SARASOTA MANATEE AIRPORT AUTHORITY · There are now five signatory airlines, consisting of AirTran Airways, Continental, Delta, JetBlue Airways, and US Airways. Rates and Charges

Sarasota Manatee Airport Authority Financial Statements with Management’s Discussion and Analysis For the years ended September 30, 2006 and 2005 with Supplemental Schedules and Report of Independent Auditors’ Report

Sarasota Manatee Airport Authority

Financial Statements and Other Financial Information

Years ended September 30, 2006 and 2005

Contents

Management’s Discussion and Analysis ....................................................................................... 1 Report of Independent Certified Public Accountants................................................................... 14 Basic Financial Statements Enterprise Fund Statements of Net Assets ....................................................................................................... 16 Statements of Revenues, Expenses and Changes in Net Assets ............................................ 18 Statements of Cash Flows...................................................................................................... 19 Pension Trust Fund Statements of Plan Net Assets ............................................................................................... 20 Statements of Changes in Plan Net Assets............................................................................. 21 Notes to Financial Statements ................................................................................................... 22 Required Supplementary Information Schedule of Funding Progress ............................................................................................... 40 Schedule of Employer Contributions..................................................................................... 40 Supplemental Schedules Schedule of Operating Expenses ........................................................................................... 42 Schedule of Receipts and Disbursements – Bond Proceeds Account.................................... 43 Schedule of Receipts and Disbursements – Cash – Unrestricted Operating and Investment Accounts ....................................................................................................... 44

Sarasota Manatee Airport Authority Management’s Discussion and Analysis September 30, 2006 and 2005

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The following Management Discussion and Analysis (MD & A) of the Sarasota Manatee Airport Authority’s (the Authority) activities and financial performance provides an introduction to the basic financial statements of the Authority for the year ended September 30, 2006 with comparative information for the year ended September 30, 2005. The information contained in this MD & A should be considered in conjunction with the information contained in the financial statements and the notes thereto, which are essential to a full understanding of the financial statement data. Authority Background and History The Authority is an independent special district pursuant to the constitution and laws of Florida, particularly Chapter 91-358, Laws of Florida, as amended, revising and consolidating Chapter 31263, Special Laws of Florida, 1955, which, by the Act authorized the Authority to own and operate the Sarasota Bradenton International Airport (the Airport). The Authority has jurisdiction, control, supervision and management of the Airport. The Authority's Board consists of six members who are appointed on a non-partisan basis to four-year staggered terms. The Act requires that three members of the Authority be residents of, and be appointed within, each of Sarasota and Manatee Counties. The Act further requires that the Chairperson elected by the members thereof, alternate county representation annually. The Airport is situated on approximately 1,100 acres located in Sarasota and Manatee Counties and the City of Sarasota. It is classified as a small hub airport by the Federal Aviation Administration (FAA). The airport has two crossing asphalt-surfaced runways, 4/22 (NE/SW) and 14/32 (SE/NW). Both runways were built in the early 1940’s. Runway 4/22, at 5,004 feet long is used almost exclusively by general aviation aircraft. Runway 14/32 was extended in 1969 to 7,003 feet and again in 2001 to its present length of 9,500 feet. As the main carrier runway, it is used by commercial jets as well as general aviation aircraft. The current terminal building opened to travelers on October 29, 1989. It is located southwest of the intersection of runways 4/22 and 14/32 and has approximately 240,000 square feet of interior space. The terminal project, including the new building, parking area, ramp space and landscaping took nearly ten years to apply for and be approved by the local governments, regional planning councils and the State of Florida. Construction began in 1987 and was completed in 1990. The construction costs were approximately $58 million for which $72.8 million in bonds were issued with $12 million being subsequently redeemed, leaving approximately $61 million outstanding. The Authority is self supporting, using aircraft landing fees, fees from terminal and other rentals, and revenues from concessions to fund operating expenses. Operating expenses of the Authority are not taxpayer funded. Construction programs are funded by federal and state grants, Passenger Facility Charges (PFCs), and Authority revenues.


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Sarasota Bradenton International Airport activities during 2006 as compared to 2005 are as follows:

% IncreaseFY 2006 FY 2005 (Decrease)

Enplanements 689,673 652,483 5.7%Aircraft Operations 163,634 159,261 2.7%Landed Weight 834,934,487 813,432,600 2.6%

