HomeMy WebLinkAboutIR 125 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 22-125
To the Mayor and Members of the City Council September 6, 2022
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SUBJECT: FY2023 DFW INTERNATIONAL AIRPORT BUDGET
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Dallas Fort Worth International Airport (DFW) is requesting that the Owner Cities of Dallas and
Fort Worth approve its fiscal year (FY) 2023 Budget. The 1968 Contract and Agreement between
the Cities of Dallas and Fort Worth require that both Owner Cities approve the annual budget. As
a reminder, the City of Fort Worth does not contribute any expenses to the operations of the DFW
Airport. This document summarizes the major components of the DFW Airport's FY23 Budget.
Attached is a presentation that provides historical context to the budget and shows comparisons
to FY19 (pre-COVID), FY20, and FY21 actuals and the outlook or forecast for FY22. In addition,
Council Members have received the DFW Airport's FY23 Annual Budget Book, which contains
more detail.
Summary
DFW's FY23 budget reflects a full recovery from the COVID-19 pandemic from a passenger and
revenue standpoint.
The major themes for this year's budget are as follows:
• DFW continues to recover more quickly than other large-hub airports worldwide, primarily
due to the increased air service provided by American Airlines.
o Passengers are budgeted at a record 78.3 million in FY23, a 6.8 million (9.5%)
increase over the FY22 Outlook and 6.8% higher than FY19.
o The DFW Cost Center comprises non-airline businesses such as parking,
concessions, rental car, and commercial development. DFW Cost Center revenues
are budgeted at a record $476.5 million, a $52.8 million (12.5%) increase over the
FY22 Outlook and 19.3% more than FY19.
o DFW Cost Center net revenues (i.e., profits) are budgeted at a record $206.7
million, a $26.8 million (14.9%) increase over the FY22 Outlook and 35.6% more
than FY19.
o Per the terms of the Use Agreement, DFW budgets to share a record $95.2 million
with the airlines to reduce landing fees and deposit a record $111 .4 million into the
DFW discretionary capital account.
• The FY23 Expenditure Budget is $1 .173 billion, a $133.4 million (12.8%) increase from the
FY22 Outlook.
o The FY23 Operating Expenditure Budget is $618.4 million, a $54.6 million (9.7%)
increase from the FY22 Outlook due primarily to costs related to increased
passengers, fixed contract increases already approved by the Board, inflation in
service contracts, parts, and fuel; and investments in digital technology.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 22-125
To the Mayor and Members of the City Council September 6, 2022
Page 2 of 2
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SUBJECT: FY2023 DFW INTERNATIONAL AIRPORT BUDGET
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o The debt service budget is $554.8 million, a $78.7 million (16.5%) increase from the
FY22 Outlook primarily due to the issuance of $1 .3 billion of new debt in April and
July 2022 to finance DFW's capital programs, partially offset by savings from past
refundings.
• The FY23 Budget assumes that DFW's remaining Federal Relief Proceeds of
approximately $214 million will be used to pay for the inflationary cost increases
associated with DFW's major capital programs rather than subsidizing the airline rate
base.
• Airline cost represents the amount paid to DFW primarily for landing fees and terminal
rents. Airline cost and airline cost per enplanement (CPE) are budgeted to increase by
$120.1 million (25.3%) and $1 .92 (14.7%) from the FY22 Outlook, respectively, due to
higher costs described above and the use of Federal Relief Proceeds for capital projects
rather than applied to the operating budget. The increased airline cost will result in higher
terminal rates. Landing fees are budgeted to decrease due to higher transfers from the
DFW Cost Center discussed above.
The DFW Board of Directors approved the FY 2023 budget in the amount of $1 .173 billion on
August 2, 2022. The FY23 Budget request from the Cities of Fort Worth and Dallas is the
approval of a $1 .183 billion budget that includes $10 million of contingency outside the airline rate
base. This contingency may only be used if approved by the DFW Board of Directors. The use of
contingency outside the rate base has been requested by DFW and approved by the Cities for
over a decade.
FY23
Annual Expenditure (in Millions) Budget
Operating expenditures $ 618.4
Gross debt 554.8
Total expenditure budget within rate base $1,173.3
Board contingency outside rate base 10.0
Total budget with contingency $1,183.3
If Council Members have additional questions, please call Abel Palacios, DFW's Vice President of
Finance at (972) 973-5445.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
9/1/2022
DFW International Airport
FY 2023 Budget
Fort Worth City Council Briefing
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September
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FY23 Budget Overview*
DFW has fully recovered from COVID-19.
FY23 passenger budget—78.3 million
• 9.5% increase
• Record high
DFW cost center revenues—$476.5 million
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• 12.5% increase ($52.8 million)
• Record high
FY23 expenditure budget-$1.173 billion • } '-y
• 12.8% increase—total budget �\'1
• 9.7% increase—operating budget `
• 16.5% increase—debt service budget
No Federal Relief Proceeds included in FY23 budget --
Airline cost(airline revenue to DFW)—$595.4 million
• 25.3% increase ($120.1 million)
Cost per enplanement(CPE)—$14.99 *All comparisons in this presentation are to the FY22
2 14.7% increase ($1.92) outlook,unless stated otherwise r��r'e i
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9/1/2022
Record Passengers
FY23 passenger budget is 78.3 million, a 9.5% increase over the FY22
Outlook and 6.8% more than FY19 actual (pre-pandemic).
Passengers(Ms)
100
80 73.3 71.5 78.3
60 55.4
47.4
40 30.3 281 30.9
20 17.5 18.8
0
FY19A FY20A FY21A FY220 FY23B
Total Passengers ■ O&D Passengers
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Record DFW Cost Center Revenues
FY23 budget is $476.5 million, $51.3 million (12.1%) higher than the FY22
Outlook; and $77.1 million (19.3%) higher than FY19. All business units are
showing revenue growth from FY19 and FY22 Outlook.
DFWCC Revenue ($Ms)
$600
$500 $476.5
$399.4 $389.8 $398.5 $425.2
$400
t
$300
$200
$100
$0
FY19A FY20A FY21A FY220 FY23B
■Revenues before FRP ■Federal Relief Proceeds
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9/1/2022
Record DFW Cost Center Net Revenues
DFW shares 75% of net revenues over the Upper Threshold with the airlines to reduce landing fees..
DFWCC Net Revenues ($Ms)
$250
$206.7
$200 $178.7 -
$152.4 $164.0
$150
$100
$50
$0
FY19A FY20A FY21A FY220 FY23B
■Airfield Transfer ■DFW CA
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Expenditure Budget
FY23 Budget is $1.17 billion, a $133.4 million (12.8%) increase from FY22 Outlook.
Operating expense budget reflects cost increases
primarily related to: A&
• More passengers/related services
• Inflation/wage pressure driven cost increases "" merican
• Technology/digital investments
Debt service budget increase due primarily to issuance
of$1.3 billion of new money debt in April 2022
FY22 vs FY23
FY22 FY 23 Inc/(Dec)
Annual Expenditure(in Millions) Outlook Budget $ %
Operating expenditures $ 563.8 $ 618.4 $ 54.6 9.7%
Gross debt 476.1 554.8 78.7 16.5%
Total expenditure budget within rate base $1,039.9 $1,173.3 $ 133.4 12.8%
Board contingency outside rate base 10.0 10.0
Total budget with contingency $1,049.9 $1,183.3 r1 '
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9/1/2022
Expenditure Budget
The FY23 Budget is 16.4% higher than FY19 (3.9% CAGR). Increases in operating costs and the
issuance of new debt are offset by savings from refundings over the last several years.
Total Expenditures (Ms)
$1,400
$1,200 $1,173
$1,008 $1,040
$1,000 $939 $949
$800
$600
$400
$200
$0
FY19A FY20A FY21A FY220 FY23B
Operating Expenses ■Gross Debt Service v�vv
Operating Expense Budget Walkforward
FY22 Outlook to FY23 Budget Walkforward
Operating Expenses (in Millions) Total
FY22 Outlook $563.8
Budget reductions (10.9)
Employee related increases 19.0
Fixed contract increases 15.6
Customer related increases 10.7
Inflationary increases 7.9
Restore CEO contingency/other 7.2
Digital and technology investments 4.9
Operating reserve adjustments 0.2
Net increase 54.6
FY23 Budget $618.4
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9/1/2022
Airline Cost (Revenue to DFW) Walkforward
Higher airline cost is due primarily to increased debt service costs and the removal of
Federal relief proceeds from the budget.
Airline Cost Walkforward(in Millions) Total CPE
FY22 Outlook $475.3 $13.07
Debt&Use Agreement Items
Increase in Debt Service 55.5
Increase in PFC (5.6)
Threshold Adjustment 6.6
Total Debt and Use Agreement 56.5
Net Operating Expenses
Federal Relief Proceeds Reduction 50.4
Airline Cost Centers O&M 35.5
Transfer from DFW Cost Center (18.9)
Other Non-Airline Revenues (3.4)
Total Net Operating Expenses 63.6
Total Increases 120.1
FY23 Budget $595.4 $14.99
(1)Actual rate,not in millions Lr%, ��
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Request Budget Approval - $1 . 183B
FY23
Annual Expenditure(in Millions) Budget
Operating expenditures $ 618.4
Gross debt 554.8
Total expenditure budget within rate base $1,173.3
Board contingency outside rate base 10.0
Total budget with contingency $1,183.3
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9/1/2022
Tax Sharing to Owner Cities
Euless, Irving, Coppell, and Grapevine (south of HWY 114) have tax sharing
arrangements with DFW and the Owner Cities.
Revenues split between "Host City" (1/3rd) and Owner Cities (2/3rd)
• Split between Dallas and Fort Worth is based upon 7/11t"and 4/11t" ownership,
except for Rental Car Center taxes which are shared equally
Host Cities paid $15.1 million in FY21:
• Dallas -$8.3 million
• Fort Worth - $6.8 million
• Owner Cities received total of$3.9 million (25.9%) increase from prior year.
• Taxes from rental car facility in Euless increased 54.7% from prior year.
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6
DALLAS
F
I A / FFORT WORTH
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AIRPORTTIONAL
FY 2023 Proposed Budget
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Finance Department
P.O. Box 619428
DFW Airport,Texas 75261-9428
FY 2023 Proposed Budget I Introduction
Table of Contents
Introduction
Boardof Directors........................................................................................................................... 2
DFWInfrastructure.......................................................................................................................... 4
Strategic Plan and DFW's Vision Statement .................................................................................. 6
DFWs Airline Use Agreement Rate Model...................................................................................... 8
DFW's Fund Structure......... ........................................................................................................... 10
FY23 Budget Comparisons to Other Periods......................................................................11
BudgetSchedule............................................................................. ................................11
Executive Summary
Passengers, Operations and Landed Weights...............................................................................13
FY23 Budget Comparisons and Walkforward..................................................................................14
Revenues Overview....................................................................................................15
AirlineCost........................................................................................................................................ 15
DFW Cost Center Revenues and Net Revenues......... ................................................................. 16
Federal Relief Proceeds (FRP) Available..........................................................................17
Airline Cost Centers
Airline Cost Centers and Airline Cost Walkforward................................. ................................19
AirfieldCost Center............................ .......................................................................................20
TerminalCost Center............................ ....................................................................................23
Transfers - DFW Terminal Contribution..........................................................................................24
Cost Per Enplanement (CPE) Calculation........................................................................ 25
DFW Cost Center
DFWCost Center ............................................................................................................................. 26
Parking ...........................................................................................................................................27
Concessions ...................................................................................................................................28
RentalCar Center (RAC) ................................................................................................................. 29
Commercial Development ..............................................................................................................29
Other DFW Revenues and Expenses .............................................................................................. 30
Operating Expenses
FY23 Expenditure Budget and Operating Expense Budget Walkforward .....................................32
OperatingBudget by Category .......................................................................................................35
DepartmentOverview .....................................................................................................................38
NetDebt Service Budget ................................................................................................................39
Positions..........................................................................................................................................40
Capital Budget
Projected Capital - Uses of Cash by Capital Account.....................................................................42
DFWCapital Account... ..................................................................................................................47
JointCapital Account ......................................................................................................................48
Capital Project Sources of Cash.....................................................................................................49
DFW International Airport
FY 2023 Proposed Budget I Introduction
DALLAS
FXA1 FORT WORTH
V V INTERN
AIRPORTTIONAL
V
Board of Directors
Henry Borbolla III Gloria M.Tarpley Vernon Evans Eric Johnson
Chair Vice Chair Secretary Mayor
Fort Worth Dallas Fort Worth Dallas
J.
Mattie Parker Matrice Ellis-Kirk Ben Leal William Meadows
Mayor Dallas Dallas Fort Worth
Fort Worth
Raj Narayanan Mario Quintanilla Rick Stopfer
Dallas Dallas Mayor
Irving
DFW'S Vision Statement
Travel. Transformed.
DFW'S Mission Statement
We discover new ways to care for our customers, inspire
our employees, and strengthen our communities to
create an exceptional Airport experience. Every Day.
DFW International Airport
FY 2023 Proposed Budget I Introduction
Airport Background
The Dallas Fort Worth International Airport Board (Airport or DFW) was created by a Contract and
Agreement between the cities of Dallas, Texas, and Fort Worth, Texas (Cities) on April 15, 1968,
for the purpose of developing and operating an airport as a joint venture between the Cities.
Although owned by Dallas and Fort Worth, DFW is located within the boundaries of the cities of
Grapevine, Coppell, Irving, Euless and Fort Worth; and within Dallas and Tarrant counties.
