Results of the Fiscal Year (FY) 2014 (’14) Financial Statements of the A. B. Won Pat International Airport Authority, Guam were presented and approved by their Board of Directors today at the January 29, 2015 regular meeting. The audit was performed by independent auditors, Ernst & Young, and gave GIAA a “clean” opinion on its compliance report over major federal programs and the Airport was commended on its second year of “no findings” pertaining to their federal programs.
Passenger enplanements for FY2014 sustained the nearly 1.7 million passengers recorded in FY2013, the third highest total in the Airport’s history. The Authority also maintained its position as the 8th ranked airport for international arrivals for all US ports of entry ahead of large airports such as Orlando and Washington D.C. Guam Airport’s enplanements are over 90% international from origin and destination markets.
The Authority ended FY’14 with a 3.6% increase in net position of $11.5Million, up to $327.7M in FY2014 from $316.2M in FY2013. The Authority enjoyed an increase of $5.3M in operating revenues from $18M in FY2013 to $23.3M in FY2014, which was a result to the 62% increase in general merchandise revenue. Concession fees also increased to $23.3M in FY2014 from $18M in FY2013. This was a result of the increase in general merchandise revenue and the minimum annual guarantee from new concessionaire Lotte Duty Free Guam, LCC. Although the Airport Authority saw a slight decline of $4.8M in grants from the federal government, dropping to $12.6M compared to $17.4M in FY2013 that was offset by the increase in non-aeronautical revenues.
For FY2014, operational expenses of $38.6M slightly increased from $38.4M in FYY2013. Contractual costs increased by $900K, however, personnel costs decreased by $440K and bad debt declined by $335K. Professional services only increased from $2.8M to 4.3M to account for the accrual of future pollution remediation and monitoring costs as required by GASB49 and legal expenses.
GIAA maintained a competitive cost structure with a debt service coverage ratio of 1.52 well over the required ratio of 1.25 under the Airport’s 2013 General Revenue bonds. In September 2013, the Airport issued bonds totaling $247.3M. These bonds refunded the outstanding 2003 bonds and provided new money for upper tier priority capital improvement projects such as the new international arrivals corridor, design for parking expansion, increased fuel storage capacity for the fueling system, upgraded preconditioned air units for passenger loading bridges and manufacturing of key components of the baggage handling system.
“Overall, we fared well in Fiscal Year 2014, increasing our net position by 3.6% to $327.7M,” stated Charles H. Ada II, Executive Manager. “We saw a tremendous growth of 62.2% in our concession revenue with new concessionaire Lotte Duty Free Guam. We completed our energy management program and are now equipped with energy efficient lighting and new cooling system components that provide a comfortable atmosphere for our passengers, workers and residents.”
“We closed the year with a healthy debt service coverage ratio of 1.52,” continued Mr. Ada. “That ratio is a true reflection of our strong fiscal performance. Our focus for FY 2015 is moving forward with our capital improvement projects, constructing our international arrivals corridor for efficient passenger facilitation, a new facility for our Aircraft Fire Fighting crew, a new cargo apron adjacent to the integrated cargo facility and many other upgrades, improvement and enhancements. We are committed to aggressive marketing to grow our business and will continue to remain financially prudent to safeguard Guam’s most valuable asset,” Mr. Ada concluded.