31, 2014 and 2013 was ($5.3) million and ($2.0) million, respectively. The

comparative analysis below is a summary of the Statements of Revenues, Expenses and Changes in Net Position for 2014

and 2013.

2014 2013 $ Variance % Variance

(Table Amounts in Thousands)

Total operating revenues $ 142,831 $ 139,660 $ 3,171 2.3%

Total non-operating revenues 51,587 53,496 (1,909) -3.6%

Total revenues 194,418 193,156 1,262 0.7%

Total operating expenses 156,503 156,023 480 0.3%

Net non-operating expenses 57,314 60,639 (3,325) -5.5%

Total expenses 213,817 216,662 (2,845) -1.3%

Loss Before Capital Contributions and Grants (19,399) (23,506) 4,107 -17.5%

Capital Contributions and Grants 14,148 21,493 (7,345) -34.2%

Increase (Decrease) in Net Position (5,251) (2,013) (3,238) 160.09%

Net Position, Beginning of Year 1,049,439 1,051,452 (2,013) -0.2%

Net Position, End of Year $ 1,044,188 $ 1,049,439 $ (5,251) -0.5%

Operating revenue in 2014 increased $3.2 million, or 2.3%

from prior year. This represents increases in activity-based

revenues along with applicable rental rate adjustments

reflected in airfield, increased automobile rental

commissions, parking revenues, rented buildings/other

and reliever revenues. This was offset by lower operating

expense reimbursements related to the Indianapolis

Maintenance Center.

Airfield revenue in 2014 of $21.7 million increased from

prior year by $0.2 million or 1.0%. The 2014 Signatory

landing fee rate of $1.88 was maintained from prior

year, as well as the 2014 Non-Signatory landing fee rate

of $2.82. Landing fee revenues from scheduled airlines

decreased $0.1 million or 1.4% attributable to the accrual

of airline incentive plans, offset by a slight increase in

passenger carrier landed weights of 0.9% from prior year.

Current year cargo carrier landing fee revenues exceeded

prior year by $0.1 million attributable to an increase in

cargo landed weights of 1.5%. Other airfield revenues

increased $0.2 million or 21.3% from prior year relating to

higher ground handling commissions.

Terminal complex revenues of $49.4 million were flat with

prior year. Airline terminal rental rates were maintained

at the prior year rate of $91.68 per square foot, however,

terminal space rental revenues decreased $0.3 million

or 1.2% due to the accrual of airline incentive plans.

Automobile rental commissions were higher than prior

year by $0.3 million or 3.2% attributable to an increase in

enplaned passengers of 2.4% and greater car rental usage

from business travelers than prior year.

Parking revenues increased from prior year by $2.8 million

or 6.8%, resulting in $43.5 million in 2014 parking

revenue. Year-to-date enplaned passengers exceeded prior

year by 2.4%, as well as product mix differences and yields

higher than prior year.

Rented buildings and other revenues of $15.9 million

increased $0.3 million or 1.8%. The increase is attributable

to the new solar farm II agreement and various new and

renegotiated ground lease agreements including the

Airport Plaza.

Revenues from Indianapolis Maintenance Center (IMC) of $9.2 million decreased by $0.2 million or 2.1%. This

represents revenues due the Authority for reimbursement

of eligible expenditures under the terms of the Settlement

Agreement reached between the Authority and the trustee

for the special facility revenue bonds the Authority had

previously issued on behalf of United Airlines. Decrease

from prior year relates to percentage rent received in the

prior year and not in 2014.

Reliever airports revenue of $3.1 million increased $0.1

million or 4.9% representing an increase in fuel sales and

farm revenue.

Federal operating grant income of $1.0 million increased

$0.2 million attributable to the 2014 reimbursement from

Federal Emergency Management Agency (FEMA) for 75%

of operating costs submitted for a 48-hour period related

to a severe winter storm in January 2014.

Passenger facility charges (PFC) income of $14.6 million

increased $0.2 million or 1.2%. This increase is due to an

increase in passenger numbers and ticket sales as

PFC revenues are earned when tickets are sold, and an

increase in military charter activity, which are not subject

to the PFC.

Customer facility charges (rental cars) income of $6.4

million increased $0.3 million or 5.6%. Increase is due to

higher passenger enplanements and an increased number

of transactions.

Investment income of $2.7 million decreased $2.6 million.

This was attributable to the year-end GASB 53 adjustment

of $1.3 million on the basis swap market valuation.

Additionally, due to partial terminations of forward

delivery agreements in late 2013 and in 2014 due to lower

debt service reserve requirements on two series of bonds,

investment earnings were reduced.

Operating expenses for the years ended December 31,

2014 and 2013 totaled $62.4 million and $60.2 million,

respectively. The following analysis explores material

operating expense change by both operating expense

classes and operating expenses business area.

Operating expenses (before depreciation) increased $2.2

million or 3.6%. Total personal services expense decreased

1.0% or $0.3 million to $26.3 million primarily due to

lower full-time staff equivalents than prior year and lower

health insurance claims associated with the self-funded

plan. Total contractual services expense increased 5.6% or

$1.0 million to $18.2 million due to higher professional

fees relating to Environmental, Parking Marketing, Air

Service and Information Technology strategic initiatives,

as well as greater outsourced contract services including

snow removal, taxiway and runway repairs, and parking

garage washing/restriping. Total utilities expense of $9.4

million increased by $1.0 million or 11.2% primarily

driven by the severe weather in the first quarter of 2014

and increased usage of electricity, natural gas and sewer

charges related to glycol processing. Total supplies expense

of $4.0 million increased slightly by $0.1 million driven by

increased usage of snow and ice chemical. Total materials

expense increased by $0.5 million to $2.4 million reflecting

higher airfield painting materials and light replacements

as well as increased airfield vehicle and shuttle bus repairs

than prior year. Total general expense of $2.1 million was

flat with the prior year.

Airfield expenses (before depreciation) of $8.5 million

increased $0.7 million, or 9.1% from the prior year.

Variance due to snow related operations during the severe

winter weather in the first quarter of 2014 and resulting

increases in sewage costs for glycol processing and snow

equipment repairs and replacement parts. Current year

also had an increase in outsourced contract services

relating to taxiway B repairs, retexturing runway 23L & 5R

touchdown area, and removal of numerous dead trees on

airport property due to Ash Borer.

Terminal complex expenses (before depreciation) of $14.6

million increased $0.4 million, or 2.5% from the prior

year. Variance attributable to higher utility costs, grease

trap remediation in the retail concessionaire’s area, and

replacement of doors and trash receptacles in the terminal.

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Parking expenses (before depreciation) of $7.7 million

increased $0.7 million, or 10.1% from the prior year.

Increase attributable to consulting, marketing and

software/hardware maintenance costs in support of the

parkIND Plus program, as well as shuttle bus repairs,

outsourced contract services for snow removal and parking

garage washing/restriping, and higher credit card fees

associated with increased parking revenues.

Rented buildings and other expenses (before depreciation)

of $1.1 million remained flat with prior year. Current year

reflects increases in professional fees related to property

appraisals, utilities, and pavement repairs, offset by an

accrual reduction for anticipated GASB 49 environmental

remediation expenses as several projects closed requiring

no further action.

Indianapolis Maintenance Center (IMC) expenses (before

depreciation) of $7.5 million decreased $0.5 million,

or 6.0%, primarily due to lower costs associated with

management and operation of the Central Energy Plant,

and expiration of the amortization of lease enticement

costs during 2014.

Reliever airports expenses (before depreciation) of $1.7

million increased $0.2 million, or 15.7% from prior year.

Variance due to snow-related operations during the severe

winter weather in the first quarter of 2014 and resulting

increases in outsourced contract snow removal services,

utilities, snow and ice chemical, and snow equipment

repairs and replacement parts, as well as garage repairs at

the Indianapolis Heliport.

Public safety expenses (before depreciation) of $9.8 million

increased $0.1 million, or 0.6% from prior year. Variance

primarily related to an increase in vehicle repairs and

communication equipment.

Administration costs (before depreciation) of $11.5 million

increased $0.6 million, or 5.5% from prior year. Variance

due to an increase in legal fees, professional fees relating

to Air Service, Information Technology strategic initiatives,

and Airline Use Agreement renewal negotiations, as well as

greater Air Service print/advertising/marketing costs and

bad debt expense.

Depreciation expense of $94.1 million decreased $1.7

million, or 1.8%, attributable to various information

technology equipment associated with the new terminal

now fully depreciated. This was offset by a full year of

depreciation on the Comlux Hanger and various other

assets that were placed into service at the end of 2013 and

the first of 2014.

Interest expense of $57.9 million decreased $0.3 million

over the prior year, or 0.4%; a net effect of various

increases and decreases of interest expense over the

year. The issuance of the 2014 refunding revenue bonds

increased interest expense by $1.8 million and added

$1.1 million in costs of issuance and bond-related costs.

These increases were netted against $1.2 million in savings

in interest due to the amortization of debt and natural

reduction in interest expense, savings from a partial

refunding of the 2006A Bonds in late 2013 of $0.9 million

and savings of $1.1 million on non-cash interest expense

related to pass-through debt.

Gain (loss) on disposals of capital assets and other of

$0.6 million increased $3.1 million over the prior year.

Prior year included expensing the cost of the old terminal

demolition of $5.3 million and only $0.1 million was

expensed in 2014. Insurance claim reimbursements were

also lower than prior year.

Capital contributions and grants of $14.1 million

decreased $7.3 million compared to prior year. Prior

year included higher contributions from leased property

tenant improvements. This decrease was offset by higher

federal and state grant revenues in 2014 due to timing of

completion of projects and related funding received.

2013 to 2012 Comparative Statements of Revenues, Expenses and Changes in Net Position The change in net position for the years ended December 31, 2013 and 2012 was $(2.0) million and $9.2 million,

respectively. The comparative analysis below is a summary of the Statements of Revenues, Expenses and Changes in

Net Position for 2013 and 2012.

2013 2012 $ Variance % Variance

(Table Amounts in Thousands)

Total operating revenues $ 139,661 $ 138,258 $ 1,403 1.0%

Total non-operating revenues 53,496 54,166 (670) -1.2%

Total revenues 193,157 192,424 733 0.4%

Total operating expenses 156,022 156,022 – 0.0%

Net non-operating expenses 60,641 60,754 (113) -0.2%

Total expenses 216,663 216,776 (113) -0.1%

Loss Before Capital Contributions and Grants (23,506) (24,352) 846 -3.5%

Capital Contributions and Grants 21,493 33,571 (12,078) -36.0%

Increase (Decrease) in Net Position (2,013) 9,219 (11,232) -121.8%

Net Position, Beginning of Year 1,051,452 1,042,233 9,219 0.9%

Net Position, End of Year $ 1,049,439 $ 1,051,452 $ (2,013) -0.2%

Operating revenue in 2013 increased $1.4 million, or

1.0% from prior year. This represents increases in activity-

based revenues consisting primarily of airfield and

parking revenues as well as increased operating expense

reimbursement revenue related to the Indianapolis

Maintenance Center. This is offset by a decrease in

terminal complex revenues and rented buildings and other

revenues.

Airfield revenue in 2013 of $21.5 million increased from

prior year by $0.4 million or 1.7%. Total landed weights

increased a net 1.6% from prior year as passenger carriers

decreased 3.9% and cargo carriers increased 6.6%. The

2013 Signatory landing fee rate decreased 1.1% to $1.88

from $1.90 in 2012. The 2013 Non-Signatory landing fee

rate decreased to $2.82, as compared to the 2012 rate of

$2.85. Apron rental revenue was lower than prior year by

$0.2 million, or 19.0%, as the 2013 rental rate was $0.34

per square foot as compared to $0.57 in 2012.

Terminal complex revenues of $49.9 million were

essentially flat with prior year with a slight decrease of

0.8%. Airline terminal rental rates decreased in 2013

to $91.68 per square foot compared to the prior year

rate of $92.80 per square foot. Concessionaire revenues

were greater than prior year by $0.1 million, offsetting

the decrease in airline terminal rental. This was primarily

related to an increase in performance from Granite City,

Champps, Starbucks and Harry & Izzy’s.

Parking revenues increased from prior year by $1.1 million

or 2.9%, resulting in $39.5 million in 2013 parking

revenue. Year-to-date enplaned passengers were below

prior year by 2.4% contributing to the decrease, offset

significantly by a higher yield per passenger attributed

to an increase in the average duration of stay and use of

higher priced offerings.

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Rented buildings and other revenues decreased by $0.2

million or 1.5% attributable to the prior year including

an initial contract payment of $0.8 million for the solar

farm lease. This was offset by new 2013 leases for the

Airport Plaza, M&M Transport and Maxim Crane Works. In

addition, the variance was due to promotional revenues,

which related to the 2012 Super Bowl that were not

earned in 2013.

Revenues from Indianapolis Maintenance Center (IMC) increased by $0.6 million or 7.0%. This represents

revenues due to the Authority for reimbursement of

eligible expenditures under the terms of the Settlement

Agreement reached between the Authority and the trustee

for the special facility revenue bonds the Authority had

previously issued on behalf of United Airlines. Additional

hanger bay activation days have attributed to the increase

over the prior year.

Reliever airports revenues decreased by $0.06 million or

1.9%, attributable to decreased fuel sales and lower farm

revenues.

Passenger facility charges (PFC) income decreased $0.1

million. This decrease is due to lower passenger numbers

and ticket sales as PFC revenues are earned when tickets

are sold, and an increase in military charter activity, which

is not subject to the PFC.

Investment income decreased $0.4 million or 7.8%. This

was attributable to the year-end GASB 53 adjustment

of the basis swap market valuation, as well as interest

received and discounts on purchased investments being

lower.

Operating expenses for the years ended December 31,

2013 and 2012 totaled $60.2 million and $60.7 million,

respectively. The following analysis explores material

operating expense changes by both operating expense

class and operating expense business area.

Operating expenses (before depreciation) decreased $0.5

million and totaled $60.2 million. Total personal services

expense decreased 9.1% or $2.7 million to $26.5 million

primarily due to the one-time costs associated with the

2012 Super Bowl in the prior year. Total contractual services

expense increased 7.3% or $1.2 million to $17.2 million

due to the $1.4 million reduction in expected future GASB

49 environmental remediation expenses.

Total utilities expense increased by $0.5 million. Total

general expense increased by $0.3 million to $2.1 million

reflecting higher insurance and bad debt costs.

Terminal complex expenses (before depreciation) decreased

$0.1 million, or 0.7% from the prior year. The variance

primarily relates to an increase in employee insurance and

salaries of approximately $0.3 million.

Rented buildings and other expenses (before depreciation)

increased $1.4 million, or 546.5% from prior year.

This primarily represents an increase of $1.5 million in

other contractual services due to upgrades of several

environmental and maintenance systems.

Indianapolis Maintenance Center (IMC) expenses (before

depreciation) decreased $0.2 million, or 2.4%, primarily

due to lower maintenance and security expenses.

Electricity volumes were also lower than the prior year at

the Central Energy Plant as a result of seasonally shutting

down the air handlers.

Reliever airports expenses (before depreciation) decreased

$0.2 million, or 13.9% from prior year. Variance

attributable to decreased fuel costs along with decreased

costs related to pavement and grounds materials.

Administration costs (before depreciation) decreased $1.8

million, or 13.8% from prior year. In 2013, there was a

significant decrease in personal services of approximately

20.3%. In addition, contractual services were also lower by

approximately 13.3% as compared to prior year.

Depreciation expense increased $1.9 million, or 0.5%,

primarily attributable to the addition of several new assets

in 2013.

Interest expense decreased $6.3 million compared to prior

year, which is primarily attributable to the implementation

of GASB 65, which requires entities to expense issuance

costs related to bonds as incurred instead of amortize

over the life of the bond as well as the payoff of the 2003

Revenue Bonds and partial paydown of the 2006 Revenue

Bonds.

Gain (loss) on disposals of capital assets and other decreased $6.2 million or 164.8% over the prior year.

Prior year included lease settlement proceeds of $1.8

million and insurance claim reimbursements of $2.1

million related to the 2011 parking garage canopy

collapse event and the 2010 Comlux hangar fire. There

were no impairments during 2013.

Capital contribution and grants of $21.5 million

decreased $12.1 million compared to prior year. This is

associated with contributions from lessees lower than prior

year for leased property tenant improvements including

Building #53 for $15.0 million and the Comlux hangar for

$10.0 million.

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The following is a graphic illustration of operating revenues by source for the years ended December 31, 2014 and 2013: The following is a graphic illustration of the total operating expenses by source for the years ended December 31, 2014

and 2013 (excluding depreciation):

OPERATING REVENUES

2014

OPERATING EXPENSES

(Excluding Depreciation)

2014

OPERATING EXPENSES

(Excluding Depreciation)

2013

OPERATING REVENUES

2013

Parking – 30%

Personal Services – 42%

Personal Services – 44%

Parking – 29%

Indianapolis Maintenance Center (IMC) – 7%

Contractual Services – 29%

Contractual Services – 29%Indianapolis Maintenance Center (IMC) – 7%

Rented Buildings and Other – 11%

General – 3%

General – 4%

Rented Buildings and Other – 11%

Reliever Airports – 2%

Materials – 4%

Materials – 3%

Reliever Airports – 2%

Airfield – 15%

Supplies – 7%

Supplies – 6%

Airfield – 15%

Terminal Complex – 35%

Utilities – 15%

Utilities – 14%

Terminal Complex – 36%

IND knows time is money.

Anything that can be done to shorten

your travel time is a welcomed benefit. In

working with Airline partners, IND

has added several additional non-stop flights

to the schedule. New York City, Los Angeles,

Boston, Myrtle Beach, Dallas and

Pittsburgh are just a few of the

newest non-stop flights.

More non-stop flights make it more

convenient for Indy business and

leisure travelers to get where they want to

go, and for travelers to get to Indianapolis.

Saving time is important and provides

the opportunity to do more, see more,

and enjoy more.

INDIANAPOLIS AIRPORT AUTHORITY2014 COMPREHENSIVE ANNUAL FINANCIAL REPORT

FOCUS ON NON-STOPGROWTH

3938

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CAPITAL ASSET AND DEBT ADMINISTRATION

Capital Assets During 2014, the Authority expended approximately

$26.0 million on capital activities. This included $0.6

million for land acquisition and sound insulation costs

in conjunction with the Authority’s approved Part

150 Noise Compatibility Program. The balance of

capital expenditures related to multiple construction

and equipment acquisition projects, including the

rehabilitation of Taxiway D, expansion of the airport’s

stormwater system, replacement of shuttle busses, and

completing the Runway7-25 and Taxiway Extension at

Indianapolis Regional.

During 2014, completed projects totaling $15.5 million

were closed from construction-in-progress to their

respective capital asset accounts. The more significant of

these completed projects are as follows:

• Rehabilitation of Taxiway D .......................$4.7 million

• Rehabilitation of T-Hangar Taxilanes

at Indianapolis Regional ............................$2.2 million

• Building 7 Rehabilitations ..........................$0.9 million

• Eagle Hub Apron Rehabilitation .................$0.8 million

Note 4 to the financial statements provides additional

information on the Authority’s capital asset activity.

Long-Term Debt Capital acquisitions are funded using a variety of financing

mechanisms, including federal and state grants, passenger

facility charges, public debt issues and airport operating

revenues.

The Authority’s Master Bond Ordinance enables it to adopt

an ordinance or resolution irrevocably designating certain

revenues as Dedicated Revenues (which may include,

without limitation, PFC & CFC revenues, state and/or

federal grants, or other identified revenues) to be used to

pay debt service on Authority revenue bonds. Note 5 of

the financial statements explains the details of resolutions

adopted in 2009 and 2014.

As of December 31, 2014, the Authority had $1.05 billion

in outstanding senior lien bonds and no outstanding

subordinate securities. The Authority, through its Master

Bond Ordinance, has a covenant to maintain a debt

service coverage ratio of not less than 1.25 for senior

lien debt. Debt service coverage is calculated based on a

formula included in the Master Ordinance and the Airline

Agreements. Historically, the Authority has maintained

a coverage ratio higher than its requirement. During

2014 and 2013, respectively, the Authority’s debt service

coverage was 1.62 and 1.58 for senior lien debt.

Notes 5, 6, 7, 8 and 9 to the financial statements provide

additional information regarding the Authority’s debt

activities.

Economic Factors and Next Year’s Rates and Charges IND experienced a 2.4% increase in the number of

passenger enplanements over last year, resulting in total

2014 enplanements of 3,686,245. Increased airline

competition, a drop in fuel prices, and subsequent

airfare deals led to stimulation in IND passenger traffic.

The majority of the traffic increases occurred between

March and August, indicating that the airlines offered

additional capacity and fare deals to attract IND’s leisure

traveler during their peak travel season. Scheduled airline

passenger capacity was up 0.6% over 2013 and passenger

airline landed weights were up 0.3% over the previous

year. Although passenger performance and airline capacity

returned to near-2013 levels to finish the year, a flurry of

new airline route announcements, including new airlines

coming to IND, indicate that airline competition and

stimulated passenger travel levels can be expected for

2015.

IND is served by most major and several national airlines

operating at the majority of the domestic hubs. In

addition, point-to-point service is provided to major

business and leisure destinations, primarily in the Eastern

and Central U.S., and improved limited coverage on the

West coast. Two new IND market destinations launched

in 2014 when United Airlines initiated service to San

Francisco and Frontier began service into Trenton, NJ. An

announcement was also made in 2014 that a new airline,

Allegiant Air, would start operations from IND in 2015. In

late 2014, Southwest Airlines also announced new service

to Boston (BOS) and Los Angeles (LAX) from IND starting

in 2015, after launching Washington Reagan (DCA) service

in November 2014. The Authority remains significantly

an Origination and Destination (O&D) airport, with

approximately 96.2% of its traffic being generated by the

population and economy of the region, rather than the

schedule of service or hub operations of an airline.

In addition to passenger activity, the Authority continues

to benefit from the sustained activity of cargo operations,

which are significantly dominated by FedEx. IND’s position

as FedEx’s second largest hub has helped the airport

maintain high cargo landed weight levels, even during

more challenging/recovering economic periods. Cargo

volumes were up 0.8% and landed weight levels were up

1.2% as FedEx continued their transition at IND towards

scheduling a larger cargo aircraft mix, including 777, 767,

& MD11 aircraft.

Future increases in passenger and cargo traffic at the

Authority will be influenced by several key factors, which

include, but are not limited to, the following:

• Economic and political conditions

• Airline consolidation and alliances

• Aviation security concerns

• Availability and price of aviation fuel

• Financial health of the airline industry

• Capacity of the airport

• Airline service and routes

• Airline consolidation and alliances

• Airline competition and airfares

• Capacity of national air traffic control and airport

systems

Fuel costs and economic conditions can have a significant

effect on air travel and transportation industries. The

Authority cannot predict how future air travel may be

impacted by various economic or other factors or the

extent of any adverse impact on net revenues (gross

operating revenues, less operating and maintenance

expenses), passenger facility charge collections, passenger

enplanements, operations or the financial condition of the

Authority.

The anticipated passenger traffic in 2014 is based on those

trends seen during early 2013 and takes into account

load factors by carrier, average daily departures and seat

capacity, average nonstop fares, average fares by market,

airline communication, aircraft orders/retirements and

posted 2014 schedules via Innovata. The restructuring or

liquidation of one or more of the large network airlines

could drastically affect airline service at many connecting

hub airports, present business opportunities for the

remaining airlines, and change travel patterns throughout

the U.S. aviation system.

Request for Information: This financial report is designed

to provide a general overview of the Authority’s finances

for all those interested. Questions concerning any of

the information provided in this report or requests for

additional information should be addressed in writing

to the Senior Finance Director, 7800 Col. H. Weir Cook

Memorial Drive, Suite 100, Indianapolis, IN 46241-4941 or

via the “Contact Us” area of the Authority’s website www.

indianapolisairport.com.

