ITEM NO: 7a_Supp_1 ____ 
DATE OF 
MEETING October 23, 2012 

2013 Budget Follow-up 
Airport Fund Balance 
October 23, 2012

Fund Balance Based on Business Management 
Amount of minimum balance is driven by prudent business and financial
management - Balance achieving business goals with maintaining flexibility 
Port has always maintained minimum fund balances to provide liquidity for
business operations 
Pay on-going operating and maintenance expenses 
Pay debt service 
Pay cash funded capital projects (excludes debt funded) 

2011 target balance equaled 
5 months of cash uses 


2

Cash is a Risk Management Tool 
Occasional extraordinary uses of cash 
February 2001 earthquake 
Port self-insured for earthquakes 
Timing gap for recoveries 
Financial crisis 2008-2009 
Cash funded rental car facility project with a $20 million "loan"
from the ADF 
Port's commercial paper program unavailable as normal source
of liquidity 
Provided cash to meet a debt service reserve requirement when
the surety provider went bankrupt 


3

History of 10 month target 
Prior to 2003, Port targeted $20 million balance 
Port charged the airlines 1.35x debt service 
Full airport residual model meant airlines, not airport, absorbed
enplanement risk even for non-aeronautical businesses 
2005 negotiated new airline agreement 
Reduced airline costs & Reduced Airport's financial margins 
1.0x debt service charge 
Use PFCs & CFCs to pay Revenue Bond debt service 
Allows for more cash funded, less debt funded capital 
Shifted non-aeronautical risk and opportunity to airport 


4

History of 10 month target 
Developed Intermediate Lien to support these changes 
Rating Agencies and Investors have placed greater emphasis on
liquidity following 9/11 and the 2008 financial crisis 
Ratings based on increasing cash-on-hand in exchange for lower
debt service coverage 
Overall target of 9 months O&M 
10 months for the Airport  larger allocation to Airport based on
Airport driver for shift from cash flow to cash-on-hand/liquidity 
6 months for the Seaport & Real Estate 
2012 Bond Issue Moody's noted factors that could cause a downgrade 
First noted was a reduction in liquidity position 


5

Moody's Airport Median Comparison 
Airport's actual days cash and
target days cash are below
similarly rated airports 
- target is similar to lowest
ratings 


Historically, compared to all
investment grade airports
(Baa3-Aa2) the Airport's
target cash is low 


6