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3 DFW International Airport
FY 2023 Proposed Budget I Introduction
DFW consists of 26.9 square miles (17,183 acres), one of the largest land mass airports in
the world. Celebrating nearly 50 years of operations, DFW is the most connected Airport
worldwide, ranking as the second largest airport based on passengers and the third largest
airport based on operations. DFW is located within a four-hour flight time of 98% of the U.S.
population and its central location is the focal point of one of the nation's largest intermodal
hubs, connecting air, rail, and interstate highway systems. Home to about 3,000 high-tech
firms and the grantee/operator of Foreign Trade Zone No. 39, DFW is known as the major
economic generator for North Texas powering a $534.8 billion economy, according to the
North Texas Commission (NTC). As of July 6, 2022, DFW operated daily passenger flights
to 265 destinations worldwide, including 194 nonstop domestic destinations and 71 nonstop
international destinations.
DFW Infrastructure
Terminals - The Airport has five terminals (A, B, C, D and E) totaling 6.3 million square feet of
building space, with 170 aircraft boarding gates, approximately 361 ticketing positions, including
self-service kiosks and 15 security checkpoints, four of which have Transportation Security
Administration (TSA)expedited screening for domestic passengers. The Airport recently opened
the newly reconstructed High-C Gates in Terminal C (Gates 35C-39C).
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DFW Terminal Complex
American Airlines operates mainline domestic service in Terminals A, B, C and D. All of
American's international arrivals are in Terminal D. Their international departures are primarily
in Terminal D, with several operated from Terminals A and C. American Eagle operates regional
domestic service in Terminals B, D and E. Their international arrivals are in Terminal D with
international departures in Terminals B, D and E. All other airline domestic flights operate from
Terminal E, except for Sun Country and a few seasonal flights in Terminal D. Except for pre-
cleared international flights, airline international arrivals and most departures operate from
Terminal D, with a few international departures in Terminal E.
d I DFW International Airport
FY 2023 Proposed Budget I Introduction
Terminal D has 2.36 million square feet and 30 gates. Seventeen gates are preferentially leased
to American Airlines. The remaining 13 gates are common use. The preferential gate lease
currently expired on September 30, 2021, as part of the Airline Lease and Use Agreement, but
the Airlines and the Airport have agreed to extend the current agreement on a month-to-month
basis while negotiations for a new agreement continue.
The Airport's U.S. Customs and Border Protection (CBP) facilities are in Terminal D. This facility
has the capacity to handle approximately 2,800 international customers per hour and customers
can retrieve their luggage from any one of eight bag carousels.
The Airport is responsible for the custodial services in Terminals B, D and E, and assumed
custodial services in public areas of Terminals A and C in FY20. American Airlines is responsible
for facilities maintenance in Terminals A and C, and the Terminal E satellite. Additionally,
American Airlines handles Terminal D baggage maintenance, the airline's leased boarding
bridges in Terminal D, and six boarding bridges in Terminal B. The Airport handles facilities
maintenance for the balance of Terminals B, D and E, and outsources most of the maintenance
and janitorial functions to third parties. The costs associated with the Airport's maintenance of
these facilities are included in DFW's operating budget. The costs of maintenance activities paid
directly by American Airlines are not included in the Airport's operating budget or financial
statements.
Airfield — DFW is one of the highest capacity airports in the world with seven runways: two
diagonal runways and five north/south parallel runways. Four of the Airport's parallel runways
are 13,400 feet in length. The Airport has the capacity to land, park and gate the A380,
currently the largest passenger airliner in the world. The Airport's designated hourly capacity
arrival/departure flow is approximately 170 aircraft operations per hour under reduced
instrument flight conditions and approximately 226 to 264 aircraft operations per hour under
optimum visual flight conditions, a condition that prevails approximately 94% of the time.
Integrated Operations Center(IOC)—The new Integrated Operations Center provides "360-
degree situational awareness" of all Airport operations with a common, complete operating
picture from both customer and operator perspectives. Presently, Team IOC is forecasted to
have over 400,000 engagements (phone calls, emails, text messages, application requests,
etc.) in 2022. Data shows the IOC trending beyond prepandemic numbers, but with the
renewed focus on teamwork and customer centric response, along with technology
improvements, the call abandonment rates are trending less than 5% on average. The IOC
averaged an inquiry every 60 seconds or less.
Skylink Automated People Mover (APM) —The Skylink APM system carries approximately
129,000 passengers and employees each day (47 million annually prior to the COVID-19
pandemic) between DFW's five terminals. Skylink trains are on the secure side of the
terminals and travel in concentric loops in both directions. There are two Skylink stations in
each terminal and trains average two-minute headways. Skylink normally operates around-
the clock with 16 two-car trains.
DFW International Airport
FY 2023 Proposed Budget I Introduction
DFW Controlling Documents
In addition to the Contract and Agreement between the cities, DFW is governed by several
other key documents, including the Master Bond Ordinance and the Use Agreements
between DFW and the Signatory Airlines. Collectively, these agreements are called the
Controlling Documents. The Controlling Documents define how DFW manages its business
affairs. DFW does not collect any local tax revenue to fund its operations. The Controlling
Documents require that Gross Revenues of the Airport be deposited into the Revenue and
Expense Fund. Gross Revenues are defined as all Airport revenues and receipts except:
bond proceeds, Passenger Facility Charge (PFC) proceeds used to fund capital projects
(rather than for debt service), interest earned on unspent bonds, proceeds transferred from
a Capital Account, grant proceeds used to fund capital projects, and any sale of land or
mineral rights (including natural gas royalties), and revenues of the Public Facility Improvement
Corporation (PFIC).
Strategic Plan
DFW Airport adopted the organization's current Strategic Plan in FY22. The structure of the
plan is shown below. DFW's Strategic Plan is available at:
https://www.dfwairport.com/business/about/strategicplan/
6 I DFW International Airport
FY 2023 Proposed Budget I Introduction
OUR VISION OUR MISSION
We discover new ways to care for our
Travel. Transformed. customers, inspire our employees,and
strengthen our communities to create an
exceptional Airport experience. Every Day.
OUR KEY RESULTS
BUSINESS- OPERATIONAIL ',
DIVERSITY, PERFORMANCE EXCELLENCE
ERrOI
CUSTOMER
EXPERIENCE
SAFE,SECURE AND RESILIENT
.
AND INCLUSION TRANSFORMATION
OURAPPROACH
OUR BELIEFS
You're Everyone's Collaborating Striving for Trust is
Important Welcome Wins Excellence Everything
DFW International Airport
FY 2023 Proposed Budget I Introduction
Airline Use Agreement Rate Model
The Airline Use Agreement is a hybrid model, whereby the Signatory Airlines pay landing fees
and terminal rentals based on the net costs to provide those services. DFW retains a portion
of the net revenues from non-airline business units (e.g., parking) in the DFW Cost Center
(DFWCC). DFW is currently negotiating a new use agreement with the Airlines. The following
chart summarizes the Airline Use Agreement rate model that has been extended on a month-
to-month basis.
•.- - - -
DFW Cost Centers
Airfield Terminal DFW
Expenses Expenses DFW Revenues(Business Units)
Direct Costs Direct Costs Parking, Concessions, RAC,
DPS and Overhead Allocations DPS and Overhead Allocations Commercial Development,
Debt Service (net of PFCs) Debt Service(net of PFCs) Employee Transp., Taxis,
Utilities, and Interest Income
Less: Misc Airfield Revenues Less: Misc. Terminal Rentals Less: Expenses
General Aviation Federal Inspection Fees Direct Costs
Fueling Facility Lease Turn Fees; TSA Rentals DPS and Overhead Allocations
Concessions Reimbursements Debt Service(net of PFCs)
+/-Transfers/Adjustments +/-Transfers/Adjustments Transfers/Other
Lower Threshold Adjustment + DFW Terminal Contribution Skylink Costs
+ Upper Threshold Adjustment + Annual Capital Transfer DFW Terminal Contribution
+/- True-Up Adjustment +/- True-Up Adjustment
Net Cost= Landing Fees Net Cost=Terminal Rentals DFW Cost Center Net Revenues
Airline Cost&Airline Cost per Enplanement +/-Threshold Adjustments
+/- True-Up Adjustment
Net RevenueslWe
DFW Capital Account
Joint Capital Account Rolling Coverage Account DFW Capital Account
+ Natural Gas Royalties
+ Sale of Land Proceeds Funded from existing coverage, plus Funded annually from DFW Cost
coverage from New Debt Service from
Annual Capital Transfer to all three cost centers as debt service Centers. Contributions currently equal
the Terminal Cost Center increases upper threshold plus 25%.
Airline Cost Centers — The Airline Cost Centers are cost recovery in nature, such that the
amount charged to the airlines equals the cost to provide services, after certain adjustments.
Landing fees and terminal rental rates are based on the net cost to operate and maintain the
airfield and terminals, respectively. DFW charges the direct operating and maintenance costs
for the airfield and terminals, plus allocated Department of Public Safety and administrative
costs, plus debt service (net of PFCs) to each cost center. DFW subtracts ancillary revenues
generated in these cost centers and credits or charges certain transfers and/or adjustments
(see True-Up Adjustments below). The budgeted landing fee rate is determined by dividing
the net cost of the airfield by projected landed weights. The budgeted average terminal rental
rate is determined by dividing the net cost of the terminal cost center divided by leasable
square footage. The Use Agreement requires equalized terminal rental rates for all five
DFW International Airport
FY 2023 Proposed Budget I Introduction
terminals. The amount paid by the airlines for landing fees and terminal rent fees equals
"airline cost", an airport industry Key Performance Indicator (KPI). Another common
industry KPI is passenger airline cost per enplaned passenger (CPE). This KPI is calculated
by dividing airline cost by the number of enplanements.
DFW Cost Center (DFWCC) — All non-airline business units, plus interest income, are
included in the DFWCC. The DFWCC pays all costs associated with the Skylink A P M
system. One of DFW's most important KPIs is DFWCC net revenue. This KPI measures the
profitability (i.e., net revenues) generated by the Airport's non-airline business units, after
adjusting for the cost of Skylink, driving the contribution of discretionary capital to the DFW
Capital Account (DFWCA). DFW shares 75% of the DFWCC net revenues over the "upper
threshold"with the airlines to reduce landing fees and transfers the remainder into the DFWCA.
Joint Capital Account— Funds in the Joint Capital Account (JCA) generally require DFW and
airline approval before money can be spent. The JCA is funded from the proceeds from natural
gas royalties and the sale of land, plus interest income on the account. Supplemental funding
for projects paid from the JCA comes from grants and the issuance of debt.
Coverage Account — The Airport established the Coverage Account as part of the c u r re n t
Use Agreement to implement "rolling coverage." Each year, the Coverage Account is rolled
into the 102 Fund as a source of revenue, and then transferred back into the Coverage Account
as excess revenue at the end of the year. The Coverage Account must equal 25% of aggregate
debt service each year. If new debt is issued, rates are established to generate the
incremental coverage required to fund 25% of the new debt service, except if commercial
paper is issued, then the coverage amount is 10%.
DFW Capital Account — This is DFW's discretionary account and is funded primarily from
DFWCC net revenues plus interest income. Supplemental funding for projects paid from the
DFW Capital Account comes from grants and the issuance of debt. Funds in this account
may be used for any legal purpose without airline approval.
Threshold Adjustments —The Use Agreement established Lower and Upper Thresholds for
DFWCC net revenues. If DFWCC net revenues are budgeted to be less than the lower
threshold ($52.0 million in FY23), an incremental charge (i.e., a lower threshold adjustment)
is collected through landing fees in an amount sufficient to achieve the lower threshold amount.
The lower threshold adjustment guarantees that DFW will have a minimum level of cash to
transfer to the DFW Capital Account to replace assets on a timely basis. DFW has never had
to use the lower threshold adjustment. If DFWCC net revenues are budgeted to be greater
than the upper threshold ($79.7 million in FY23), then 75% of the excess is credited to the
Airfield Cost Center as an upper threshold adjustment. This reduces budgeted landing fees.
The remaining net revenues are transferred into the DFWCA. The retention of net revenues in
the DFWCA provides funds for capital replacement. The threshold amounts are adjusted
annually for inflation.
True-Up Adjustments — At the end of each fiscal year, DFW performs a reconciliation or
true-up, such that revenues collected equal the actual net cost to operate and maintain the
airfield and terminals. Any difference becomes a true-up adjustment, which is either charged or
credited to the appropriate cost center in the next fiscal year.
DFW International Airport
FY 2023 Proposed Budget Introduction
DFW Terminal Contribution — Per the terms of the Use Agreement, an annual transfer is
made from the DFWCC to the Terminal Cost Center to pay for DFW's share of common use
and leasable, but unleased space in Terminals D and E ($0 in FY23).
DFW's Fund Structure
Although DFW uses the word "fund" to describe the designation of the source and prospective
use of proceeds, DFW is an enterprise fund and does not utilize traditional fund accounting
commonly used by government organizations. The following table summarizes DFW's primary
funds.
Number Fund Description Primary Use
101 Fixed Assets and Long-Term Debt Capital Assets/Bonds
102 Operating Revenues and Expenses Operations
252 Passenger Facility Charges (PFC) Collections/Debt Service
320s/330s Joint Capital Account and Bond Funds Capital/Bond Proceeds
340s DFW Capital Accounts and Bond Funds Capital/Bond Proceeds
500-600s Debt Service and Sinking Funds Principal and Interest
907/910s Public Facility Improvement Corporation (PFIC) RAC/Hotels/Campus West/19th
Street Cargo
DFW's financial statements are issued in conformance with Generally Accepted Accounting
Principles (GAAP) and include all DFW's funds, whereas the Annual Budget focuses on
revenues and expenses included in the 102 Fund only. DFW manages its day-to-day
operations primarily through the 102 Fund in accordance with the Controlling Documents.