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BALANCE SHEETS | December 31, 2014 and 2013

2014 2013

Assets and Deferred Outflows of Resources

Current Assets

Unrestricted Assets

Cash and cash equivalents $ 16,178,400 $ 14,817,334

Accounts receivable, net of allowance of $370,000 and $98,000, respectively 2,210,182 3,141,814

Unbilled revenues 2,336,519 2,966,738

Grants receivable 10,064,914 7,261,642

Supplies and materials inventories 1,584,607 1,456,145

Other 1,670,439 1,615,888

Total unrestricted current assets 34,045,061 31,259,561

Restricted Assets

Cash and cash equivalents 46,548,516 55,876,996

Cash and cash equivalents - customer deposits 684,200 784,428

Receivable - passenger facility charges 1,158,210 1,228,476

Receivable - governments and other 3,953,966 3,854,635

Receivable - reimbursable IMC expenses 2,875,098 1,767,048

Total restricted current assets 55,219,990 63,511,583

Total current assets 89,265,051 94,771,144

Noncurrent Assets

Cash and cash equivalents, restricted 75,382,143 92,224,783

Investment securities, unrestricted 34,832,891 32,256,989

Investment securities, restricted 61,409,160 37,755,022

Investment derivatives - basis swap agreements (365,256) 4,073,223

Rent receivable 1,642,454 1,988,198

Unamortized lease costs – 116,603

Derivative instruments - forward delivery purchase agreements 19,545,054 4,771,947

Nondepreciable capital assets 314,776,441 304,679,637

Depreciable capital assets, net 1,643,805,298 1,720,252,407

Total noncurrent assets 2,151,028,185 2,198,118,809

Total assets 2,240,293,236 2,292,889,953

Deferred Outflows of Resources

Deferred loss on refunding of debt 40,111,560 45,565,014

Accumulated decrease in fair value of hedging derivatives 17,340,139 1,911,064

Total deferred outflows of resources 57,451,699 47,476,078

Total assets and deferred outlfows of resources $ 2,297,744,935 $ 2,340,366,031

2014 2013

Liabilities and Net Position

Current Liabilities

Payable From Unrestricted Assets

Accounts payable $ 3,399,156 $ 3,685,708

Accrued and withheld items (including compensated absences) 4,770,206 4,270,013

Total current liabilities payable from unrestricted assets 8,169,362 7,955,721

Payable From Restricted Assets

Accounts payable 10,120,828 10,277,650

Customer deposits payable 685,200 785,428

Current portion of debt 54,309,282 56,302,096

Accrued interest on debt 15,554,329 19,069,096

Total current liabilities payable from restricted assets 80,669,639 86,434,270

Total current liabilities 88,839,001 94,389,991

Noncurrent Liabilities

Derivative instruments - interest rate swap agreements 84,528,941 54,326,759

Bonds payable and other debt, payable from restricted assets 1,080,189,160 1,142,210,328

Total noncurrent liabilities 1,164,718,101 1,196,537,087

Total liabilities 1,253,557,102 1,290,927,078

Net Position

Net investment in capital assets 868,462,597 883,951,100

Restricted for

Capital projects 44,481,210 34,944,858

Debt service 65,294,250 69,382,285

Other 3,598,732 3,495,080

Total restricted net position 113,374,192 107,822,223

Unrestricted 62,351,044 57,665,630

Total net position 1,044,187,833 1,049,438,953

Total liabilities and net position $ 2,297,744,935 $ 2,340,366,031

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STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION | Years Ended December 31, 2014 and 2013

2014 2013Operating Revenues Airfield $ 21,673,724 $ 21,468,743 Terminal complex 49,436,370 49,457,673 Parking 43,469,204 40,718,709 Rented buildings and other 15,947,294 15,659,448 Indianapolis Maintenance Center (IMC) 9,200,391 9,395,175 Reliever airports 3,104,534 2,960,507 Total operating revenues 142,831,517 139,660,255

Operating Expenses Personal services 26,261,096 26,533,176 Contractual services 18,185,285 17,228,486 Utilities 9,431,004 8,479,881 Supplies 3,986,625 3,903,816 Materials 2,423,047 1,932,201 General 2,089,473 2,124,562 Total operating expenses 62,376,530 60,202,122

Income From Operations Before Depreciation 80,454,987 79,458,133 Depreciation expense 94,126,914 95,820,684

Loss From Operations (13,671,927) (16,362,551)

Non-operating Revenues (Expenses) State and local appropriations 26,785,041 26,818,065 Federal operating grants 1,036,085 868,966 Passenger facility charges 14,645,121 14,473,637 Customer facility charges (rental cars) 6,442,212 6,097,820 Investment income 2,678,463 5,237,098 Interest expense, net of $185,169 and $267,153 interest capitalized in 2014 and 2013, respectively (57,935,260) (58,191,635) Gain (loss) on disposals of capital assets and other 621,023 (2,448,881) (5,727,315) (7,144,930)

Decrease in Net Position Before Capital Contributions and Grants (19,399,242) (23,507,481)

Capital Contributions and Grants Federal, state and local grants 12,327,394 10,321,815 Contributions from lessees and other 1,820,728 11,171,313 14,148,122 21,493,128

Decrease in Net Position (5,251,120) (2,014,353)

Net Position, Beginning of Year 1,049,438,953 1,051,453,306

Net Position, End of Year $ 1,044,187,833 $ 1,049,438,953

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STATEMENTS OF CASH FLOWS | Years Ended December 31, 2014 and 2013

2014 2013

Cash Flows From Operating Activities

Cash receipts from customers and users $ 143,993,483 $ 143,536,858

Cash payments to vendors for goods and services (36,512,733) (32,907,533)

Cash payments for employees services (26,176,289) (27,096,929)

Net cash provided by operating activities 81,304,461 83,532,396

Cash Flows From Noncapital Financing Activities

Operating grants received 1,000,018 964,172

Customer facility charges received 6,442,212 6,097,820

Insurance recoveries 393,324 2,668,128

Net cash provided by noncapital financing activities 7,835,554 9,730,120

Cash Flows From Capital and Related Financing Activities

Proceeds from issuance of revenue bonds 184,775,413 37,845,000

Principal paid on bonds (221,800,000) (73,410,000)

Bond issue costs paid (1,236,275) (419,650)

Interest paid (54,875,388) (52,728,659)

Acquisition and construction of capital assets (25,992,983) (31,944,835)

Demolition costs related to capital assets (135,179) (5,314,735)

Proceeds from sale of capital assets 192,492 41,433

Passenger facility charges received 14,715,387 14,494,496

Capital grants received 9,560,189 9,203,520

Net cash used in capital and related financing activities (94,796,344) (102,233,430)

Cash Flows From Investing Activities

Purchase of investment securities (188,139,399) (118,087,017)

Proceeds from sales and maturities of investment securities 163,552,770 129,377,080

Interest received on investments and cash equivalents 2,215,676 4,071,697

Cash received from monetization of investment derivative 3,117,000 –

Net cash provided by (used in) investing activities (19,253,953) 15,361,760

Net Increase (Decrease) in Cash and Cash Equivalents (24,910,282) 6,390,846

Cash and Cash Equivalents, Beginning of Year 163,703,541 157,312,695

Cash and Cash Equivalents, End of Year $ 138,793,259 $ 163,703,541

2014 2013

Reconciliation of Loss From Operations to Net Cash

Provided by Operating Activities

Loss from operations $ (13,671,927) $ (16,362,551)

Item not requiring cash

Depreciation of capital assets 94,126,914 95,820,684

Change in assets and liabilities

Accounts receivable and unbilled revenues 1,161,966 3,876,603

Supplies and materials inventories (128,462) 2,632

Other assets 62,052 451,908

Accounts payable (330,889) 306,873

Accrued and withheld items 84,807 (563,753)

Net cash provided by operating activities $ 81,304,461 $ 83,532,396

Noncash Capital and Related Financing Activities

Capital assets included in accounts payable at end of year $ 5,805,119 $ 6,009,674

Capital assets contributed by lessees and other governments 1,820,728 11,171,313

State and local appropriations used to fund capital lease

obligations and interest 26,779,302 26,812,442

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NOTES TO FINANCIAL STATEMENTS | December 31, 2014 and 2013

Note 1: Nature of Organization and Summary of Significant Accounting Policies

The Indianapolis Airport Authority (Authority) is a

municipal corporation established January 1, 1962,

under authority granted by Indiana statute (1961 Acts,

Chapter 283, I.C. 1979 19-6-2, superseded by I.C.

8-22-3). The Authority was established for the general

purpose of acquiring, maintaining, operating and

financing airports and landing fields in and bordering

on Marion County, Indiana. In connection therewith,

the Authority is authorized, among other things, to issue

general obligation and revenue bonds and to levy taxes

in accordance with the provisions of the statute. The

Authority administers an airport system comprised of the

Indianapolis International Airport, three general aviation

reliever airports, one general aviation airport and one

general aviation reliever heliport. The Authority has no

stockholders or equity holders and all revenue and other

receipts must be disbursed in accordance with such

statute.

The Authority’s Board consists of nine members, five of

which are appointed by the Mayor of the Consolidated

City of Indianapolis-Marion County (a unified form of

government commonly referred to as Unigov), one by

the majority leader of the City-Council, and one each by

the Hendricks, Hamilton and Hancock County Boards of

Commissioners. Each member is appointed a four-year

term. Also, the Board has one nonvoting, advisory board

member from Morgan County.

Use of Estimates The preparation of financial statements in conformity with

accounting principles generally accepted in the United

States of America requires management to make estimates

and assumptions that affect the reported amounts of

assets and liabilities and disclosure of contingent assets

and liabilities at the date of the financial statements and

the reported amounts of revenues and expenses during

the reporting period. Actual results could differ from those

estimates.

Financial Reporting Entity The definition of the reporting entity under Governmental

Accounting Standards Board (GASB) Statement

No. 14, The Financial Reporting Entity, as amended, is

based primarily on the concept of financial accountability.

Although the Mayor appoints a voting majority of the

Authority’s governing body, neither of the other two

tests of financial accountability are met. Unigov is unable

to impose its will on the Authority. Also, the Authority

does not impose a financial burden or provide a financial

benefit to Unigov. Careful review of these criteria,

therefore, has resulted in the conclusion that the Authority

is a separate reporting entity and is not a component of

Unigov or any other government.

Basis of Accounting and Financial Reporting The financial statements consist of a single-purpose

business-type activity, which is reported on the accrual

basis of accounting using the economic resources

measurement focus.

The Authority prepares its financial statements in

conformity with accounting principles generally accepted

in the United States of America as applied to governmental

units. GASB is the accepted standard-setting body for

establishing governmental accounting and financial

reporting principles.

Cash Equivalents For purposes of the statements of cash flows, the Authority

considers all highly liquid investments (including restricted

assets) with a maturity of three months or less when

purchased to be cash equivalents.

Investment Securities Investment securities are stated at fair value.

Unbilled Revenues The Authority accrues revenue for rentals earned but not

yet billed as of year-end.

Inventories Inventories of supplies and materials are valued at average

cost and consist primarily of building, vehicle and airfield

maintenance parts and supplies.

Lessee-Financed Improvements Certain leases include provisions whereby lessee-financed

improvements become the property of the Authority. Prior

to the adoption of GASB Statement No. 33, Accounting

and Financial Reporting for Nonexchange Transactions, the

Authority recorded lessee-financed improvements only

upon leasehold reversion or lease termination, at which

time the improvements were capitalized at fair value and

recorded as a capital contribution. Upon implementation

of GASB Statement No. 33, the Authority began

recognizing lessee-financed improvements at cost or

estimated cost upon completion of construction, or upon

the asset being placed in service, whichever occurs first.

However, lessee-financed improvements placed in service

prior to the adoption of GASB Statement No. 33 continue

to be recognized only upon leasehold reversion or lease

termination.

Capital Assets Capital assets are defined by the Authority as assets with

an initial, individual cost of more than $2,500. Capital

assets purchased by the Authority are stated at historical

cost. Depreciation is computed using the straight line

method over the estimated useful lives of such assets.

The estimated lives by general classification are as follows:

YEARS

Buildings, including parking garage 20-50

Sewers 25-50

Runways, taxiways and aprons 15-25

Roads, ramps, parking areas, runway and apron

lighting, etc. 15-20

Heavy equipment, furniture and fixtures

and fencing 5-20

Vehicles, office equipment and other 3-10

Interest incurred during construction periods is capitalized

and included in the cost of property and equipment.

Maintenance and repairs are expensed as incurred.

Environmental mitigation costs incurred to establish

wetlands and habitats are capitalized, while costs related

to maintaining wetlands and habitats are generally

charged to expense as incurred. Gains and losses on

disposition of capital assets are included in nonoperating

revenues and expenses.

Original Issue Discount Original issue discounts on bonds are amortized using the

interest method over the lives of the bonds to which they

relate.

Employee Health Benefits The Authority offers health benefit plans which provide

employees with a choice of coverage under a Health

Savings Account plan or a plan provided by a Preferred

Provider Organization.

Compensated Absences In accordance with the vesting method provided under

GASB Statement No. 16, Accounting for Compensated

Absences, accumulated vacation and personal time is

accrued based on assumptions concerning the probability

that certain employees will become eligible to receive

these benefits in the future.

Federal and State Grants Outlays for airport capital improvements and certain

airport operating expenses, primarily those relating

to airport security, are subject to reimbursement from

federal grant programs. Funds are also received for airport

development from the State of Indiana. Funding provided

from government grants is considered earned as the

related approved capital outlays or expenses are incurred.

Costs claimed for reimbursement are subject to audit and

acceptance by the granting agency.

From time to time, the Authority disposes of land or

other assets which were originally purchased with federal

assistance. In accordance with the Airport Improvement

Program (AIP), the Authority must reinvest the federal

government’s proportionate share of the proceeds realized

from the sale or exchange of such assets in approved

AIP projects or return such amounts to the federal

government.

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Revenue and Expense and Net Position Recognition Revenues from airlines, concessionaires, lessees, and

parking are reported as operating revenues. Operating

expenses include the cost of administering the airport

system, including depreciation and amortization of

capital assets. All revenues and expenses not meeting this

definition are reported as nonoperating revenues and

expenses or capital contributions, grants and charges.

When both restricted and unrestricted net position are

available for use, it is the Authority’s policy to use restricted

net position first, and then unrestricted net position as

they are needed.

Passenger Facility Charges The Authority received approval from the Federal Aviation

Administration (FAA) to impose and use a passenger

facility charge (PFC) of $3.00 per eligible enplaned

passenger and has imposed the PFC since September

1993. PFC’s are restricted for use in the acquisition

of real estate and the construction of certain airport

improvements and other costs, as approved by the FAA.

During 2001, the Authority received approval from the

FAA to increase the collection level from $3.00 to $4.50

per enplaned passenger beginning April 2002. In addition,

approvals received in March 2001 and August 2003 allow

the Authority to impose and use $524,907,606 in PFC’s

for various capital and debt related purposes. Included in

the use approval is $208,872,000 for principal payments

on debt, $178,668,000 for interest payments on debt

and $56,330,000 for the New Indianapolis Airport and

associated program construction.

PFC’s, which are recognized as earned, are included in

nonoperating revenues and amounted to $14,645,121

and $14,473,637 for 2014 and 2013, respectively.

Customer Facility Charges (Rental Cars) The Authority collects a customer facility charge (CFC)

from all rental car concessionaires that operate facilities on

the airport. The CFC, which started in 2007, was $3.00

per rental car transaction per day, up to 14 days. The

Authority increased this charge to $4.00 per transaction

in May 2010. Under the adopting ordinance, CFC’s may

be pledged or dedicated for the payment of airport

bonds or other obligations, as defined by applicable bond

documents, or other costs as agreed to by the Authority.

CFC revenue totaled $6,442,212 and $6,097,820 for 2014

and 2013, respectively.

Rental Income All leases wherein the Authority is the lessor are accounted

for as operating leases. Rental income is generally

recognized as it becomes receivable over the respective

lease terms. The Authority has some leases which provide

for waived rent during the initial period of the lease term

and/or rental escalations throughout the lease term. In

accordance with GASB Statement No. 13, Accounting for

Operating Leases with Scheduled Rent Increases, the related

rental income for leases in which the rental income stream

is not systematic, if significant, is reported using the

straight-line method rather than using the terms of the

lease agreements. Accordingly, the Authority has recorded

a receivable of $1,642,454 and $1,988,198 at December

31, 2014 and 2013, respectively. The current receivable

will be recognized in full in 2034.

Reclassifications Certain reclassifications have been made to the 2013

financial statements to conform to the 2014 financial

statement presentation. These reclassifications had no

effect on the change in net position.

Note 2: Cash, Cash Equivalents and Investment Securities

Deposits Custodial credit risk is the risk that in the event of a bank

failure, the Authority’s deposits may not be returned

to it. The Authority’s deposit policy for custodial credit

risk requires compliance with the provisions of Indiana

statutes.

The Authority’s cash deposits are insured up to $250,000

at financial institutions insured by the Federal Deposit

Insurance Corporation (FDIC). Any cash deposits in

excess of the $250,000 FDIC limits are partially or fully

collateralized by the depository institution and insured by

the Indiana Public Deposits Insurance Fund (Fund) via the

pledged collateral from the institutions securing deposits

of public funds. The Fund is a multiple financial institution

collateral pool as provided under Indiana Code, Section

5-13-12-1.

Investments Indiana statutes generally authorize the Authority to invest in United States obligations and issues of federal agencies,

Indiana municipal securities, secured repurchase agreements fully collateralized by U.S. Government or U.S. Government

agency securities, certificates of deposit, and open-ended money market mutual funds.

At December 31, 2014 and 2013, the Authority had the following investment securities and maturities:

December 31, 2014

Rating Total Less than 1 year 1-5 years

U.S. Treasury notes AA+/Aa1 $ 12,533,268 $ – $ 12,533,268

U.S. Government-sponsored enterprise securities

Federal National Mortgage Association AA+/Aaa 13,112,876 – 13,112,876

Federal Home Loan Bank AA+/Aaa 27,912,746 21,615,410 6,297,336

Federal Home Loan Mortgage Corporation AA+/Aaa 6,567,115 – 6,567,115

Total U.S. Government-sponsored

enterprise securities 47,592,737 21,615,410 25,977,327

Indiana municipal securities AAA/Aaa 1,231,375 – 1,231,375

AA+/Aa1 34,786,265 2,519,536 32,266,729

AA/Aa2 2,675,351 180,393 2,494,958

AA-/Aa3 381,581 10,183 371,398

A+/A1 5,062,581 180,955 4,881,626

A/A2 4,682,388 1,042,862 3,639,526

A-/A3 1,675,319 293,054 1,382,265

BBB+ 1,040,294 – 1,040,294

BBB 1,728,087 386,095 1,341,992

BBB- 30,863 30,863 –

Not Rated 6,538,519 1,690,254 4,848,265

Total Indiana municipal securities 59,832,623 6,334,195 53,498,428

Money market mutual funds AAA/Aaa 87,807,820 87,807,820 –

External investment pools Not Rated 4,843,223 4,843,223 –

$ 212,609,671 $ 120,600,648 $ 92,009,023

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December 31, 2013

Rating Total Less than 1 year 1-5 years

U.S. Government-sponsored enterprise securities

Federal National Mortgage Association AAA/Aaa $ 26,915,867 $ 23,415,867 $ 3,500,000

Federal Home Loan Mortgage Corporation AAA/Aaa 1,000,000 – 1,000,000

Total U.S. Government-sponsored

enterprise securities 27,915,867 23,415,867 4,500,000

Indiana municipal securities AAA/Aaa 102,925 – 102,925

AA+/Aa1 39,995,207 7,192,624 32,802,583

AA/Aa2 2,849,430 787,399 2,062,031

AA-/Aa3 2,346,016 10,289 2,335,727

A+/A1 9,465,714 652,274 8,813,440

A/A2 1,444,500 986,063 458,437

A-/A3 1,124,546 105,000 1,019,546

BBB 5,170,972 1,480,010 3,690,962

Not Rated 3,012,702 845,811 2,166,891

Total Indiana municipal securities 65,512,012 12,059,470 53,452,542

Money market mutual funds AAA/Aaa 103,971,967 103,971,967 –

External investment pools Not Rated 4,826,738 4,826,738 –

$ 202,226,584 $ 144,274,042 $ 57,952,542

Interest Rate Risk – As a means of limiting its exposure

to fair value losses arising from rising interest rates, the

Authority is limited to investing in municipal securities of

Indiana issuers that have not defaulted within the previous

20 years and other securities with a stated maturity of not

more than five years after the date of purchase or entry

into a repurchase agreement, as defined by Indiana Code,

Section 5-13-9-5.6. The Authority’s investment policy for

interest rate risk requires compliance with the provisions

of Indiana statutes. The money market mutual funds and

external investment pools are presented as an investment

with a maturity of less than one year because they are

redeemable in full immediately.

Credit Risk – Credit risk is the risk that the issuer or other

counterparty to an investment will not fulfill its obligations.

The Authority’s investment policy for credit risk requires

compliance with the provisions of Indiana statutes,

and Indiana Code Section 5-13-9-2.5 requires that the

Authority only invest in money market mutual funds that

are rated AAAm by Standard and Poor’s or Aaa by Moody’s

Investors Service. Other securities, including municipal

securities, may be rated lower than AAAm/Aaa or may

be unrated. The Authority’s investment policy restricts

investments in unrated or below investment grade Indiana

municipal securities to five percent of its total investment

portfolio.

Custodial Credit Risk – For an investment, custodial

credit risk is the risk that, in the event of the failure of the

counterparty, the Authority will not be able to recover the

value of its investment or collateral securities that are in

the possession of an outside party. At December 31, 2014

and 2013, the Authority’s investments were not exposed

to custodial credit risk. The Authority’s investments in

Indiana municipal securities and U.S. agency obligations

are held by the pledging financial institution’s trust

department or agent in the Authority’s name. Likewise,

investments in repurchase agreements (which are secured

by U.S. Government and U.S. Government agency

obligations) are not subject to custodial credit risk as the

underlying collateral was held in the Authority’s name.

The existence of the Authority’s investment in money market mutual funds and external investment pools is not

evidenced by securities that exist in physical or book entry form. The Authority’s investment policy does not address how

investment securities and securities underlying repurchase agreements are to be held.

Concentration of Credit Risk – The Authority places the following limits on the amount that may be invested in any one

issuer: (1) no more than 50% of total investments with any one governmental agency; (2) no more than 25% in any one

money market mutual fund, investment pool or certificate of deposit; and (3) no more than 15% with any one Indiana

municipal issuer. No single issuer of the Indiana municipal securities in which the Authority has invested exceeded 5% of

total investments. The following governmental agency investments held by the Authority are not explicitly guaranteed by

the U.S. Government and are subject to concentration of credit risk:

2014 2013

Federal National Mortgage Association $ 13,112,876 $ 26,915,867

Federal Home Loan Bank 27,912,746 –

Federal Home Loan Mortgage Corporation 6,567,115 1,000,000

$ 47,592,737 $ 27,915,867

Foreign Currency Risk – This risk relates to adverse effects on the fair value of an investment from changes in exchange

rates. The Authority’s investment policy prohibits investments in foreign investments.

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2014 2013

Cash and cash equivalents Current - unrestricted $ 16,178,400 $ 14,817,334 Current - restricted 47,232,716 56,661,424 Noncurrent - restricted 75,382,143 92,224,783 Total cash and cash equivalents 138,793,259 163,703,541

Investment securities Noncurrent - unrestricted 34,832,891 32,256,989 Noncurrent - restricted 61,409,160 37,755,022 Total investment securities 96,242,051 70,012,011 $ 235,035,310 $ 233,715,552

Investment Income Investment income for the years ended December 31, 2014 and 2013 consisted of:

2014 2013

Interest and dividend income $ 2,678,473 $ 5,237,098

Cash, cash equivalents and investment securities are restricted as follows:

2014 2013

Revenue Bond Interest and Principal Fund $ 45,927,127 $ 53,829,503Revenue Bond Reserve Fund 62,269,199 65,264,642 Operation and Maintenance Reserve Fund 11,177,156 11,005,118 Renewal and Replacement Fund 2,619,316 2,589,386 Capital Improvement Fund 34,162,608 26,033,420Passenger Facility Charge Fund 9,160,392 7,682,962 Debt Service Coverage Fund 17,171,014 17,172,739 Escrow for owner controlled insurance program 400,136 1,810,215Customer deposits 684,200 784,428 Air Service Task Force and other 452,871 468,816

$ 184,024,019 $ 186,641,229

The above funds and accounts have been established in

accordance with the Authority’s General Ordinance No.

6-1985, the Master Bond Ordinance, as amended and

restated by a Revised Master Bond Ordinance No. 4-2002,

and further amended by various supplemental ordinances

(collectively, the Ordinance). The Ordinance provides,

among other things, that certain accounting procedures

be followed and certain funds be established to provide

bond holders a degree of security against certain

contingencies. Brief descriptions of these funds follow.

Deposits into the Airport System Fund are disbursed in

accordance with the Authority’s annual budget to provide

for current operations and maintenance expenses. Such

deposits are also used to replenish balances in other funds

to their required levels under the Ordinance. Amounts

in the Airport System Fund are pledged to secure the

Authority Revenue Bonds, but all current operations and

maintenance expenses of the Airport System are paid prior

to debt service on the Authority Revenue Bonds.

Assets included in the Revenue Bond Interest and Principal

Funds and Revenue Bond Reserve Funds are used for

the payment of bond principal, interest and redemption

premiums, as well as any amounts due under Qualified

Derivative Agreements (as defined under the Ordinance)

entered into with regard to any of the Authority’s Revenue

Bonds. The Operation and Maintenance Reserve Fund

must be maintained at a balance at least equal to one sixth

of the Authority’s current operating budget as a reserve

for payment of operation and maintenance expenses.

Assets of the Renewal and Replacement Fund are used to

pay extraordinary costs of replacing depreciable property

and equipment and/or making extraordinary repairs,

replacements, or renovations to the airport system. The

Capital Improvement Fund can be used for any lawful

airport system purpose, including payment for capital

improvements and land acquisition. Finally, amounts in

the Debt Service Coverage Fund are used for the purposes

of establishing future coverage on outstanding Revenue

Bonds.

Funds not used for these purposes are transferred into a

Prepaid Airline Revenue Fund and used as a credit against

the rentals and fees to be paid by Signatory Airlines (as

defined later in these notes) in subsequent years. Balances

included in the Airport System Fund and Prepaid Airline

Revenue Fund are classified in current unrestricted assets in

the accompanying balance sheets.

The Authority has established a Customer Facility Charge

Fund, which provides for a segregated account for

receipt of CFC revenue. Such revenue is expended for

reimbursement of capital and operating expenditures

related to rental car operations on airport property, as well

as to service debt associated with the financing of such

capital projects. Balances in the CFC Fund are classified in

current unrestricted assets in the accompanying balance

sheets.