The Airport, like most airports, was closed from September 11 through 13, 2001 and reopened on September 14, 2001. The Authority received Federal and State funds of approximately $.1 million in fiscal year 2006 and $1.3 million in fiscal year 2005 to replace lost revenues and additional expenses incurred as a result of the events of September 11, 2001 (September 11). The lost revenue compensation is included in non-operating revenues and the reimbursement of additional expenses is included in federal and state grants in the Statements of Revenues, Expenses and Changes in Net Assets. The majority of the operating revenues at the Airport are directly related to the number of passenger and aircraft operations. With the addition of new service from AirTran and the addition of JetBlue, there was a significant increase in passenger activity and a resulting increase in operating revenues at the Authority. With the desire of the Authority to increase air service to the Airport, the Authority passed several resolutions waiving fees such as landing fees and terminal rent fees in an effort to improve air service. The Authority issued approximately $.7 million in fee waivers to those airlines who qualified under the fee waiver program during fiscal year 2006 and $.8 million during fiscal year 2005. The following is a summary of the financial results for the year ended September 30, 2006: Operating revenues increased by 7.8% from $14.6 million in fiscal 2005 to $15.7 million in fiscal 2006 due primarily to increased parking lot fees and car rental concessions as a direct result of increased passengers; in addition to rental revenue received from the development of non-aviation land. Operating expenses (excluding depreciation and amortization) decreased from $13.3 million in fiscal 2005 to $13.1 million in fiscal 2006 primarily as a result of a decrease in marketing and maintenance costs. Depreciation and amortization decreased from $6.9 million in fiscal 2005 to $6.7 million in fiscal 2006. Operating loss before non-operating revenues and expenses decreased from a loss of $5.6 million in fiscal 2005 to a loss of $4.0 million in fiscal 2006. Non-operating revenues and expenses increased from a net expense of $.1 million in fiscal 2005 to $1.0 million in fiscal 2006 due primarily to the reduction in Federal/State compensation Capital contributions received in the form of grants from Federal and State governments decreased from $9.5 million in fiscal 2005 to $7.3 million in fiscal 2006 due to the fact that several large construction projects were completed in FY 2005, while FY 2006 construction projects were primarily in the design stages.


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Summary of Operations and Changes in Net Assets

FY 2006 FY 2005

Operating revenues 15,714,267$ 14,583,053$ Operating expenses (19,744,083) (20,211,432)

Loss before non-operating revenues and expenses (4,029,816) (5,628,379) Non-operating revenues and expenses, net (987,759) (130,983)

Loss before capital contributions (5,017,575) (5,759,362) Capital contributions 7,311,791 9,516,167

Increase in Net Assets 2,294,216$ 3,756,805$ Summary of Net Assets Over time, net assets may serve as a useful indicator of the Authority’s financial position. The Authority’s net assets exceeded liabilities by approximately $110.9 million at September 30, 2006, a $2.3 million increase from September 30, 2005.

FY 2006 FY 2005Assets:

Current and other assets 26,499,357$ 33,190,343$ Capital assets, net 117,640,611 117,155,186

Total assets 144,139,968 150,345,529

Liabilities:Revenue bonds payable, less current portion 26,471,907 34,286,610 Other liabilities 6,785,324 7,470,398

Total liabilities 33,257,231 41,757,008

Net assets:Invested in capital assets, net of related debt 88,023,701 79,655,635 Restricted 6,612,357 14,613,735 Unrestricted 16,246,679 14,319,151

Total net assets: 110,882,737$ 108,588,521$

The largest portion of the Authority’s net assets each year represents its investment in capital assets (e.g., land, buildings, improvements and equipment), less the related indebtedness outstanding used to acquire and construct those capital assets. The Authority uses these capital assets to provide services to its passengers and visitors to the Airport; consequently, these assets are not available for future spending. Although the Authority’s investment in its capital assets is reported net of related debt, the resources required to repay this debt must be provided annually from operations, since it is unlikely the capital assets themselves will be liquidated to pay liabilities. An additional portion of the Authority’s net assets represents bond reserve funds that are subject to external restrictions on how they can be used under bond resolutions, and Passenger Facility Charges that are restricted by Federal regulations and a bond resolution until they can be used to pay future indebtedness. The remaining unrestricted net assets may be used to meet any of the Authority’s ongoing obligations.