Passenger Facility Improvement Corporation (PFIC)
DFW has a PFIC which owns and operates the Grand Hyatt Hotel in Terminal D and the Hyatt
Place Hotel in Southgate Plaza, as well as the Rental Car Facility (RAC) and rental car bus
transportation services. In October 2018, the PFIC assumed operations of the Verizon office
complex located in the west section of the Airport. This complex, now known as DFW Campus
West, will be leased to other tenants in the future. Revenues, expenses and capital projects of
the PFIC are not included in this budget document. These businesses are excluded from the
airline rate base and are not part of the Use Agreement. DFW issued bonds to refinance the
bonds issued by the PFIC for the construction of the Grand Hyatt Hotel and Rental Car Facility.
The PFIC transfers funds in an amount equal to the debt service so that there is no impact on
the airline rate base.
Basis of Budgeting
The Operating Revenue and Expense Fund budget is commonly called the Operating Budget
but contains elements that are not expenses under GAAP such as debt service, reserve
requirements and certain other expenditures that may be capitalized under GAAP.
Capital expenditures are funded through Joint Revenue Bonds, grants, PFCs or cash in the
DFW or Joint Capital Accounts. From a process standpoint, the Board of Directors approves
the Operating Budget. The Board reviews the capital budget as part of the Annual Budget
process but does not approve a capital budget.
10 1 DFW International Airport
FY 2023 Proposed Budget I Introduction
FY23 Budget Comparisons to Other Periods
FY22 Outlook — The Board approves a total annual budget each year that consists of
operating expenditures and debt service. Management has authority to move money between
budget categories. The FY22 budget included contingency fund outside the rate base that
required Board approval ($10 million). During FY22, DFW utilized $10 million of Board-
approved contingency to fund incremental debt service costs from the issuance of new debt in
FY22.
Presentation of Amounts and Prior Years Actuals — The FY23 Budget is presented in
tables and charts that are rounded to millions and thousands. Some columns and charts
may not appear to add-up or foot due to rounding differences. Certain prior year amounts have
been reclassified to reflect the FY23 presentation.
Budget Schedule
DFW's fiscal year begins October 1. The FY23 Expenditure Budget was compiled by the
various DFW departments in June and reviewed and modified by management in June and
July. Presentations were made to representatives of the Signatory Airlines on June 20, 2022,
with follow-up information provided a few weeks later on July 19, 2022. The proposed FY23
Budget is presented to the Finance/Audit Committee and the DFW Board on August 2 and 4,
2022, respectively. On August 4, 2022, the DFW Board approves the submission of the budget
to the City Managers of Dallas and Fort Worth. The Board approves the budget on September
1, 2022. The two City Councils then approve the budget by September 30, 2022.
111 DFW International Airport
FY23 Proposed Budget I Executive Summary
Executive Summary - FY23 Budget
DFW has fully recovered from COVID-19. This is evidenced by the FY23 Budget which projects
record passengers, non-airline revenues and non-airline net revenues, significantly better than
the FY22 Outlook and FY19 actual results (prepandemic). The major themes of DFW's FY23
Budget follow:
• DFW continues to recover more quickly than other large-hub airports around the world
primarily due to increased air service provided by American Airlines.
o Passengers are budgeted at a record 78.3 million in FY23, a 6.8 million (9.5%)
increase over the FY22 Outlook and 6.8% higher than FY19.
o DFW Cost Center revenues before Federal Relief Proceeds (FRPs) are budgeted
at a record $476.5 million, a $52.8 million (12.5%) increase over the FY22 Outlook
and 19.3% more than FY19.
o DFW Cost Center net revenues are budgeted at a record $206.7 million, a $26.8
million (14.9%) increase over the FY22 Outlook and 35.6% more than FY19.
o Per the terms of the Use Agreement, DFW budgets to share a record $95.2 million
with the airlines to reduce landing fees and deposit a record $111.4 million into the
DFW discretionary capital account.
• The FY23 Expenditure Budget is $1.173 billion, a $133.4 million (12.8%) increase from
the FY22 Outlook.
o The FY23 Operating Expenditure Budget is $618.4 million, a $54.6 million (9.7%)
increase from the FY22 Outlook due primarily costs related to increased
passengers, fixed contract increases already approved by the Board, inflation in
service contracts, parts, and fuel; and investments in digital technology.
o The debt service budget is $554.8 million, a $78.7 million (16.5%) increase from
the FY22 Outlook primarily due to the issuance of$1.3 billion of new debt in April
and July 2022 to finance DFW's capital programs, partially offset by savings from
past refundings.
• The FY23 Budget currently includes the assumption that the remaining FRPs of
approximately$213.8 million will be used to fund the inflationary cost increases associated
with DFW's major capital programs, rather than rate relief.
• Airline cost and cost per enplanement (CPE) are budgeted to increase $120.1 million
(25.3%) and $1.92 (14.7%) from the FY22 Outlook, respectively, due to higher costs
described above and the use of FRPs for capital projects rather than applied to the rate
base as in past three years. The increased airline cost will result in higher terminal rates.
Landing fees are budgeted to decrease due to higher DFWCC transfers.
o The Airport plans to keep terminal-related airline rates flat in the first quarter of
FY23 with FY22 and then increase rates beginning January 1, 2023. If DFW and
the airlines can achieve firm agreed-upon terms for a new Use Agreement in the
first quarter of FY23, DFW may utilize some of the available FRPs to offset the
increase in rates and charges.
12 1 DFW International Airport
FY23 Proposed Budget I Executive Summary
Passengers, Operations and Landed Weights
The following chart compares total passengers and originating and destination (O&D) passengers
for FY19 Actual, FY20 Actual, FY21 Actual, FY22 Outlook and FY23 Budget. The FY23
passenger budget is 78.3 million, a 6.8 million (9.5%) increase over the FY22 Outlook of 71.5
million and 6.8% more than FY19 million due primarily to increased service by American Airlines.
Passengers (Ms)
100
80 73.3 71.5 78.3
60 55.4
47.4
40 30.3 281 30.9
20 L
L
8
0
FY19A FY20A FY21A FY220 FY23B
Total Passengers O&D Passengers
Originating passengers begin their trip at DFW. Destination passengers live elsewhere and fly to
DFW for business or leisure. Passengers who travel through DFW to get to their final destination
are connecting passengers. Enplanements represent all passengers boarding a plane. Changes
in these passenger metrics are important because they are the key revenue drivers for parking
(originating passengers), concessions (enplanements) and rental car (destination passengers)
revenues. Given American Airlines' strategy to utilize DFW's hub heavily, connecting passengers
are budgeted to recover about the same rate as originating or destination passengers.
FY19 FY22 FY23 FY23 vs FY22
Actual Outlook Budget Amount Percent
Passengers (Millions)
Origination 17.0 15.9 17.4 1.5 9.8%
Destination 13.2 12.2 13.4 1.2 10.2%
Connecting 43.0 43.4 47.5 4.0 9.3%
Total Passengers 73.3 71.5 78.3 6.8 9.5%
Enplanements 36.6 35.7 39.2 3.4 9.6%
FIS Deplaned 4.2 4.5 4.5 (0.0) (0.9%)
Landed Weights (Billions) 46.8 45.9 48.6 2.7 5.9%
Operations (Thousands) 700 670 672 2.3 0.3%
FY23 landed weights and operations are projected to be 5.9% and 0.3% higher than the FY22
Outlook, respectively. FY23 landed weights are projected to be 4% above FY19, while operations
are projected to remain 4% below FY19 due to upgauging of aircraft (i.e., more seats per plane)
from regional jets to narrow body aircraft. Operations remain lower due to pilot shortages.
13 1 DFW International Airport
FY23 Proposed Budget I Executive Summary
FY 2023 Budget Comparison
The table below compares the Expenditure Budget between the FY22 Outlook and the FY23
Budget. The FY23 Expenditure Budget (within the rate base) is $1.173 billion, a $133.4 million
(12.8%) increase from the FY22 Outlook. The total expenditure budget within the rate base is
used to calculate airline rates and charges (e.g., landing fees and terminal rental rates) per the
terms of the Use Agreement.
FY23 vs FY22
FY22 FY23 Increase (Decrease)
Annual Expenditures (in Millions) Outlook Budget Amount Percent
Operating expenses $563.8 $618.4 $54.6 9.7%
Gross debt service 476.1 554.8 78.7 16.5%
Total expenditures budget within rate base $1,039.9 $1,173.3 $133.4 12.8%
Board contingency outside rate base 10.0 10.0
Total budget with contingency $1,049.9 $1,183.3
The Airport has historically requested $10 million of Board contingency as part of its budget
request from the Owner Cities. This contingency can only be used with approval of the DFW
Board of Directors, which includes the mayors of Dallas and Fort Worth. This contingency has
been used in the past when non-airline revenues are significantly higher than budget and when
large unexpected expenses are required such as a new DHS security requirement or when the
Airport desires to make an incremental contribution to its pension plans.
Operating Expense Budget Walkforward
The following table summarizes the major changes in operating expenses between the FY22
Outlook and the FY23 Budget. The major drivers of the FY23 Budget increase are inflation, wage
pressures and the increase in passengers. See the Expenditure Section for more detailed
discussion of this walkforward.
FY22 Outlook to FY23 Budget
Operating Expenses (in Millions) Total
FY22 Outlook $563.8
Budget reductions (10.9)
Employee related increases 19.0
Customer related increases 10.7
Fixed contract increases 15.6
Digital and technology investments 4.9
Inflationary increases 7.9
Other increases 7.2
Operating reserve adjustments 0.2
Net increase 54.6
FY23 Budget $ 618.4
14 DFW International Airport
FY23 Proposed Budget I Executive Summary
Revenues Overview
The following table summarizes revenues by cost center for the FY19 Actual, FY22 Outlook and
the FY23 Budget. Refer to the Airline Cost Centers and DFW Cost Center sections for more detail
on revenues.
FY19 FY22 FY23 FY23 vs FY22
Millions Actual Outlook Budget Amount Percent
Revenues
Airfield Cost Center $184.1 $188.6 $200.9 $12.3 6.5%
Terminal Cost Center 402.8 405.2 528.8 123.6 30.5%
DFW Cost Center* 332.9 340.7 381.4 40.7 11.9%
PFCs and Other 177.1 153.2 173.8 20.6 13.5%
Federal Relief Proceeds** 0.0 66.6 0.0 (66.6)
Total Revenues $1,096.9 $1,154.4 $1,284.9 $130.5 11.3%
"Excludes transfer from DFWCC and Terminal Contribution
""Excludes $30.7 m illion of FRP for concessionaires.
DFW collects a $4.50 PFC from most enplaned revenue passengers to pay for eligible debt
service. This revenue stream is used as an offset to debt service. Other revenues relate to
transfers from the PFIC to pay debt service associated with the Grand Hyatt hotel, plus transfers
from the DFW Capital Account to pay for debt service associated with the Terminal E garage and
DFW's headquarters.
Airline Cost
Airline cost represents the fees paid to DFW by the passenger and air cargo carriers, primarily for
landing fees and terminal rents. The FY23 Airline Cost Budget is $595.4 million, $120.1 million
(25.3%) higher than the FY22 Outlook due to the net impact of higher costs, less FRPs and higher
DFWCC net revenues. The following chart compares airline cost for FY19 to FY21 Actuals, FY22
Outlook and the FY23 Budget. DFW has been able to keep airline cost relatively flat through the
pandemic due to the use of FRPs, which are not being applied to the rate base in the FY23
Budget.
Airline Cost ($Ms)
$700
$595.4
$600
$500 $485.5 $443.1 $440.9 $475.3
$400
$300
$200
$100
$0
FY19A FY20A FY21A FY220 FY23B
15 DFW International Airport
FY23 Proposed Budget I Executive Summary
Passenger Airline Cost Per Enplanement
CPE represents total passenger airline revenue (cost to the airlines) paid to DFW divided by the
number of enplaned passengers. It excludes cargo landing fees. CPE is a standard airline
industry metric. Enplaned passengers (the denominator) are a key revenue/cost driver for the
airlines; however, not for airports. Airport costs are primarily fixed and are directly related to the
operation and maintenance of airport's terminals, facilities and runways. DFW estimates that
approximately 80-85% of its operating expense are fixed based on its experience with COVID-
19. Debt service is highly fixed unless the Airport has refundings available in the fiscal year which
could allow for some debt restructuring. Notwithstanding, the industry uses this indicator as a
cost performance metric. CPE is budgeted to increase 14.7% in FY23 because airline costs are
projected to grow faster (25.3%) than the increase in passenger traffic (9.5%).
Cost per Enplanement
$24
$20 S 18.29
$16 $12.95 $15.63 $13.07 $14.99
$12
$8
$4
$0
FY19A FY20A FY21A FY220 FY23B
DFW Cost Center Revenues and Net Revenues
The following chart compares DFW Cost Center(DFWCC) revenues for the periods FY19 to FY21
Actuals, FY22 Outlook and FY23 Budget. Non-airline revenues achieved record levels in FY23,
$77.1 million (19.3%) higher than FY19 and $52.8 million (12.5%) higher than the FY22 Outlook
due to increased passenger-related revenues, annualization of parking rate increases in FY22,
higher rental car rates, more commercial development acres under lease and higher interest
income due to higher rates. See more detail in the DFWCC section.