The Authority’s Passenger Facility Charge Fund provides

for the segregation of PFC receipts, as required by the

FAA. Such revenues are to be expended only for allowable

capital projects, or to repay debt issued for allowable

capital projects, under a Record of Decision granted by the

FAA.

During 2011, the Authority established an escrow account

in relation to its owner controlled insurance program

(OCIP). These funds were set aside from the Authority’s

airport system fund and are held in lieu of maintaining a

separate letter of credit for that insurance program.

Summary of Carrying Values Cash, cash equivalents and investment securities included in the balance sheets are classified as follows:

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Note 3: Grants Receivable

Grants receivable from government agencies represent reimbursements due from the federal government and/or the

State of Indiana for allowable costs incurred on federal and state award programs. Grants receivable at December 31,

2014 and 2013 consist of:

2014 2013

State of Indiana $ 162,067 $ 149,092

Federal Aviation Administration 9,864,972 7,110,742

U.S. Department of Homeland Security 37,875 1,808

$ 10,064,914 $ 7,261,642

The maximum amount of federal and state participation available for 2014 totaled $40,741,162. At December 31, 2014,

a cumulative total of $21,812,056 has been received on these grant commitments.

Note 4: Capital Assets

A summary of changes in capital assets for the years ended December 31, 2014 and 2013 is as follows:

2014

Beginning Ending

Balance, Transfers Transfers Balance,

January 1, and and December 31,

2014 Additions Disposals 2014

Capital assets, not being depreciated:

Land $ 298,310,923 $ 614,351 $ (72,565) $ 298,852,709

Construction in progress 6,368,714 31,131,822 (21,576,804) 15,923,732

Total capital assets, not being depreciated 304,679,637 31,746,173 (21,649,369) 314,776,441

Capital assets, being depreciated:

Buildings 1,734,111,385 4,041,883 (92,473,264) 1,645,680,004

Runways and other airport infrastructure 960,295,032 10,218,778 (567,866) 969,945,944

Equipment, furniture and fixtures and other 250,855,732 3,602,483 (18,399,325) 236,058,890

Total capital assets, being depreciated 2,945,262,149 17,863,144 (111,440,455) 2,851,684,838

Less accumulated depreciation for:

Buildings (566,488,496) (51,201,564) 92,321,542 (525,368,518)

Runways and other airport infrastructure (476,086,535) (33,421,878) 546,459 (508,961,954)

Equipment, furniture and fixtures and other (182,434,711) (9,503,472) 18,389,115 (173,549,068)

Total accumulated depreciation (1,225,009,742) (94,126,914) 111,257,116 (1,207,879,540)

Total capital assets, being depreciated, net 1,720,252,407 (76,263,770) (183,339) 1,643,805,298

Capital assets, net $ 2,024,932,044 $ (44,517,597) $ (21,832,708) $ 1,958,581,739

2013

Beginning Ending

Balance, Transfers Transfers Balance,

January 1, and and December 31,

2013 Additions Disposals 2013

Capital assets, not being depreciated:

Land $ 295,741,712 $ 2,631,373 $ (62,162) $ 298,310,923

Construction in progress 9,349,431 33,525,074 (36,505,791) 6,368,714

Total capital assets, not being depreciated 305,091,143 36,156,447 (36,567,953) 304,679,637

Capital assets, being depreciated:

Buildings 1,714,242,071 19,869,314 – 1,734,111,385

Runways and other airport infrastructure 945,900,045 14,394,987 – 960,295,032

Equipment, furniture and fixtures and other 242,948,079 9,188,552 (1,280,899) 250,855,732

Total capital assets, being depreciated 2,903,090,195 43,452,853 (1,280,899) 2,945,262,149

Less accumulated depreciation for:

Buildings (516,779,765) (49,708,731) – (566,488,496)

Runways and other airport infrastructure (443,145,423) (32,941,112) – (476,086,535)

Equipment, furniture and fixtures and other (170,527,083) (13,170,841) 1,263,213 (182,434,711)

Total accumulated depreciation (1,130,452,271) (95,820,684) 1,263,213 (1,225,009,742)

Total capital assets, being depreciated, net 1,772,637,924 (52,367,831) (17,686) 1,720,252,407

Capital assets, net $ 2,077,729,067 $ (16,211,384) $ (36,585,639) $ 2,024,932,044

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Note 5: Bonds Payable and Other Debt

Bonds and other debt outstanding at December 31, 2014 and 2013 consist of:

2014 2013

Revenue Bonds, Series 2014A Serial bonds, maturing January 1, 2017 to January 1, 2034 in payments from $1,490,000 to $17,075,000. Interest at 3.00% to 5.00%, due semiannually on January 1 and July 1 $ 165,340,000 $ – Unamortized premium 19,102,067 – 184,442,067 –

Revenue Bonds, Series 2013A Term bonds, maturing July 1, 2018. Interest is fixed at 1.800%, due semiannually on January 1 and July 1 12,570,000 13,000,000Revenue Bonds, Series 2013B Term bonds, maturing July 1, 2018. Interest is fixed at 1.610%, due semiannually on January 1 and July 1 22,695,000 24,845,000

Revenue Bonds, Series 2012A Term bonds, maturing July 1, 2019. Interest is fixed at 1.253%, due semiannualy on January 1 and July 1 37,285,000 44,025,000 Unamortized discount (95,182) (142,747) 37,189,818 43,882,253

Revenue Bonds, Series 2010C Term bonds, maturing January 1, 2033, 2036 and 2037. Interest is variable at (75% of the one-month LIBOR plus 0.815% (0.9426%) at December 31, 2013, due monthly on the first business day 337,280,000 341,735,000 Revenue Bonds, Series 2010A Serial bonds, maturing January 1, 2015 to January 1, 2027 in payments from $620,000 to $1,005,000. Interest at 4.00% to 4.50%, due semiannually on January 1 and July 1 10,340,000 10,940,000 Term bonds, maturing January 1, 2030 and 2037. Interest at 4.75% and 5.00%, respectively, due semiannually on January 1 and July 1 13,155,000 13,155,000 23,495,000 24,095,000 Unamortized discount (180,935) (194,376) 23,314,065 23,900,624

2014 2013

Revenue Bonds, Series 2006A Serial bonds, maturing January 1, 2015 to January 1, 2023 in payments from $14,410,000 to $20,390,000. Interest at 5.00%, due semiannually on January 1 and July 1 $ 152,170,000 $ 165,845,000 Term bonds, maturing January 1, 2027 and 2036. Interest at 4.75% and 5.00%, respectively, due semiannually on January 1 and July 1 82,235,000 82,235,000 234,405,000 248,080,000 Unamortized premium 3,182,661 3,517,212 237,587,661 251,597,212 Revenue Bonds, Series 2005A Serial bonds, maturing January 1, 2023 to January 1, 2030 in payments from $7,735,000 to $19,080,000. Interest at 5.125% to 5.25%, due semiannually on January 1 and July 1 133,970,000 133,970,000 Term bonds, maturing January 1, 2033. Interest at 4.75%, due semiannually on January 1 and July 1 63,415,000 63,415,000 197,385,000 197,385,000 Unamortized premium 2,092,509 2,247,947 199,477,509 199,632,947 Revenue Bonds, Series 2004A Serial bonds, maturing January 1, 2015 to January 1, 2024 in payments from $4,580,000 to $11,075,000. Interest at 5.00% to 5.25%, due semiannually on January 1 and July 1 – 68,420,000 Term bonds, maturing January 1, 2026 to January 1, 2034. Interest at 4.75% to 5.00%, due semiannually on January 1 and July 1 – 125,330,000 – 193,750,000 Unamortized premium – 2,324,970 – 196,074,970 Total revenue bonds 1,054,556,120 1,094,668,006

Other Debt Obligations under capital lease 79,942,322 103,844,418 79,942,322 103,844,418 Total bonds payable and other debt 1,134,498,442 1,198,512,424 Current portion (54,309,282) (56,302,096)

Long-term portion $ 1,080,189,160 $ 1,142,210,328

(continued)

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Revenue Bonds 2014A Refunding Revenue Bonds In October 2014, the Authority issued the 2014A Refunding

Revenue Bonds in the amount of $165,340,000 with an

original issue premium of $19,435,412. The proceeds from

the 2014A Revenue Bonds, in conjunction with transfers from

the debt service reserve and principal and interest funds,

were issued to refund the outstanding balance of the 2004A

Revenue Bonds of $189,400,000. The net present value

savings resulting from this refunding were $17,667,274,

and the aggregate difference in the required debt service

between the 2004A Bonds and 2014A Bonds is $21,165,935.

2013 Refunding Revenue Bonds In June 2013, the Authority issued the 2013A and 2013B

Refunding Revenue Bonds in the amounts of $13,000,000

and $24,845,000, respectively, which refunded $37,485,000

of the Authority’s then outstanding 2006A Revenue Bonds.

The Authority retired an additional $10,940,000 of the

2006A Revenue Bonds using other unencumbered funds.

Redemption Requirements The Authority’s Series 2005A, 2006A, 2010A and 2014A

Revenue Bonds are subject to optional redemption by the

Authority at various dates in the future. The 2010C Revenue

Bonds are subject to optional redemption by the Authority

upon notification of the bondholders.

The Series 2005A Revenue Bonds, maturing January 1, 2033

(the 2033 Term Bonds), are subject to redemption from

mandatory sinking fund payments during 2031 to 2033.


(the 2027 Term Bonds) and January 1, 2036 (the 2036

Term Bonds) are subject to redemption from mandatory

sinking fund payments during 2024 to 2027 and 2034 to

2036, respectively. On December 23, 2010, the Authority

repurchased and retired $39,295,000 of the 2036 Term

Bonds through a secondary market purchase.


(the 2030 Term Bonds) and January 1, 2037 (the 2037 Term

Bonds) are subject to redemption from mandatory sinking

fund payments during 2028 to 2030 and 2031 to 2037,

respectively.

The Series 2010C Revenue Bonds, maturing January 1, 2033,

2036 and 2037 are subject to redemption from mandatory

sinking fund payments during 2014 to 2037.

The Series 2012A Refunding Revenue Bonds, maturing July

1, 2019, are subject to redemption from mandatory sinking

fund payments during 2014 to 2019.

The Series 2013A and Series 2013B Refunding Revenue

Bonds, maturing July 1, 2018, are subject to redemption

from mandatory sinking fund payments during 2014

to 2018.

The Master Bond Ordinance The Authority’s Revenue Bonds are secured under the Master

Bond Ordinance (as referenced in a previous footnote) by a

pledge of net revenues of the Airport System and on parity

with each other, except with respect to their Revenue Bond

Reserve Funds.

Pursuant to its Master Bond Ordinance, the Authority has

adopted resolutions beginning in 2003 and 2006 irrevocably

dedicating revenues from passenger facility charges and

customer facility charges (the Dedicated Revenues),

respectively, to be used exclusively to pay debt service on

the Authority’s Revenue Bonds. The irrevocable designation

of passenger facility charges revenue in 2014 and 2013 was

approximately $13.2 million for both years and the customer

facility charge revenue designation was $6.4 and $6.2 million

for 2014 and 2013, respectively. In 2014, a resolution was

adopted irrevocably designating $13.2 million of passenger

facility charge revenues and $6.2 million of customer facility

charge revenues for 2015.

In accordance with the Rate Covenant contained in the

Master Bond Ordinance, rates and fees charged by the

Authority for the use of its facilities must be sufficient to

provide annual net revenues when combined with moneys

in the coverage fund to equal the larger of: (a) all amounts

required to be deposited to the credit of the Revenue Bond

Interest and Principal Fund and the Revenue Bond Reserve

Fund; or (b) an amount not less than 125% of the Debt

Service Requirement for all Revenue Bonds. For the purpose

of complying with the Rate Covenant, the Authority includes

within net revenues in any fiscal year amounts transferred

from the Prepaid Airline Fund and amounts on deposit in

the Debt Service Coverage Fund pursuant to the Master

Bond Ordinance and excludes from interest due on Authority

Revenue Bonds any interest paid from bond proceeds. The

Authority can also exclude debt service to be paid from

dedicated revenues from its Rate Covenant calculation.

Debt Service Requirements Debt service requirements to maturity for all debt of the Authority, excluding any unamortized discount or premium and its

capital lease agreements, are as follows at December 31, 2014:

Years Ending Revenue Bonds

December 31 Principal Interest Total

2015 $ 29,245,000 $ 31,526,242 $ 60,771,242

2016 30,365,000 32,783,906 63,148,906

2017 42,035,000 31,804,168 73,839,168

2018 52,050,000 30,635,185 82,685,185

2019 29,375,000 29,265,781 58,640,781

2020 - 2024 181,390,000 126,536,445 307,926,445

2025 - 2029 262,550,000 87,342,994 349,892,994

2030 - 2034 290,845,000 41,005,719 331,850,719

2035 - 2037 112,600,000 4,446,871 117,046,871

$ 1,030,455,000 $ 415,347,311 $ 1,445,802,311

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The following is a summary of long-term obligation transactions for the Authority for the years ended December 31, 2014

and 2013:

2014

Beginning Ending Current

Balance Additions Deductions Balance Position

Long-term obligations

Revenue bonds payable $ 1,086,915,000 $ 165,340,000 $ (221,800,000) $ 1,030,455,000 $ 29,245,000

Bond (discounts)/premium 7,753,006 19,435,412 (3,087,298) 24,101,120 –

Total revenue bonds

payable 1,094,668,006 184,775,412 (224,887,298) 1,054,556,120 29,245,000

Obligations under capital lease 103,844,418 – (23,902,096) 79,942,322 25,064,282

Total long-term obligations $ 1,198,512,424 $ 184,775,412 $ (248,789,394) $ 1,134,498,442 $ 54,309,282

2013

Beginning Ending Current

Balance Additions Deductions Balance Position

Long-term obligations

Revenue bonds payable $ 1,122,480,000 $ 37,845,000 $ (73,410,000) $ 1,086,915,000 $ 32,400,000

Bond (discounts)/premium 9,125,243 – (1,372,237) 7,753,006 –

Total revenue bonds

payable 1,131,605,243 37,845,000 (74,782,237) 1,094,668,006 32,400,000

Obligations under capital lease 126,647,809 – (22,803,391) 103,844,418 23,902,096

Total long-term obligations $ 1,258,253,052 $ 37,845,000 $ (97,585,628) $ 1,198,512,424 $ 56,302,096

Note 6: Special Facility Revenue Bonds

To provide for the construction of the Hawker Beechcraft Services, Inc. Project, FedEx Corporation Sort Facility, and the

Indianapolis Maintenance Center (IMC) (formerly leased to United Air Lines, Inc.), the Authority issued separate series of

Special Facility Revenue Bonds (conduit debt obligations). These bonds are special limited obligations of the Authority,

payable solely from and secured by a pledge of lease rentals to be received by the Authority. The bonds do not constitute

a debt or pledge of the faith and credit of the Authority, the County, the City or the State and are, therefore, not reported

in the accompanying financial statements.

At December 31, 2014, the Special Facility Revenue Bonds outstanding were as follows:

Special Facility Revenue Bonds, Series 2009 (Hawker Beechcraft Services, Inc. Project) $ 7,956,054

Special Facility Revenue Bonds, Series 2004 (FedEx Corporation Sort Facility) 237,755,000

Special Facility Revenue Bonds, Series 1995 (Indianapolis Maintenance Center) 165,988,327

$ 411,699,381

Note 7: Derivative Financial Instruments

Forward Delivery Purchase Agreements - Hedging Derivative Instruments The Authority has entered into three forward delivery purchase agreements (the Forward Delivery Agreements). The

Forward Delivery Agreements require the counterparties to deposit securities in the Authority’s debt service reserve trust

accounts and provides the Authority a guaranteed rate of return. The securities that are deposited into the debt service

reserve trust accounts are required to mature prior to scheduled debt service payment dates on the bonds that are

secured by the respective debt service reserve funds.

Eligible securities include (a) discount notes issued by a federal agency; and (b) securities backed by the full faith and

credit of the United States Treasury or fully guaranteed by the United States of America, and issued by any of the

following:

• the United States Treasury • a federal instrumentality

• a federal agency • a federal government-sponsored enterprise

Objective of the Forward Delivery Agreements The Forward Delivery Agreements allow the Authority to earn a guaranteed fixed rate of return over the life of the

agreement. These Agreements are utilized by the Authority to earn a rate of return in excess of a rate that would

otherwise be feasible by investing in securities with a shorter term.

Terms The general terms of each agreement are set forth in the table below:

Scheduled Fair Value at Fair Value at

Date of Reserved Guaranteed December 31, December 31,

Agreement Termination Date Amount Rate 2014 2013

Series 2004A Debt Service Fund December 1, 2004 December 30, 2033 $ 16,534,000 4.962% $ 5,033,182 $ 1,259,328

Series 2005A Debt Service Fund December 28, 2005 December 31, 2032 19,532,425 4.820% 5,539,783 1,048,437

Series 2006A Debt Service Fund August 1, 2006 January 1, 2036 21,090,099 5.311% 8,972,089 2,464,182

$ 19,545,054 $ 4,771,947

The forward delivery agreement associated with the Series 2004A Debt Service Reserve Fund was amended when

the 2004A Bonds were refunded by the 2014A Bonds. The amended agreement now provides for the delivery of the

securities into debt service reserve fund of the 2014A Bonds.

The notional amount associated with the Series 2006A Debt Service Fund Agreement was reduced by $810,000 during

2013, the result of refunding a portion of the related Series 2006A Bonds.

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Fair Value – The fair values of the Forward Delivery

Agreements are based on the value of the future

discounted cash flows expected to be received over the

life of the agreement relative to an estimate of discounted

cash flows that could be received over the same term

based on current market conditions. The fair values of the

Forward Delivery Agreements are classified as a noncurrent

asset on the balance sheets as of December 31, 2014 and

2013. As the Forward Delivery Agreements are effective

hedging instruments, the offsetting balance is reflected as

a deferred outflow of resources on the Authority’s balance

sheets. The changes in fair value of the Forward Delivery

Agreements of $14,773,107 and $(14,519,645) for the

years ended December 31, 2014 and 2013, respectively,

are shown as an adjustment to the carrying amount of

the related deferred outflows of resources on the balance

sheets.

Credit Risk – Credit risk is the risk that a counterparty will

not fulfill its obligations. Under the terms of the Forward

Delivery Agreements, the Authority is either holding cash

or an approved security within the debt service reserve

funds. None of the principal amount of an investment

under the Forward Delivery Agreements is at risk to

the credit of the counterparty. Should the counterparty

default, the Authority’s maximum exposure is the positive

termination value, if any, related to these agreements.

Interest Rate Risk – Interest rate risk is the risk that changes

in interest rates will adversely affect the fair values of

the Authority’s financial instruments or cash flows. The

fair market value of the Forward Delivery Agreements is

expected to fluctuate over the life of the agreements in

response to changes in interest rates. The Authority does

not have a formally adopted policy related to interest rate

risk on the Forward Delivery Agreements.

Termination Risk – The Authority or the counterparties may

terminate the Forward Delivery Agreements if the other

party fails to perform under the terms of the contract.

In addition, the Authority has an unrestricted option to

terminate the Forward Delivery Agreements. If the Forward

Delivery Agreements have a negative fair value at the

time of termination, the Authority would be liable to the

counterparty for a payment equivalent to the fair market

value of the instrument at the time of termination.

Interest Rate Swap Agreements – Hedging Derivative Instruments

The Authority is a party to four interest rate swap

agreements (the Swap Agreements) that became effective

on July 1, 2008, concurrent with the issuance of the 2008

Revenue Bonds. The Swap Agreements continued to

hedge the 2008 Revenue Bonds until December 21, 2010,

at which time the 2008 Revenue Bonds were refunded by

the issuance of the 2010C Revenue Bonds. This refunding

resulted in a terminating event and accordingly, the

Authority included the balance of the deferred outflows

associated with this hedge in its calculation of the deferred

loss on refunding, which was $47,643,748. At that same

time, the Swap Agreements became a hedge of the

2010C Revenue Bonds with terms and conditions that

are identical to the previous hedge of the refunded 2008

Revenue Bonds.

Objective of the Interest Rate Swaps – The Swap Agreements are used as a strategy to maintain acceptable levels of

exposure to the risk of future changes in interest rates related to the Authority’s existing variable rate debt. The primary

intention of the Swap Agreements is to effectively convert the Authority’s variable interest rates on its long-term debt to

synthetic fixed rates.

Terms – The general terms of each agreement are set forth in the table below:

Rate Variable Rate Fair Value at Fair Value at Notional Effective Date of Termination Authority Authority December 31, December 31, Amount Trade Date Swap Agreement Date Pays Receives 2014 2013

$ 116,845,000 October 14, 2004 July 1, 2008 January 1, 2036 4.0325% 75% One $ (28,787,340) $ (19,279,931) Month LIBOR

70,435,000 October 14, 2004 July 1, 2008 January 1, 2037 4.1500% 75% One (18,915,953) (12,705,178) Month LIBOR



$ 337,280,000 $ (84,528,941) $ (54,326,759)

Payments due under the Swap Agreements (excluding any

termination payments) and payments on any repayment

obligation will be payable from net revenues of the airport

system on a parity with the Revenue Bonds. Under the

Swap Agreements, the Authority pays or receives the net

interest amount monthly, with the monthly settlements

included in interest expense. The Swap Agreements

resulted in no initial cash receipts or payments to be made

by the Authority.

Fair Value – The fair values of the Swap Agreements

are based on estimated discounted future cash flows

determined using the counterparties’ proprietary models

based upon financial principles and estimates about

relevant future market conditions. The fair values of the

Swap Agreements are classified as a noncurrent liability on

the balance sheets as of December 31, 2014 and 2013. As

the Swap Agreements are effective hedging instruments,

the offsetting balance is reflected as a deferred outflow of

resources on the Authority’s balance sheets. The changes

in fair value of the Swap Agreements of $(30,302,182)

and $44,463,942 for the years ended December 31, 2014

and 2013, respectively, are shown as an adjustment to

the carrying amount of the related deferred outflows of

resources on the balance sheets.

Credit Risk – The fair value of each of the Swap

Agreements represents the Authority’s credit exposure

to the counterparties as of December 31, 2014. Should

the counterparties to these transactions fail to perform

according to the terms of the Swap Agreements, the

Authority has a maximum possible loss equivalent to the

fair value at that date. As of December 31, 2014, the

Authority was not exposed to credit risk because each of

the swaps had a negative fair value. In order to mitigate

the potential for credit risk, if any of the counterparties’

credit quality rating falls below a rating threshold of Aa3

by Moody’s Investors Service or AA- by Standard & Poors,

the fair value of that counterparty’s swap or swaps is to

be fully collateralized by the counterparty with eligible

securities (as defined in the Schedule to the Master

Agreement) to be held by a third-party custodian on

behalf of the Authority.

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The ratings of the various counterparties at December 31, 2014 are as follows:

Ratings of the Counterparty

Moody’s Investors

Service Standard & Poors

JPMorgan Chase Bank, N.A., counterparty of the interest rate swaps with notional

amounts of $116,845,000 and $70,435,000 A3 A

Merrill Lynch Derivative Products, counterparty of the interest rate swap with the notional

amount of $50,000,000 Baa21 A-

UBS AG, counterparty of the interest rate swap with the notional amount of $100,000,000

and both basis swap agreements A2 A

Basis Risk – The Authority is not exposed to basis risk because the variable-rate payments received by the Authority

under the Swap Agreements are based on an index that coincides with the interest rates the Authority pays on its

2010C Revenue Bonds. As of December 31, 2014, the interest rate on the Authority’s 2010C Revenue Bonds is 0.647%,

(calculated at 75% of the one-month LIBOR plus 0.520%), while the Authority receives payments under the Swap

Agreements equal to 75% of the one-month LIBOR, or 0.127%.

Termination Risk – The Authority or the counterparties may terminate the Swap Agreements if the other party fails to

perform under the terms of the contract. In addition, the Authority has the unilateral option to terminate the Swap

Agreements. If the Swap Agreements have a negative fair value at the time of termination, the Authority would be liable

to the counterparty for a payment equal to the fair value of the respective swap.

Swap Payments and Associated Debt – The variable rate bond interest payments and net swap payments will vary with

changes in interest rates. Using rates as of December 31, 2014, debt service requirements of the variable rate debt and

net swap payments, assuming current interest rates remain the same, for their term are set forth in the table below.

1 – The swaps are guaranteed by both Merrill Lynch Capital Services, Inc. and Merrill Lynch & Company, whose ratings are Aa3 and A+.

