LOS ANGELES WORLD AIRPORTS REPORTS 36.2 PERCENT INCREASE IN OPERATING INCOME
Financial growth attained despite SARS, Iraqi war impact, lower passenger volume and increased security costs
Management's Discussion and Analysis (MD&A) report
(Los Angeles, California – January 14, 2004) Los Angeles World Airports (LAWA) officials today reported net operating income of $18.9 million for fiscal year 2003, a 36.2 percent increase over the previous year. Contributing to the increase was a 5.8 percent growth in operating revenue, which ended the fiscal year at $499.3 million from $471.9 million the prior year.
"Fundamental to the positive financial results achieved in fiscal year 2003 were the dedication and hard work of the 2,900 men and women of Los Angeles World Airports who create exceptional value for tenants, travelers, shippers and our other stakeholders," said Chief Financial Officer Karen Sisson. "We remain on a long-range path of financial strength that allows us to enjoy unmatched credit standing and fiscal flexibility among major airport operators in the world."
LAWA is the City of Los Angeles department that owns and operates a system of four airports in Southern California: Los Angeles International (LAX), Ontario International (ONT), Van Nuys (VNY) and Palmdale Regional (PMD). As a proprietary (or enterprise) department, LAWA receives no City funding or tax revenues.
The growth in system-wide revenues came from concessions, building rentals and landing fees at LAX and ONT, despite slightly lower passenger volumes and aircraft landings. Operating and administrative expenses rose 4.9 percent, driven by significantly increased costs related to post-Sept. 11 security measures. LAWA management continued reducing operating expenses in all areas not related to enhancing safety and security.
Ted Stein, president of the Board of Airport Commissioners, termed the financial performance particularly satisfying given the challenging business climate of the fiscal year. "SARS, the Iraqi War, lower passenger traffic and dramatically higher security costs created a most difficult environment to maintain our financial stability," Stein said. "The excellent financial footing we are currently on puts us in an enviable position to fund needed infrastructure improvements at all of the LAWA airports."
At June 30, 2003, LAWA's total net assets - which serve as an indicator of the department's financial position - increased $142.6 million (6.9 percent) to $2.2 billion.
LAWA prepares its financial statements following generally accepted accounting principles using the accrual basis as outlined by the Governmental Accounting Standards Board and the Financial Accounting Standards Board.
(NOTE TO EDITORS:
Summary Statements of Net Assets and Changes in Net Assets follows. A 9-page Management's Discussion and Analysis of LAWA's financial statements can be viewed on the LAWA website at at www.lawa.org.)
Los Angles World Airports
Summary Statements of Net Assets and Changes in Net Assets For the fiscal years ended June 30, 2003 and 2002 (Dollars in thousands) |
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Summary Statement of Net Assets | ||||
---|---|---|---|---|
Assets: | ||||
Current assets | $ 589,264 | $ 488,512 | $ 100,752 | 20.6% |
Restricted assets | 603,610 | 506,458 | 97,152 | 19.2 |
Capital assets, net | 1,763,777 | 1,741,009 | 22,768 | 1.3 |
Bond issuance costs | 5,019 | 3,658 | 1,361 | 37.2 |
Total assets | 2,961,670 | 2,739,637 | 222,033 | 8.1 |
Liabilities: | ||||
Current liabilities | 81,398 | 67,218 | 14,170 | 21.1 |
Current liabilities payable from restricted assets |
186,979 | 152,410 | 34,569 | 22.7 |
Noncurrent liabilities | 493,657 | 462,984 | 30,673 | 6.6 |
Total liabilities | 762,034 | 682,612 | 79,422 | 11.6 |
Net assets: | ||||
Invested in capital assets, net of related debt |
1,296,868 | 1,290,413 | 6,455 | 0.5 |
Restricted: capital projects |
16,345 | 45,905 | (29,560) | (64.4) |
debt service | 51,519 | 46,716 | 4,803 | 10.3 |
special purpose | 212,205 | 196,790 | 15,415 | 7.8 |
Unrestricted |
622,699 | 477,201 | 145,498 | 30.5 |
Total net assets | $ 2,199,636 | $ 2,057,025 | $ 142,611 | 6.9% |
Summary of Changes in Net Assets | ||||
Operating revenue | $ 499,260 | $ 471,886 | $ 27,374 | 5.8% |
Operating expenses before depreciation and amortization |
418,972 | 399,462 | 19,510 | 4.9 |
Income from operations before depreciation and amortization | 80,288 | 72,424 | 7,864 | 10.9 |
Depreciation and amortization | (61,345) | (58,512) | (2,833) | 4.8 |
Operating income | 18,943 | 13,912 | 5,031 | 36.2 |
Nonoperating revenue, net | 100,376 | 87,908 | 12,468 | 14.2 |
Income before capital grants | 119,319 | 101,820 | 17,499 | 17.2 |
Capital grants | 23,292 | 39,633 | (16,341) | (41.2) |
Change in net assets | 142,611 | 141,453 | 1,158 | 0.8 |
Total net assets at beginning of year | 2,057,025 | 1,915,572 | 141,453 | 7.4 |
Total net assets at end of year | $ 2,199,636 | $ 2,057,025 | $ 142,611 | 6.9% |