16 1 DFW International Airport
FY23 Proposed Budget I Executive Summary
DFWCC Revenues ($Ms)
$600
$500 $476.5
$399.4 $389.8 $398.5 $425.2
$400
$300
$200
$100
$0
FY19A FY20A FY21A FY220 FY23B
■Revenues before FRP ■ Federal Relief Proceeds
The following chart highlights the portion of DFWCC Net Revenues that are shared with the
airlines to reduce landing fees and the amount transferred to the DFW Capital Account for the
periods FY19 to FY21 Actuals, FY22 Outlook and FY23 Budget. DFWCC Net Revenues are
budgeted at $206.7 million in FY23, $26.8 million higher than in FY22. DFW has used Federal
Relief Proceeds to keep net revenues and revenues transferred to the DFW Capital Account
relatively flat during pandemic but will not need any in FY23. The Use Agreement requires DFW
to share 75% of revenues over the "upper threshold" ($79.7 million in FY23) with the airlines.
DFWCC Net Revenues ($Ms)
$250
$206.7
$200 $164.0 $178.7 $179.9
$152.4
$150
$100
$50
$0
FY19A FY20A FY21A FY220 FY23B
e Airfield Transfer DFW CA
Available Federal Relief Proceeds (FRPs)
The U.S. government passed three FRP packages into law to provide financial assistance for
airports: the Coronavirus Aid, Relief, and Economic Security Act (CARES) in March 2020, the
Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA) in December 2020,
and the American Rescue Plan Act of 2021 (ARPA) in March 2021. DFW's share of these FRP
packages totals $611.2 million as shown in the table on the following page. DFW currently
projects to have $213.8 million outstanding at the end of FY22.
17 1 DFW International Airport
FY23 Proposed Budget I Executive Summary
The FY23 Budget currently includes the assumption that the remaining FRPs will be used to pay
for the inflationary cost increases of the Central Terminal Area Expansion Program or other capital
projects. If DFW and the airlines can achieve firm agreed-upon terms to a new Use Agreement
in the first quarter of FY23, DFW may utilize some of the available FRPs to offset the increase in
rates and charges.
Federal Relief Proceeds (FRPs) Summary
$ Millions
Debt Con-
Service cessions Total
Federal Relief Awarded
CARES $299.2 $0.0 $299.2
CRRSA 52.6 7.7 60.3
ARPA 221.1 30.7 251.8
Total Federal Relief Awarded 572.9 38.3 611.2
FRP Utilization through FY22 Budget
FY20 Actual 144.1 0.0 144.1
FY21 Actual 148.4 7.7 156.1
FY22 Outlook 66.6 30.7 97.3
Total Uses thourgh FY22 Budget 359.1 38.3 397.4
FRPs Available $213.8 $0.0 $213.8
(THE REST OF THIS PAGE IS LEFT INTENTIONALLY BLANK)
18 1 DFW International Airport
FY 2023 Proposed Budget I Airline Cost Centers
Airline Cost Centers
There are two airline cost centers, the airfield and the
terminal. The airlines pay landing fees to cover the net
cost of the airfield and terminal rents to cover the net cost
of the terminals. At the end of each fiscal year, DFW
performs a reconciliation, or true-up, of actual costs paid
and revenues received. If there is a variance (i.e., if
revenues collected exceed or are lower than the actual
costs), then the Airport provides a credit or adds an - --a,
incremental charge in the following fiscal year to settle
the difference (called a true-up adjustment). � ak
fl ,.
Airline Cost Walkforward
The following table is a walkforward of airline cost from the FY22 Outlook to the FY23 Budget.
To explain the table, an increase in a non-airline revenue, like PFCs, is shown as a negative
number because airlines will pay lower fees due to the growth of this revenue (i.e., decrease
airline cost). Similarly, a reduction in a revenue source, like FRPs, will increase airline costs.
Airline Cost Walkforward (in Millions) Total
FY 2022 Outlook $475.3
Debt & use agreement items
Increase in debt service 55.5
Increase in threshold adjustment 6.6
Increase in passenger facility charges (5.6)
Total Debt and Use Agreement 56.5
Net operating expenses changes
Lower Federal Relief Proceeds 50.4
Increase in operating expenses 35.5
Increased DFWCC transfer (18.9)
Increased other non-airline revenues (3.4)
Total net operating expenses 63.6
Total increases 120.1
FY 2023 Budget $595.4
DFW International Airport
FY 2023 Proposed Budget I Airline Cost Centers
Summary of Airline Cost
The following table summarizes airline costs included in FY19 Actual, FY22 Outlook and FY23
Budget. Landing fees are lower due to higher DFWCC sharing, while terminal costs are higher
primarily due to higher costs and the removal of FRPs from the budget in FY23.
FY19 FY22 FY23 23 vs 22 Inc (Dec)
Airline Revenue/Costs (in Millions) Actual Outlook Budget Amount Percent
Landing Fees 107.8 93.9 91.0 ($2.9) (3.1%)
Terminal Leases 315.8 327.3 420.8 93.5 28.6%
FIS Fees 28.0 26.1 34.7 8.6 32.8%
Turn Fees & Terminal Office Rent! 33.2 27.2 48.3 21.1 77.4%
Aircraft Parking 0.7 0.7 0.7 (0.0) (6.2%)
Total Airline Revenue/Cost $485.5 $475.3 $595.4 $120.1 25.3%
Airfield Cost Center
The table below compares the FY19 Actual, FY22 Outlook and FY23 Budget for the Airfield Cost
Center. This is a residual cost center, so revenues equal expenses with landing fees as the
balancer. The remaining balance of net airfield revenue in FY19 of $10.5 million was before
settlement and would be applied as a reduction in the following year's landing fees. Note that
FRPs were not needed in FY22 or FY23 due to the amount of DFWCC revenue sharing. See
further discussion below.
FY19 FY22 FY23 23 vs 22 Inc (Dec)
Airfield CC (in Millions) Actual Outlook Budget Amount Percent
Revenues
Landing Fees $118.4 $93.9 $91.0 ($2.9) (3.1%)
Transfer from DFWCC 63.2 80.1 95.2 15.2 18.9%
Federal Relief Proceeds 0.0 0.0 0.0 0.0 0.0%
Other 13.0 14.6 14.6 0.0 0.2%
Total Revenues 194.6 188.6 200.9 12.3 6.5%
Expenditures
Operating Expenses 102.5 118.0 115.4 (2.6) (2.2%)
Net Debt Service 81.5 70.7 85.5 14.8 21.0%
Total Expenditures 184.1 188.6 200.9 12.3 6.5%
Net Airfield Revenue $10.5 $0.0 $0.0 $0.0 0.0%
DFW International Airport
FY 2023 Proposed Budget I Airline Cost Centers
Calculation of Landing Fees -The following table shows the calculation of landing fees for the
three periods. The Use Agreement requires DFW to share revenues from the DFW Cost Center
to lower landing fees. Other airfield revenues include fees for aircraft parking, landing and other
fees for the use of DFW's corporate aviation facility, ground lease payments for the fuel farm
(operated for the airlines by a third party), and an allocation of Department of Public Safety (DPS)
revenues. The FY23 landing fees budget is $91.0 million, a decrease of$2.9 million (3.1%) from
the FY22 Outlook because transfers from the DFW Cost Center are greater than net cost
increases.
FY19 FY22 FY23 23 vs 22 Inc (Dec)
Airfield CC (in Millions) Actual Outlook Budget Amount Percent
Expenditures
Operating Expenses $102.5 $118.0 $115.4 (2.6) (2.2%)
Net Debt Service 81.5 70.7 85.5 14.8 21.0%
Total Expenditures 184.1 188.6 200.9 12.3 6.5%
Revenues
Transfer from DFW Cost Center 63.2 80.1 95.2 15.2 18.9%
Federal Relief Proceeds 0.0 0.0 0.0 0.0 0.0%
Aircraft Parking 0.7 0.7 0.7 (0.0) (6.2%)
Corporate Aviation 2.5 3.7 3.7 (0.1) (1.6%)
Fuel Facility Ground Lease 6.0 6.5 7.1 0.6 9.0%
DPS 3.9 3.7 3.3 (0.4) (11.4%)
Trueup activity (10.5) 0.0 0.0 0.0 0.0%
Other (0.0) (0.1) (0.1) (0.0) 16.9%
Revenues before Landing Fees 65.7 94.7 109.9 15.2 16.0%
Landing Fees $118.4 $93.9 $91.0 (2.9)
DFW International Airport
FY 2023 Proposed Budget I Airline Cost Centers
Landed Weights— Landed weights are budgeted at 48.6 billion tons in FY23, a 2.7 billion (5.9%)
increase from the FY22 Outlook. The increase is primarily due to the recovery and the use of
heavier aircraft (i.e., narrow body aircraft versus regional jets) and wide body aircraft with more
seats.
Landed Weights
(in Billions)
60 48.6
50 46.8 45.9
40
30
20
10
0
FY19A FY22O FY23B
Landing Fee Rates —The landing fee rate is assessed per 1,000 pounds of maximum approved
landed weight for each specific aircraft, as certified by the FAA. Changes in landed weights will
not affect total landing fee revenues because DFW must charge the airlines collectively for the
cost to operate the airfield. Thus, an increase in landed weights will lower the average landing
fee rate and a decrease in landed weights will cause the landing fee rate to increase.
Landing Fee Rates (per 1,000 pounds)
$3.00
$2.31 $2.23
$2.00 $1.88
$1.00
50.00
FY19A FY22O FY23B
Per the Use Agreement, non-signatory airlines are assessed a rate that is 25% greater than
signatory airlines. Non-signatory landed weights are only 0.4% of total weights in FY23B.
Cargo
DFW Airport is increasingly being recognized as an attractive cargo gateway, providing direct
access to the fast-growing Sunbelt region and acting as a superior connecting point for cargo
flowing between Asia and Latin America. The Airport's prime location allows assorted cargo to
reach millions of U.S. customers by road, while also reaching several continents by plane in a
matter of hours. From DFW, 98% of the continental U.S. population can be reached via truck
within 48 hours. Cargo represents 9.4% of DFW's budgeted landing fees in FY23.
DFW International Airport
FY 2023 Proposed Budget I Airline Cost Centers
A strong performance in the second half of FY21 carried over with strong demand for global air
freight into the first half of FY22 resulting in a 3.2% increase in cargo tonnage year over year.
There was unexpected drop in demand in the second half of FY22 due to Covid lockdowns in
China, which impacted production as well as crew schedules and global inflation. DFW projects
a drop of about 6% of cargo tonnage for the second half of FY22 resulting in a net 3.3% decline
in tonnage. DFW projects FY23 cargo tonnage to be flat to FY22 due to a decrease in consumer
demand caused by inflation, high interest rates and geopolitical uncertainty.
Cargo Tonnage (US Tons in 000s)
FY Tonnage Change Percent
2020 888 0 -
2021 984 96 10.8%
2022 OL 952 (32) (3.3%)
2023 B 950 (2) (0.2%)
Terminal Cost Center
The table below compares the FY19 Actual, FY22 Outlook and FY23 Budget for the Terminal
Cost Center. Since this is a residual cost center, revenues equal expenses. The $2.3 million
variance for FY19 Actual resulted in a true-up credit the following year. Revenue variances
between the FY23 Budget and the FY22 Outlook are explained below.
FY19 FY22 FY23 23 vs 22 Inc (Dec)
Terminal CC (in Millions) Actual Outlook Budget Amount Percent
Revenues
Operating Revenue
Terminal Leases $318.1 $327.3 $420.8 $93.5 28.6%
FIS Fees 28.0 26.1 34.7 8.6 32.8%
Turn Fees & Office Rents 33.2 27.2 48.3 21.1 77.4%
Other 22.5 21.8 25.0 3.3 15.0%
Federal Relief Proceeds 0.0 50.4 0.0 (50.4) (100.0%)
Total Operating Revenue 401.7 452.7 528.8 76.0 16.8%
DFW Terminal Contribution 3.3 2.8 0.0 (2.8) (100.0%)
Total Revenues 405.0 455.6 528.8 73.2 18.1%
Expenditures
Operating Expenses 219.7 258.8 297.0 38.1 14.7%
Net Debt Service 183.0 196.7 231.8 35.1 17.8%
Total Expenditures 402.8 455.6 528.8 73.2 16.1%
Net Terminal Revenue $2.3 $0.0 $0.0 $0.0 0.0%
DFW International Airport
FY 2023 Proposed Budget I Airline Cost Centers
Terminal Leases—The FY23 terminal lease budget is$93.5 million (28.6%) higher than the FY22
Outlook, primarily due to increases in operating expenses and net debt service and zero FRPs
being applied to offset the cost increases.
Federal Inspection Services (FIS) Fees — Costs are allocated to the FIS based on its percent
share of terminal square footage. The FIS budget in FY23 is $34.7 million, $8.6 million (32.8%)
higher than the FY22 Outlook. The rate for FIS per international passenger clearing customs at
DFW is budgeted at $6.30 for the first quarter of FY23, then increase to $8.11 starting January 1,
2023, and for the remainder of FY23. FIS passengers do not include arriving passengers from
countries where passengers clear U.S. Customs in that country (e.g., Canada).
Turn Fees and Office Rents—Turn fees are paid by airlines for common use gates in Terminals
D and E in lieu of permanently renting space. Per the terms of the Use Agreement, turn fee rates
must change at the same percentage as terminal lease rates. The turn fee revenue budget for
FY23 is $48.3 million, a $21.1 million increase from the FY22 Outlook. The turn fee rates are the
same as the FY22 budgeted rates for the first quarter of FY23, then increase 32.2% starting
January 1, 2023, and for the remainder for FY23.
Other Terminal Revenues—Other terminal revenues include TSA rents, concessions operations
and maintenance (O&M) reimbursements, catering fees and allocable miscellaneous DPS
revenues. Concessionaires are required to reimburse the Airport (for Terminals B, D and E) and
American Airlines (for Terminals A and C) for the allocated maintenance cost per square foot.