Variable Rate Bonds Interest Rate Principal Interest Swaps, Net Total

2015 $ 4,680,000 $ 2,153,676 $ 12,707,210 $ 14,860,886

2016 4,915,000 2,128,850 12,513,960 14,642,810

2017 5,170,000 2,102,739 12,310,711 14,413,450

2018 5,430,000 2,075,312 12,097,213 14,172,525

2019 5,710,000 2,046,474 11,872,729 13,919,203

2020 - 2024 44,865,000 9,658,437 55,185,179 64,843,616

2025 - 2029 111,185,000 6,718,807 38,808,550 45,527,357

2030 - 2034 124,365,000 2,330,118 15,040,309 17,370,427

2035 - 2037 30,960,000 131,371 1,030,480 1,161,851

$ 337,280,000 $ 29,345,784 $ 171,566,341 $ 200,912,125

Basis Swaps - Investment Derivative Instruments

The Authority also entered into basis swap agreements that are associated with the $100 million interest rate swap with a

trade date of October 11, 2005. These basis swaps are considered investment derivative instruments. The general terms

of these basis swaps are set forth in the table below:

Rate Variable Rate Fair Value at Fair Value at Notional Effective Date of Termination Authority Authority December 31, December 31, Amount Trade Date Swap Agreement Date Pays Receives 2014 2013

$ 100,000,000 March 15, 2011 July 1, 2015 January 1, 2033 75% One 75% ISDA Ten $ (365,256) $ 4,073,233 Month LIBOR Year Swap Rate

The fair value of the basis swaps is classified as a

noncurrent asset on the balance sheets. Changes in the

fair value of the basis swaps are classified as nonoperating

revenues (investment income) on the statements of

revenues, expenses, and changes in net position.

During 2014, the Authority monetized a portion of the fair

value of the basis swaps, which resulted in the Authority

receiving $3,117,000 of cash.

Interest Rate Risk – Interest rate risk is the risk that changes

in interest rates will adversely affect the fair values of the

Authority’s financial instruments or cash flows. The fair

value of the basis swaps are expected to fluctuate over

the term of the agreements. The Authority does not have

a policy related to interest rate risk on these basis swap

agreements.

Credit Risk – Credit risk is the risk that the counterparty

to an investment derivative will not fulfill its obligations.

Should the counterparties to these transactions fail

to perform according to the terms of the basis swap

agreements, the Authority has a maximum possible loss

equivalent to the fair value at that date.

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Note 8: Obligations Under Capital Leases

In November 1991, the Authority entered into an

agreement (the MOC-II Agreement) with the State of

Indiana, the City of Indianapolis, and United Air Lines,

Inc. (United) to provide a 300-acre site for United’s

Indianapolis Maintenance Center (IMC).

The State, the City and Hendricks County, Indiana

provided the initial funding for the IMC. The State

provided $184.5 million from the proceeds of tax-exempt

lease revenue bonds and a $15.2 million grant. The City

provided approximately $111.0 million from the proceeds

of tax-exempt current interest and capital appreciation

bonds. Hendricks County provided $8.0 million in the

form of a grant, from the proceeds of an economic

development income tax revenue bond issue.

Concurrently with the execution of the MOC-II Agreement

in 1991, the Authority entered into a tenancy in common

agreement and various lease agreements, which created

certain leasehold interests in the IMC site and facilities

and provided the framework for financing the costs of its

construction. Accordingly, the Authority’s leases with the

State and the City for the IMC and its lease with the State

for a building and related equipment ancillary to IMC, the

Aviation Technology Center (ATC), have been reflected

as capital lease obligations in these financial statements.

The leases expire at various dates between 2016 and

2018. The gross amounts of capital assets and related

accumulated depreciation recorded under these capital

leases at December 31, 2014 and 2013 follow:

The present value of future minimum capital lease

payments at December 31, 2014 follows:

2014 2013

Capital assets $ 352,111,077 $ 352,111,077

Accumulated depreciation (175,892,332) (169,239,618)

$ 176,218,745 $ 182,871,459

2015 $ 28,308,327

2016 28,271,916

2017 16,643,240

2018 16,115,198

Total minimum lease payments 89,338,681

Amounts representing interest (9,396,359)

Present value of future minimum

capital lease payments $ 79,942,322

The Authority’s capital lease payments to the State are

payable solely from monies to be appropriated by the

Indiana General Assembly, the governing body for the

State. There is no requirement that these amounts be

appropriated. However, the Authority cannot be held

liable, should an appropriation not be made, for the State’s

debt obligations relative to the IMC and ATC facilities.

Assuming appropriations from the General Assembly

continue, the Authority expects to receive the following

future amounts to fund its capital lease obligations with

the State:

2015 $ 21,612,275

2016 21,623,920

2017 22,616,806

2018 20,801,713

$ 86,654,714

The Authority’s capital lease payments to the City are

secured by an irrevocable pledge of a distributive share

of Marion County Option Income Taxes (the Pledged

Revenues). The City-County Council has covenanted not

to repeal or rescind this tax as long as such rentals remain

due. The Authority is not obligated for the debt incurred

by the City with regard to the IMC facilities. Future

pledged revenues to be received by the Authority to fund

its capital lease obligation with the City follow:

2015 $ 14,219,750

2016 14,211,750

$ 28,431,500

Note 9: Indianapolis Maintenance Center

As discussed previously in these footnotes, the Authority,

the State of Indiana, the City of Indianapolis and United

financed the construction and equipping of the IMC. As

a part of the financing of these facilities, the Authority

issued $220,705,000 in special facility revenue bonds of

which $165,988,327 remains outstanding at December

31, 2014. The Authority had, and continues to have, no

obligation to make interest and principal payments on

these special facility bonds. Revenues from the IMC are

reserved for expense reimbursement to the Authority

for operational expenses incurred. Revenue in excess

of expenses are provided back to the bondholders

and the Authority on a percentage basis bound by the

Settlement Agreement, but not until all of the Authority

expenses have been reimbursed. Previously, the interest

and principal payments for the Series 1995 Special

Facility Revenue Bonds were funded by rentals paid by

United under its lease agreement with the Authority. On

December 9, 2002, United filed for bankruptcy under

Chapter 11 of the United States Bankruptcy Code. On May

9, 2003, the Bankruptcy Court made effective United’s

rejection of its lease of the IMC and United abandoned the

IMC facilities, whereby all of the IMC assets reverted to the

Authority’s control.

In February 2004, the Authority and the Trustee of the

bondholders entered into a Settlement Agreement

which, among other things, provides for up to $7.5

million in reimbursements for certain costs incurred after

May 2003. The Settlement Agreement also provides

for reimbursement for up to $6.5 million of the Tenant

Improvement Expenditure Reserve (TIER) fund for use of

capital improvements, if certain conditions are met. On

the ten year anniversary of the Settlement Agreement,

all the funds accumulated in the TIER Fund are disbursed

to the bondholders with the exception of $1 million. On

February 13, 2014, these funds were disbursed.

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Since 2004, the Authority has entered into various leases

for certain portions of the IMC. These leases include

hangar space, office areas and the backshops (which are

being used primarily for the maintenance, repair and

overhaul of commercial aircraft) and certain warehouse

space for non-aviation related use. As a part of the

Settlement Agreement, rentals collected for the IMC are

not considered revenue to the Authority, but instead are

required to be deposited into a trust held on behalf of the

United bondholders. The monies held in trust are to be

used to pay ongoing operating and maintenance costs of

the IMC and must be applied in a manner prescribed by

the terms of the Settlement Agreement.

For the years ended December 31, 2014 and 2013, the

Authority incurred approximately $7.5 million and $7.9

million of costs for the IMC, respectively. The Authority

has received reimbursements for these costs under the

Settlement Agreement aggregating approximately $5.8

million and $6.9 million for 2014 and 2013, respectively.

In addition, as of December 31, 2014 and 2013, the

Authority has accrued approximately $2.9 million and

$1.8 million, respectively, in reimbursements from the

Trustee for allowable costs incurred.

The aforementioned lease agreements contain a number

of incentives to be provided by the Authority in the form

of grants and rent credits over the terms of these leases,

which currently range from six months to ten years.

These grants and rent credits are designed to assist the

tenants with start-up costs and the acquisition of certain

capital assets, including leasehold improvements, and

to encourage them to expand their operations and/

or increase the amount of space they lease. Grants for

start-up costs are recorded as unamortized lease costs

by the Authority and amortized over the respective

lease term, while grants for capital improvements result

in new depreciable assets of the Authority. Success

payments (for expanding operations) and other similar

grants are expensed as they are earned by the tenants.

All existing IMC capital assets, as well as those acquired

by the tenants through Authority grants or otherwise,

remain the property of the Authority, subject only to the

tenants’ rights to use such assets during their respective

lease terms. As of December 31, 2014, the Authority has

provided $7.5 million in grants and $8.0 million in rental

credits to the lessees of the IMC.

Note 10: Risk Management

Risk management is the responsibility of the Authority.

Operationally, the Authority is exposed to various risks of

loss related to the theft of, damage to and destruction of

assets, natural disasters as well as certain tort liabilities for

which commercial insurance is carried. The commercial

insurance policies carry deductibles ranging from $0

to $100,000. Insurance policies procured, including

commercial general liability and commercial property

damage, are inclusive of coverage for certain war casualty

and acts of terrorism. Coverage terms, limits, and

deductibles have each been benchmarked in comparison

with those maintained at other mid-size airports and found

to be within the range of our peers. Although coverage

limits are significant, no assurance can be given that such

coverage will continue to be available at such amounts

and/or at a reasonable cost.

The Authority has a self-insured arrangement for health

care benefits provided to Authority employees and has

established a self-insured liability for employee medical

claims. The Authority utilizes a third-party company to

provide individual stop loss coverage of $100,000 on

each covered individual’s health claims and $4,205,500

on overall health care program aggregate claims. The

estimated self-insurance liability is based on claim trend

and consultation with an actuary. There is no significant

incremental claim adjustment expense, salvage or

subrogation attributable to this liability.

Note 11: Benefit Plan

The Authority provides a 401(a) defined-contribution

employee retirement plan for employer contributions

and a 457(b) deferred compensation plan for employee

contributions. The Authority is the administrator of

these plans, which are available to substantially all of

its employees. Employer contributions to the 401(a)

plan can range from zero up to nine percent of eligible

compensation. Contributions to the plan were $731,605

for 2014 and $619,530 for 2013.

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Note 12: Rental Income From Operating Leases

The Authority leases space in the Indianapolis International

Airport terminal along with other land and buildings on a

fixed fee as well as a contingent rental basis. Many of the

leases provide for a periodic review and adjustment of the

rental amounts. Substantially all capital assets are held by

the Authority for the purpose of rental or related use.

Minimum future rentals on noncancelable operating leases

to be received in each of the next five years and thereafter

as of December 31, 2014 are as follows:

2015 $ 64,900,987

2016 33,118,243

2017 32,477,724

2018 29,260,091

2019 14,653,614

Thereafter 116,400,596

$ 290,811,255

The Authority has entered into an Agreement and Lease

of Premises (Airline Agreement) with certain passenger,

charter and cargo airlines serving the airport (collectively,

the Signatory Airlines). Other airlines operate under

an airport use permit that generally has a term of no

more than two years. The Airline Agreement’s residual

rate-making features are designed to ensure that the

Authority’s debt service and related coverage obligations,

including the Rate Covenant, will be met. The Airline

Agreement authorizes the Authority to implement

new fees and charges as necessary. In the event of an

airline bankruptcy, the Authority may adjust the rates

and charges for all Signatory Airlines in the current rate

period to recover the rates and charges due from the

bankrupt carrier. However, there can be no assurance that

such other airlines will be financially able to absorb the

additional costs. Rental rates under these agreements are

determined annually.

Contingent rentals and fees aggregated approximately

$42.4 million in 2014 and $42.1 million in 2013, and are

accrued in arrears.

Note 13: Commitments and Contingencies

Land Acquisition and Disposal In 1991, the Authority updated its FAA Part 150 Noise and

Land Use Compatibility Study and final recommendations

were adopted by the Authority Board in April 1992. The

recommendations included expanding the Guaranteed

Purchase Program to add approximately 750 more

homes. As of December 31, 2014, the Authority has spent

approximately $102.6 million (including relocation costs)

under this program (Phase II), substantially all of which

was eligible for 80% reimbursement from the FAA. There

are an estimated 30 homes remaining eligible for purchase

under Phase II.

A second update and five-year review of the Authority’s

noise compatibility program (Phase III) began in 1996.

Final recommendations were adopted by the Authority

Board in February 1998, followed by FAA approval

in October 1998. The recommendations include

continuation of the Guaranteed Purchase Program with

respect to approximately 132 additional homes, of which

127 have been acquired by the Authority. In addition,

approximately 361 homes are eligible for the Sound

Insulation and Purchase Assurance Programs.

The Sound Insulation Program pays for a home within

the impacted noise area to be sound insulated with

respect to doors, window treatments, etc., with no further

cash outlay required by the Authority. At December 31,

2014, 316 homes have been sound insulated under this

program. Under the Purchase Assurance Program, the

Authority will purchase the property, sound insulate the

home and then resell the property on the open market. At

December 31, 2014, 118 homeowners have expressed an

interest and successfully completed their participation in

the Purchase Assurance Program. Participation in either the

Sound Insulation or Purchase Assurance programs requires

the homeowner to grant an aviation easement in favor of

the Authority.

A third program, Sales Assistance, is available to

approximately 487 homes, of which 382 requests have

been completed. Sales Assistance consists of a benefit

payment to homeowners adjacent to the 65DNL noise

contour. The benefit payment is equal to 10% of the

contract sales price between the homeowner and third-

party buyer, in exchange for the inclusion of a Noise

Disclosure Statement in the deed of conveyance. The

estimated cost of the Phase III programs approximate

$98.5 million. These programs, excluding Sales Assistance,

are eligible for reimbursement from passenger facility

charges and FAA noise grants (at 80% reimbursement).

The noise mitigation land use programs described above

are voluntary on the part of the homeowner as there is

no legal requirement that homeowners participate in any

of these programs, therefore, the foregoing comments

regarding the number of homeowners eligible for

participation in the various programs assumes 100%

participation, which is unlikely.

The Authority has also acquired land south of Interstate

70 (I-70). With the exception of one small parcel of land,

all parcels have been acquired for the future development

of a third parallel runway in this area. As of December 31,

2014, the Authority has expended approximately $13.7

million for this project.

In November 2014, the Authority Board approved and

adopted Resolution No. 12-2014, establishing certain land

use policies and guidelines for the implementation of a

new land use initiative. The Authority owns approximately

9,000 acres of land in and around the Indianapolis

International Airport, with large holdings not only in

Wayne and Decatur Townships of Marion County, but

also in neighboring Hendricks County. After an extensive

review of its land holdings in 2014, the Authority

developed this land use initiative under which more

than 30 parcels of land (approximately 743 acres) will be

available for sale, and an additional six large parcels of

land (470 acres) will be available for leasing opportunities.

With respect to the Authority’s permanently protected

bat and wetland habitat (containing approximately

2,000 acres), the Authority will pursue opportunities to

divest itself of this land to a third party who has expertise

in this area, such as a public or private conservation

organization or governmental entity that has responsibility

for environmental matters. As land is sold and proceeds

received, the Authority will determine how those proceeds

must be treated, including what amounts, if any, must be

returned to the Federal Aviation Administration directly or

reinvested in other AIP eligible projects pursuant to federal

grant requirements.

Environmental Mitigation and Remediation In order to comply with environmental laws, the Authority

has implemented a natural resource mitigation program to

create, monitor and maintain wetlands along with habitats

for the endangered Indiana bat. As of December 31, 2014,

the Authority had acquired approximately 1,993 acres in

order to replace wetland and bat habitat areas that were

removed by construction of the Indianapolis Maintenance

Center and runway 5L-23R. The Authority will continue

to maintain and monitor interim bat habitats under this

program pursuant to a permit with the U.S. Fish & Wildlife

Service through the year 2016 and approximately 2,000

acres of wetlands and certain associated summer bat

habitats in perpetuity, or until control over such areas are

transferred to an entity that will assume the responsibility.

Approximately $22.9 million has been spent under this

program, of which approximately 28% was eligible for

reimbursement from the FAA. The Authority’s share of the

costs for this conservation plan was originally estimated

to be $2.4 million, and as of December 31, 2014, the

Authority has incurred $2.8 million in costs.

The Authority is currently involved in three separate

pollution remediation obligations that meet the

requirements for accounting treatment under GASB

Statement 49, Accounting and Financial Reporting for

Pollution Remediation Obligations. These obligations

are related primarily to the removal and/or treatment

of contaminated soil associated with underground

fuel tanks. The pronouncement dictates that for each

obligating event, an estimate of the expected pollution

remediation outlays is required to be accrued as a liability

and expensed in the current period. Re-measurement of

the liability is required when new information indicates

increases or decreases in estimated outlays.

The amount of the estimated liability as of December

31, 2014 and 2013 was $130,000 and $329,000,

respectively, which represents the approximate present

value of the amounts the Authority expects to pay for

future remediation activities. This estimate was generated

using input and guidance from internal management and

professional consultants, and represents a wide array of

remediation activities ranging from one-time events to

longer term sustained monitoring activity.

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75


The Authority will continue to closely monitor each of

these obligations, working toward the point of ultimate

resolution, and will make any necessary adjustments to the

potential liability as new information becomes available.

Capital Improvements As of December 31, 2014, the Authority had outstanding

commitments for certain airport improvements

aggregating approximately $18.3 million.

Litigation and Claims The nature of the business of the Authority generates

certain litigation against the Authority arising in the

ordinary course of business.

As of December 31, 2014, there were ten claims in

litigation for alleged personal injury, property damages,

constructive eviction, unjust enrichment, and/or other

claims pending against the Authority. Eight of these claims

were for personal injury, one was for property damage

from a hangar fire, and one was from a tenant alleging

overpayment of rental to the Authority; the claims for

personal injury and property damage are fully insured. In

addition, there were two worker’s compensation claims

pending as of December 31, 2014. The Authority was also

aware of several claims for which legal action against the

Authority might be threatened or possible in the future.

In addition to the foregoing, as of December 31, 2014,

there were two claims in litigation filed by the Authority

against third parties for various reasons, including breach

of contract and breach of duty of good faith and fair

dealing. The Authority, in these matters, is seeking the

enforcement of certain provisions of a lease and insurance

policy, as well as judgment and damages. No amounts

have been accrued as receivable in relation to these claims

filed by the Authority.

SUPPLEMENTARY INFORMATION

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77


2014

Authority IMC Total


Current Assets

Unrestricted Assets

Cash and cash equivalents $ 16,178,400 $ – $ 16,178,400

Accounts receivable, net 2,210,182 – 2,210,182

Unbilled revenues 2,336,519 – 2,336,519

Grants receivable 10,064,914 – 10,064,914

Supplies and materials inventories 1,584,607 – 1,584,607

Other 1,670,439 – 1,670,439

Total unrestricted current assets 34,045,061 – 34,045,061

Restricted Assets

Cash and cash equivalents 46,548,516 – 46,548,516

Cash and cash equivalents - customer deposits 684,200 – 684,200

Receivable - passenger facility charges 1,158,210 – 1,158,210

Receivable - other governments 623,079 3,330,887 3,953,966

Receivable - reimbursable IMC expenses – 2,875,098 2,875,098

Total restricted current assets 49,014,005 6,205,985 55,219,990

Total current assets 83,059,066 6,205,985 89,265,051

Noncurrent Assets

Cash and cash equivalents, restricted 75,382,143 – 75,382,143

Investment securities, unrestricted 34,832,891 – 34,832,891

Investment securities, restricted 61,409,160 – 61,409,160

Investment derivatives - basis swap agreements (365,256) – (365,256)

Rent receivable 1,642,454 – 1,642,454

Derivative instruments - forward delivery purchase agreements 19,545,054 – 19,545,054

Capital assets, net 1,677,288,507 281,293,232 1,958,581,739

Total noncurrent assets 1,869,734,953 281,293,232 2,151,028,185

Total assets 1,952,794,019 287,499,217 2,240,293,236


Deferred loss on refunding of debt 40,111,560 – 40,111,560

Accumulated decrease in fair value of hedging derivatives 17,340,139 – 17,340,139

Total deferred outflows of resources 57,451,699 – 57,451,699

Total assets and deferred outflows of resources $ 2,010,245,718 $ 287,499,217 $ 2,297,744,935

SCHEDULE OF BALANCE SHEET INFORMATION | December 31, 2014

2014

Authority IMC Total


Current Liabilities


Accounts payable $ 3,399,156 $ – $ 3,399,156

Accrued and withheld items 4,770,206 – 4,770,206

Total current liabilities payable from unrestricted assets 8,169,362 – 8,169,362


Accounts payable 6,991,705 3,129,123 10,120,828

Customer deposits payable 685,200 – 685,200

Current portion of debt 29,946,672 24,362,610 54,309,282

Accrued interest on debt 15,224,191 330,138 15,554,329

Total current liabilities payable from restricted assets 52,847,768 27,821,871 80,669,639

Total current liabilities 61,017,130 27,821,871 88,839,001


Derivative instruments - interest rate

swap agreements 84,528,941 – 84,528,941

Bonds payable and other debt, payable from restricted assets 1,027,062,992 53,126,168 1,080,189,160

Total noncurrent liabilities 1,111,591,933 53,126,168 1,164,718,101

Total liabilities 1,172,609,063 80,948,039 1,253,557,102

Net Position

Net investment in capital assets 667,658,893 200,803,704 868,462,597

Restricted for

Capital projects 44,481,210 – 44,481,210

Debt service 62,293,501 3,000,749 65,294,250

Other 852,007 2,746,725 3,598,732

Total restricted net position 107,626,718 5,747,474 113,374,192

Unrestricted 62,351,044 – 62,351,044

Total net position 837,636,655 206,551,178 1,044,187,833

Total liabilities and net position $ 2,010,245,718 $ 287,499,217 $ 2,297,744,935

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79


SCHEDULE OF BALANCE SHEET INFORMATION | December 31, 2013

2013

Authority IMC Total


Current Assets

Unrestricted Assets

Cash and cash equivalents $ 14,817,334 $ – $ 14,817,334

Accounts receivable, net 3,141,814 – 3,141,814

Unbilled revenues 2,966,738 – 2,966,738

Grants receivable 7,261,642 – 7,261,642

Supplies and materials inventories 1,456,145 – 1,456,145

Other 1,615,888 – 1,615,888

Total unrestricted current assets 31,259,561 – 31,259,561

Restricted Assets

Cash and cash equivalents 55,876,996 – 55,876,996

Cash and cash equivalents - customer deposits 784,428 – 784,428

Receivable - passenger facility charges 1,228,476 – 1,228,476

Receivable - other governments 529,654 3,324,981 3,854,635

Receivable - reimbursable IMC expenses – 1,767,048 1,767,048

Total restricted current assets 58,419,554 5,092,029 63,511,583

Total current assets 89,679,115 5,092,029 94,771,144

Noncurrent Assets

Cash and cash equivalents, restricted 92,224,783 – 92,224,783

Investment securities, unrestricted 32,256,989 – 32,256,989

Investment securities, restricted 37,755,022 – 37,755,022

Investment derivatives - basis swap agreements 4,073,223 – 4,073,223

Rent receivable 1,988,198 – 1,988,198

Unamortized lease costs – 116,603 116,603

Derivative instruments - forward delivery purchase agreements 4,771,947 – 4,771,947

Capital assets, net 1,729,637,754 295,294,290 2,024,932,044

Total noncurrent assets 1,902,707,916 295,410,893 2,198,118,809

Total assets 1,992,387,031 300,502,922 2,292,889,953


Deferred loss on refunding of debt 45,565,014 – 45,565,014

Accumulated decrease in fair value of hedging derivatives 1,911,064 – 1,911,064

Total deferred outflows of resources 47,476,078 – 47,476,078

Total assets and deferred outflows of resources $ 2,039,863,109 $ 300,502,922 $ 2,340,366,031

2013

Authority IMC Total


Current Liabilities


Accounts payable $ 3,685,708 $ – $ 3,685,708

Accrued and withheld items 4,270,013 – 4,270,013

Total current liabilities payable from unrestricted assets 7,955,721 – 7,955,721


Accounts payable 6,808,637 3,469,013 10,277,650

Customer deposits payable 785,428 – 785,428

Current portion of debt 33,059,005 23,243,091 56,302,096

Accrued interest on debt 18,663,129 405,967 19,069,096

Total current liabilities payable from restricted assets 59,316,199 27,118,071 86,434,270

Total current liabilities 67,271,920 27,118,071 94,389,991


Derivative instruments - interest rate

swap agreements 54,326,759 – 54,326,759

Bonds payable and other debt, payable from restricted assets 1,064,721,550 77,488,778 1,142,210,328

Total noncurrent liabilities 1,119,048,309 77,488,778 1,196,537,087

Total liabilities 1,186,320,229 104,606,849 1,290,927,078

Net Position

Net investment in capital assets 692,307,693 191,643,407 883,951,100

Restricted for

Capital projects 34,944,858 – 34,944,858

Debt service 66,463,271 2,919,014 69,382,285

Other 2,278,031 1,217,049 3,495,080

Total restricted net position 103,686,160 4,136,063 107,822,223

Unrestricted 57,549,027 116,603 57,665,630

Total net position 853,542,880 195,896,073 1,049,438,953

Total liabilities and net position $ 2,039,863,109 $ 300,502,922 $ 2,340,366,031

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SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET POSITION INFORMATION Years Ended December 31, 2014 and 2013

2014

Authority IMC TotalOperating Revenues Airfield $ 21,673,724 $ – $ 21,673,724 Terminal complex 49,436,370 – 49,436,370 Parking 43,469,204 – 43,469,204 Rented buildings and other 15,947,294 – 15,947,294 Indianapolis Maintenance Center (IMC) – 9,200,391 9,200,391 Reliever airports 3,104,534 – 3,104,534 Total operating revenues 133,631,126 9,200,391 142,831,517