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Airport Use Agreements The Authority has entered into Airport Use Agreements with the principal commercial air carriers that serve the airport. The original signatory airlines were American Eagle, Air Sunshine, American Trans Air (ATA), Continental, Delta Air Lines, and US Airways. ATA entered Chapter 11 bankruptcy protection in October 2004, rejected its signatory agreement with the Authority, and terminated service in April 2005. AirTran Airways signed a signatory agreement in December 2004 and initiated new non-stop service to Atlanta and Baltimore. AirTran added service to Chicago Midway in February 2005 and Indianapolis in November 2005, effectively replacing ATA’s service to those destinations. US Airways emerged from Chapter 11 bankruptcy in late 2005, affirmed its signatory agreement with the Authority, and began monthly installments to repay its pre-petition debt. JetBlue Airways signed a signatory agreement and started new non-stop service to JFK airport in New York City, both in September 2006. The signatory airlines are granted the non-exclusive use of the airport for the purpose of operating an air transportation system for the carriage of persons, property, cargo and mail, according to the rules and regulations of the Authority. The term of the use agreement was originally five years, subject to each airline’s right to terminate its agreement for cause upon sixty days prior written notice to the Authority. The agreements for American Trans Air, Continental, Delta and US Airways were set to expire in September 2004. The fiscal year 2001 rate reconciliation, wherein airline rates and charges are reconciled to actual year-end costs, resulted in approximately $800,000 in additional charges being owed to the Authority by the airlines. Considering the financial stresses on the airline industry after the September 11 tragedy and this sizeable amount owed, the Authority successfully negotiated a two-year extension of the agreements with those remaining active airlines in exchange for a waiver of the amount owed. Consequently, the $800,000 is included in other long-term assets and is being amortized over the remaining term of the agreements. These agreements expired at the end of September 2006, and after several months of negotiations, the Airport Use Agreements were successfully amended and extended five years, to an expiration date of September 2011. There are now five signatory airlines, consisting of AirTran Airways, Continental, Delta, JetBlue Airways, and US Airways. Rates and Charges Each of the signatory airlines leases space in the terminal for its exclusive use with the right to make certain leasehold improvements. Each of the signatory airlines pays monthly: (1) rentals for terminal building space, (2) landing fees, and (3) preferential apron space rental. Rentals and landing fees may be adjusted by the Authority, usually on an annual basis, to maintain a balanced budget. Rates and charges for recent years are as follows:

2006 2005 2004Landing fee (per 1,000 lbs MGLW)

Signatory 1.86 1.86 1.89Non-signatory 2.05 2.05 2.08

Average terminal rate (per square foot)Signatory 55.05 53.26 53.09Non-signatory 60.56 58.59 58.40

Apron fee rental (per linear foot) 239.89 225.80 217.18Air cargo facility (per square foot) 11.22 11.14 11.50

Sarasota Manatee Airport Authority Management’s Discussion and Analysis September 30, 2006 and 2005 Landing Fees All costs of the airfield runway area, as well as the cost of unleased terminal space, are combined in a monthly landing fee based upon the signatory airline’s aircraft arrivals during the month. The landing fee is computed by multiplying the maximum gross certified landing weight of the aircraft by a landing fee rate expressed in terms of thousand pound units of landed weight. Revenues A summary of revenues for the year ended September 30, 2006 and the amount and percentage of change in relation to prior year amounts is as follows:

Increase Percent2006 Percent (Decrease) Increase

Amount of Total from 2005 (Decrease)Operating Revenues:

Building rentals 5,588,832$ 32.6% 247,386$ 4.6%Car rental concessions 3,372,956 19.7% 162,554 5.1%Parking lot fees 2,278,141 13.3% 276,487 13.8%Landing fees 858,094 5.0% 120,903 16.4%Other airfield revenue 1,482,874 8.6% 18,348 1.3%Other concessions 716,061 4.2% 67,213 10.4%Non-aviation system revenue 1,324,645 7.7% 170,131 14.7%Other revenue 92,664 0.5% 68,192 278.7%

Total Operating Revenues 15,714,267 91.6% 1,131,214 7.8%Non-Operating Revenues:

Federal/state compensation, net 239,083 1.4% (3,175,259) -93.0%Interest and other investment income 1,196,154 7.0% 639,011 114.7%Other miscellaneous 12,879 0.1% 7,715 149.4% Total Non-Operating Revenues 1,448,116 8.4% (2,528,533) -63.6%

Total Revenues 17,162,383$ 100.0% (1,397,319)$ -7.5% The following chart shows the major sources and the percentage of revenues for the year ended September 30, 2006:

Building rentals13%

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5%8% Federal/state compensation, net

Car rental concessions1% 9%Other revenue

Non-aviation system revenue

20% 4% Parking lot fees

Landing fees0%Other airfield revenue

7%1% Other concessions

Other miscellaneous

Interest and other investment income32%


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he following chart shows the major cost centers and the percentage of expenses for the year ended

Expenses A summary of expenses for the year ended September 30, 2006 and the amount and percentage of change in relation to prior year amounts is as follows:

Increase Percent2006 Percent (Decrease) Increase

Amount of Total from 2005 (Decrease)Operating Expenses:

Depreciation and amortization 6,682,295$ 30.1% (230,380)$ -3.3%Salaries and employee benefits 7,754,356 35.0% 107,508 1.4%Administration and general 2,964,771 13.4% (433,911) -12.8%Maintenance 1,271,204 5.7% (184,093) -12.6%Utilities 1,071,457 4.8% 273,527 34.3% Total Operating Expenses 19,744,083 89.0% (467,349) -2.3%

Non-Operating Expenses:Interest expense 2,281,467 10.3% (301,161) -11.7%Revenue guarantee 74,988 0.3% (1,350,024) -94.7%Amortization of bond issuance costs 79,420 0.4% (20,572) -20.6%