Other terminal revenues are $3.3 million (15%) higher than the FY22 Outlook, due primarily to
higher concessions O&M reimbursement driven by higher maintenance costs and an increase in
concessions terminal square footage. Other increases include catering fees, which are driven by
an increase in international passengers and DPS revenues.
DFW Terminal Contribution — Per the terms of
the Use Agreement, DFW pays for a portion of the
terminal cost based on DFW's proportionate share ?\�
of expenses for common use and vacant space In 1 t
the terminals. From a cost center standpoint, this 'ILIA;
contribution is shown as a source of cash in the _
Terminal Cost Center and a use of cash for the '
DFW Cost Center. DFW can reduce its
contribution to the Terminal Cost Center b �
leasing more space to other airlines or tenants,
increasing common use turn fees, and by reducing
costs in the terminals. No terminal contribution is
needed in the FY23 Budget.
Average Terminal Rents before Credits — Total terminal operations, maintenance and debt
service costs, including utilities for the five terminals, are divided by leasable square feet to
calculate an average lease rate per square foot. American Airlines pays directly for the
maintenance costs of Terminals A, C and E Satellite and six jet bridges in Terminal B. These
costs are added into the numerator of this formula to derive the fully loaded average rate.
American Airlines receives a rent credit for their costs. The credit in FY23 is $44.9 million.
24 DFW International Airport
FY 2023 Proposed Budget I Airline Cost Centers
Total terminal leased square footage in FY23 remained relatively flat to FY22 Outlook at 1.222
million square feet. Terminal rental rate is budgeted at $307 per square foot for the first quarter
of FY23, then increase to $406 starting January 1, 2023, and for the remainder of FY23. The
following chart compares average terminal rents before credits for the FY19 Actuals, FY22
Outlook and FY23 Budget.
Average Terminal Rents before Credits
per square foot
$500
S406
$400
$310 S307 S307
$300
$200
$100
$0
FY19A FY22O FY23 FY23
Q 1 Q2-Q4
CPE Calculation
The following table shows the passenger airline cost per enplanement calculation and compares
the CPE for the FY19 Actual, FY22 Outlook and FY23 Budget. This KPI only includes passenger-
related airline revenues (i.e., costs) and excludes cargo and general aviation revenues. CPE
increases since costs rise faster than enplanements.
FY19 FY22 FY23 23 vs 22 Inc (Dec)
Cost Per Enplanement (in Millions) Actual Outlook Budget Amount Percent
Enplanements(1) 36.6 35.7 39.1 3.4 9.6%
Passenger Airline CPE
Airline Cost/Revenue $485.5 $475.3 $595.4 $120.1 25.3%
Less: Cargo (11.2) (8.7) (8.6) 0.1 (1.5%)
Total PAX Airline Revenue 474.4 466.6 586.8 120.3 25.8%
Cost per Enplanement (CPE) $12.95 $13.07 $14.99 $1.92 14.7%
1 Corporate Aviation enplanements are excluded from CPE calculation
2Actual rates,not in millions
DFW International Airport
FY 2023 Proposed Budget I DFW Cost Center
DFW Cost Center
The table below compares the FY19 Actual, FY22 Outlook and FY23 Budget for the DFWCC.
The FY23 Budget does not include any FRPs as discussed in the Executive Summary. Not
shown in this table are $30.7 million of FRP shared with concessionaires during FY22 through
billing credits. DFW transfers 75% of net revenues in excess of the "upper threshold" ($95.2
million in FY23) with the Airfield Cost Center to reduce landing fees. This is called the threshold
adjustment.
FY19 FY22 FY23 23 vs 22 Inc (Dec)
DFW Cost Center (in Millions) Actual Outlook Budget Amount Percent
Revenues
Parking $178.7 $184.9 $202.1 $17.2 9.3%
Concessions 94.2 98.9 108.2 9.3 9.4%
Rental Car(RAC) 33.5 40.1 47.5 7.4 18.4%
Commercial Development 49.7 64.8 71.7 6.9 10.6%
Subtotal 356.1 388.7 429.5 40.8 10.5%
Employee Transportation 17.5 16.6 21.8 5.2 31.4%
Utilities & Miscellaneous 8.9 11.5 11.7 0.2 2.0%
DPS 1.8 1.7 1.5 (0.2) (10.1%)
Interest Income 15.1 5.2 12.0 6.8 129.5%
Subtotal (Before FRP) 399.4 423.7 476.5 52.8 12.5%
Federal Relief Proceeds 0.0 1.6 0.0 (1.6) (100.0%)
Total Revenues 399.4 425.2 476.5 51.3 12.1%
Expenditures
Operating Expenses 139.8 140.4 155.0 14.7 10.5%
Net Debt Service 61.0 51.3 57.8 6.5 12.7%
Total Expenditures and Debt Service 200.8 191.6 212.8 21.2 11.1%
Gross Margin - DFW Cost Center 198.6 233.6 263.7 30.1 12.9%
Less: Terminal Contribution 3.3 2.8 0.0 (2.8) (100.0%)
Less: Skylink 42.9 50.9 57.0 6.1 12.0%
DFW Cost Center Net Revenues $152.4 $179.9 $206.7 $26.8 14.9%
Transfer to Airfield Cost Center 63.2 80.1 95.2 15.2 18.9%
Amount to DFW Capital Account 89.2 99.8 111.4 11.6 11.7%
Allocation of DFWCC Net Revenues $152.4 $179.9 $206.7 $26.8 14.9%
DFW Cost Center has four business units that focus on increasing net revenues (Parking,
Concessions and Advertising, Rental Car Center and Commercial Development). The other
business units generally use cost-based pricing, except interest income.
26 1 DFW International Airport
FY 2023 Proposed Budget I DFW Cost Center
Parking and Ground Transportation Revenue
The following chart shows the composition of Parking and Ground Transportation revenues by
parking product including prepaid parking online (PPO) for FY19 Actual, FY22 Outlook and
FY23 Budget. Ground Transportation and Parking are combined because passengers have the
choice to park at the Airport, get dropped off, take a taxi/limo, or use a transportation network
company (TNC). PPO continues to grow as a percentage of parking revenues.
Parking and Ground Transportation Revenue
(in Millions)
$250
$200 178.7 $184.9 $202.1
14.9% 12.9% I
0
150 8.2% 19.6% 19.6/o —
$100 --0
$50 74.5% 66.3% 63.9%
$0
FY19 Actual FY22 Outlook FY23 Budget
■Parking (Excluding PPO) Prepaid Parking ■TNCs Taxi/Limos
Parking Background — Parking is DFW's largest source of non-airline revenue. Customers are
charged parking fees based on the length of stay and the parking product used. The following
table highlights parking products and parking rates.
DFW Parking Rate Summary
Parking Product Rate Description
Terminal $27 all day parking
Express Lots $15/$18 uncovered /covered
Remote $12 uncovered
Intra-day $9- $10 up to 6 hours
Meeter-Greeter $3 30 minutes-2 hours
Drop-Off $2 8-30 minutes
Pass-Throughs $6 0-8 minutes
Taxi, Limos $4 up to 2 hours
TNCs $6 up to 2 hours
PPO discounted pricing can vary depending on length of stay, advance purchase, and trip
purpose (business vs. leisure). Ground transportation fees are paid by taxis, limos, TNCs and
other shared-ride transportation companies that require Airport access to drop-off and pick-up
passengers. DFW also collects a privilege fee of 12% of sales from off-airport parking and valet
providers. The Airport contracts directly with a third party to provide a DFW branded valet
service. DFW has five terminal parking garages, two Express lots and two Remote lots. The
'7 1 DFW International Airport
FY 2023 Proposed Budget I DFW Cost Center
Remote South lot reopened in May 2022 and the Remote North lot is scheduled to open in fall
of 2023.
FY23 Budget — The FY23 parking revenue budget is $202.1 million, an increase of $17.2
million (9.3%) from the FY22 Outlook due primarily to the annualization of FY22 rate changes,
the growth of originating passengers due to a strong local economy, and advanced pricing and
yield management tactics related to PPO.
The FY23 parking budget does not assume any rate increases; however, the annualization of
FY22 rate increases are providing more revenue in FY23. The FY22 rate increases included a
$1 TNC rate increase, a $3 Express lot increase, and $2 Remote lot increase in May 2022 when
the lots reopened. Express and Remote increases had not been made for many years.
PPO will continue to be marketed as a low-cost, safe and convenient parking option in FY23;
however, given the closure of one of the Terminal C parking garages and the heavy utilization of
Terminal D, PPO sales will be limited during certain peak travel periods in FY23. DFW will
continue to invest in the application of new tools and technologies to help in understanding
various customer segments and developing targeted pricing strategies. Future plans for PPO
may include premium nested lots for elite customers, loyalty programs, dynamic pricing,
bundling and cross-selling opportunities.
Concessions
Background — Terminal concessions consist
of food and beverage, retail and duty free, _ T
advertising, and various customer services and
amenities. Concessions agreements normally *�
l e�-
consist of leases or contracts that generally
range from 5 to 10 years and are based on = -
percentage rent subject to a minimum annual errr r '
guarantee. Concessions also issues short-
term permits for kiosks and storage locations.
As of June 30, 2022, the Airport had 215 total
locations. P !la
Concessions revenues also include contracts ' I
for sponsorships, advertising and communications services, which generally have periodic or
one-time payments that may be recognized throughout the contract year. Concessions' goal is
to optimize retail, services, and food and beverage options for customers to increase revenue
per enplanement, and to grow new revenue streams from sponsorships, communications and
advertising not tied directly to enplanements.
FY23 Budget — The FY23 concessions and advertising budgets total $108.2 million, a $9.3
million (9.4%) increase from the FY22 Outlook due primarily to a 9.5% increase in passenger
enplanements and the planned opening of about 10 new locations.
28 1 DFW International Airport
FY 2023 Proposed Budget I DFW Cost Center
Rental Car Center (RAC)
Background — The RAC covers 155 acres
and includes a common building with
individual counters and back office space for
each rental car company. The facility
Na Vim, includes a parking garage for ready and
R a'; j�;fi return car spaces, a bus maintenance facility,
overflow surface parking areas and individual
� �r rental company service sites that feature car
wash racks, maintenance bays and fueling
y systems. The Airport collects ground leases
and percentage rents (10% of sales) from
rental car companies. The ground lease rate
increases 3% each year. The Airport has
agreements with six rental car companies representing 12 brands, providing a total inventory of
approximately 25,000 cars.
DFW management has very little control over rental car company activities. RAC sales and
DFW revenues tend to follow the economy. RAC revenues can rise or fall based on the number
of DFW destination passengers, the percentage of destination passengers renting cars, the
average stay per renter and the average daily price charged for the cars.
Before the pandemic, rental car companies experienced significant competition from TNCs. This
trend reversed during the pandemic as customers preferred driving rental cars. The rental car
companies also reduced their fleet inventories during the pandemic, resulting in fewer rental
cars available with increasing demand. Thus, significant price increases from average per day
rates in the $40s to $50s prepandemic to rates ranging from $65 to $80 per day since the
pandemic.
FY23 Budget — The FY23 rental car revenue budget is $47.5 million, a $7.4 million (18.4%)
increase from the FY22 Outlook due to expected continuation of higher daily rates and higher
destination passengers. The FY23 Budget is based on the assumption that percent rent is
retained for the full fiscal year.
Commercial Development
Background — The Airport has a total land mass
of 17,183 acres. As of May 31, 2022, DFW's "
commercially developed areas total 3,204 acres.
Management estimates that approximately 2,725
acres of additional land is available for future
development. DFW focuses primarily on
developing land that has airport synergy, such as
logistics and warehousing.
Commercial Development revenues include
ground leases, foreign trade zone tariff and facility _
rents generated from non-terminal Airport facilities s'
and property and surface use fees primarily from natural gas drilling. Multiyear lease
29 1 DFW International Airport
FY 2023 Proposed Budget I DFW Cost Center
agreements are negotiated with tenants on a square-foot or acre basis. Some facilities, such as
the Hyatt Regency Hotel and Bear Creek Golf Course, also have percentage rent components.
The key drivers for Commercial Development revenues are acres developed and the average
ground rental rate. Approximately 77% of the ground lease revenue is based on negotiated
rates, 23% is based on the airport services ground rental rate, which are primarily older leases
that have airfield access. The airport services ground rental rate per acre changes annually
with inflation and will be $33,202 in FY23.
FY23 Budget — The FY23 Commercial Development revenue budget is $71.7 million, a $6.9
million (10.6%) increase from the FY22 Outlook. FY23 reflects an increase of $2.6 million in
new ground lease rents (64 acres developed in FY22, plus an additional 171 acres to be
developed in FY23), and a $2.5 million due to lease rate increases. Many of the new ground
leases are located in the logistics developments in the southern part of the Airport.
Other DFW Revenues and Expenses
The fees charged in this category are generally established to recover costs, except interest
income.
Employee Transportation — DFW charges fees for employees to access the transportation
system that takes employees from employee parking lots to the terminals. For most employees,
the employer (e.g., airlines, concessionaires) pays these fees. The FY23 Budget is $21.8
million, a $5.2 million (31.4%) increase from the FY22 Outlook, due to increase in the number of
employees and a $16 rate increase, effective January 1, 2023, to cover incremental operating
costs that were previously covered by FRP. The increased operating costs are related to higher
bus contract costs due to increases in entry wages and fuel costs.