Operating Expenses Personal services 25,778,047 483,049 26,261,096 Contractual services 14,603,477 3,581,808 18,185,285 Utilities 6,600,510 2,830,494 9,431,004 Supplies 3,722,310 264,315 3,986,625 Materials 2,404,298 18,749 2,423,047 General 1,807,965 281,508 2,089,473 Total operating expenses before depreciation 54,916,607 7,459,923 62,376,530

Income From Operations Before Depreciation Expense 78,714,519 1,740,468 80,454,987 Depreciation expense 77,970,110 16,156,804 94,126,914

Income (Loss) From Operations 744,409 (14,416,336) (13,671,927)

Non-operating Revenues (Expenses) State and local appropriations 825,542 25,959,499 26,785,041 Federal operating grants 1,036,085 – 1,036,085 Passenger facility charges 14,645,121 – 14,645,121 Customer facility charge (rental cars) 6,442,212 – 6,442,212 Investment income 2,678,463 – 2,678,463 Interest expense, net of capitalized interest (55,218,852) (2,716,408) (57,935,260) Gain (Loss) on disposals of capital assets and other 621,023 – 621,023 (28,970,406) 23,243,091 (5,727,315)

Increase (Decrease) in Net Position Before Capital Contributions and Grants (28,225,997) 8,826,755 (19,399,242)

Capital Contributions and Grants Federal, state and local grants 12,327,394 – 12,327,394 Contributions from lessees and other 1,820,728 – 1,820,728 14,148,122 – 14,148,122

Increase (Decrease) in Net Position (14,077,875) 8,826,755 (5,251,120)

Transfers (1,828,350) 1,828,350 –

Net Position, Beginning of Year 853,542,880 195,896,073 1,049,438,953

Net Position, End of Year $ 837,636,655 $ 206,551,178 $ 1,044,187,833

2013

Authority IMC TotalOperating Revenues Airfield $ 21,468,743 $ – $ 21,468,743 Terminal complex 49,457,673 – 49,457,673 Parking 40,718,709 – 40,718,709 Rented buildings and other 15,659,448 – 15,659,448 Indianapolis Maintenance Center (IMC) – 9,395,175 9,395,175 Reliever airports 2,960,507 – 2,960,507 Total operating revenues 130,265,080 9,395,175 139,660,255

Operating Expenses Personal services 26,058,409 474,767 26,533,176 Contractual services 13,114,514 4,113,972 17,228,486 Utilities 5,744,305 2,735,576 8,479,881 Supplies 3,662,431 241,385 3,903,816 Materials 2,019,341 (87,140) 1,932,201 General 1,668,559 456,003 2,124,562 Total operating expenses before depreciation 52,267,559 7,934,563 60,202,122

Income From Operations Before Depreciation Expense 77,997,521 1,460,612 79,458,133 Depreciation expense 79,552,973 16,267,711 95,820,684

Income (Loss) From Operations (1,555,452) (14,807,099) (16,362,551)

Non-operating Revenues (Expenses) State and local appropriations 825,542 25,992,523 26,818,065 Federal operating grants 868,966 – 868,966 Passenger facility charges 14,473,637 – 14,473,637 Customer facility charge (rental cars) 6,097,820 – 6,097,820 Investment income 5,237,098 – 5,237,098 Interest expense, net of capitalized interest (54,383,570) (3,808,065) (58,191,635) Gain (Loss) on disposals of capital assets and other (2,448,881) – (2,448,881) (29,329,388) 22,184,458 (7,144,930)

Increase (Decrease) in Net Position Before Capital Contributions and Grants (30,884,840) 7,377,359 (23,507,481)

Capital Contributions and Grants Federal, state and local grants 10,321,815 – 10,321,815 Contributions from lessees and other 11,171,313 – 11,171,313 21,493,128 – 21,493,128

Increase (Decrease) in Net Position (9,391,712) 7,377,359 (2,014,353)

Transfers 1,995,857 (1,995,857) –

Net Position, Beginning of Year, As Previously Reported 860,938,735 190,514,571 1,051,453,306

Net Position, End of Year $ 853,542,880 $ 195,896,073 $ 1,049,438,953

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SCHEDULES OF OPERATING REVENUES | Years Ended December 31, 2014 and 2013

Increase

2014 2013 (Decrease)

Airfield Landing fees - scheduled airlines $ 7,768,443 $ 7,876,130 $ (107,687) Landing fees - freight and other 10,304,967 10,172,021 132,946 Apron fees 1,993,759 2,085,167 (91,408) Commissions - aviation fuel sales 281,483 243,244 38,239 Other 1,325,072 1,092,181 232,891 21,673,724 21,468,743 204,981

Terminal Complex Space rental Airlines 26,102,447 26,428,972 (326,525) Concessionaires 7,382,263 7,480,441 (98,178) Other space rental 1,394,935 1,320,779 74,156 Automobile rental commissions 9,439,326 9,146,137 293,189 Other commissions, fees, etc. 5,117,399 5,081,344 36,055 49,436,370 49,457,673 (21,303)

Parking - parking operations 43,469,204 40,718,709 2,750,495

Rented Buildings and Other Space rental - freight buildings 927,796 929,573 (1,777) Space rental - hangars 648,697 662,586 (13,889) Space rental - other buildings 7,660,450 7,641,364 19,086 Ground leases 6,148,547 5,790,366 358,181 Farm income 149,336 161,759 (12,423) International building 23,500 24,750 (1,250) Other 388,968 449,050 (60,082) 15,947,294 15,659,448 287,846

Indianapolis Maintenance Center (IMC) 9,200,391 9,395,175 (194,784)

Reliever Airports 3,104,534 2,960,507 144,027

$ 142,831,517 $ 139,660,255 $ 3,171,262

ENHANCING AND SERVING OUR

COMMUNITY

Supporting local charities is an important

way to help enhance and serve the community. Events, such

as IAA’s Annual Charity Golf Outing raise money and

awareness for worthy causes. Participants have an

enriching experience and know they are making a difference while

having a fun-filled day with friends and colleagues. Throughout the

year, IAA employees participate in a number of charitable

events and provide financial support to help improve

the lives of those in need.

83

84


85


Year Ended Reliever Public December 31, Increase Airports Safety Administration Total 2013 (Decrease)

Personal Services Salaries and wages $ 265,470 $ 5,771,781 $ 5,061,648 $ 20,143,488 $ 20,215,661 $ (72,173) Employee insurance 41,491 1,187,489 746,134 3,831,609 4,118,503 (286,894) Retirement and social security 29,139 860,970 503,533 2,285,999 2,199,012 86,987 336,100 7,820,240 6,311,315 26,261,096 26,533,176 (272,080)

Contractual Services Transportation and communication 26,721 73,733 801,927 1,091,546 912,467 179,079 Professional fees 11,182 61,883 2,127,282 3,428,098 2,925,465 502,633 Printing and advertising – 2,898 184,017 300,865 255,579 45,286 Repairs and maintenance 51,402 27,432 1,047,981 4,459,633 4,361,703 97,930 Facilities maintenance and security 56,860 170 18,153 4,975,598 5,070,222 (94,624) Other contractual services 100,309 896,572 304,441 3,929,545 3,703,050 226,495 246,474 1,062,688 4,483,801 18,185,285 17,228,486 956,799

Utilities 263,229 183,391 65,366 9,431,004 8,479,881 951,123

Supplies Fuel 504,294 – – 1,408,208 1,391,964 16,244 Garage and motor 7,250 22,557 4,122 244,064 199,007 45,057 Institutional and medical 11,192 29,489 1,375 511,615 595,354 (83,739) Office supplies 1,218 59,504 36,612 118,590 111,197 7,393 Snow and ice chemicals 21,606 42 845 924,331 811,647 112,684 Other 11,544 144,948 98,863 779,817 794,647 (14,830) 557,104 256,540 141,817 3,986,625 3,903,816 82,809Materials Building 6,260 2,669 663 80,698 (23,647) 104,345 Pavement and grounds 59,939 1,355 177 454,883 348,152 106,731 Repair parts 59,246 229,775 21,861 1,740,639 1,432,433 308,206 Small equipment and tools 3,285 7,770 2,534 51,100 46,028 5,072 Other (126) 13,675 4,057 95,727 129,235 (33,508) 128,604 255,244 29,292 2,423,047 1,932,201 490,846

General Insurance 127,134 174,800 24,896 1,311,293 1,268,772 42,521 Equipment rental – 221 61,109 214,823 263,422 (48,599) Other (including bad debts) – 11,082 430,640 563,357 592,368 (29,011) 127,134 186,103 516,645 2,089,473 2,124,562 (35,089)

Subtotal 1,658,645 9,764,206 11,548,236 62,376,530 60,202,122 2,174,408

Depreciation 2,827,975 195,376 996,449 94,126,914 95,820,684 (1,693,770)

$ 4,486,620 $ 9,959,582 $ 12,544,685 $ 156,503,444 $ 156,022,806 $ 480,638

SCHEDULE OF OPERATING EXPENSES | Year Ended December 31, 2014 (With Comparative Totals for 2013)

20142014

Rented Indianapolis Terminal Buildings Maintenance Airfield Complex Parking and Other Center (IMC)

Personal Services Salaries and wages $ 1,995,943 $ 3,770,639 $ 2,493,267 $ 411,230 $ 373,510 Employee insurance 363,724 932,595 464,213 28,314 67,649 Retirement and social security 201,087 388,907 220,881 39,592 41,890 2,560,754 5,092,141 3,178,361 479,136 483,049

Contractual Services Transportation and communication 76,446 27,921 21,651 29,665 33,482 Professional fees 556,097 24,237 451,710 146,037 49,670 Printing and advertising 1,584 2,225 106,508 3,633 – Repairs and maintenance 200,047 2,183,931 346,678 152,834 449,328 Facilities maintenance and security 29,876 1,798,430 262,630 37,249 2,772,230 Other contractual services 327,067 742,675 1,249,302 32,081 277,098 1,191,117 4,779,419 2,438,479 401,499 3,581,808

Utilities 1,943,897 3,421,831 482,739 240,057 2,830,494

Supplies Fuel 489,379 – 371,227 – 43,308 Garage and motor 148,792 6,155 53,240 61 1,887 Institutional and medical 20,636 362,793 80,064 1,570 4,496 Office supplies 5,098 4,823 7,023 2,980 1,332 Snow and ice chemicals 587,433 583 277,896 3,418 32,508 Other 72,989 213,723 53,172 3,794 180,784 1,324,327 588,077 842,622 11,823 264,315 Materials Building 23,653 44,138 22,182 4,325 (23,192) Pavement and grounds 372,933 975 199 19,305 – Repair parts 801,181 214,215 392,677 3,448 18,236 Small equipment and tools 8,422 16,969 9,655 22 2,443 Other 35,096 8,764 5,267 7,732 21,262 1,241,285 285,061 429,980 34,832 18,749

General Insurance 265,318 418,708 168,855 (31,347) 162,929 Equipment rental – – 151,892 – 1,601 Other (including bad debts) 2,620 1,100 4 933 116,978 267,938 419,808 320,751 (30,414) 281,508

Subtotal 8,529,318 14,586,337 7,692,932 1,136,933 7,459,923

Depreciation 27,439,069 21,935,788 3,864,057 20,711,396 16,156,804

$ 35,968,387 $ 36,522,125 $ 11,556,989 $ 21,848,329 $ 23,616,727

86


87


Year Ended Reliever Public December 31, Increase Airports Safety Administration Total 2012 (Decrease)

Personal Services Salaries and wages $ 252,440 $ 5,739,457 $ 4,935,884 $ 20,215,661 $ 22,239,135 $ (2,023,474) Employee insurance 54,451 1,265,371 822,094 4,118,503 4,702,091 (583,588) Retirement and social security 26,802 769,395 513,482 2,199,012 2,276,352 (77,340) 333,693 7,774,223 6,271,460 26,533,176 29,217,578 (2,684,402)

Contractual Services Transportation and communication 24,749 98,027 650,492 912,467 939,487 (27,020) Professional fees – 89,634 1,775,687 2,925,465 2,942,210 (16,745) Printing and advertising – 944 92,017 255,579 251,530 4,049 Repairs and maintenance 17,832 66,078 1,061,506 4,361,703 4,588,823 (227,120) Facilities maintenance and security 4,318 – 4,896 5,070,222 5,606,253 (536,031) Other contractual services 115,412 879,937 322,349 3,703,050 1,706,602 1,996,448 162,311 1,134,620 3,906,947 17,228,486 16,034,905 1,193,581

Utilities 240,673 166,433 64,829 8,479,881 7,977,155 502,726

Supplies Fuel 482,315 – – 1,391,964 1,459,849 (67,885) Garage and motor 5,039 22,765 5,172 199,007 202,724 (3,717) Institutional and medical 9,567 31,239 1,243 595,354 564,439 30,915 Office supplies 612 70,137 24,998 111,197 122,170 (10,973) Snow and ice chemicals 7,521 42 – 811,647 718,596 93,051 Other 10,523 146,994 250,710 794,647 609,745 184,902 515,577 271,177 282,123 3,903,816 3,677,523 226,293Materials Building 3,609 904 225 (23,647) 67,947 (91,594) Pavement and grounds 34,545 577 480 348,152 394,265 (46,113) Repair parts 54,679 139,317 27,563 1,432,433 1,181,787 250,646 Small equipment and tools 7,410 6,106 4,247 46,028 82,460 (36,432) Other 5,004 22,301 8,678 129,235 217,135 (87,900) 105,247 169,205 41,193 1,932,201 1,943,594 (11,393)

General Insurance 75,465 176,220 22,750 1,268,772 1,337,143 (68,371) Equipment rental – 134 59,151 263,422 212,676 50,746 Other (including bad debts) 46 9,366 294,604 592,368 285,234 307,134 75,511 185,720 376,505 2,124,562 1,835,053 289,509

Subtotal 1,433,012 9,701,378 10,943,057 60,202,122 60,685,808 (483,686)

Depreciation 2,848,080 213,712 2,619,102 95,820,684 95,335,879 484,805

$ 4,281,092 $ 9,915,090 $ 13,562,159 $ 156,022,806 $ 156,021,687 $ 1,119

SCHEDULE OF OPERATING EXPENSES | Year Ended December 31, 2013 (With Comparative Totals for 2012)

20132013

Rented Indianapolis Terminal Buildings Maintenance Airfield Complex Parking and Other Center (IMC)

Personal Services Salaries and wages $ 2,077,083 $ 3,901,095 $ 2,531,574 $ 413,163 $ 364,965 Employee insurance 481,815 941,796 439,766 43,559 69,651 Retirement and social security 213,820 387,341 219,730 28,291 40,151 2,772,718 5,230,232 3,191,070 485,013 474,767

Contractual Services Transportation and communication 70,804 27,675 13,546 4,876 22,298 Professional fees 488,057 60,833 279,553 83,613 148,088 Printing and advertising 937 2,399 145,678 13,276 328 Repairs and maintenance 213,563 2,155,508 246,258 97,606 503,352 Facilities maintenance and security 119,429 1,822,567 33,597 12,902 3,072,513 Other contractual services 72,127 659,207 992,987 293,638 367,393 964,917 4,728,189 1,711,619 505,911 4,113,972

Utilities 1,568,268 3,100,278 449,370 154,454 2,735,576

Supplies Fuel 432,762 – 431,626 – 45,261 Garage and motor 119,433 5,352 39,363 – 1,883 Institutional and medical 15,995 390,464 71,533 391 74,922 Office supplies 3,913 4,591 4,466 1,713 767 Snow and ice chemicals 588,101 3,809 195,069 – 17,105 Other 63,836 134,472 86,330 335 101,447 1,224,040 538,688 828,387 2,439 241,385 Materials Building 1,600 75,432 7,508 3,491 (116,416) Pavement and grounds 317,198 (5,243) 595 – – Repair parts 670,441 108,947 419,893 229 11,364 Small equipment and tools 12,616 14,754 167 – 728 Other 56,325 6,275 11,507 1,961 17,184 1,058,180 200,165 439,670 5,681 (87,140)

General Insurance 226,454 435,212 184,447 (6,609) 154,833 Equipment rental – – 182,480 716 20,941 Other (including bad debts) 4,424 1,245 1,141 1,313 280,229 230,878 436,457 368,068 (4,580) 456,003

Subtotal 7,819,001 14,234,009 6,988,184 1,148,918 7,934,563

Depreciation 27,862,738 22,114,356 4,213,273 19,681,712 16,267,711

$ 35,681,739 $ 36,348,365 $ 11,201,457 $ 20,830,630 $ 24,202,274

88


89


SCHEDULE OF BOND DEBT SERVICE REQUIREMENTS TO MATURITY December 31, 2014

2014A Revenue Bonds 2013A Revenue Bonds 2013B Revenue Bonds 2012A Revenue Bonds

Principal Interest Principal Interest Principal Interest Principle Interest

2015 $ – $ 5,892,990 $ 435,000 $ 224,325 $ 1,270,000 $ 360,278 $ 7,830,000 $ 442,716

2016 – 8,066,450 445,000 216,450 1,290,000 339,750 7,925,000 344,324

2017 1,490,000 8,044,100 450,000 208,395 10,310,000 318,941 8,030,000 244,711

2018 – 8,021,750 11,240,000 200,250 9,825,000 152,266 8,130,000 143,750

2019 – 8,021,750 – – – – 5,370,000 41,600

2020 6,205,000 7,866,625 – – – – – –

2021 6,515,000 7,548,625 – – – – – –

2022 6,840,000 7,214,750 – – – – – –

2023 7,185,000 6,864,125 – – – – – –

2024 11,070,000 6,407,750 – – – – – –

2025 8,130,000 5,927,750 – – – – – –

2026 8,535,000 5,511,125 – – – – – –

2027 8,965,000 5,073,625 – – – – – –

2028 9,415,000 4,614,125 – – – – – –

2029 13,375,000 4,044,375 – – – – – –

2030 14,045,000 3,358,875 – – – – – –

2031 14,750,000 2,639,000 – – – – – –

2032 15,485,000 1,883,125 – – – – – –

2033 16,260,000 1,089,500 – – – – – –

2034 17,075,000 341,500 – – – – – –

2035 – – – – – – – –

2036 – – – – – – – –

2037 – – – – – – – –

$ 165,340,000 $ 108,431,915 $ 12,570,000 $ 849,420 $ 22,695,000 $ 1,171,235 $ 37,285,000 $ 1,217,101

1 – The 2010C Revenue Bonds bear interest at a variable rate. See Note 5 to the financial statements.

2010C Revenue Bonds1 2010A Revenue Bonds 2006A Revenue Bonds 2005A Revenue Bonds Total Debt

Principal Interest Principal Interest Principal Interest Principle Interest Service

2015 $ 4,680,000 $ 2,153,676 $ 620,000 $ 1,069,363 $ 14,410,000 $ 11,346,925 $ – $ 10,035,969 $ 60,771,242

2016 4,915,000 2,128,850 645,000 1,044,063 15,145,000 10,608,050 – 10,035,969 63,148,906

2017 5,170,000 2,102,739 670,000 1,017,763 15,915,000 9,831,550 – 10,035,969 73,839,168

2018 5,430,000 2,075,312 695,000 990,463 16,730,000 9,015,425 – 10,035,969 82,685,185

2019 5,710,000 2,046,474 725,000 962,063 17,570,000 8,157,925 – 10,035,969 58,640,781

2020 6,000,000 2,016,169 755,000 932,463 18,465,000 7,257,050 – 10,035,969 59,533,276

2021 6,305,000 1,984,323 785,000 901,663 19,410,000 6,310,175 – 10,035,969 59,795,755

2022 6,630,000 1,950,838 815,000 869,153 20,390,000 5,315,175 – 10,035,969 60,060,885

2023 6,965,000 1,915,659 850,000 834,281 14,135,000 4,452,050 7,735,000 9,837,759 60,773,874

2024 18,965,000 1,791,448 885,000 797,413 1,220,000 4,069,700 13,265,000 9,291,344 67,762,655

2025 19,980,000 1,652,620 925,000 758,372 1,275,000 4,010,444 17,480,000 8,484,288 68,623,474

2026 21,050,000 1,506,305 965,000 716,425 1,335,000 3,948,456 18,420,000 7,541,913 69,529,224

2027 22,180,000 1,352,079 1,005,000 672,100 1,400,000 3,883,500 19,420,000 6,548,613 70,499,917

2028 23,365,000 1,189,537 1,050,000 624,550 – 3,850,250 20,470,000 5,501,500 70,079,962

2029 24,610,000 1,018,266 1,100,000 573,488 – 3,850,250 18,100,000 4,489,038 71,160,417

2030 25,930,000 837,742 1,155,000 519,931 – 3,850,250 19,080,000 3,513,063 72,289,861

2031 27,310,000 647,527 1,210,000 462,250 – 3,850,250 20,130,000 2,534,125 73,533,152

2032 28,775,000 447,034 1,270,000 400,250 – 3,850,250 21,120,000 1,554,438 74,785,097

2033 30,315,000 235,723 1,335,000 335,125 – 3,850,250 22,165,000 526,419 76,112,017

2034 12,035,000 162,092 1,400,000 266,750 – 3,850,250 – – 35,130,592

2035 12,650,000 98,201 1,470,000 195,000 36,300,000 2,942,750 – – 53,655,951

2036 13,295,000 31,051 1,545,000 119,625 40,705,000 1,017,625 – – 56,713,301

2037 5,015,000 2,119 1,620,000 40,500 – – – – 6,677,619

$ 337,280,000 $ 29,345,784 $ 23,495,000 $ 15,103,054 $ 234,405,000 $ 119,118,550 $ 197,385,000 $ 140,110,252 $1,445,802,311

90


91


STATISTICAL INFORMATION

Financial Trend Data

Revenue Capacity Data

Debt Capacity Data

Operating Information

Demographic and Economic Data

These schedules provide information on the distribution

of IND’s carriers, passenger traffic, and airport personnel

over the past ten years as well as how the airport is insured

against material risk.

• Airline Landing Weight Statistics

• Enplaned Passenger Statistics

• Airport Employee Statistics

• Schedule of Insurance

Demographic and economic data The data in these schedules illustrates the current

demographic and economic status of the Indianapolis

Metropolitan Statistical Area (MSA) as well as trends over

the past ten years.

The Indianapolis MSA supports the majority of the traffic

passing through IND.

• Demographic and Economic Statistics

• Principal Employers in Indianapolis

• Other Airport Information

The Statistical Section provides information with up to ten

years of comparable data, when available, and differs from

the audited financial statements as some non-accounting

data is presented.

Financial trend data These schedules depict the financial position of the

IAA over the past several years. The trend information

provided allows for an understanding of how revenues and

expenses have changed over the years as well as how cash

has been utilized.

• Balance Sheets

• Statements of Revenue, Expenses and Changes

in Net Position

• Changes in Cash and Cash Equivalents

Revenue capacity data These schedules identify the significant sources of IND’s

Operating Revenues and the airline rates and charges

associated with generating these revenues.

• Operating Revenues

• Signatory Airline Rates and Charges

Debt capacity data The data in these schedules reveals the trends in

outstanding debt that the airport has carried over the past

ten years, related debt service ratios, as well as the airport’s

ability to repay the outstanding debt.

• Outstanding Debt and Debt Service Ratios

• Revenue Bond Debt Service Coverage

Operating information

STATISTICAL SECTION (unaudited) | Fiscal Year Ended December 31, 2014

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93


BALANCE SHEETS | For the Last Ten Years Ended December 31 (in thousands)

2014 2013(1) 2012(1) 2011 2010(2) 2009(2) 2008(2) 2007 2006 2005

Assets Current Assets - Unrestricted $ 34,045 $ 31,260 $ 30,562 $ 32,238 $ 61,369 $ 62,851 $ 77,189 $ 70,050 $ 45,264 $ 45,976 Current Assets – Restricted 55,220 63,511 51,009 67,476 61,744 54,300 40,017 41,359 47,049 38,009 Noncurrent Assets: Capital Assets, Net 1,958,582 2,024,932 2,077,729 2,122,516 2,208,994 2,140,139 2,182,891 1,844,781 1,444,013 1,174,325 Other Noncurrent Assets 192,446 173,187 208,089 235,711 177,070 212,050 269,904 394,576 638,799 417,999 Total Assets 2,240,293 2,292,890 2,367,389 2,457,941 2,509,177 2,469,340 2,570,001 2,350,766 2,175,125 1,676,309 Deferred Outflows of Resources 57,452 47,476 80,796 34,108 – 36,627 75,332 – – – Total Assets and Deferred Outflows of Resources $ 2,297,745 $ 2,340,366 $ 2,448,185 $ 2,492,049 $ 2,509,177 $ 2,505,967 $ 2,645,333 $ 2,350,766 $ 2,175,125 $ 1,676,309 Liabilities Current Liabilities - payable from unrestricted $ 8,169 $ 7,956 $ 8,130 $ 8,042 $ 10,217 $ 10,335 $ 11,782 $ 8,784 $ 6,941 $ 5,118 Current Liabilities - payable from restricted 80,670 86,434 78,986 77,688 72,412 94,601 132,191 278,690 157,664 76,891 Noncurrent Liabilities - payable from unrestricted – – – – 443 1,328 2,213 – – – Noncurrent Liabilities - payable from restricted 1,164,718 1,196,537 1,309,616 1,352,169 1,343,608 1,440,493 1,531,446 1,140,558 1,181,895 823,410 Total Liabilities 1,253,557 1,290,927 1,396,732 1,437,899 1,426,680 1,546,757 1,677,632 1,428,032 1,346,500 905,419 Deferred Inflows of Resources – – – – 1,168 – – – – – Net Position Invested in capital assets, net of related debt 868,463 883,951 884,123 869,618 915,229 798,088 808,080 711,132 615,800 612,581 Restricted 113,374 107,822 97,267 122,822 102,197 106,055 92,120 144,681 167,713 111,310 Unrestricted 62,351 57,666 70,063 61,710 63,903 55,067 67,501 66,921 45,112 46,999 Total Net Position 1,044,188 1,049,439 1,051,453 1,054,150 1,081,329 959,210 967,701 922,734 828,625 770,890 Total Liabilities, Deferred Inflows of Resources, and Net Position $ 2,297,745 $ 2,340,366 $ 2,448,185 $ 2,492,049 $ 2,509,177 $ 2,505,967 $ 2,645,333 $ 2,350,766 $ 2,175,125 $ 1,676,309

(1) T(1) The Authority adopted GASB Statement No. 65 in FY 2013, resulting in changes to the financial statements for the year ended December 31, 2012. The Statistical Section of the CAFR has also been adjusted accordingly.