Total Non-Operating Expenses 2,435,875 11.0% (1,671,757) -40.7%

Total Expenses 22,179,958$ 100.0% (2,139,106)$ -8.8% TSeptember 30, 2006:

13%

0%

Depreciation and amortization

Amortization of bond issuance costs

Administration and general36%30%

Salaries and employee benefits

Maintenance

Utilities

Interest expense0%

Revenue guarantee6%10%

5%


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with an original maturity of three months or less.

he Authority’s available cash and cash equivalents decreased from approximately $7.3 million at the end

irport Statistics

he following operating and passenger data are provided to comply with the Authority’s covenant to

Summary of Cash Flow Activities The following shows a summary of the major sources and uses of cash and cash equivalents for the past two years. Cash equivalents are considered cash-on-hand, bank deposits and highly liquid investments

FY 2006 FY 2005

Cash flows from Operating Activities 2,508,115$ 1,435,747$ Cash flows from Investing Activities (7,549,216) (7,170,012) Cash flows from Non-capital Financing Activities 181,979 1,991,475 Cash flows from Capital and Related Financing Activities 3,938,216 897,301

Net increase (decrease) in Cash and Cash Equivalents (920,906) (2,845,489)

Cash and Cash Equivalents:Beginning of year 7,335,290 10,180,779

End of year 6,414,384$ 7,335,290$

Tof fiscal year 2005 to approximately $6.4 million at the end of fiscal year 2006 mainly due to project expenses. A Tholders of the Series 2006 and Series 2003 bonds to provide continuing disclosure of such information.

Fiscal Year TotalYearly Percent

(Decrease) IncreaseAirport as Percent

of U.S. Total

2002 557,165 -11.8% 0.102003 537,119 -3.6% 0.092004 557,309 3.8% 0.092005 652,483 17.1% 0.082006 689,673 5.7% n.a.

Fiscal Year Historical Passenger Enplanements


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Calendar Year Total

Yearly Percent (Decrease) Increase

Airport as Percent of U.S. Total

2002 564,516 -4.7% 0.102003 535,716 -5.1% 0.092004 566,466 5.7% 0.092005 671,988 18.6% 0.092006 715,137 6.4% n.a.

Calendar Year Historical Passenger Enplanements

Fiscal YearTotal

DeparturesAverage Daily

DeparturesEnplaned Passengers

per Departure

2002 7,361 20 772003 6,863 19 792004 8,027 22 712005 9,500 26 712006 9,623 26 74

Airline Aircraft Departures

As of January 2006, the Airport was served by five national airlines (AirTran, Continental, Delta, Northwest and US Airways) and two commuter airlines (Cape Air, and Comair; collectively, the “Participating Airlines”). In fiscal year 2006, the top four airlines accounted for 71.4% of total enplanements. Delta Air Lines ranks first in number of enplaned passengers (31.2%), with AirTran ranking second (27.7%), Continental third (9.2%) and Northwest Airlines ranking fourth (3.3%). The tables below set forth information on passenger enplanements and landed weight by airlines. The Airport remains actively engaged in on-going marketing activities to enhance service by incumbent carriers as well as recruit service from airlines not currently serving the Airport Service Area, as shown by the welcome addition of JetBlue as a signatory airline as of September 2006.


2002 2003 2004 2005 2006

ATA 68,805 73,053 73,333 35,929 0AirTran 0 0 0 107,732 191,115Continental 44,594 44,863 46,888 34,031 63,265Delta 253,652 229,048 223,180 254,286 215,564JetBlue 0 0 0 0 1,133Northwest 28,026 24,445 28,711 26,972 22,480US Airways 94,031 83,770 77,473 77,868 20,890Other Airlines 1 68,057 81,940 107,724 115,665 175,226

Totals 557,165 537,119 557,309 652,483 689,673

2002 2003 2004 2005 2006

ATA 12.3% 13.6% 13.2% 5.8% 0.0%AirTran 17.4% 27.7%Continental 8.0% 8.4% 8.4% 5.5% 9.2%Delta 45.5% 42.6% 40.0% 41.2% 31.3%JetBlue 0.2%Northwest 5.0% 4.6% 5.2% 4.4% 3.3%US Airways 16.9% 15.6% 13.9% 6.9% 3.0%Other Airlines 1 12.3% 15.2% 19.3% 18.8% 25.3%

Totals 100.0% 100.0% 100.0% 100.0% 100.0%

1 Includes American, Air Sunshine, Atlantic Southeast, Comair and Gulfstream, Cape Air, Continental Express, Chataugua,

Florida Coastal, Mesa, PSA, Republic & Tans State

Fiscal Years ended September 30, 2002 - 2006

Airline Passenger EnplanementsFiscal Years ended September 30, 2002 - 2006

Airline Market SharesEnplaned Passengers

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2002 2003 2004 2005 2006

ATA 79,907 85,395 84,967 49,477 0AirTran 132,080 234,144Continental 57,392 51,920 53,226 38,472 72,132Delta 353,841 297,565 290,877 322,827 261,041JetBlue 1,280Northwest 34,760 29,308 37,372 30,853 29,870US Airways 97,678 101,287 90,454 47,200 23,602Other Airlines 1 98,019 108,648 146,662 192,524 212,865