Utilities & Miscellaneous — This revenue category represents fees charged to non-airline
users of utilities, heating ventilation and air conditioning, trash removal, water and certain permit
and accounting fees. Utility charges to users are based on the cost to provide the services.
The FY23 Budget is $11.7 million, a $0.2 million (2.0%) increase from the FY22 Outlook
primarily due to rate increases.
DIPS Revenues — The FY23 Budget is $1.5 million, a $0.2 million (10.1%) decrease from the
FY22 Outlook due to the shift in allocation percentage between the DFW Cost Center and
Airline Cost Centers. DPS also receives federal reimbursements from the TSA for Law
Enforcement Officers, plus fees for badging, fire training and other services, budgeted at $1.3
million in FY22.
Interest Income — Interest income includes interest earned on investments from the Operating
Revenue and Expense Fund, three-month Operating Reserve, Debt Service Reserve Fund and
Rolling Coverage Account. The FY23 interest income budget is $12.0 million, a $6.8 million
(129.5%) increase from the FY22 Budget due primarily to higher projected interest rates.
Terminal Contributions — Per the terms of the Use Agreement, DFW pays terminal costs
based on common use space and its share of vacant leasable space. The FY23 Budget is $0, a
decrease of$2.8 million from FY22 Outlook.
30 1 DFW International Airport
FY 2023 Proposed Budget I DFW Cost Center
Skylink — Expenses and debt service related to Skylink are recovered in the DFW Cost Center
per the Use Agreement. The FY23 Budget is $57.0 million, a $6.1 million (12.0%) increase from
the FY22 Outlook primarily related to a new maintenance contract that has higher costs due to
the age of Skylink.
1
31 DFW International Airport
FY 2023 Proposed Budget I Operating Expenses
FY23 Expenditure Budget
The FY23 Budget is $1.173 billion, an increase of $133.4 million (12.8%) from the FY22
Outlook.
FY19 FY22 FY23 23 vs 22 Inc (Dec)
Annual Expenditure (in Millions) Actual Outlook Budget Amount Percent
Operating Expenses $499.6 $563.8 $618.4 $54.6 9.7%
Gross Debt Service 508.0 476.1 554.8 78.7 16.5%
Total Expenditures Budget within rate base $1,007.7 $1,039.9 $1,173.3 $133.4 12.8%
Operating Expense Budget Walkforward
J
_ � l
The following table is a walkforward between the FY22 Outlook and the FY23 Budget. The
reference letters in the previous table are cross-referenced to the variance explanations that
follow.
Budget Walkforward (millions)
Total DFW Airline
FY22 Outlook $563.8 $187.0 $376.8
A. Budget reductions (10.9) (2.1)
B. Employee related increases 19.0 4.4 14.6
C. Customer related increases 10.7 7.2 3.5
D. Fixed contract increases 15.6 5.6 10.0
E. Digital and technology investments 4.9 1.5 3.4
F. Inflationary increases 7.9 3.5 4.4
G. Other increases 7.2 (0.7) 8.0
H. Operating reserve adjustments 0.2 m `) 0.5
Net increase 54.6 19.1 35.5
FY23 Budget $618.4 $206.1 $412.4
32 1 DFW International Airport
FY 2023 Proposed Budget I Operating Expenses
A. Budget reductions ($10.9) million
The FY23 Budget reflects a $4.0 million reduction for non-recurring winter weather related
expenditures that occurred in FY22 and are included in the FY22 Outlook. Consistent with past
years, DFW has removed all costs related to winter weather from the budget. If winter weather
occurs, it will be handled with contingency. Other reductions include the charging of certain DCC
costs to the capital account ($3.4 million), converting the access control sytem contract to in-
house staff ($1.6 million — see offsetting cost increase below), increased usage in accrued
vacation, which reduces costs in FY23 ($1.3 million) and contract labor reductions related to
custodial strike teams ($0.7 million).
B. Employee related increases $19.0 million
The FY23 Budget includes a 5% merit pool, annualization of FY22 merit increases, DPS step
increases from last year, and recommended modfications to the incentive compensation program
($4.9 million). Also assumed is a reduction in the vacancy rate from over 20% in FY22 to 13% in
the FY23. This results in $3.6 million of additional employee costs in FY23. In addition, this will
increase pension and health care costs. Other increases result from an increased actuarially
required pension/other postemployment benefit contributions due to the retirement incentive plan
offered last year ($3.3 million), health care costs ($3.2 million), annualization of the FY22 midyear
hourly rate increases that were effecitve July 1, 2022 ($2.3 million), and 24 new positions ($1.7
million). These new positions exclude the 12 incremental Customer Experience (CX) positions
and eight incremental ITS positions described below in other sections.
C. Customer related increases $10.7 million
Passenger levels are projected to increase 9.5%compared to FY22 Outlook. Accordingly, certain
service levels need to be increased to cover the needs of passengers.
• Busing costs are increasing by$5.7 million from the FY22 Outlook due to reopening of the
Remote North lot in May 2022 ($2.1 million) and increases in hourly rates for bus drivers
and service level for Express ($1.8 million), Terminal Link ($0.9 million) and Employee
($0.9 million).
• Wheelchair and Customs assistance services costs are increasing by $2.6 million
compared to the FY22 Outlook due to a new contract.
• One of the Terminal C parking garages will be torn down during FY23 as construction of
the Central Terminal Area Expansion Program begins. The budget includes $1.1 million
of incremental contract labor to help customers find parking spots in the other Terminal C
garages and Terminal D.
• Marketing and advertising programs are increasing $0.7 million to promote revenue
growth for PPO and Concessions.
• Personnel costs are increasing $0.6 million to add 11 new Airport Customer Expereinces
Specialists (ACES)and one new international manger effective March 1, 2023. The ACES
will help keep the terminals clean and responding to customer needs. They are also
responsible for continually auditing terminal environment against standards. The
international manager will focus on reducing customs queues during peak times.
33 1 DFW International Airport
FY 2023 Proposed Budget I Operating Expenses
D. Fixed Contract increases $15.6 million
This category relates primarily to annualized fixed contract increases from contracts approved by
the Board in FY22.
• New facility maintenance contracts for terminal facility maintenance ($3.5 million),
baggage handling ($1.2 million) and passenger boarding bridge maintenance ($0.7
million).
• A new Skylink maintenance contract, effective February 2022, that has a $3.2 million
annual increase primarily due to aging Skylink infrastruture.
• Maintenance contract increases of $2.0 million includes bolt torquing for airfield lighting
($0.4 million), airfield paint removal ($0.4 million), storm sewer/open channel maintenance
($0.3 million), roofing/waterproofing/ventahood cleaning ($0.4 million), runway rubber
removal ($0.2 million).
• Expected increases to property casualty insurance premiums based on higher asset
replacement values ($1.9 million). This estimated cost increase was provided by DFW's
insurance broker.
• Infrastructure and facilities assessments were added back into the FY23 Budget. Most
assessments were eliminated from the budget during the pandemic ($1.1 million).
• Other contract increases including lanscaping ($1.0 million), employee checkpoint
screening ($0.5 million) and ramp cleaning ($0.4 million).
E. Digital/Technology $4.9 million
This category relates to cost increases associated with DFW's commitment to implementing its
Digital Strategy and 5-year ITS Strategic Plan. Most of these increases relate to annualization of
contracts awarded in FY22 and contracts that have fixed annual cost increases. Since most new
technology investments are cloud-based, they are charged to the operating budget. In the past,
these costs were not cloud-based and were capitalized.
• Technology contract increases and upgrades of($2.6 million) for cloud services including
Oracle Fusion, digital twin, business intelligence software, the new badging system and
the terminal visual display system. Also included in this section are incremental cyber
security investments (Dark Trace safe breach platform, Palo Alto firewall support, anitvirus
and scanning tools).
• Addition of eight ITS staff and funding for parts and supplies for access control system
maintenance ($1.4 million). This insourcing will result in a net savings $0.2 million in FY23
and an estimated $4.3 million over the next five years as the access control system is
replaced.
• Professional services / staff augmentation in support of new systems development,
cybersecurity projects, and technical support for hard to fill positions ($0.9 million).
F. Inflationary increases $7.9 million
This category relates to cost increases impacted by the currently high-inflation environment which
is averaging 9% in the Dallas-Fort Worth metropolitan area. There is exposure in this area as
some commodity prices are rising much faster than the Consumer Price Index.
34 1 DFW International Airport
FY 2023 Proposed Budget I Operating Expenses
• Parts and materials,janitorial supplies, uniform and badging supplies, computer and other
non-capital equipment ($4.3 million).
• Increases in fuel prices for Compressed Natural Gas (CNG) and other fuels ($2.0
million).
• Increases in utilities for electricity, gas, water, waste services and internet/telephone
services ($1.6 million).
G. Other increases $7.2 million
• Restore CEO Contingency inside the rate base ($4.7 million increase)-CEO Contingency
is included in the rate base and may be used by the CEO at his discretion.
• Employee staff training $1.3 million, which was significantly reduced during the
pandemic.
• Other net ($1.2 million) includes increases in uniforms, general supplies and other
professional services.
H. Operating Reserve $0.2 million
DFW's Bond Ordinances and Use Agreement require the Airport to maintain a 90-day operating
reserve and $0.2 million is the amount necessary to achieve that requirement for FY23.
Operating Budget by Category
The table below compares the FY22 Outlook with the FY23 Budget by expense category.
Variance explanations by major cost driver follow in the walkforward. All categories are higher
year over year.
FY19 FY22 FY23 23 vs 22 Inc (Dec)
Operating Expense (in Millions) Actual Outlook Budget Amount Percent
Salaries &Wages $157.4 $160.2 $171.0 $10.9 6.8%
Benefits 76.4 71.2 79.1 7.9 11.1%
Facility Maintenance Contracts 75.5 102.4 113.7 11.3 11.0%
Other Contract Services 119.6 138.0 150.1 12.1 8.8%
Utilities 26.5 29.5 30.9 1.5 4.9%
Equipment and Other Supplies 20.7 23.6 24.7 1.1 4.8%
Insurance 5.5 12.1 14.1 2.0 16.5%
Fuels 3.7 3.2 5.1 1.9 58.1%
General, Administrative and Other 7.4 7.9 8.9 1.0 12.8%
CEO Contingency - 3.3 8.0 4.7 144.3%
Subtotal 492.8 551.2 605.6 54.4 9.9%
Change in Operating Reserve 6.8 12.6 12.8 0.2 1.7%
Total Expense $499.6 $563.8 $618.4 $54.6 9.7%
35 1 DFW International Airport
FY 2023 Proposed Budget I Operating Expenses
Salaries and Wages
The FY23 salaries and wages budget is $171.0 million, a $10.9 million (6.8%) increase from the
FY22 Outlook of $160.2 million due to the reduced vacancy rate ($3.6 million), FY22 midyear
hourly rate increase ($2.3 million), overtime increase ($0.6 million) partially offset by an increase
in vacation usage (-$1.3 million). The hiring of new and vacant positions has been staggered
throughout FY23 based on operational needs and strategic priority($1.7 million). A 5% merit pool
is planned in the FY23 Budget, along with DPS step increases and annualization of the FY22
merit increase ($4.0 million).
Benefits
The FY23 benefits budget is $79.1 million, a $7.9 million (11.1%) increase from the FY22 Outlook
of $71.2 million due to an increase in health care costs. The increases are based on additional
budgeted positions, a 1.4% increased rate per employee ($2.8 million) and an increase in
actuarially required defined benefit plan/OPEB contributions ($2.1 million). Other increases
include payroll taxes and employee retirement savings match due to more positions in the budget
($3.0 million).
Contract Services
The FY23 contract services budget is $263.8
million, a $23.4 million (9.7%) increase from the
FY22 Outlook of$240.4 million due to increases in -
busing ($5.7 million), facility maintenance ($3.5
million), Skylink ($3.2 million), digital/technology NQJ p
($3.3 million), wheelchair assistance ($2.6 million), -
baggage handling system ($1.2 million), contract F TA
labor for parking Terminal C construction ($1.1
million), airfield paint removal, runway rubber
removal and bolt torquing airfield lighting ($1.1 NA), #
storm water and roofing maintenance ($0.9 million),
conveyances ($0.7 million), marketing programs for
parking and concessions ($0.7 million), employee checkpoint ($0.5 million), ramp cleaning ($0.4
million), offset by charging certain Design, Code and Construction (DCC) services to the capital
account ($3.4 million).
Utilities
The FY23 utilities budget is $30.9 million, a $1.5 million (4.9%) increase from the FY22 Outlook
of$29.5 million. The increase is due to higher rates and usage of gas ($1.4 million), water ($0.2
million), solid waste ($0.2 million), electricity ($0.1 million), offset by reductions in telephone and
internet services ($0.4 million).
Equipment and Supplies
The FY23 equipment and supplies budget is $24.7 million, a $1.1 million (4.8%) increase from
the FY22 Outlook of$23.6 million primarily driven by inflation.
36 1 DFW International Airport
FY 2023 Proposed Budget I Operating Expenses
Insurance
The FY23 insurance budget is $14.1 million, a $2.0 million (16.5%) increase from the FY22
Outlook of$12.1 million primarily due to a rate increase in property insurance premiums.
Fuels
The FY23 fuels budget is $5.1 million, a $1.9 million (58.1%) increase from the FY22 Outlook of
$3.2 million due to inflation and increased usage of CNG and other fuels.
General and Administrative
The FY23 general and administrative expenses budget is $8.9 million, a $1.0 million (12.8%)
increase from the FY22 Outlook of$7.9 million due to increases in employee related training.