(2) (2) The Authority adopted GASB Statement No. 53 in FY 2010, resulting in changes to the financial statements for the years ended December 31, 2009 and December 31, 2008 (in the Management’s Discussion and Analysis). The Statistical Section of the CAFR has also been adjusted accordingly.

2014 2013(1) 2012(1) 2011 2010(2) 2009(2) 2008(2) 2007 2006 2005

Assets Current Assets - Unrestricted $ 34,045 $ 31,260 $ 30,562 $ 32,238 $ 61,369 $ 62,851 $ 77,189 $ 70,050 $ 45,264 $ 45,976 Current Assets – Restricted 55,220 63,511 51,009 67,476 61,744 54,300 40,017 41,359 47,049 38,009 Noncurrent Assets: Capital Assets, Net 1,958,582 2,024,932 2,077,729 2,122,516 2,208,994 2,140,139 2,182,891 1,844,781 1,444,013 1,174,325 Other Noncurrent Assets 192,446 173,187 208,089 235,711 177,070 212,050 269,904 394,576 638,799 417,999 Total Assets 2,240,293 2,292,890 2,367,389 2,457,941 2,509,177 2,469,340 2,570,001 2,350,766 2,175,125 1,676,309 Deferred Outflows of Resources 57,452 47,476 80,796 34,108 – 36,627 75,332 – – – Total Assets and Deferred Outflows of Resources $ 2,297,745 $ 2,340,366 $ 2,448,185 $ 2,492,049 $ 2,509,177 $ 2,505,967 $ 2,645,333 $ 2,350,766 $ 2,175,125 $ 1,676,309 Liabilities Current Liabilities - payable from unrestricted $ 8,169 $ 7,956 $ 8,130 $ 8,042 $ 10,217 $ 10,335 $ 11,782 $ 8,784 $ 6,941 $ 5,118 Current Liabilities - payable from restricted 80,670 86,434 78,986 77,688 72,412 94,601 132,191 278,690 157,664 76,891 Noncurrent Liabilities - payable from unrestricted – – – – 443 1,328 2,213 – – – Noncurrent Liabilities - payable from restricted 1,164,718 1,196,537 1,309,616 1,352,169 1,343,608 1,440,493 1,531,446 1,140,558 1,181,895 823,410 Total Liabilities 1,253,557 1,290,927 1,396,732 1,437,899 1,426,680 1,546,757 1,677,632 1,428,032 1,346,500 905,419 Deferred Inflows of Resources – – – – 1,168 – – – – – Net Position Invested in capital assets, net of related debt 868,463 883,951 884,123 869,618 915,229 798,088 808,080 711,132 615,800 612,581 Restricted 113,374 107,822 97,267 122,822 102,197 106,055 92,120 144,681 167,713 111,310 Unrestricted 62,351 57,666 70,063 61,710 63,903 55,067 67,501 66,921 45,112 46,999 Total Net Position 1,044,188 1,049,439 1,051,453 1,054,150 1,081,329 959,210 967,701 922,734 828,625 770,890 Total Liabilities, Deferred Inflows of Resources, and Net Position $ 2,297,745 $ 2,340,366 $ 2,448,185 $ 2,492,049 $ 2,509,177 $ 2,505,967 $ 2,645,333 $ 2,350,766 $ 2,175,125 $ 1,676,309

(1) T(1) The Authority adopted GASB Statement No. 65 in FY 2013, resulting in changes to the financial statements for the year ended December 31, 2012. The Statistical Section of the CAFR has also been adjusted accordingly.

(2) (2) The Authority adopted GASB Statement No. 53 in FY 2010, resulting in changes to the financial statements for the years ended December 31, 2009 and December 31, 2008 (in the Management’s Discussion and Analysis). The Statistical Section of the CAFR has also been adjusted accordingly.

1 – The Authority adopted GASB Statement No. 65 in FY 2013, resulting in changes to the financial statements for the year ended December 31, 2012. The Statistical Section of the CAFR has also been adjusted accordingly.

2 – The Authority adopted GASB Statement No. 53 in FY 2010, resulting in changes to the financial statements for the years ended December 31, 2009 and December 31, 2008 (in the Management’s Discussion and Analysis). The Statistical Section of the CAFR has also been adjusted accordingly.

94


95


STATEMENTS OF REVENUES, EXPENSES & CHANGES IN NET POSITION For the Last Ten Years Ended December 31 (in thousands)

2014 2013(1) 2012 (1) 2011 2010(2) 2009(2) 2008 (2) 2007 2006 2005

Operating Revenues Airfield $ 21,674 $ 21,468 $ 21,101 $ 22,191 $ 23,379 $ 22,742 $ 23,889 $ 24,750 $ 21,075 $ 22,597 Terminal complex 49,435 49,458 50,312 50,257 51,178 49,960 36,529 31,786 30,461 27,862 Parking 43,469 40,719 38,436 38,764 38,284 34,660 29,437 28,581 27,128 25,701 Rented buildings and other 15,949 15,660 16,612 13,436 12,972 13,099 12,406 10,922 9,124 9,384 Indianapolis Maintenance Center (IMC) 9,200 9,396 8,779 9,200 8,803 6,852 7,253 6,478 4,049 3,313 Reliever airports 3,105 2,961 3,019 2,649 2,474 2,414 2,402 2,205 2,119 2,028 Total Operating Revenues 142,832 139,661 138,259 136,497 137,090 129,727 111,916 104,722 93,956 90,885

Non-operating Revenues State and local appropriations 26,785 26,818 26,856 26,826 26,771 27,130 26,927 26,821 21,492 17,575 Federal operating grants 1,036 869 711 1,210 1,008 1,032 1,111 1,138 1,147 1,136 Passenger facility charges 14,645 14,474 14,606 15,418 15,654 15,430 16,853 16,775 17,480 17,461 Customer facility charges (rental cars) 6,442 6,098 6,316 6,065 5,365 4,208 5,115 5,137 3,527 – Investment income 2,678 5,237 5,678 7,815 6,211 9,531 8,235 27,621 25,468 11,007 Total Non-Operating Revenues 51,586 53,496 54,167 57,334 55,009 57,331 58,241 77,492 69,114 47,179

Total Revenues 194,418 193,156 192,426 193,831 192,099 187,058 170,157 182,214 163,070 138,064

Operating Expenses Personal services 26,261 26,533 29,218 27,985 27,398 30,340 26,333 25,583 24,502 23,254 Contractual services 18,185 17,228 16,035 17,462 16,661 18,225 16,526 18,798 15,016 13,282 Utilities 9,431 8,480 7,977 8,776 8,391 10,572 9,220 7,382 6,477 5,730 Supplies 3,987 3,904 3,678 3,567 3,121 3,157 3,704 2,618 2,135 2,161 Materials 2,423 1,932 1,944 1,440 1,453 1,498 1,258 1,284 1,647 1,232 General 2,089 2,125 1,835 2,313 2,222 2,585 2,599 1,247 2,455 3,395 Depreciation 94,127 95,821 95,336 106,271 102,589 100,954 73,551 44,090 42,352 42,742 Total Operating Expenses 156,503 156,023 156,023 167,814 161,835 167,331 133,191 101,002 94,584 91,796

Non-Operating Expenses Interest expense 57,935 58,192 64,532 69,327 70,151 73,564 36,265 33,954 40,390 29,173 (Gain) loss on disposals of capital assets and other (621) 2,449 (3,779) (1,163) (4,721) (1,920) 1,426 1,947 3,373 7,385 Total Non-Operating Expenses 57,314 60,641 60,753 68,164 65,430 71,644 37,691 35,901 43,763 36,558

Total Expenses 213,817 216,664 216,776 235,978 227,265 238,975 170,882 136,903 138,347 128,354 Income (Loss) Before Capital Contributions, Grants and Charges (19,399) (23,508) (24,350) (42,147) (35,166) (51,917) (725) 45,311 24,723 9,710

Capital Contributions, Grants and Charges Federal and state grants 12,327 10,322 5,551 11,457 11,014 18,097 17,609 26,729 22,149 28,791 Contributions from lessees 1,821 11,171 28,020 3,510 146,271 25,329 26,447 21,940 8,676 14,063 Contributions from local governmental entity – – – – – – 26 128 2,187 7,554 Total Capital Contributions, Grants and Charges 14,148 21,493 33,571 14,967 157,285 43,426 44,082 48,797 33,012 50,408

Increase (Decrease) in Net Position (5,251) (2,015) 9,221 (27,180) 122,119 (8,491) 43,357 94,108 57,735 60,118

Net Position, Beginning of Year, as previously reported 1,049,439 1,051,453 1,054,150 1,081,329 959,210 967,701 922,734 828,625 770,890 710,772

Cumulative Effect of Change in Acct. Principle – – (11,918) – – – 1,609 – – –

Net Position, Beginning of Year, as restated 1,049,439 1,051,453 1,042,232 1,081,329 959,210 967,701 924,343 828,625 770,890 710,772

Net Position, End of Year $ 1,044,187 $ 1,049,439 $ 1,051,453 $ 1,054,149 $ 1,081,329 $ 959,210 $ 967,700 $ 922,733 $ 828,625 $ 770,890

2014 2013(1) 2012 (1) 2011 2010(2) 2009(2) 2008 (2) 2007 2006 2005

Operating Revenues Airfield $ 21,674 $ 21,468 $ 21,101 $ 22,191 $ 23,379 $ 22,742 $ 23,889 $ 24,750 $ 21,075 $ 22,597 Terminal complex 49,435 49,458 50,312 50,257 51,178 49,960 36,529 31,786 30,461 27,862 Parking 43,469 40,719 38,436 38,764 38,284 34,660 29,437 28,581 27,128 25,701 Rented buildings and other 15,949 15,660 16,612 13,436 12,972 13,099 12,406 10,922 9,124 9,384 Indianapolis Maintenance Center (IMC) 9,200 9,396 8,779 9,200 8,803 6,852 7,253 6,478 4,049 3,313 Reliever airports 3,105 2,961 3,019 2,649 2,474 2,414 2,402 2,205 2,119 2,028 Total Operating Revenues 142,832 139,661 138,259 136,497 137,090 129,727 111,916 104,722 93,956 90,885

Non-operating Revenues State and local appropriations 26,785 26,818 26,856 26,826 26,771 27,130 26,927 26,821 21,492 17,575 Federal operating grants 1,036 869 711 1,210 1,008 1,032 1,111 1,138 1,147 1,136 Passenger facility charges 14,645 14,474 14,606 15,418 15,654 15,430 16,853 16,775 17,480 17,461 Customer facility charges (rental cars) 6,442 6,098 6,316 6,065 5,365 4,208 5,115 5,137 3,527 – Investment income 2,678 5,237 5,678 7,815 6,211 9,531 8,235 27,621 25,468 11,007 Total Non-Operating Revenues 51,586 53,496 54,167 57,334 55,009 57,331 58,241 77,492 69,114 47,179

Total Revenues 194,418 193,156 192,426 193,831 192,099 187,058 170,157 182,214 163,070 138,064

Operating Expenses Personal services 26,261 26,533 29,218 27,985 27,398 30,340 26,333 25,583 24,502 23,254 Contractual services 18,185 17,228 16,035 17,462 16,661 18,225 16,526 18,798 15,016 13,282 Utilities 9,431 8,480 7,977 8,776 8,391 10,572 9,220 7,382 6,477 5,730 Supplies 3,987 3,904 3,678 3,567 3,121 3,157 3,704 2,618 2,135 2,161 Materials 2,423 1,932 1,944 1,440 1,453 1,498 1,258 1,284 1,647 1,232 General 2,089 2,125 1,835 2,313 2,222 2,585 2,599 1,247 2,455 3,395 Depreciation 94,127 95,821 95,336 106,271 102,589 100,954 73,551 44,090 42,352 42,742 Total Operating Expenses 156,503 156,023 156,023 167,814 161,835 167,331 133,191 101,002 94,584 91,796

Non-Operating Expenses Interest expense 57,935 58,192 64,532 69,327 70,151 73,564 36,265 33,954 40,390 29,173 (Gain) loss on disposals of capital assets and other (621) 2,449 (3,779) (1,163) (4,721) (1,920) 1,426 1,947 3,373 7,385 Total Non-Operating Expenses 57,314 60,641 60,753 68,164 65,430 71,644 37,691 35,901 43,763 36,558

Total Expenses 213,817 216,664 216,776 235,978 227,265 238,975 170,882 136,903 138,347 128,354 Income (Loss) Before Capital Contributions, Grants and Charges (19,399) (23,508) (24,350) (42,147) (35,166) (51,917) (725) 45,311 24,723 9,710

Capital Contributions, Grants and Charges Federal and state grants 12,327 10,322 5,551 11,457 11,014 18,097 17,609 26,729 22,149 28,791 Contributions from lessees 1,821 11,171 28,020 3,510 146,271 25,329 26,447 21,940 8,676 14,063 Contributions from local governmental entity – – – – – – 26 128 2,187 7,554 Total Capital Contributions, Grants and Charges 14,148 21,493 33,571 14,967 157,285 43,426 44,082 48,797 33,012 50,408

Increase (Decrease) in Net Position (5,251) (2,015) 9,221 (27,180) 122,119 (8,491) 43,357 94,108 57,735 60,118

Net Position, Beginning of Year, as previously reported 1,049,439 1,051,453 1,054,150 1,081,329 959,210 967,701 922,734 828,625 770,890 710,772

Cumulative Effect of Change in Acct. Principle – – (11,918) – – – 1,609 – – –

Net Position, Beginning of Year, as restated 1,049,439 1,051,453 1,042,232 1,081,329 959,210 967,701 924,343 828,625 770,890 710,772

Net Position, End of Year $ 1,044,187 $ 1,049,439 $ 1,051,453 $ 1,054,149 $ 1,081,329 $ 959,210 $ 967,700 $ 922,733 $ 828,625 $ 770,890

1 – The Authority adopted GASB Statement No. 65 in FY 2013, resulting in changes to the financial state-ments for the year ended December 31, 2012. The Statistical Section of the CAFR has also been adjusted accordingly.

2 – The Authority adopted GASB Statement No. 53 in FY 2010, resulting in changes to the financial state-ments for the years ended December 31, 2009 and December 31, 2008 (in the Management’s Discussion and Analysis). The Statistical Section of the CAFR has also been adjusted accordingly.

96


97


CHANGES IN CASH & CASH EQUIVALENTS For the Last Ten Years Ended December 31 (in thousands)

2014 2013 2012 2011 2010 2009 2008 2007 2006 2005

Cash Flows From Operating Activities Cash receipts from customers and users $ 143,993 $ 143,537 $ 137,982 $ 134,248 $ 135,291 $ 130,966 $ 111,055 $ 107,470 $ 93,823 $ 88,584 Cash payments to vendors for goods and services (36,513) (32,908) (29,614) (35,080) (31,849) (38,527) (31,349) (32,132) (26,603) (27,864) Cash payments for employees services (26,176) (27,097) (29,962) (27,725) (28,496) (29,955) (24,920) (23,551) (23,840) (22,704) Net cash provided by operating activities 81,304 83,532 78,406 71,443 74,946 62,484 54,786 51,788 43,380 38,016 Cash Flows From Non-capital and Related Financing Activities Operating grants received 1,000 964 998 1,096 1,032 1,041 1,122 1,156 1,036 1,066 Customer facility charges received 6,442 6,097 6,316 6,065 5,365 4,208 5,115 5,137 3,193 – Insurance recoveries 393 2,668 3,973 2,724 347 1,663 111 2,502 – – Net cash provided by non-capital and related financing activities 7,835 9,731 11,287 9,885 6,744 6,912 6,348 8,795 4,229 1,066 Cash Flows From Capital and Related Financing Activities Proceeds from issuance of commercial paper – – – – – 50,000 597,665 525,336 119,200 40,000 Proceeds from issuance of revenue bonds 184,775 37,845 46,650 – 375,511 – 350,000 – 397,534 200,901 Principal paid on bonds and commercial paper (221,800) (73,410) (115,130) (21,850) (421,657) (35,830) (803,480) (407,085) (131,725) (81,140) Deferred lease costs paid – – – – – – – – (500) (1,482) Bond issue costs paid (1,236) (420) (666) (45) (684) (489) (9,345) (566) (6,464) (4,768) Interest paid (54,875) (52,729) (60,153) (60,031) (62,904) (65,655) (22,861) (23,297) (14,880) (13,087) Proceeds from novation of derivative financial instrument - basis swap – – – 3,500 – – – – – – Advance payment on interest rate swap agreement – – – – – – 3,540 – – – Acquisition and construction of capital assets (25,993) (31,945) (20,358) (17,079) (35,358) (96,386) (363,431) (453,714) (258,590) (128,729) Demolition costs related to capital assets (136) (5,315) – – – – – – – – Proceeds from sale of capital assets 192 41 178 204 2,982 1,487 1,235 5,543 3,468 8,934 Passenger facility charges received 14,715 14,494 14,937 15,463 15,491 15,404 16,748 17,370 17,327 17,900 Capital grants received 9,560 9,204 321 18,791 11,830 26,272 17,130 13,164 33,878 18,895 Contributions from other government – – – – – 1,021 1,003 3,711 734 5,006 Net cash provided by (used in) capital and related financing activities (94,798) (102,235) (134,221) (61,047) (114,789) (104,176) (211,795) (319,539) 159,982 62,430 Cash Flows From Investing Activities Purchase of investment securities (188,139) (118,087) (121,837) (130,596) (118,528) (134,297) (139,820) (171,495) (239,842) (106,287) Proceeds from sales and maturities of investment securities 163,553 129,377 89,570 95,166 116,307 126,660 152,710 253,652 165,924 108,246 Interest received on investments and cash equivalents 2,216 4,072 3,896 5,264 1,892 1,650 9,340 23,018 20,409 9,090 Cash received from monetization of investment derivative 3,117 – – – – – – – – – Net cash provided by (used in) investing activities (19,253) 15,362 (28,371) (30,166) (329) (5,987) 22,230 105,175 (53,509) 11,049 Net Increase (Decrease) in Cash and Cash Equivalents (24,911) 6,390 (72,899) (9,885) (33,428) (40,767) (128,431) (153,782) 154,082 112,561 Cash and Cash Equivalents, Beginning of Year 163,704 157,313 230,212 240,097 273,524 314,291 442,722 596,504 442,422 329,861

Cash and Cash Equivalents, End of Year $ 138,793 $ 163,703 $ 157,313 $ 230,212 $ 240,096 $ 273,524 $ 314,291 $ 442,722 $ 596,504 $ 442,422

2014 2013 2012 2011 2010 2009 2008 2007 2006 2005

Cash Flows From Operating Activities Cash receipts from customers and users $ 143,993 $ 143,537 $ 137,982 $ 134,248 $ 135,291 $ 130,966 $ 111,055 $ 107,470 $ 93,823 $ 88,584 Cash payments to vendors for goods and services (36,513) (32,908) (29,614) (35,080) (31,849) (38,527) (31,349) (32,132) (26,603) (27,864) Cash payments for employees services (26,176) (27,097) (29,962) (27,725) (28,496) (29,955) (24,920) (23,551) (23,840) (22,704) Net cash provided by operating activities 81,304 83,532 78,406 71,443 74,946 62,484 54,786 51,788 43,380 38,016 Cash Flows From Non-capital and Related Financing Activities Operating grants received 1,000 964 998 1,096 1,032 1,041 1,122 1,156 1,036 1,066 Customer facility charges received 6,442 6,097 6,316 6,065 5,365 4,208 5,115 5,137 3,193 – Insurance recoveries 393 2,668 3,973 2,724 347 1,663 111 2,502 – – Net cash provided by non-capital and related financing activities 7,835 9,731 11,287 9,885 6,744 6,912 6,348 8,795 4,229 1,066 Cash Flows From Capital and Related Financing Activities Proceeds from issuance of commercial paper – – – – – 50,000 597,665 525,336 119,200 40,000 Proceeds from issuance of revenue bonds 184,775 37,845 46,650 – 375,511 – 350,000 – 397,534 200,901 Principal paid on bonds and commercial paper (221,800) (73,410) (115,130) (21,850) (421,657) (35,830) (803,480) (407,085) (131,725) (81,140) Deferred lease costs paid – – – – – – – – (500) (1,482) Bond issue costs paid (1,236) (420) (666) (45) (684) (489) (9,345) (566) (6,464) (4,768) Interest paid (54,875) (52,729) (60,153) (60,031) (62,904) (65,655) (22,861) (23,297) (14,880) (13,087) Proceeds from novation of derivative financial instrument - basis swap – – – 3,500 – – – – – – Advance payment on interest rate swap agreement – – – – – – 3,540 – – – Acquisition and construction of capital assets (25,993) (31,945) (20,358) (17,079) (35,358) (96,386) (363,431) (453,714) (258,590) (128,729) Demolition costs related to capital assets (136) (5,315) – – – – – – – – Proceeds from sale of capital assets 192 41 178 204 2,982 1,487 1,235 5,543 3,468 8,934 Passenger facility charges received 14,715 14,494 14,937 15,463 15,491 15,404 16,748 17,370 17,327 17,900 Capital grants received 9,560 9,204 321 18,791 11,830 26,272 17,130 13,164 33,878 18,895 Contributions from other government – – – – – 1,021 1,003 3,711 734 5,006 Net cash provided by (used in) capital and related financing activities (94,798) (102,235) (134,221) (61,047) (114,789) (104,176) (211,795) (319,539) 159,982 62,430 Cash Flows From Investing Activities Purchase of investment securities (188,139) (118,087) (121,837) (130,596) (118,528) (134,297) (139,820) (171,495) (239,842) (106,287) Proceeds from sales and maturities of investment securities 163,553 129,377 89,570 95,166 116,307 126,660 152,710 253,652 165,924 108,246 Interest received on investments and cash equivalents 2,216 4,072 3,896 5,264 1,892 1,650 9,340 23,018 20,409 9,090 Cash received from monetization of investment derivative 3,117 – – – – – – – – – Net cash provided by (used in) investing activities (19,253) 15,362 (28,371) (30,166) (329) (5,987) 22,230 105,175 (53,509) 11,049 Net Increase (Decrease) in Cash and Cash Equivalents (24,911) 6,390 (72,899) (9,885) (33,428) (40,767) (128,431) (153,782) 154,082 112,561 Cash and Cash Equivalents, Beginning of Year 163,704 157,313 230,212 240,097 273,524 314,291 442,722 596,504 442,422 329,861

Cash and Cash Equivalents, End of Year $ 138,793 $ 163,703 $ 157,313 $ 230,212 $ 240,096 $ 273,524 $ 314,291 $ 442,722 $ 596,504 $ 442,422

98


99


OPERATING REVENUES For the Last Ten Years Ended December 31 (in thousands)

2014 2013 2012 2011 2010 2009 2008 2007 2006 2005

Airfield Landing Fees - Scheduled Airlines $ 7,768 $ 7,876 $ 8,282 $ 8,552 $ 8,721 $ 8,970 $ 10,009 $ 10,222 $ 9,455 $ 10,832 Landing Fees - Freight and Other 10,306 10,172 9,722 9,685 9,472 9,166 10,416 10,570 9,408 9,462 Apron Fees 1,994 2,085 2,796 3,692 4,911 4,386 3,190 3,669 1,932 2,002 Commissions - Aviation Fuel Sales 281 243 294 259 274 219 271 276 267 288 Other 1,325 1,092 7 3 1 1 3 13 13 13 Total Airfield 21,674 21,468 21,101 22,191 23,379 22,742 23,889 24,750 21,075 22,597 Terminal Complex Space Rental Airlines 26,102 26,429 26,635 27,121 28,774 28,646 19,601 16,254 15,989 14,159 Concessionaires 7,382 7,481 7,491 7,118 7,142 6,752 5,362 5,534 5,144 4,971 Administration Building – – – – – 22 245 253 248 216 Other Space Rental 1,395 1,321 1,281 1,185 637 550 307 245 247 236 Automobile Rental Commissions 9,439 9,146 9,335 9,211 8,715 8,353 8,753 7,903 7,353 6,877 Security Fees – – – – 375 372 403 415 406 427 Other Commissions, Fees, etc. 5,117 5,081 5,570 5,622 5,535 5,265 1,858 1,182 1,074 976 Total Terminal Complex 49,435 49,458 50,312 50,257 51,178 49,960 36,529 31,786 30,461 27,862 Parking - Parking Operations 43,469 40,718 38,435 38,764 38,284 34,660 29,437 28,581 27,128 25,701 Rented Buildings and Other Space Rental - Freight Buildings 928 930 771 810 618 1,061 694 625 718 630 Space Rental - Hangars 649 663 660 527 208 40 49 39 38 53 Space Rental - Other Buildings 7,660 7,641 6,945 5,857 5,616 5,869 5,986 4,532 3,080 3,176 Ground Leases 6,149 5,790 6,512 5,289 5,659 5,363 5,129 5,012 4,389 4,452 Farm Income 149 162 71 70 67 44 25 33 31 32 International Building 24 25 65 43 64 45 22 62 9 71 Other 389 449 1,587 840 740 677 501 619 859 970 Total Rented Buildings and Other 15,948 15,659 16,611 13,436 12,972 13,099 12,406 10,922 9,124 9,384 Indianapolis Maintenance Center (IMC)(1) 9,200 9,395 8,779 9,200 8,803 6,852 7,253 6,478 4,049 3,313 Reliever Airports 3,105 2,961 3,019 2,649 2,474 2,414 2,402 2,205 2,119 2,028 Total Operating Revenues $ 142,831 $ 139,659 $ 138,257 $ 136,497 $ 137,090 $ 129,727 $ 111,916 $ 104,722 $ 93,956 $ 90,885