Totals 721,597 674,123 703,558 813,433 834,934

2002 2003 2004 2005 2006

ATA 11.1% 12.7% 12.1% 6.1% 0.0%AirTran 16.2% 28.0%Continental 8.0% 7.7% 7.6% 4.7% 8.6%JetBlue 0.2%Delta 49.0% 44.1% 41.3% 39.7% 31.3%Northwest 4.8% 4.3% 5.3% 3.8% 3.6%US Airways 13.5% 15.0% 12.9% 5.8% 2.8%Other Airlines 1 13.6% 16.2% 20.8% 23.7% 25.5%

Totals 100.0% 100.0% 100.0% 100.0% 100.0%

1 Includes American, Air Sunshine, Atlantic Southeast, Comair and Gulfstream

Landed WeightsFiscal Years ended September 30, 2002 - 2006

Share of total landed weight

Airline Landed WeightsFiscal Years ended September 30, 2002 - 2006

(in thousand pounds)

Airline Market Shares


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Aircraft Operations The volume of aircraft operations at the Airport, as reported by the FAA air traffic control tower, is presented below. Aircraft operations consist of aircraft landings and departures and are reported by the FAA in four categories: air carrier, air taxi and commuter airline, general aviation, and military. Aircraft operations for fiscal year 2006 totaled 163,634 showing a positive rebound following several years of decline, to exceed the previous five-year high of 162,213 in fiscal year 2002.

Fiscal Year Air CarrierAir Taxi and Commuter

General Aviation Military Total

2002 8,821 11,663 139,935 1,794 162,2132003 9,511 10,035 114,156 2,764 136,4662004 10,876 11,533 111,209 1,986 135,6042005 13,702 12,711 130,734 2,114 159,2612006 15,468 11,641 133,792 2,733 163,634

Aircraft OperationsFiscal Years ended September 30, 2002 - 2006

Financial Statements The Authority’s financial statements are prepared on an accrual basis in accordance with generally accepted accounting principles promulgated by the Government Accounting Standards Board (“GASB”). The bulk of the operations of the Authority are recorded in a single enterprise fund with revenues recognized when earned, not when received. Expenses are recognized when incurred, not when they are paid. Capital assets are capitalized and, except for land, depreciated over their useful lives. Amounts are restricted for debt service and, where applicable, for construction activities. The accompanying financial statements include statements for the enterprise fund and the Authority’s employee pension plan. The enterprise fund statements are comprised of the Statements of Net Assets; the Statements of Revenues, Expenses and Changes in Net Assets; and the Statements of Cash Flows. Net assets are displayed in three components: invested in capital assets, net of related debt; restricted; and unrestricted. The component of net assets comprising invested in capital assets, net of related debt, includes restricted capital assets, is net of accumulated depreciation and reduced by the outstanding balances of any outstanding debt that is attributable to the acquisition, construction or improvements of those assets. The Statements of Cash Flows present information showing how the Authority’s cash and cash equivalents changed during the fiscal year. The Statements of Cash Flows classify cash receipts and cash payments as resulting from operating activities, capital and non-capital related financing activities, and investing activities. The pension fund statements include a Statements of Plan Net Assets and a Statements of Changes in Plan Net Assets.


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Capital Acquisitions and Construction Activities During fiscal year 2006, the Authority expended approximately $6.3 million on capital activities. This included approximately $275,000 for sound insulation and easement acquisitions, as this multi-year project has come to completion, and $1.3 million on terminal building improvements, including enhanced security and bag screening capabilities, installation of a wireless network for public use, and an expanded Customs clearance facility. $3.0 million was also expended for construction of a new facilities maintenance building, with the remaining $1.7 million for runway and taxiway construction projects. During fiscal year 2006, all major projects were on-going and few were actually closed from construction-in-progress to capital accounts. These projects totaled only $46,880 and were as follows: Installation of terminal building wireless network $36,145 Repairs to terminal building skylights $10,735 These acquisitions were funded with Airport Authority funds. Additional information on the Authority’s capital assets and commitments can be found in Note 8 – Commitments and Contingencies, of the Notes to the Financial Statements. Long-term Debt Administration

The Authority had outstanding long-term debt of $32.2 million and $39.7 million as of September 30, 2006 and 2005, respectively. The following table reflects the debt activities that occurred during fiscal year 2006:

Total TotalOutstanding Bonds Principal Outstanding10/1/2005 Issued Paid Retired 9/30/2006

Revenue refunding bonds:Series 2006 -$ 27,330,000$ -$ -$ 27,330,000$ Series 2003 5,475,000 - 545,000 - 4,930,000 Series 1996 34,265,000 - 3,070,000 31,195,000 -

39,740,000$ 27,330,000$ 3,615,000$ 31,195,000$ 32,260,000$

Less current maturities (3,510,000)$

Long term portion 28,750,000 Capital lease less current maturity 9,165 Less unamortized loss on refunding (2,278,093) Total 26,481,072$

Bond ratings The Series 2003 bonds have been rated Aaa by Moody’s Investor Services, Inc., and AAA by Standard & Poor’s, while the Series 2006 bonds have been rated AA-/A-1+ by Standard & Poor’s.