CEO Contingency
The FY23 Budget includes $8.0 million of CEO contingency inside the rate base to be spent at
the CEO's discretion for projects and unforeseen events during the fiscal year such as winter
weather. The $4.7 million is the amount necessary to restore CEO contingency to $8 million.
Operating Reserve
DFW is required to have a 90-day cash reserve for operating expenses. The FY23 change in
operating reserve budget of$12.8 million is the amount necessary to fund the reserve. This is a
$0.2 million increase from the FY22 Outlook.
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
37 1 DFW International Airport
FY 2023 Proposed Budget I Operating Expenses
Department Overview
DFW is organized into divisions, which are comprised of departments. The table below is
a comparison of FY19 Actual, FY22 Outlook and FY23 Budget by department and
division.
2019 FY22 FY23 23 vs 22 Inc(Dec)
(in Millions) Actuals Outlook Budget Amount Percent
Department of Public Safety $91.3 $93.7 $97.2 $3.5 3.7%
Airport Operations Department 12.5 9.7 10.7 1.0 10.3%
Integrated Operations Center 2.0 8.2 8.2 0.1 0.8%
Environmental Affairs Department 8.7 10.0 12.0 2.0 20.4%
Operations 114.5 121.5 128.1 6.6 5.4%
Parking Department 57.3 55.8 63.1 7.3 13.0%
Concessions Department 3.4 3.4 3.5 0.1 4.3%
Customer Experience Department 49.5 67.5 72.0 4.5 6.7%
Revenue Management and CX 110.2 126.7 138.6 12.0 9.4%
Business Diversity& Development 1.8 1.8 1.9 0.2 11.1%
Communications and Marketing 12.6 12.1 13.0 0.9 7.1%
Human Resources Department 8.3 10.1 11.3 1.3 12.5%
Risk Management 7.9 14.8 17.2 2.4 16.2%
Administration and Diversity 30.5 38.8 43.5 4.7 12.2%
Information Technology Services Dept. 56.8 68.0 73.2 5.2 7.7%
Aviation Real Estate 1.4 1.6 1.3 (0.3) -18.5%
Treasury Management 1.3 1.4 1.7 0.3 18.9%
Finance Department 6.8 6.9 7.1 0.2 3.3%
Procurement& Materials Mgmt. Dept. 5.1 5.0 5.7 0.7 14.1%
Finance and ITS 71.5 82.9 89.0 6.1 7.4%
Government Relations 0.6 0.8 0.9 0.1 10.4%
Research&Analytics 1.2 2.1 2.7 0.6 29.2%
Airline Relations 1.0 1.3 1.2 (0.1) -8.2%
Cargo Business Development 0.8 1.0 1.1 0.2 19.9%
Global Strategy& Development 3.6 5.1 5.9 0.8 15.2%
Innovation 1.7 3.7 3.8 0.1 1.5%
Commercial Development 2.3 2.5 2.4 (0.2) -7.2%
Energy,Transport., and Asset Mgmt. Dept. 127.0 140.7 157.4 16.7 11.9%
Planning Department 6.6 6.9 7.2 0.2 3.5%
Controls and Analytics 0.0 0.3 0.7 0.4 134.9%
Design, Code &Construction Department 5.0 5.7 2.3 (3.4) -59.9%
Infrastucture and Development 140.9 156.1 169.9 13.8 8.8%
Legal Department 3.0 2.8 3.0 0.2 5.6%
Audit Services Department 2.7 2.7 2.9 0.3 10.7%
Executive Office 5.5 6.0 6.2 0.2 3.5%
Non-Departmental 15.5 14.3 19.6 5.3 36.7%
Contingency 0.0 3.3 8.0 4.7 144.3%
Operating Reserve 6.8 12.6 12.8 0.2 1.6%
Total Operating Expenses $499.6 $563.8 $618.4 $54.6 9.7%
38 1 DFW International Airport
FY 2023 Proposed Budget I Operating Expenses
Net Debt Service Budget
The FY23 Net Debt Service Budget is $381.1 million, a $58.1 million (18.0%) increase from the
FY22 Outlook as shown in the table below:
FY22 FY23 23 vs 22 Inc (Dec)
Debt Service (in Millions) Outlook Budget Amount Percent
Gross Debt Service and Coverage
Bond Debt Service $460.7 $521.4 $60.6 13.2%
Commercial Paper 0.7 6.1 5.4 743.5%
PFIC Related Bond Debt Service' 2.6 5.3 2.6 99.9%
DFW Capital Acct Bond Debt Service 12.0 12.4 0.4 3.4%
AA Facility Debt Service - 9.7 9.7 100.0%
Gross Debt Service and Coverage $ 476.1 $ 554.8 $ 78.7 16.5%
Offsets to Debt Service
PFCs for Existing Debt Service (138.5) (146.4) 7.9 5.7%
PFIC Transfers' (2.6) (5.3) 2.6 99.9%
DFW Capital Acct Transfers2 (12.0) (12.4) 0.4 3.4%
AA Facility Debt Service - (9.7) 9.7 100.0%
Total Offsets $(153.2) $(173.8) $20.6 13.4%
Net Debt Service Paid by Rate Base $ 322.9 $ 381.1 $ 58.1 18.0%
'Public Facility Improvement Corp for RAC, Grand Hyatt and Hyatt Place Infrastructure
2Airport Headquarters and Terminal-E Garage
Debt Service has increased for FY23, attributable to the issuance of approximately $1.3 billion of
combined new money and commercial paper refundings issued in FY22 for DFW's capital
programs. Additionally, increased interest rates contribute to higher Commercial Paper debt
service. Net debt service is higher in FY23, a result of higher gross debt service, but partially
offset by higher PFC's Charges due to increased passengers and higher transfers from the PFIC.
PFCs are currently being collected by the airlines under the authority of Application 11-10-C-00-
DFW from revenue enplaned passengers (about 88% of all passengers). These funds are used
by the Airport to pay debt service on FAA-approved projects primarily for Terminal D and Skylink.
PFIC debt service relates to debt associated with the Grand Hyatt Hotel. This debt service is
transferred into the Interest and Sinking Funds from the PFIC. Similarly, the debt service related
to the DFW headquarters building and Terminal E garage is funded with transfers from the DFW
Capital Account.
39 1 DFW International Airport
FY 2023 Proposed Budget I Operating Expenses
The following table shows the breakout of the $58.1 million Net Debt Service increase by cost
center.
Cost Centers
Airline
Net Debt Service Variance (in Millions) DFW Airfield Terminal Total
Bond Debt Service and Commercial Paper 10.5 19.6 35.9 66.0
PFCs 2.3 4.7 0.9 7.9
Total Debt Service Variance 8.2 14.8 35.1 58.1
Positions
The following table shows positions by division from the FY22 Outlook plus an addition of 44
positions. The total FY23 budgeted salary and benefit increase for these positions is
approximately $3.1 million.
FY22 FY 23
Division Outlook Changes Budget
Operations 942 6 948
Revenue Management 459 12 471
Infrastructure and Development 405 1 406
Finance, Procurement and Technology 313 14 327
Administration and DEI 106 6 112
Global Strategy and Development 23 3 26
Executive Office 14 1 15
Audit Services 13 - 13
Innovation 7 1 8
Legal 3 - 3
Total DFW 2,285 44 2,329
Of the 44 new positions, 12 are for Customer Experience in the terminals and eight are for ITS to
bring maintenance of the access control system in house. A total of nine new positions have been
added in Procurement and Materials Management (3), Finance (2), Treasury (1), Business
Diversity and Development (2), Design, Code and Construction (1) and Controls and Analytics
(1)to support the growth of DFW's capital programs in the coming years. The remaining positions
were added in Human Resources (2), Communications and Marketing (2), Innovation (1),
Environmental Affairs (2), Department of Public Safety (3), Airfield Operations (1) and Global
Strategy and Development (3) to support increased administrative and training requirements.
40 1 DFW International Airport
FY 2023 Proposed Budget Capital Budget
Capital Budget
DFW has two capital accounts in its Construction and Improvement Fund: DFW Capital Account,
(DFWCA) and Joint Capital Account (JCA).
The DFWCA is the Airport's discretionary account. It may be used for any legal purpose and
does not require airline approval. DFW uses this fund for renewals and replacements and other
discretionary projects. Funding for the DFWCA comes from the DFW Cost Center net revenues,
interest income, grants and bond proceeds primarily for commercial development projects. DFW
has numerous capital projects currently underway and funded from the DFWCA (see detailed
pages that follow).
The JCA generally requires airline approval for capital projects, which are typically funded through
the sale of bonds and interim Commercial Paper financing, natural gas royalties, sale of land
proceeds, grants and interest income.
Infrastructure renewal is currently DFW's largest active capital program and is at various stages
of planning, design and construction. This program involves renewal of aging critical airside and
landside infrastructure. DFW Airport is the third largest airport in the world in terms of land mass
with 17,183 acres, which includes a significant amount of infrastructure to maintain. Much of the
airfield, landside, utilities and other infrastructure were constructed in 1970s. This program is
discussed in more detail in the Major Capital Project Descriptions section.
h• h
J
41 DFW International Airport
FY 2023 Proposed Budget Capital Budget
Projected Capital — Uses of Cash by Capital Account
DFW projects to spend approximately $1,222.9 million on capital expenditures in FY23 as
summarized in the following chart.
FY23 Projected Capital Expenditures ($1,222.9M)
DFW Capital
Account'
$186.1
Joint Capital
Account
$1,036.8
*Includes$13.310 debt financed for Commercial Development excludes contingency
The following table summarizes projected capital expenditures for projects to be in progress
during FY23.
Active Projects in FY 2023
Prior Projected Future Total
Capital Budget (Millions) Years FY 2023 Years Budget
DFW Capital Account $246.6 $186.1 $192.1 $624.8
Joint Capital Acccount 927.7 1,036.8 2,638.1 4,602.7
Total Capital $1,174.3 $1,222.9 $2,830.2 $5,227.4
Capital Project Approval Process
DFW has a financial plan that includes the long-term Capital Plan. In preparation for the upcoming
Use Agreement, effective FY23 — FY32, an updated Capital Plan is being negotiated with the
airlines. There are new projects originating from this Capital Plan, which are officially in a planning
status. When a project manager is ready to initiate one of the projects from the Capital Plan, a
detailed capital worksheet is prepared, including alternatives, and presented to the Capital
Council for review and approval. CEO approval is required for projects equal to or greater than
$1 million. Projects on this list may be modified or eliminated if planning assumptions on costs
and benefits do not materialize upon more detailed analysis. New projects may arise during the
fiscal year due to the dynamic nature of an airport. From a process standpoint, the Board of
42 1 DFW International Airport
FY 2023 Proposed Budget Capital Budget
Directors does not approve an overall capital budget. Instead, the Board reviews individual capital
projects as contracts for those projects are brought to the Board for approval and reviews projects
in total as bonds are issued.
Capital Project — Major Projects and Programs
The Airport has approximately 334 approved capital projects currently underway with a total
budget of$4.78 billion. Of this amount, $1.35 billion has been spent, $589 million is committed,
and $3.42 billion is unspent and uncommitted.
Some of the more significant projects continuing to move forward are summarized below:
• $2.3 billion for Terminal C renewal and expansion and related projects. Terminal C will
undergo similar renovations and improvements as Terminals A, B and E that were
completed in 2018. Renovations and improvements will include redesigned check-in
areas, larger security checkpoints, expanded concessions spaces, improved lighting and
flooring, new HVAC and electrical systems, expansion and upgrading of main utility
services, and baggage handling systems. Additionally, related airfield ramp and facilities
relocations and improvements will be made. This program also includes nine incremental
gates on two new piers to be added to Terminal A and C (see diagram below). The
Terminal C parking garage and associated roadways will also be improved and expanded.
This program is currently in design and is projected to reach substantial completion in the
fall of 2027. Approximately $544.7 million is forecasted to be spent during FY23. DFW is
currently in discussions with the airlines to potentially add scope and the cost of inflation
to this program. Those additions, however, have not yet been finalized.
.-.- 'Ile
y
1 �
31H�TQ$ � � NO CA �
C.-Utility Corridor
D.-Terminai C Garages and Roadways
E"—Terminal C&A Expansion{Piers and Renovation}
F"—Terminal C Renovations(Continued Design Developmenty
• $170 million to construct a Zero Carbon Electric Central Utility Plant(eCUP)to restore and
improve capacity, redundancy, and resiliency and support future terminal growth. The
eCUP will be powered by 100% renewable electricity and replace DFWs aging natural
gas heating system, positioning DFW to achieve its target of net-zero carbon emissions
by 2030. The airlines have approved funding for design, which is now complete.
Approximately $16 million is forecasted to be spent during FY23. DFW was awarded $40
million of grants thus far to offset the project cost and additional grants are being pursued.
• $305 million (gross of $101 million in TSA grants) for Baggage Handling System (BHS)
renewals and improvements in all five terminals. An amount of$138 million will be for TSA
grant-eligible BHS and terminal modifications to accommodate the TSA's latest baggage
43 1 DFW International Airport
FY 2023 Proposed Budget Capital Budget
Explosive Detection System equipment. This project will be offset by an anticipated TSA
grant of $101 million. Also included are $36 million in Terminal D BHS Optimization
improvements, which are not grant eligible. This multiyear effort should be completed over
the next three to five years.
• Runway 17R is DFW's primary
departure runway on the east side.
Condition assessments indicated
the need for major rehabilitation.
Design is complete with substantial
completion of construction expected
in Spring 2025. The total project
cost, including both the 17R runway i =
and the associated hold pads, will
be $273 million. Approximately $28
million is forecasted to be spent
during FY23. DFW is anticipating f
FAA grants totaling approximately
75% of eligible construction to offset
this cost. The airlines have _
approved $15 million for design.