Signatory Airline Rates and Charges Landing Fee (Per 1,000 lbs.) $1.88 $1.88 $1.90 $1.95 $1.95 $1.95 $1.95 $1.95 $1.74 $1.95 / $1.68 * Average Terminal Building Rate (Per Sq. Ft.) $91.68 $91.68 $92.80 $95.00 $95.00 $95.00 $75.09 $63.03 $64.78 $55.55 Apron Rate (Per Sq. Ft.) $0.34 $0.34 $0.57 $1.86 $2.62 $2.62 $2.05 $2.65 $0.72 $0.91

2014 2013 2012 2011 2010 2009 2008 2007 2006 2005

Airfield Landing Fees - Scheduled Airlines $ 7,768 $ 7,876 $ 8,282 $ 8,552 $ 8,721 $ 8,970 $ 10,009 $ 10,222 $ 9,455 $ 10,832 Landing Fees - Freight and Other 10,306 10,172 9,722 9,685 9,472 9,166 10,416 10,570 9,408 9,462 Apron Fees 1,994 2,085 2,796 3,692 4,911 4,386 3,190 3,669 1,932 2,002 Commissions - Aviation Fuel Sales 281 243 294 259 274 219 271 276 267 288 Other 1,325 1,092 7 3 1 1 3 13 13 13 Total Airfield 21,674 21,468 21,101 22,191 23,379 22,742 23,889 24,750 21,075 22,597 Terminal Complex Space Rental Airlines 26,102 26,429 26,635 27,121 28,774 28,646 19,601 16,254 15,989 14,159 Concessionaires 7,382 7,481 7,491 7,118 7,142 6,752 5,362 5,534 5,144 4,971 Administration Building – – – – – 22 245 253 248 216 Other Space Rental 1,395 1,321 1,281 1,185 637 550 307 245 247 236 Automobile Rental Commissions 9,439 9,146 9,335 9,211 8,715 8,353 8,753 7,903 7,353 6,877 Security Fees – – – – 375 372 403 415 406 427 Other Commissions, Fees, etc. 5,117 5,081 5,570 5,622 5,535 5,265 1,858 1,182 1,074 976 Total Terminal Complex 49,435 49,458 50,312 50,257 51,178 49,960 36,529 31,786 30,461 27,862 Parking - Parking Operations 43,469 40,718 38,435 38,764 38,284 34,660 29,437 28,581 27,128 25,701 Rented Buildings and Other Space Rental - Freight Buildings 928 930 771 810 618 1,061 694 625 718 630 Space Rental - Hangars 649 663 660 527 208 40 49 39 38 53 Space Rental - Other Buildings 7,660 7,641 6,945 5,857 5,616 5,869 5,986 4,532 3,080 3,176 Ground Leases 6,149 5,790 6,512 5,289 5,659 5,363 5,129 5,012 4,389 4,452 Farm Income 149 162 71 70 67 44 25 33 31 32 International Building 24 25 65 43 64 45 22 62 9 71 Other 389 449 1,587 840 740 677 501 619 859 970 Total Rented Buildings and Other 15,948 15,659 16,611 13,436 12,972 13,099 12,406 10,922 9,124 9,384 Indianapolis Maintenance Center (IMC)(1) 9,200 9,395 8,779 9,200 8,803 6,852 7,253 6,478 4,049 3,313 Reliever Airports 3,105 2,961 3,019 2,649 2,474 2,414 2,402 2,205 2,119 2,028 Total Operating Revenues $ 142,831 $ 139,659 $ 138,257 $ 136,497 $ 137,090 $ 129,727 $ 111,916 $ 104,722 $ 93,956 $ 90,885

Signatory Airline Rates and Charges Landing Fee (Per 1,000 lbs.) $1.88 $1.88 $1.90 $1.95 $1.95 $1.95 $1.95 $1.95 $1.74 $1.95 / $1.68 * Average Terminal Building Rate (Per Sq. Ft.) $91.68 $91.68 $92.80 $95.00 $95.00 $95.00 $75.09 $63.03 $64.78 $55.55 Apron Rate (Per Sq. Ft.) $0.34 $0.34 $0.57 $1.86 $2.62 $2.62 $2.05 $2.65 $0.72 $0.91

1 – Revenues from 2007 to current exceed revenue from prior years due to higher occupancy of the facility.

* Rates effective 1/1/05 - 6/30/05 and 7/1/05 - 12/31/05.

101


100


SIGNATORY AIRLINE RATES & CHARGES For the Last Ten Years Ended December 31

Signatory Average Terminal Landing Fees Building Rates Apron Rates Year (Per 1,000 lbs.) (Per Sq. Ft.) (Per Sp. Ft.) 2014 $ 1.88 $ 91.68 $ 0.34 2013 1.88 91.68 0.34 2012 1.90 92.80 0.57 2011 1.95 95.00 1.86 2010 1.95 95.00 2.62 2009 1.95 95.00 2.62 2008 1.95 75.09 2.18 2007 1.95 63.03 2.56 2006 1.74 64.78 0.72 2005 1.68* 55.55 0.911.95 /

* Rates effective 1/1/05 - 6/30/05 and 7/1/05 - 12/31/05, respectively.

1– The revenue bases to which the rates are applied and lists of principal payors can be found in other schedules. 2– The Authority uses a residual rate-making methodology for its Airline Agreements. This provides for the review and adjustment of Signatory Airline Terminal Complex rental rates, Apron Area rents, and Landing Fees each Fiscal Year to ensure that the Gross Revenues of the Airport System are sufficient to meet the Operation and Maintenance Expenses of the Airport System, the Debt Service Requirements of the Authority’s Outstanding Revenue Bonds and Subordinate Securities, and other funding requirements established by the Bond Ordinance.

102


103


OUTSTANDING DEBT BY TYPE & REVENUE BOND DEBT SERVICE RATIOS For the Last Ten Years Ended December 31

1– These Revenue Bond Debt Service figures are gross debt service requirements on a cash basis, they are not net of Capitalized Interest. 2– Revenue Bond Debt Service exceeds prior year due to the payoff of the 1996 revenue bonds.

2014 2013 2012 2011 2010 2009 20082 2007 2006 2005

Outstanding Debt Revenue Bonds $ 1,054,556,120 $ 1,094,668,006 $ 1,082,664,813 $ 1,149,569,629 $ 1,168,856,377 $ 1,250,769,922 $ 1,262,438,413 $ 946,557,200 $ 977,804,883 $ 597,849,945 Commercial Paper & Credit Facility Agreements – – – – – 25,000,000 – 170,000,000 20,000,000 15,000,000 Obligations under Capital Lease 79,942,322 103,844,418 126,647,808 148,415,051 169,134,580 188,835,590 207,955,583 225,990,469 243,085,450 254,222,100

Total Outstanding Debt $ 1,134,498,442 $ 1,198,512,424 $ 1,209,312,621 $ 1,297,984,680 $ 1,337,990,957 $ 1,464,605,512 $ 1,470,393,996 $ 1,342,547,669 $ 1,240,890,333 $ 867,072,045

Outstanding Debt Per Capita $ 616.17 $ 657.52 $ 672.40 $ 729.55 $ 761.85 $ 840.22 $ 854.48 $ 790.82 $ 742.20 $ 527.09

Total Enplaned Passengers 3,686,245 3,598,718 3,687,742 3,770,469 3,770,383 3,740,873 4,088,526 4,142,657 4,045,004 4,258,054

Outstanding Debt / Enplaned Passenger $ 307.77 $ 333.04 $ 327.93 $ 344.25 $ 354.87 $ 391.51 $ 359.64 $ 324.08 $ 306.77 $ 203.63

Outstanding Debt as % of Personal Income Data Not Available 0.77% 0.76% 0.84% 0.91% 1.02% 0.92% 0.83% 0.81% 0.56% Revenue Bond Debt Service Principal $ 32,400,000 $ 24,625,000 $ 25,110,000 $ 21,850,000 $ 11,390,000 $ 10,830,000 $ 35,815,000 $ 31,750,000 $ 17,525,000 $ 21,140,000 Interest 50,046,187 52,706,166 58,290,969 58,230,465 60,137,740 54,368,589 46,938,584 48,997,004 26,418,095 15,744,021

Total Revenue Bond Debt Service1 $ 82,446,187 $ 77,331,166 $ 83,400,969 $ 80,080,465 $ 71,527,740 $ 65,198,589 $ 82,753,584 $ 80,747,004 $ 43,943,095 $ 36,884,021

Total Expenses (Less Depreciation) $ 119,690,767 $ 120,842,636 $ 121,439,037 $ 129,706,035 $ 124,676,237 $ 138,021,318 $ 97,330,848 $ 92,812,310 $ 95,995,243 $ 85,610,942

Revenue Bond Debt Service1 / Total Expenses 68.68% 63.99% 68.68% 61.74% 57.37% 47.24% 85.02% 87.00% 45.78% 43.08%

Revenue Bond Debt Service1 / Enplaned Passenger $ 22.37 $ 21.49 $ 22.62 $ 21.24 $ 18.97 $ 17.43 $ 20.24 $ 19.49 $ 10.86 $ 8.66


2014 2013 2012 2011 2010 2009 20082 2007 2006 2005

Outstanding Debt Revenue Bonds $ 1,054,556,120 $ 1,094,668,006 $ 1,082,664,813 $ 1,149,569,629 $ 1,168,856,377 $ 1,250,769,922 $ 1,262,438,413 $ 946,557,200 $ 977,804,883 $ 597,849,945 Commercial Paper & Credit Facility Agreements – – – – – 25,000,000 – 170,000,000 20,000,000 15,000,000 Obligations under Capital Lease 79,942,322 103,844,418 126,647,808 148,415,051 169,134,580 188,835,590 207,955,583 225,990,469 243,085,450 254,222,100

Total Outstanding Debt $ 1,134,498,442 $ 1,198,512,424 $ 1,209,312,621 $ 1,297,984,680 $ 1,337,990,957 $ 1,464,605,512 $ 1,470,393,996 $ 1,342,547,669 $ 1,240,890,333 $ 867,072,045

Outstanding Debt Per Capita $ 616.17 $ 657.52 $ 672.40 $ 729.55 $ 761.85 $ 840.22 $ 854.48 $ 790.82 $ 742.20 $ 527.09

Total Enplaned Passengers 3,686,245 3,598,718 3,687,742 3,770,469 3,770,383 3,740,873 4,088,526 4,142,657 4,045,004 4,258,054

Outstanding Debt / Enplaned Passenger $ 307.77 $ 333.04 $ 327.93 $ 344.25 $ 354.87 $ 391.51 $ 359.64 $ 324.08 $ 306.77 $ 203.63

Outstanding Debt as % of Personal Income Data Not Available 0.77% 0.76% 0.84% 0.91% 1.02% 0.92% 0.83% 0.81% 0.56% Revenue Bond Debt Service Principal $ 32,400,000 $ 24,625,000 $ 25,110,000 $ 21,850,000 $ 11,390,000 $ 10,830,000 $ 35,815,000 $ 31,750,000 $ 17,525,000 $ 21,140,000 Interest 50,046,187 52,706,166 58,290,969 58,230,465 60,137,740 54,368,589 46,938,584 48,997,004 26,418,095 15,744,021

Total Revenue Bond Debt Service1 $ 82,446,187 $ 77,331,166 $ 83,400,969 $ 80,080,465 $ 71,527,740 $ 65,198,589 $ 82,753,584 $ 80,747,004 $ 43,943,095 $ 36,884,021

Total Expenses (Less Depreciation) $ 119,690,767 $ 120,842,636 $ 121,439,037 $ 129,706,035 $ 124,676,237 $ 138,021,318 $ 97,330,848 $ 92,812,310 $ 95,995,243 $ 85,610,942

Revenue Bond Debt Service1 / Total Expenses 68.68% 63.99% 68.68% 61.74% 57.37% 47.24% 85.02% 87.00% 45.78% 43.08%

Revenue Bond Debt Service1 / Enplaned Passenger $ 22.37 $ 21.49 $ 22.62 $ 21.24 $ 18.97 $ 17.43 $ 20.24 $ 19.49 $ 10.86 $ 8.66


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REVENUE BOND DEBT SERVICE COVERAGE For the Last Ten Years Ended December 31 (in thousands)

1– Pursuant to the Authority’s Master Bond Ordinance, amounts deposited into the Authority’s Coverage Fund will be added to Net Revenues for purposes of determining the Authority’s Revenue Bond Debt Service Coverage. 2– Reflects actual transfer versus calculated Prepaid Airline Credit as defined in the Authority’s Master Bond Ordinance. 3– Debt service coverage exceeds prior year primarily as net debt service requirements decreased from 2006. Additional committed revenues from CFCs and capitalized interest contributed to the decrease in the net debt service requirements.

2014 2013 2012 2011 2010 2009 20083 20073 2006 2005

Gross Revenues

Total Operating Revenues $ 142,831 $ 139,659 $ 138,257 $ 136,497 $ 137,090 $ 129,727 $ 111,916 $ 104,722 $ 93,956 $ 90,885 Other revenues not deemed Gross Revenues – – – – – – (7,256) (6,478) (4,049) (3,313)Reduced (Excess) Rental Revenue Recognized Under GASB 13 306 306 210 170 148 148 148 103 (182) (182) Federal Payments (522) (478) (816) (742) (700) (658) (583) (635) (571) (577)

Total Gross Revenues 142,615 139,487 137,651 135,925 136,538 129,217 104,225 97,712 89,154 86,813

Operating and Maintenance Expenses Total Operating Expenses 156,502 156,022 156,022 167,814 161,835 167,331 133,191 101,002 94,584 91,796 Capital Assets Expensed Under Ordinance 396 1,055 635 682 314 1,130 2,161 679 367 252Environmental Mitigation Costs 38 1,182 1,511 53 346 – (502) (2,350) – –Depreciation (94,126) (95,820) (95,335) (106,271) (102,590) (100,954) (73,551) (44,090) (42,352) (42,742)

Total Operating and Maintenance Expenses 62,810 62,439 62,833 62,278 59,905 67,507 61,299 55,242 52,599 49,306 Net Revenues Available for Debt Service 79,805 77,048 74,818 73,647 76,633 61,710 42,926 42,470 36,555 37,507Fund Transfers Transfers from Debt Service Coverage Fund1 17,173 15,130 16,218 16,140 16,032 13,647 7,464 5,940 3,755 – Transfers from Prepaid Airline Revenue Fund2 1,500 500 2,019 4,013 4,000 4,000 3,959 3,004 7,499 7,158

Total Funds Available for Debt Service $ 98,478 $ 92,678 $ 93,055 $ 93,800 $ 96,665 $ 79,357 $ 54,349 $ 51,414 $ 47,809 $ 44,665

Debt Service Requirements Debt Service Requirements for Revenue Bonds $ 60,819 $ 58,801 $ 60,262 $ 62,306 $ 60,706 $ 52,246 $ 14,680 $ 13,621 $ 25,171 $ 18,965 Debt Service Coverage Revenue Bond Debt Service Coverage 1.62 1.58 1.54 1.51 1.59 1.52 3.70 3.77 1.90 2.36

1– Pursuant to the Authority’s Master Bond Ordinance, amounts deposited into the Authority’s Coverage Fund will be added to Net Revenues for purposes of determining the Authority’s Revenue Bond Debt Service Coverage. 2– Reflects actual transfer versus calculated Prepaid Airline Credit as defined in the Authority’s Master Bond Ordinance. 3– Debt service coverage exceeds prior year primarily as net debt service requirements decreased from 2006. Additional committed revenues from CFCs and capitalized interest contributed to the decrease in the net debt service requirements.

2014 2013 2012 2011 2010 2009 20083 20073 2006 2005

Gross Revenues

Total Operating Revenues $ 142,831 $ 139,659 $ 138,257 $ 136,497 $ 137,090 $ 129,727 $ 111,916 $ 104,722 $ 93,956 $ 90,885 Other revenues not deemed Gross Revenues – – – – – – (7,256) (6,478) (4,049) (3,313)Reduced (Excess) Rental Revenue Recognized Under GASB 13 306 306 210 170 148 148 148 103 (182) (182) Federal Payments (522) (478) (816) (742) (700) (658) (583) (635) (571) (577)

Total Gross Revenues 142,615 139,487 137,651 135,925 136,538 129,217 104,225 97,712 89,154 86,813

Operating and Maintenance Expenses Total Operating Expenses 156,502 156,022 156,022 167,814 161,835 167,331 133,191 101,002 94,584 91,796 Capital Assets Expensed Under Ordinance 396 1,055 635 682 314 1,130 2,161 679 367 252Environmental Mitigation Costs 38 1,182 1,511 53 346 – (502) (2,350) – –Depreciation (94,126) (95,820) (95,335) (106,271) (102,590) (100,954) (73,551) (44,090) (42,352) (42,742)

Total Operating and Maintenance Expenses 62,810 62,439 62,833 62,278 59,905 67,507 61,299 55,242 52,599 49,306 Net Revenues Available for Debt Service 79,805 77,048 74,818 73,647 76,633 61,710 42,926 42,470 36,555 37,507Fund Transfers Transfers from Debt Service Coverage Fund1 17,173 15,130 16,218 16,140 16,032 13,647 7,464 5,940 3,755 – Transfers from Prepaid Airline Revenue Fund2 1,500 500 2,019 4,013 4,000 4,000 3,959 3,004 7,499 7,158

Total Funds Available for Debt Service $ 98,478 $ 92,678 $ 93,055 $ 93,800 $ 96,665 $ 79,357 $ 54,349 $ 51,414 $ 47,809 $ 44,665

Debt Service Requirements Debt Service Requirements for Revenue Bonds $ 60,819 $ 58,801 $ 60,262 $ 62,306 $ 60,706 $ 52,246 $ 14,680 $ 13,621 $ 25,171 $ 18,965 Debt Service Coverage Revenue Bond Debt Service Coverage 1.62 1.58 1.54 1.51 1.59 1.52 3.70 3.77 1.90 2.36

1– Pursuant to the Authority’s Master Bond Ordinance, amounts deposited into the Authority’s Coverage Fund will be added to Net Revenues for purposes of determining the Authority’s Revenue Bond Debt Service Coverage.

2– Reflects actual transfer versus calculated Prepaid Airline Credit as defined in the Authority’s Master Bond Ordinance.

3– Debt service coverage exceeds prior year primarily as net debt service requirements decreased from 2006. Additional committed revenues from CFCs and capitalized interest contributed to the decrease in the net debt service requirements.

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AIRLINE LANDING WEIGHT STATISTICS For the Last Ten Years Ended December 31 Listed by Current Rank

2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 Landing Wts. Landing Wts. (000 lbs.) % of Total (000 lbs.)

Scheduled Air Carrier: Delta1 1,153,816 12.0% 1,190,901 1,229,200 1,174,008 1,130,081 898,375 391,023 398,745 426,814 494,102Southwest1 947,356 9.8% 723,664 814,156 816,604 766,466 802,206 841,360 700,058 695,378 731,740 US Airways1 653,730 6.8% 635,757 605,967 573,319 584,823 647,061 700,292 732,785 690,206 654,946United1 623,969 6.5% 637,841 543,286 327,948 315,647 352,956 382,567 403,364 417,717 460,653American1 474,639 4.9% 410,592 397,707 403,328 318,983 319,129 382,827 355,645 384,812 507,767AirTran Airways1 211,352 2.2% 434,352 441,008 546,035 681,256 577,152 563,328 572,160 498,936 197,120 Frontier Airlines1 120,871 1.3% 126,538 144,204 166,963 152,247 146,720 194,529 189,211 151,362 134,178Indianapolis Aviation Partners2 48,576 0.5% 65,667 77,332 57,888 57,011 26,153 – – – – Continental1 – 0.0% – 94,211 282,262 89,598 92,660 179,328 309,392 314,857 292,260Expressjet1 – 0.0% – 37,324 50,668 187,580 151,621 110,721 – – – American Eagle, et.al.1 – 0.0% – – – 66,787 115,760 107,992 119,242 105,638 60,962America West1 – 0.0% – – – – – – – 61,321 86,513ATA1 – 0.0% – – – – – 6,581 65,458 160,805 681,663 Chicago Express 1 – 0.0% – – – – – – – – 51,699Independence Air1 – 0.0% – – – – – – – – 47,658Northwest1 – 0.0% – – – – 373,213 1,188,324 1,246,371 1,288,486 1,371,168Other 35,156 0.4% 33,670 49,388 37,417 97,557 49,164 143,694 150,531 145,581 164,864 Subtotal 4,269,465 44.3% 4,258,982 4,433,783 4,436,440 4,448,036 4,552,170 5,192,566 5,242,962 5,341,913 5,937,293

Net Change from Prior Year 0.2% -3.9% -2.6% 0.3% -2.3% -12.3% -1.0% -1.9% -10.0% 0.7%

Freight and Charter: Federal Express 5,216,438 54.1% 5,141,051 4,803,868 4,714,088 4,617,965 4,448,460 5,051,199 5,125,126 5,073,992 4,953,071 Cargolux Airlines International S.A. 98,575 1.0% 101,933 101,223 68,065 66,557 64,601 67,265 68,597 45,287 –Mountain Air Cargo 23,360 0.2% 22,300 29,510 25,809 20,939 19,655 – – – –Eli Lilly International3 10,758 0.1% 12,870 12,474 12,870 15,972 18,216 19,206 19,140 – – Tradewinds Airlines1 – 0.0% – – – – 28,360 89,217 – – –World Airways1 – 0.0% – – – – – – – 2,290 8,702Other 18,314 0.2% 13,292 15,553 20,948 17,052 19,085 23,279 112,753 149,756 145,462 Subtotal 5,367,445 55.7% 5,291,446 4,962,628 4,841,780 4,738,485 4,598,377 5,250,166 5,325,616 5,271,325 5,107,235

Net Change from Prior Year 1.4% 6.6% 7.9% 2.2% 3.0% -12.4% -1.4% 1.0% 3.2% 9.9%

Total Airline Landing Weights 9,636,910 100% 9,550,428 9,396,411 9,278,220 9,186,521 9,150,547 10,442,733 10,568,578 10,613,238 11,044,528

Net Change from Prior Year 0.9% 1.6% 1.3% 1.0% 0.4% -12.4% -1.2% -0.4% -3.9% 4.7%

1 – Airline either merged with another airline, serves another airline,discontinued operations or no longer serves Indianapolis International Airport. 2 – Indianapolis Aviation Partners (dba Million Air) began operations in April 2009. 3 – Eli Lilly was in the “Other” category in 2006 and prior.

2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 Landing Wts. Landing Wts. (000 lbs.) % of Total (000 lbs.)