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Passenger Facilities Charges (PFC) On June 29, 1992, the Authority received approval from the FAA of its first application to impose a $3.00 Passenger Facility Charge (PFC) at the Airport effective September 1, 1992. The authorization to impose the PFC is contingent on continued compliance with the terms of Federal Aviation Regulations. A second application to "use" the proceeds of the first application was filed with the FAA and approval was granted in its Record of Decision dated January 31, 1995. Applications three and four were combined “impose and use” PFC applications and were approved by the FAA in Records of Decision dated December 15, 1995 and October 3, 2000, respectively. On February 22, 2002 an amendment to the fourth application was administratively approved by the FAA that increased the charge level from $3.00 to $4.50 per enplaned passenger and increased the approved collection amount. Since inception of the PFC program, the Authority has collected approximately $33.7 million and expended approximately $30.5 million of these locally generated funds. Request for Information This financial report is designed to provide a general overview of the Authority’s finances for all those interested. Questions concerning any of the information provided in this report, or request for additional information should be addressed in writing to the Vice President, Chief Financial Officer, Sarasota Manatee Airport Authority, 6000 Airport Circle, Sarasota, FL 34243 or by email to [email protected].

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Sarasota Manatee Airport AuthorityStatements of Net AssetsSeptember 30, 2006 and 2005

Assets 2006 2005Current Assets

Unrestricted AssetsCash and cash equivalents $ 294,412 $ 176,999 Investments 15,773,490 13,616,840 Accounts receivable (net of allowance fordoubtful accounts of $118,383 and $105,32, respectively) 1,045,315 838,601 Grants receivable 797,681 3,291,681 Inventory of materials and supplies 158,263 164,827 Prepaid expenses and other current assets 509,958 1,061,270

Total unrestricted assets 18,579,119 19,150,218

Restricted AssetsCash and cash equivalents 6,119,972 7,158,291 Investments 617,404 5,480,477 Accounts receivable 390,429 268,135 Accrued interest receivable 10,595 46,234

Total restricted assets 7,138,400 12,953,137

Total current assets 25,717,519 32,103,355

Non-Current AssetsCapital assets, net 117,640,611 117,155,186 Intangible and other assets 404,416 669,266 Deferred bond issuance costs (net of accumulated amortizationof approximately $1,291,000 and $1,212,000, respectively) 377,422 417,722

Total non-current assets 118,422,449 118,242,174

Total Assets $ 144,139,968 $ 150,345,529

The accompanying notes are an integral part of these financial statements.

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Sarasota Manatee Airport AuthorityStatements of Net Assets (continued)September 30, 2006 and 2005

Liabilities and Net Assets 2006 2005Current Liabilities

Payable from unrestricted assetsAccounts payable 1,803,891$ 2,169,593$ Accrued expenses and other liabilities 936,223 1,066,047

Total unrestricted liabilities 2,740,114 3,235,640

Current liabilities payable from restricted assetsAccrued revenue bond interest payable 245,305 331,941 Security deposits 280,740 275,414 Current portion of revenue bonds payable 3,510,000 3,615,000

Total restricted liabilities 4,036,045 4,222,355

Total current liabilities 6,776,159 7,457,995

Non-Current LiabilitiesPayable from unrestricted assets

Obligations under capital lease 9,165 12,403

Payable from restricted assetsRevenue bonds payable, less current portion 26,471,907 34,286,610

Total non-current liabilities 26,481,072 34,299,013

Total liabilities 33,257,231 41,757,008

Net AssetsInvested in capital assets, net of related debt 88,023,701 79,655,635 Restricted 6,612,357 14,613,735 Unrestricted 16,246,679 14,319,151

Total net assets 110,882,737 108,588,521

Total Liabilities and Net Assets 144,139,968$ 150,345,529$


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Sarasota Manatee Airport AuthorityStatements of Revenues, Expenses and Changes in Net AssetsFor the Years ended September 30, 2006 and 2005

2006 2005Operating Revenues

Building rentals $ 5,588,832 $ 5,341,446 Car rental concessions 3,372,956 3,210,402 Parking lot fees 2,278,141 2,001,654 Landing fees 858,094 737,191 Other airfield revenue 1,482,874 1,464,526 Other concessions 716,061 648,848 Non-aviation system revenue 1,324,645 1,154,514 Other revenue 92,664 24,472