• $101.3 million for consolidation of
DFW's four existing end of life
Aircraft Rescue Fire Fighting _s� k
(ARFF) stations into two locations.
Design is nearly complete with A
construction estimated to be -_- - - -
substantially complete by - =""'' 7
Fall/Winter 2025. The Airport is
expecting at least $45.9 million in
grant funds to offset this project
cost. The airlines have approved
funding for this project.
The Airport has also developed a long-term Infrastructure Capital Program (ICP) to improve and
maintain DFWs runways, bridges, roads and utilities through 2035. The phasing and
implementation of the ICP will be based on asset evaluations that are completed by the Airport
on a regular basis. The Airport is currently negotiating with the signatory airlines to include a
portion of these projects as part of the next Use Agreement.
44 1 DFW International Airport
FY 2023 Proposed Budget Capital Budget
Other Programs
Landside Roads, Bridges and Rail
Landside infrastructure is part of the ICP program discussed above, which includes infrastructure
renewal of roads and bridges that were validated by condition assessments to require
reconstruction. A number of roads and bridges are in various stages of programming, design, and
construction. The International Parkway Modernization Program is the largest component in this
category and is budgeted at$180.9 million to demolish existing left-hand exit flyover bridges from
the main entry roadway and replace them with right-hand exits for a more intuitive and safer
roadway configuration. Also included in this program is replacement of end-of-life North Airfield
Drive bridge and associated intersection roads, and the replacement of high pole lights along
International Parkway. Approximately $55.8 million is estimated to be spent for reconstruction of
roads and bridges during FY23.
CLOVERLEAF
-OVERLEAF - RAIIP TO BE
RAMP TO BE . Jp RE4:1OVED AND
EM OVE D AND R EGRADE D
F�E-GRADED
ROPOSED N TFl pJRVIELD OR BRIDGE
,• S S�
r
Commercial Development and Other Facilities
Commercial Development, including eCommerce warehousing and distribution facilities,
continues to grow to meet demand. Other Commercial Development includes the continuation of
on-airport American Airlines facilities, including the Parts Distribution Center ($99 million) and the
new Flight Kitchen ($106 million),
which DFW will finance. American
Airlines will reimburse through
rents that include a 200-basis point
premium over DFW's cost of debt.
This premium will flow into the S Or I
DFWCA and will not be shared withAft
the airlines. Approximately $83.9
--�J ML �
million is anticipated to be spent on
various Commercial Development
projects during FY23.
45 1 DFW International Airport
FY 2023 Proposed Budget Capital Budget
Safety and Security
DFW Airport is in the final stages of an airport wide Security Master Plan. This holistic approach
will provide guidance and recommendations for future DFW security capital investments. For
FY23, security projects include an enterprise-wide replacement of DFW's Automated Access
Control System and employee screening for entry into the terminals. Other capital expenditures
for safety and security include Physical Security Information Management System (PSIM) for
situational awareness and incident management. Various other safety and security initiatives are
also included, such as a reconstruction of sub-surface storm sewer due to collapsed soil sites, air
purification enhancements to various facility HVAC systems to mitigate COVID-19 transmission,
and additional vehicles and equipment in support of increased number of DPS employees.
Approximately $42.8 million is anticipated to be spent on Safety and Security initiatives in FY23.
Customer Experience
Various initiatives are currently underway to support the strategic DFW goal of creating an
exceptional customer experience to align with the strategic plan. One of the major customer
experience initiatives involves expansion and renovation of terminal restrooms to include smart
capabilities and better accommodate forecasted growth. The Airport will also implement
touchless solutions, biometric facial recognition and a customer relationship management (CRM)
system. Approximately $18 million is anticipated to be spent on customer experience initiatives
in FY23.
, --
x X �
S/ ay dtoot 'r
...i..!:�'. 'ii. Pre-�rderFoo .f'
DFW Airport I
�\•<' C\ a I g _ - � Ili ® II �-„
z
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46 DFW International Airport
FY 2023 Proposed Budget Capital Budget
The following projects will be funded from the DFW Capital Account during FY23. Capital
spending amounts are gross of grant reimbursements.
DFW CAPITAL ACCOUNT (In Millions) Prior Future
Project Name Years FY23 Years
AA Flight Kitchen (AA Reimb) 58.8 46.2 1.3
AA Parts Distribution Facility (AA Reimb) 78.7 19.6 .4
Weber Gruene DFW 1 LLC (Valley View Ln) 1.0 8.1 .0
Replace 25 Employee Buses .0 6.9 .0
Replace Express Vans .0 5.3 .0
Replace Remote Buses .0 4.8 4.4
121 Mustang Business Park (Industrial) (150 acres) Ph II DD#11 .0 3.6 10.7
Air Service Incentive Program (ASIP) Annual 3.0 N/A
Fire Svcs: FY22 Structural Fire Truck Replacement .0 2.9 .0
Glade Rd Reconstruction (Reimb to TXDOT) 3.8 2.5 .4
IT Term Sys: CCTV head-end Refresh/Expansion .0 2.4 .0
Customer Relationship Management (CRM) Ph 1 .0 2.2 2.2
FY 22 Infrastructure Engineering Evaluations (studies) 2.2 2.2 .0
Rehab Sewer Mains at Hackberry Creek 2.1 1.9 .0
Fumigation Center Relocation (West Cargo) .0 1.9 3.6
Facility and Campus Information Standardization (Digital Twin) .5 1.8 4.3
Integrated Ops Ctr (IOC) - ITS General Systems (Back-up AOC site) 1.3 1.8 2.5
FY21 DIPS Front Line Vehicle Replacement 1.4 1.7 .7
Integrated Ops Ctr (IOC) - ITS General Systems 1.6 1.7 1.5
Term D: Millwork and Phenolic Panel Replacement .9 1.6 .3
Campus LAN Modernization .4 1.5 3.1
PAVE Microphone Station Upgrade .0 1.4 .7
Founders Plaza Ph 1 (12 acres East of Texan Trail) .1 1.4 .0
Enterprise Sensor Platform .0 1.3 2.7
19th Street Cargo 10% Design Drip Funding (DFWCA) 1.1 1.3 1.1
NW Logistics (34 acres) DD#4 .0 1.3 2.5
IT Term Sys: EVIDS Content Mgt/Digital Signage Sys 3.0 1.2 .6
Automated Taxi Queue .4 1.1 .7
Data360 FY22 .5 1.1 .4
Terminal D Systems Rehab 4.3 1.1 1.2
IT Network Sys: Annual Technology Purchase 9.6 1.1 1.1
Identity and Access Management .7 1.1 .3
PSIM Integrations .3 1.0 1.7
Reconfigure Stormwater at Various Locations (Design) .3 1.0 .8
Term A, B, C, D, & E UPS Replacement .9 1.0 .5
Video Analytics .3 1.0 1.8
Modernize Conveyance Monitoring System .3 1.0 1.8
5G Deployment .0 1.0 1.0
General Purpose Vehicles Annual 1.0 N/A
Rehab/Replace AOA Perimeter Security Access Gates 7.5 1.0 1.9
Replace Special Ops Buses .0 1.0 .0
EDL Program FY 22 .4 1.0 .6
Elevator Replacement at CUP & FTRC .2 1.0 .1
FY21 AFOPS and Parking Vehicle Replacement Plan .5 1.0 .0
Projects <1M 63.6 36.8 135.1
TOTAL DFW CAPITAL ACCOUNT $246.6 $186.1 $192.1
ADD: TRANSFER TO 102 (Debt Svc for AHQ and Term E Garage)
TOTAL USES OF DFW CAPITAL ACCOUNT $246.6 $186.1 $192.1
47 1 DFW International Airport
FY 2023 Proposed Budget Capital Budget
The following projects will be funded from the Joint Capital Account during FY23. Capital
spending amounts are gross of grant reimbursements.
JOINT CAPITAL ACCOUNT (In Millions) Prior Future
Project Name Years FY23 Years
Expansion: Term C Renovations
CTA Expansion: Pier A 12.4 110.3 182.2
CTA Expansion: Pier C 12.9 109.5 135.7
CTA Expansion: Term C Garage/Roadway- South 10.4 45.1 83.1
CTA Expansion: AA Scope- BHS 4.9 34.0 79.1
CTX Recap (Construction) Term D: Allocable 12.4 33.6 31.5
CTA Expansion: Airfield Lighting Vault Relocation 9.1 31.9 54.1
CTA Expansion: Airfield Ramp Efficiency 12.1 31.6 11.7
Runway 17R& Hold Pads Reconstruction (Construction) .0 28.0 229.9
Term C High Gate Reconstruction (Construction: High Gates Fit Out) 41.9 25.1 8.6
CTA Expansion: Project Management Office (PMO) 8.6 24.7 1.2
CTA Expansion: Terminal C Utility Corridor 7.2 23.7 50.6
Int'I Pkwy Modernization- Flyover Bridge Conversion to Right-hand exits TE 14.9 21.8 82.7
Rehabilitation & Improvements Employee Lot 5E (ph 1 - reconstruct existin .9 19.5 7.1
Collapsed Soil Sites (Ph 2) (MII Exempt) 9.4 19.3 1.0
Term F: Design Criteria Pkg .6 17.1 9.9
Airfield Remediation (Design and Construction) 2.5 16.1 31.4
Central Utility Plant (eCUP) (Design refresh+ Construction) .0 16.0 154.0
Term C High Gate Reconstruction (Board) 113.7 15.5 4.3
SW End Around Taxiway (EAT) Inner Loop &T/W E Extension 13.1 14.4 152.1
Int'I Pkwy Modernization- N.Airfield Bridge/Intersection Reconstruction .1 10.3 20.9
Term E Satellite Conveyances (AA reimb) .4 10.2 5.4
Skylink Auto Train Control (ATC) Replacement 24.1 9.9 1.0
Term A, B, C, and E Waterproofing 8.4 8.8 1.2
CTA Expansion: Term C Garage/Roadway- Central (section B renovation: 4.1 8.2 46.6
Employee Screening Portal &Associated Equip (MII Exemption) 2.1 8.0 9.8
CTX Recap (Construction) Term D: Optimization Non-Allocable 1.7 7.5 26.0
Automated Access Control Sys (AACS) - DCC RAACS (MII Exempt) 2.0 7.4 54.8
Int'I Pkwy Modernization Program- High Pole Lighting Replacement (Phas( 1.6 7.1 18.9
Term D: Add'I Bag Makeup Unit (MU6) (AA reimb) .3 7.0 3.7
Rehab West Potable Water Pump Stations (equip, facility, civil) Constructic 2.0 6.7 11.6
Rehab Open Storm Channels FY16/17 .9 6.3 1.8
Term D Dry Sprinkler Systems Replacement .5 5.9 5.2
1 E Cargo Rd Reconstruction (AA reimb) 1.9 5.7 .1
BHS Improvements AA-Terminal A(AA reimb) 2.0 5.6 38.4
SW Campus: Consolidated Heavy Equip (Snow/Ice) Storage Ph 1 1.1 5.5 9.9
Term D- South: Phase 1 (formerly "Term F- Ph 1") 200.6 5.1 1.9
Energy Plaza Water Condenser 7.7 4.9 1.5
Future Devlp: Master Planner/Master Architechtural Svcs 6.5 4.8 14.5
Replace Terminal D Parking Garage Lights (LED) .8 4.8 2.7
Holistic Airside Restroom Program (HARP) Ph 1 (1319 & E34) .3 4.5 4.5
CTA Expansion: Term C Garage/Roadway- North (section A renovations) 3.1 4.4 51.5
Projects <4M 348.8 138.1 859.6
TOTAL JOINT CAPITAL ACCOUNT $927.7 $1,036.8 $2,638.1
TOTAL DFW CAPITAL ACCOUNT $246.6 $186.1 $192.1
TOTAL USES OF JOINT + DFW CAPITAL ACCOUNT $1,174.3 $1,222.9 $2,830.2
48 1 DFW International Airport
FY 2023 Proposed Budget I Capital Budget
Capital Projects - Sources of Cash
DFW's capital programs are funded from a variety of sources as shown in the following chart.
FY23 Capital Sources of Cash($1,222.9M)
Carryover Cash
Balance
$457.6
New Financing
(Debt/
Commercial
Paper)
$279.0
Cash Flow
Adjustment
$244.6
AA Facilities
Interest Income Letter of Credit
$22.1 $65.9
Natural Gas Grants
Royalties $152.0
$1.9
The following table highlights the walkforward of DFW's capital funds. Consistent with prior years,
the Cash Flow Adjustment is equal to 20% of the total capital budget, which historically is not
spent during the fiscal year due to timing of cash flows.
Airport Capital Funds Walkforward
(In Millions)
Joint DFW
Capital Walkforward Capital Capital Total
Beginning Cash (10/1/22) $1,243.8 $97.4 $1,341.2
Sources of Funds:
Grants 139.9 12.1 152.0
New Financing (Commercial Paper) 261.3 17.7 279.0
AA Facilities Letter of Credit .0 65.9 65.9
Natural Gas Royalties 1.9 - 1.9
Interest Income 20.8 1.3 22.1
Cash Flow Adjustment/Transfers 207.4 37.2 244.6
Total Sources $631.2 $134.2 $765.4
Less:
Capital Uses (1,036.8) (186.1) (1,222.9)
DFW Capital Account Transfer to 102 - .0 .0
Total Uses (1,036.8) (186.1) (1,222.9)
Ending Cash Balance 838.2 45.5 883.6
Add: Cash From DFW Cost Center - 111.4 111.4
Total Ending Cash (9/30/23) $838.2 $156.9 $995.1
49 DFW International Airport