Rental Car Customer Facility Fees and Financings. ACI Economics and Finance Conference Miami, Florida

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1 Rental Car Customer Facility Fees and Financings ACI Economics and Finance Conference Miami, Florida James Branda, Vice President May 4, 2010

2 Overview Customer Facility Charges ( CFCS ) Eligible costs Recent CFC-backed financings Seattle, New Orleans, Nashville Trends 2

3 CFCS CFCS currently being collected at over 110 airports $1.00-$6.20 per day; or $3-$10 per transaction Regulated by state law in California, Hawaii, Illinois, New York and Washington Otherwise local airport owner/operator AKA: Transportation Fee, Facilities Maintenance Fee 3

4 CFC Eligible costs How determined Policy Statute/ordinance/resolution Process Financial Analysis 4

5 CFC Eligible Costs Facility Debt Service Facility O & M Common Use Transportation System Fleet Acquisition O & M Bus Maintenance Facilities Other Terminal roadway and curbside improvements Infrastructure (utilities, access roadways Environmental remediation 5

6 CFC Financings in the Current Credit Environment Seattle New Orleans Nashville 6

7 Comparison of Key Terms-Then and Now Interest Rates Reserves Coverage Rating Pre-collection Contingent rent Other: Signed concession and lease agreements; construction price locked; 7

8 Seattle Port of Seattle Revenue Bonds were issued to fund the project CFCs are not included in Gross Revenue pledged to pay the bonds, but CFCs are expected to pay debt service Total cost $419.3 mil Includes consolidated facility, bus maintenance facility, roadway improvements, and common bus fleet acquisition Bond Par amount = $317.0 million Early collection (Feb 06 to Jun 09) = $69.0 mil used toward project costs CFCs expected to be used to pay annual debt service for facility, fund Transportation Reserve Fund (50% of following year s transportation expenses), bus replacement, and facility major maintenance 7.00% Taxable Interest rate for 2036 Debt service coverage projected to be 2.0x or above (for all of the Port s First Lien Debt) (based on Port s Net Revenues not counting CFCs) 8

9 New Orleans October 2009 Gulf Opportunity Zone CFC Revenue Bonds Par amount -- $96.5 mil Early collection --1 year $7.5 million of CFC PAYGO funding for CONRAC Interest rate % (true interest cost) Coverage x to 2.04x over projection period Amounts in Coverage Fund used towards calculation of coverage Reserves Maintenance Reserve Fund - $300K over 5 years ($1.5 million) Surplus Fund Allows for contingent rent 9

10 Nashville January 2010 Stand-Alone Special Facility Debt Par amount = $66.3 million Early collection (Jan 08 to Dec 09) = $15.0 mil used toward project costs Term 20-year bonds Interest rate (avg. coupon rate) = 6.3% Projected Coverage 1.65x to 1.68x Reserves O&M Fund = 3 months O&M R&R Fund = $3.0 million funded over 5 years Discretionary/Major Maintenance Fund = $3.0 million funded over 5 years Projected CFC Fund Balance = $100,000, increasing to $1.5 million CFC does not pay for CONRAC Facility O&M, but can cover RAC ground rent if sufficient CFCs are available Allows for contingent rent 10

11 Trends Pressure on top rate to exceed $6.00 per day Facility development costs rising Consolidated facility O&M costs rising Affordability a specific airport rental car market may not support facility debt service CFC revenue combined with other revenue sources Maximum per day CFC rate historically tracked maximum PFC rate not now California Expand CFC eligible cost categories Increase $10 per transaction cap Allow per-transaction-day CFC Permit local airport sponsor to set rate 11

12 Special Thanks To: Ricondo & Associates Rental Car Facility Finance Experts Garfield Eaton Jeff Schulthess Phil Hill Pete Stettler Kevin McKenna 12

13 THANK YOU!! Jim Branda Vice President Rental Car Practice Leader Ricondo & Associates, Inc. 13