Total operating revenues 15,714,267 14,583,053

Operating ExpensesDepreciation and amortization 6,682,295 6,912,675 Salaries and employee benefits 7,754,356 7,646,848 Administration and general 2,964,771 3,398,682 Maintenance 1,271,204 1,455,297 Utilities 1,071,457 797,930 Total operating expenses 19,744,083 20,211,432

Operating Loss (4,029,816) (5,628,379)

Non-Operating Revenues (Expenses)Interest expense (2,281,467) (2,582,628)Interest and other investment income 1,196,154 557,143 Revenue Guarantee (74,988) (1,425,012)Federal/state compensation, net 239,083 3,414,342 Amortization of bond issuance costs (79,420) (99,992)Other miscellaneous 12,879 5,164 Total non-operating expenses (987,759) (130,983)

Loss before Capital Contributions (5,017,575) (5,759,362)

Capital ContributionsPassenger facility charges 3,102,721 2,609,943 Federal and state grants 4,209,070 6,906,224 Total capital contributions 7,311,791 9,516,167

Net Assets

Increase in net assets 2,294,216 3,756,805 Total net assets, beginning of year 108,588,521 104,831,716

Total net assets, end of year $ 110,882,737 $ 108,588,521


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Sarasota Manatee Airport AuthorityStatements of Cash FlowsFor the Years ended September 30, 206 and 2005

2006 2005Cash Flows from Operating Activities:

Cash received from customers 15,410,570$ 14,448,078$ Cash paid to employees (7,789,430) (7,629,457) Cash paid to suppliers for goods and services (5,113,025) (5,382,874)

Net cash provided by operating activities 2,508,115 1,435,747

Cash Flows from Capital and Related Financing Activities:Principal paid on revenue bonds maturity (3,615,000) (3,470,000) Interest paid (2,807,806) (2,148,947) Net cash contributed to refunding (3,865,000) - Purchases of capital assets (6,325,894) (8,303,809) (Loss) Proceeds from sale of PP&E (5,005) 3,019 Acquisition of intangibles (616,096) (1,413,349) Contributions and grants 9,683,497 7,983,635 Payment of capital lease obligations (3,238) 10,343 Increase in security deposits 5,326 169,096

Net cash (used in) provided by capital and related financing activities (7,549,216) (7,170,012)

Cash Flows from Non-capital Financing Activities:Federal/State compensation from 9/11 disaster 239,083 3,414,342 Revenue Guarantee (74,988) (1,425,012) Car Rental Concession Settlements 17,884 2,145

Net cash (used in) provided by non-capital financing activities 181,979 1,991,475

Cash Flows from Investing Activities:Proceeds from sales and maturities of investments 27,124,951 3,000,000 Purchases of investments (24,404,366) (3,000,000) Interest on restricted investments 395,750 349,304 Interest on unrestricted investments 821,881 547,997

Net cash provided by (used in) investing activities 3,938,216 897,301

Net increase (decrease) in Cash and Cash Equivalents (920,906) (2,845,489) Cash and Cash Equivalents, Beginning of Year 7,335,290 10,180,779

Cash and Cash Equivalents, End of Year 6,414,384$ 7,335,290$

Cash and Cash Equivalents:Unrestricted 294,412$ 176,999$ Restricted 6,119,972 7,158,291

6,414,384$ 7,335,290$

Reconciliation of Operating Loss to Net Cash Provided by Operating Activities:Operating loss (4,029,816)$ (5,628,379)$ Adjustments to reconcile operating loss to net cash provided by operations:

Depreciation 6,009,774 6,191,692 Amortization 672,521 720,983 Other non-operating expenses/income - - (Increase) decrease in accounts receivable (206,714) (217,473) (Increase) decrease in inventory, prepaid expenses and other assets 557,876 (253,765) Increase (decrease) in accounts payable and accrued expenses (495,526) 622,689

Net cash provided by operating activities 2,508,115$ 1,435,747$

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Sarasota Manatee Airport AuthorityStatements of Plan Net AssetsPension Trust Fund - Employee Retirement FundSeptember 30, 2006 and 2005

2006 2005Assets

Investments, at fair valueLong-term equity investments $ 3,638,190 $ 3,159,612 Real estate 628,006 523,996 Bonds/Fixed income 4,981,849 4,183,743 Total assets 9,248,045 7,867,351

Net Assets Held in trust for pension benefits $ 9,248,045 $ 7,867,351


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Sarasota Manatee Airport Authority Statements of Changes in Plan Net AssetsPension Trust Fund - Employee Retirement FundFor the years ended September 30, 2006 and 2005

2006 2005Additions

ContributionsEmployer $ 850,279 $ 901,029

Investment incomeNet appreciation in fair value of investments 621,313 663,439 Interest and dividends - -