Scheduled Air Carrier: Delta1 1,153,816 12.0% 1,190,901 1,229,200 1,174,008 1,130,081 898,375 391,023 398,745 426,814 494,102Southwest1 947,356 9.8% 723,664 814,156 816,604 766,466 802,206 841,360 700,058 695,378 731,740 US Airways1 653,730 6.8% 635,757 605,967 573,319 584,823 647,061 700,292 732,785 690,206 654,946United1 623,969 6.5% 637,841 543,286 327,948 315,647 352,956 382,567 403,364 417,717 460,653American1 474,639 4.9% 410,592 397,707 403,328 318,983 319,129 382,827 355,645 384,812 507,767AirTran Airways1 211,352 2.2% 434,352 441,008 546,035 681,256 577,152 563,328 572,160 498,936 197,120 Frontier Airlines1 120,871 1.3% 126,538 144,204 166,963 152,247 146,720 194,529 189,211 151,362 134,178Indianapolis Aviation Partners2 48,576 0.5% 65,667 77,332 57,888 57,011 26,153 – – – – Continental1 – 0.0% – 94,211 282,262 89,598 92,660 179,328 309,392 314,857 292,260Expressjet1 – 0.0% – 37,324 50,668 187,580 151,621 110,721 – – – American Eagle, et.al.1 – 0.0% – – – 66,787 115,760 107,992 119,242 105,638 60,962America West1 – 0.0% – – – – – – – 61,321 86,513ATA1 – 0.0% – – – – – 6,581 65,458 160,805 681,663 Chicago Express 1 – 0.0% – – – – – – – – 51,699Independence Air1 – 0.0% – – – – – – – – 47,658Northwest1 – 0.0% – – – – 373,213 1,188,324 1,246,371 1,288,486 1,371,168Other 35,156 0.4% 33,670 49,388 37,417 97,557 49,164 143,694 150,531 145,581 164,864 Subtotal 4,269,465 44.3% 4,258,982 4,433,783 4,436,440 4,448,036 4,552,170 5,192,566 5,242,962 5,341,913 5,937,293

Net Change from Prior Year 0.2% -3.9% -2.6% 0.3% -2.3% -12.3% -1.0% -1.9% -10.0% 0.7%

Freight and Charter: Federal Express 5,216,438 54.1% 5,141,051 4,803,868 4,714,088 4,617,965 4,448,460 5,051,199 5,125,126 5,073,992 4,953,071 Cargolux Airlines International S.A. 98,575 1.0% 101,933 101,223 68,065 66,557 64,601 67,265 68,597 45,287 –Mountain Air Cargo 23,360 0.2% 22,300 29,510 25,809 20,939 19,655 – – – –Eli Lilly International3 10,758 0.1% 12,870 12,474 12,870 15,972 18,216 19,206 19,140 – – Tradewinds Airlines1 – 0.0% – – – – 28,360 89,217 – – –World Airways1 – 0.0% – – – – – – – 2,290 8,702Other 18,314 0.2% 13,292 15,553 20,948 17,052 19,085 23,279 112,753 149,756 145,462 Subtotal 5,367,445 55.7% 5,291,446 4,962,628 4,841,780 4,738,485 4,598,377 5,250,166 5,325,616 5,271,325 5,107,235

Net Change from Prior Year 1.4% 6.6% 7.9% 2.2% 3.0% -12.4% -1.4% 1.0% 3.2% 9.9%

Total Airline Landing Weights 9,636,910 100% 9,550,428 9,396,411 9,278,220 9,186,521 9,150,547 10,442,733 10,568,578 10,613,238 11,044,528

Net Change from Prior Year 0.9% 1.6% 1.3% 1.0% 0.4% -12.4% -1.2% -0.4% -3.9% 4.7%

1 – Airline either merged with another airline, serves another airline,discontinued operations or no longer serves Indianapolis International Airport. 2 – Indianapolis Aviation Partners (dba Million Air) began operations in April 2009. 3 – Eli Lilly was in the “Other” category in 2006 and prior.

1 – Airline either merged with another airline, serves another airline, discontinued operations or no longer serves Indianapolis International Airport. 2 – Indianapolis Aviation Partners (dba Million Air) began operations in April 2009. 3 – Eli Lilly was in the “Other” category in 2006 and prior.

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109


ENPLANED PASSENGER STATISTICS For the Last Ten Years Ended December 31 Listed by Current Rank

1 – Airline either merged with another airline, serves another airline or no longer serves Indianapolis International Airport. 2 – Indianapolis Aviation Partners (dba Million Air) began operations in April 2009. 3 – ATA discontinued operations in April 2009. 4 – Independence Air discontinued operations in 2006. 5 – Variance attributable to an decrease in apron fees and the elimination of security fees with the new airline use agreement along with the increase in cargo activity at IND. 6 – Variance attributable to an increase in terminal and apron fees due to a full year of operation in the New Indianapolis Airport terminal along with a decrease in the year’s enplaned passenger count.

2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 Number of Number of Enplanements % of Total Enplanements

Scheduled Air Carrier: Delta1 962,455 26.1% 954,336 957,630 979,309 961,072 719,955 341,497 342,800 353,572 376,816 Southwest1 832,464 22.6% 630,082 699,746 716,727 656,731 648,314 581,398 506,395 514,789 505,265 United1 555,441 15.1% 549,850 467,529 238,533 233,448 270,461 289,707 316,238 338,319 378,427US Airways1 547,520 14.9% 527,547 498,625 492,934 503,924 523,382 544,531 577,808 529,452 469,585American1 415,777 11.3% 365,870 366,225 363,790 284,990 233,387 315,471 308,361 321,819 375,824AirTran Airways1 206,192 5.6% 399,719 405,282 494,118 605,420 505,497 505,075 474,407 394,798 149,354Frontier Airlines1 125,026 3.4% 134,911 133,225 153,147 130,192 132,261 169,662 162,094 116,282 106,002Indianapolis Aviation Partners2 20,264 0.5% 21,025 26,686 19,273 20,986 10,378 – – – –Continental1 – 0.0% – 77,610 243,243 71,590 74,248 134,097 268,830 254,812 241,646Expressjet1 – 0.0% – 36,959 52,626 183,041 135,023 97,739 – – –America West1 – 0.0% – – – – – – – 56,911 79,753American Eagle, et.al.1 – 0.0% – – – 60,974 117,543 108,348 121,852 100,994 52,455ATA1 – 0.0% – – – – – 1,489 2,972 5,091 414,968Chicago Express1 – 0.0% – – – – – – – – 30,661Independence Air1 – 0.0% – – – – – – – – 33,097Northwest1 – 0.0% – – – – 269,113 923,305 963,814 969,331 961,473Other 21,106 0.5% 15,378 18,225 16,769 58,015 101,311 76,207 97,086 88,834 82,728

Total Enplanements 3,686,245 100% 3,598,718 3,687,742 3,770,469 3,770,383 3,740,873 4,088,526 4,142,657 4,045,004 4,258,054

Net Change from Prior Year 2.4% -2.4% -2.2% 0.0% 0.8% -8.5% -1.3% 2.4% -5.0% 5.9%

Airline Costs Air Carrier Landing Fees $ 18,073,410 $ 18,048,151 $ 18,004,897 $ 18,237,382 $ 18,193,453 $ 18,136,229 $ 20,425,307 $ 20,791,512 $ 18,863,016 $ 20,294,177 Terminal Apron Fees 1,993,759 1,001,448 2,017,343 2,934,327 3,806,095 3,388,955 2,621,632 3,066,732 1,428,164 1,678,864 Airline Terminal Fees 26,102,447 26,428,972 26,634,747 27,120,577 28,773,865 28,645,741 19,600,939 16,252,701 15,989,199 14,159,056 Security Fees – – – 12 375,189 372,048 402,965 415,021 405,967 427,192 Freight Landing Fees (10,304,967) (10,172,021) (9,722,167) (9,684,646) (9,472,048) (9,166,294) (10,416,247) (10,569,883) (9,407,592) (9,461,634)

Total Costs $ 35,864,649 $ 35,306,550 $ 36,934,820 $ 38,607,652 $ 41,676,554 $ 41,376,679 $ 32,634,596 $ 29,956,083 $ 27,278,754 $ 27,097,655

Total Costs/ Enplaned Passenger $9.73 $9.81 $10.02 $10.24 $11.05 $11.06 $7.98 $7.23 $6.74 $6.36

Net Change from Prior Year -3.8% -1.0% -2.2% -7.4%3 -0.1% 38.6%4 10.4% 7.2% 6.0% -10.2%

1 – Airline either merged with another airline, serves another airline or no longer serves Indianapolis International Airport. 2 – Indianapolis Aviation Partners (dba Million Air) began operations in April 2009. 3 – ATA discontinued operations in April 2009. 4 – Independence Air discontinued operations in 2006. 5 – Variance attributable to an decrease in apron fees and the elimination of security fees with the new airline use agreement along with the increase in cargo activity at IND. 6 – Variance attributable to an increase in terminal and apron fees due to a full year of operation in the New Indianapolis Airport terminal along with a decrease in the year’s enplaned passenger count.

2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 Number of Number of Enplanements % of Total Enplanements

Scheduled Air Carrier: Delta1 962,455 26.1% 954,336 957,630 979,309 961,072 719,955 341,497 342,800 353,572 376,816 Southwest1 832,464 22.6% 630,082 699,746 716,727 656,731 648,314 581,398 506,395 514,789 505,265 United1 555,441 15.1% 549,850 467,529 238,533 233,448 270,461 289,707 316,238 338,319 378,427US Airways1 547,520 14.9% 527,547 498,625 492,934 503,924 523,382 544,531 577,808 529,452 469,585American1 415,777 11.3% 365,870 366,225 363,790 284,990 233,387 315,471 308,361 321,819 375,824AirTran Airways1 206,192 5.6% 399,719 405,282 494,118 605,420 505,497 505,075 474,407 394,798 149,354Frontier Airlines1 125,026 3.4% 134,911 133,225 153,147 130,192 132,261 169,662 162,094 116,282 106,002Indianapolis Aviation Partners2 20,264 0.5% 21,025 26,686 19,273 20,986 10,378 – – – –Continental1 – 0.0% – 77,610 243,243 71,590 74,248 134,097 268,830 254,812 241,646Expressjet1 – 0.0% – 36,959 52,626 183,041 135,023 97,739 – – –America West1 – 0.0% – – – – – – – 56,911 79,753American Eagle, et.al.1 – 0.0% – – – 60,974 117,543 108,348 121,852 100,994 52,455ATA1 – 0.0% – – – – – 1,489 2,972 5,091 414,968Chicago Express1 – 0.0% – – – – – – – – 30,661Independence Air1 – 0.0% – – – – – – – – 33,097Northwest1 – 0.0% – – – – 269,113 923,305 963,814 969,331 961,473Other 21,106 0.5% 15,378 18,225 16,769 58,015 101,311 76,207 97,086 88,834 82,728

Total Enplanements 3,686,245 100% 3,598,718 3,687,742 3,770,469 3,770,383 3,740,873 4,088,526 4,142,657 4,045,004 4,258,054

Net Change from Prior Year 2.4% -2.4% -2.2% 0.0% 0.8% -8.5% -1.3% 2.4% -5.0% 5.9%

Airline Costs Air Carrier Landing Fees $ 18,073,410 $ 18,048,151 $ 18,004,897 $ 18,237,382 $ 18,193,453 $ 18,136,229 $ 20,425,307 $ 20,791,512 $ 18,863,016 $ 20,294,177 Terminal Apron Fees 1,993,759 1,001,448 2,017,343 2,934,327 3,806,095 3,388,955 2,621,632 3,066,732 1,428,164 1,678,864 Airline Terminal Fees 26,102,447 26,428,972 26,634,747 27,120,577 28,773,865 28,645,741 19,600,939 16,252,701 15,989,199 14,159,056 Security Fees – – – 12 375,189 372,048 402,965 415,021 405,967 427,192 Freight Landing Fees (10,304,967) (10,172,021) (9,722,167) (9,684,646) (9,472,048) (9,166,294) (10,416,247) (10,569,883) (9,407,592) (9,461,634)

Total Costs $ 35,864,649 $ 35,306,550 $ 36,934,820 $ 38,607,652 $ 41,676,554 $ 41,376,679 $ 32,634,596 $ 29,956,083 $ 27,278,754 $ 27,097,655

Total Costs/ Enplaned Passenger $9.73 $9.81 $10.02 $10.24 $11.05 $11.06 $7.98 $7.23 $6.74 $6.36

Net Change from Prior Year -3.8% -1.0% -2.2% -7.4%3 -0.1% 38.6%4 10.4% 7.2% 6.0% -10.2%

1 – Airline either merged with another airline, serves another airline, discontinued operations or no longer serves Indianapolis International Airport. 2 – Indianapolis Aviation Partners (dba Million Air) began operations in April 2009. 3 – Variance attributable to a decrease in apron fees and the elimination of security fees with the new airline use agreement along with the increase in cargo activity at IND. 4 – Variance attributable to an increase in terminal and apron fees due to a full year of operations in the New Indianapolis Airport terminal along with a decrease in the year’s enplaned passenger count.

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NUMBER OF AIRPORT EMPLOYEES BY IDENTIFIABLE ACTIVITY For the Last Ten Years Ended December 31 Listed by Current Rank

Note: These figures include full and part-time employees as of each year end.1– The Public Safety Officer positions were outsourced during 2013.

2014 2013 2012 2011 2010 2009 2008 2007 2006 2005

Number of Number of

Department Employees % of Total Employees

Terminal Services 66 16.5% 78 85 83 83 82 62 46 51 53 Parking 66 16.5% 72 72 76 85 90 89 83 86 83Police 45 11.3% 47 47 46 47 50 48 48 47 44Fire 40 10.0% 40 40 40 41 40 40 39 36 36 Airfield 35 8.8% 38 38 39 40 42 38 35 36 36Building Maintenance 32 8.0% 33 33 34 39 40 31 27 27 26 Airport Security and Dispatch 21 5.3% 23 23 23 23 24 20 16 15 19 Accounting and Finance 14 3.5% 16 16 17 16 16 14 12 14 14Information Technology 13 3.3% 13 13 15 14 13 8 5 10 9 Engineering 12 3.0% 11 11 10 10 10 8 9 9 11Operations 6 1.5% 7 7 8 8 9 8 11 11 8Personnel 8 2.0% 7 7 6 6 6 5 4 5 5 Guest Services 6 1.5% 7 5 5 5 14 18 7 7 8 Conservation Management 4 1.0% 6 6 6 6 6 5 5 5 5Reliever Airports 5 1.3% 5 6 6 6 6 6 6 5 6IMC 5 1.3% 5 5 5 5 5 5 5 4 4Properties 5 1.3% 5 4 3 4 4 4 4 4 4Legal 3 0.8% 4 4 4 1 1 – – 2 2Administration 3 0.8% 3 3 3 4 8 16 13 15 15Audit Services 3 0.8% 3 3 3 3 3 2 2 2 2Marketing 2 0.5% 2 3 5 5 5 4 3 3 3 Retail 2 0.5% 2 2 3 3 3 2 2 1 1Executive 2 0.5% 1 2 2 2 4 14 14 13 12Diversity 1 0.3% 1 1 1 1 2 1 1 1 1Public Safety Officers1 – 0.0% – 34 49 50 55 50 51 50 55

Total Employees 399 100.0% 429 470 493 507 538 498 448 459 462

Note: These figures include full and part-time employees as of each year end.1– The Public Safety Officer positions were outsourced during 2013.

2014 2013 2012 2011 2010 2009 2008 2007 2006 2005

Number of Number of

Department Employees % of Total Employees

Terminal Services 66 16.5% 78 85 83 83 82 62 46 51 53 Parking 66 16.5% 72 72 76 85 90 89 83 86 83Police 45 11.3% 47 47 46 47 50 48 48 47 44Fire 40 10.0% 40 40 40 41 40 40 39 36 36 Airfield 35 8.8% 38 38 39 40 42 38 35 36 36Building Maintenance 32 8.0% 33 33 34 39 40 31 27 27 26 Airport Security and Dispatch 21 5.3% 23 23 23 23 24 20 16 15 19 Accounting and Finance 14 3.5% 16 16 17 16 16 14 12 14 14Information Technology 13 3.3% 13 13 15 14 13 8 5 10 9 Engineering 12 3.0% 11 11 10 10 10 8 9 9 11Operations 6 1.5% 7 7 8 8 9 8 11 11 8Personnel 8 2.0% 7 7 6 6 6 5 4 5 5 Guest Services 6 1.5% 7 5 5 5 14 18 7 7 8 Conservation Management 4 1.0% 6 6 6 6 6 5 5 5 5Reliever Airports 5 1.3% 5 6 6 6 6 6 6 5 6IMC 5 1.3% 5 5 5 5 5 5 5 4 4Properties 5 1.3% 5 4 3 4 4 4 4 4 4Legal 3 0.8% 4 4 4 1 1 – – 2 2Administration 3 0.8% 3 3 3 4 8 16 13 15 15Audit Services 3 0.8% 3 3 3 3 3 2 2 2 2Marketing 2 0.5% 2 3 5 5 5 4 3 3 3 Retail 2 0.5% 2 2 3 3 3 2 2 1 1Executive 2 0.5% 1 2 2 2 4 14 14 13 12Diversity 1 0.3% 1 1 1 1 2 1 1 1 1Public Safety Officers1 – 0.0% – 34 49 50 55 50 51 50 55

Total Employees 399 100.0% 429 470 493 507 538 498 448 459 462

Note: These figures include full and part-time employees as of each year end.

1– The Public Safety Officer positions were outsourced during 2013.

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SCHEDULE OF INSURANCE IN FORCE As of December 31, 2014

Carrier Name Policy Number Policy Term Abstract of Coverage Limit of Liability Premium Lexington Insurance Company 012944932 11/30/2014 to Property All Risk; Real/Personal; Blanket $ 750,000,000 $ 762,243 11/30/15 Boiler & Machinery, (incl. in Blanket) included included Business Interruption, (as p/o Blanket) included included Terrorism Risk Insurance Act included included IMC specific; Property All Risk; R&P; Blanket incl. above included Boiler & Machinery, (incl. in Blanket) incl. above included Loss or Rents (per finance req. as p/o Blanket) incl. above included Terrorism Risk Insurance Act incl. above included Chartis Aerospace Insurance AP 022110986-05 11/30/2014 to Airport and Aviation General Liability 100,000,000 111,559 Services, Inc. 11/30/16 Aviation Non-Certified War & Terrorism 100,000,000 5,578

Chartis Aerospace Insurance AP 022110986-05 11/30/2014 to Excess Liability - Auto: Excess Liability - EL 150,000,000 included Services, Inc. 11/30/16 Excess Non-Certified War & Terrorism 150,000,000 2,092 The Charter Oak Fire Insurance Company Y-810-0F726214-TIL-14 11/30/2014 to Automobile Liability and Physical Damage 1,000,000 106,236 (Traveler’s Insurance) 11/30/15 Chubb Indemnity 99151707 11/30/2014 to Workers Compensation and Statutory Statutory 412,171 11/30/15 Employers Liability 1,000,000 included Chubb Indemnity 99151708 11/30/2014 to Foreign Workers Compensation and Statutory Statutory 2,000 11/30/15 Employers Liability 1,000,000 included ACE American Insurance Co. PHFD38298781 11/30/2014 to Foreign Liability 1,000,000 1,687 11/30/15 Allied World Surplus Lines Insurance Co. 2025264 11/30/2014 to Law Enforcement Liability 2,000,000 53,165 11/30/15

Admiral Insurance Co. EO00000920202-07 11/30/2014 to Medical Professional Liability 250,000/750,000 14,527 11/30/15 Indiana Patient Compensation Fund 14,173 Illinois National Insurance Co. 01-904-30-77 11/30/2014 to Employed Lawyers Professional Liability 2,000,000 10,208 11/30/16 Westchester Fire Insurance Co. G25730409 004 11/30/2014 to Comprehensive Crime 1,000,000 5,556 11/30/15 Westchester Fire Insurance Co. G25730409 004 11/30/2014 to Fiduciary Liability 3,000,000 3,306 11/30/15 Westchester Fire Insurance Co. G25730409 004 11/30/14 to Employment Practices Liability 3,000,000 17,312 11/30/15 Westchester Fire Insurance Co. G25730409 004 11/30/2014 to IAA Board, Directors & Officers Liability 10,000,000 41,490 11/30/15 Western Surety Various Bond #’s Various Individual Public Official Bonds, 100,000 - 500,000 5,325 according to term IAA Board Members per bond Life Insurance Co. of N. America SPS900303 07/01/2014 to Volunteers Accident/Medical ; 2,500/25,000 456 07/01/15 xs N/O Auto 500,000 included ACE American Insurance Co. G24733932 001 11/30/2014 to Underground Storage Tanks Liability 1,000,000 1,107 11/30/15 Annual Insurance Premiums; estimated as of December 31, 2014 $ 1,572,441

INDIANAPOLIS MSA DEMOGRAPHIC & ECONOMIC STATISTICS For the Last Ten Years Ended December 31

1 – The data for the years 2009-2014 represents the Indianapolis-Carmel-Anderson Metropolitan Statistical Area (MSA) and the the data for the years 2005-2008 represents the Indianapolis-Carmel Metropolitan Statistcal Area (MSA).

2 – The 2014 data is for the Indianapolis-Carmel-Anderson Metropolitan Statistical Area (MSA) and the data for the years 2005-2013 is for the Indianapolis-Carmel Metropolitan Statistcal Area (MSA). n/a = Information is not available.

Note: As defined by the U.S. Office of Management and Budget, the Indianapolis-Carmel-Anderson Metropolitan Statistical Area (MSA) includes Boone, Brown, Hamilton, Hancock, Hendricks, Johnson, Madison, Marion, Morgan, Putnam and Shelby counties in Indiana.

The Indianapolis-Carmel Metropolitan Statistical Area (MSA) includes Boone, Brown, Hamilton, Hancock, Hendricks, Johnson, Marion, Morgan, Putnam and Shelby counties in Indiana.

The compilation of the statistical data changed in 2014 to include Madison County and the city of Anderson. The historical data was updated back to 2009 but prior information does not include Madison County in the figures.

Sources: Indiana Department of Workforce Development (www.hoosierdata.in.gov)

Bureau of Economic Development U.S. Department of Commerce (www.bea.gov/regional)

Personal Per Capita Annual Average Income Personal UnemploymentYear Population(1) (in millions)(1) Income(1) Rate(2)

2014 1,841,205 n/a n/a 5.4%2013 1,822,776 $ 78,929 $ 43,285 5.1%2012 1,798,499 77,282 42,961 8.2%2011 1,779,155 73,090 41,087 8.4%2010 1,756,241 68,617 38,972 9.2%2009 1,743,113 66,844 38,375 8.4%2008 1,720,796 67,623 39,297 4.1%2007 1,697,656 65,586 38,980 4.4%2006 1,671,898 64,005 37,735 4.8%2005 1,645,027 60,018 36,391 4.9%

1– Principal employers for the Indianapolis-Carmel-Anderson MSA (Local, state and federal employers are excluded). Sources: Principal employers – The Indy Partnership (www.indypartnership.com).

Total employed in the Indianapolis-Carmel-Anderson MSA from Indiana Department of Workforce Development, as of December 2014.

% of Total # of EmployeesEmployer Name1 Employed in MSA 2014

St. Vincent Hospital and Health 1.85% 17,398Indiana University Health 1.25% 11,810 Eli Lilly and Company 1.14% 10,735 Community Health Network 1.10% 10,402Wal-Mart 0.94% 8,830 Marsh Supermarkets 0.85% 8,000 Kroger 0.83% 7,840Federal Express 0.64% 6,000Roche Diagnostics 0.49% 4,600 Rolls-Royce 0.46% 4,300

Total Employed by Principal Employers 9.54% 89,915

Total Employed in Indianapolis-Carmel-Anderson MSA 100.00% 942,497

PRINCIPAL EMPLOYERS IN INDIANAPOLIS-CARMEL-ANDERSON MSA As of December 31, 2014

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CAPITAL ASSET & OTHER AIRPORT INFORMATION As of December 31, 2014

About the Airport: Indianapolis International Airport (IND) is managed by the

Indianapolis Airport Authority (IAA). IAA was established

as a municipal corporation by the Indiana General

Assembly in 1962 and is responsible for developing,

operating, and managing six aviation facilities in the

greater metropolitan area.

In 2014, IND served about 7.4 million passengers on 7

major airlines and transported over 1.1 million tons of

cargo. IND is ranked the eighth largest cargo facility

in the nation; and 23rd in the world. It is an important

contributor to central Indiana’s growing economy,

especially in the life sciences, technology, and logistics

sectors.

Location: Conveniently located sixteen miles southwest of

downtown Indianapolis and within easy expressway access

to all parts of the metro area.

Col. H. Weir Cook Terminal: The Col. H. Weir Cook Terminal has approximately 1.2

million square feet with two concourses containing

20 gates each. TSA security checkpoints are situated

before the entrance to each concourse and include

separate lines dedicated for the expert traveler, the casual

traveler, and for families, those with special needs, and

those traveling with medicine or medical devices. Each

checkpoint contains up to 11 screening lanes. Once past

the checkpoints, a walkway is available for passengers to

walk freely between the two concourses. For international

arrivals, two gates on Concourse A have been configured

to lead directly to a dedicated federal inspection area and

baggage claim.

International Facilities: INzone is Central Indiana’s Foreign Trade Zone (FTZ)

service provider. The FTZ program is a national economic

incentives program designed to enhance foreign trade.

The FTZ program helps American based companies

improve their competitive position against their foreign

counterparts by allowing them to defer, reduce or even

eliminate Customs duties on products admitted to the

zone. FTZ’s also benefit the community at-large due to

the retention and expansion of jobs, capital investment,

and increase in the local tax-base. Indiana ranks 16th

in the annual dollar volume of merchandise received

and 9th in the annual dollar volume of merchandise

exported. With the financial and logistical advantages of

the FTZ program, INzone serves 17 active firms employing

approximately 5,000 individuals at their FTZ sites.

Runways: IND has two primary parallel runways and one crosswind

runway:

Runway One: 5L/23R 11,200’ L, 150’ W; CAT III ILS (5L),

CAT I ILS (23R)

Runway Two: 5R/23L 10,000’ L, 150’ W; CAT III ILS (5R),

CAT I ILS (23L)

Runway Three: 14/32 7,280’ L, 150’ W; CAT I ILS

Parking Spaces: The airport’s total parking capacity is approximately

14,000 vehicles.

Parking Garage 5,900 spaces

Economy Lot 7,950 spaces

Concessions: Food & Beverage 24

Specialty Retail 18

News & Gift 8

Rental Car Companies 8

Note: This page was provided for additional information only.

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