Total investment income 621,313 663,439

Less: Investment expenses (7,020) (5,627)

Net investment income 614,293 657,812

Total additions 1,464,572 1,558,841

DeductionsBenefits paid 67,265 80,121 Administrative expenses 16,613 20,594

Total deductions 83,878 100,715

Change in net assets 1,380,694 1,458,126

Net Assets Held in trust for pension benefits

Beginning of year 7,867,351 6,409,225

End of year $ 9,248,045 $ 7,867,351


Sarasota Manatee Airport Authority Notes to the Financial Statements September 30, 2006 and 2005

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1. Significant Accounting Policies

Nature of Entity The Sarasota Manatee Airport Authority (the Authority) is an independent special district pursuant to the constitution and laws of Florida, particularly Chapter 91-358, Laws of Florida, as amended, revising and consolidating Chapter 31263, Special Laws of Florida, 1955, which, by the Act authorized the Authority to own and operate the Sarasota Bradenton International Airport (the Airport). The Authority has jurisdiction, control, supervision and management of the Airport. The Authority's Board consists of six members who are appointed on a non-partisan basis to four-year staggered terms. The Act requires that three members of the Authority be residents of, and be appointed within, each of Sarasota and Manatee Counties. It is mandated that the Chairperson elected by the members thereof, alternate county representation on an annual basis. The Airport is situated on approximately 1,100 acres located in Sarasota and Manatee Counties and the City of Sarasota. It is classified as a small hub airport by the Federal Aviation Administration (FAA). Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Basis of Presentation The Authority's financial statements are presented in the form of a single enterprise fund which encompasses all financial activity relative to owning, operating, and improving the Airport facilities plus a pension trust fund for the employee defined benefit pension plan. Governmental proprietary operations (enterprise funds) and pension trust funds are accounted for using a flow of economic resources measurement focus on an accrual basis of accounting. Revenues are recognized in the period in which they are earned and expenses are recognized in the period incurred. Revenues from airlines, concessions, rental cars and parking are reported as operating revenues. Transactions which are capital, financing or investing related are reported as non-operating revenues. All expenses related to operating the Airport are reported as operating expenses. Interest expense, financing costs, and certain operating grant expenditures are reported as non-operating expenses. The accounting and reporting policies of the Authority conform with the accounting rules prescribed by the Governmental Accounting Standards Board (GASB). Private sector standards of financial accounting and reporting issued prior to December 1, 1989 generally are followed in enterprise fund financial statements, to the extent that those standards do not conflict with or contradict GASB pronouncements. Governments also have the option of following subsequent private sector guidance for their enterprise funds, subject to this same limitation. The Authority has elected not to follow subsequent private sector guidance.


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Net assets for enterprise funds on the accompanying Statements of Net Assets are required to be segregated into the following four categories:

• Invested in capital assets, net of related debt: Capital assets, net of accumulated depreciation and

outstanding debt balances (net of deferred losses and unamortized issuance costs) attributable to the acquisition, construction or improvement of those assets.

• Restricted:

Nonexpendable – Net assets subject to externally imposed stipulations requiring that the Airport Authority maintain them permanently. The Authority has no nonexpendable net assets. Expendable – Net assets whose use by the Authority is subject to externally imposed stipulations that can be fulfilled by actions of the Authority pursuant to those stipulations, or that expire by the passage of time. Such assets included the Authority’s bond construction funds on hand.

• Unrestricted: Net assets that are not subject to externally imposed stipulations and are not invested in

capital assets. Unrestricted net assets may be designated for specific purposes by action of management or the Commissioners or may otherwise be limited by contractual agreements with outside parties.

Reporting Entity The accompanying financial statements present the financial position, results of operations and cash flows of the Authority in accordance with GASB Statement No. 14, The Financial Reporting Entity, as amended by GASB Statement No. 39, Determining Whether Certain Organizations are Component Units. As a result of applying the reporting entity criteria in GASB Statement Nos. 14 and 39, no other component units exist in which the Authority has any financial accountability, which would require inclusion in the Authority's financial statements. Cash and Cash Equivalents The Authority considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Investments The Authority's investments are managed by the Vice President, Chief Financial Officer in conjunction with the Sarasota County Clerk's Office. Investments in commercial paper are recorded at cost, which approximates fair value. Investments in U.S. Treasury and government agency securities are recorded at fair value, as determined by quoted market prices. The Local Government Investment Pool operated by the Florida State Board of Administration is treated as a "2a-7 like" pool in accordance with GASB Statement No. 31; therefore, it is presented at its actual pooled share price, which approximates fair value. All investment income, including changes in the fair value of investments, is reported as interest and other investment income in the Statements of Revenues, Expenses and Changes in Net Assets. Pension investments are valued at quoted market prices, if available. The pension plan’s unallocated insurance contracts are valued at contract value. Contract value represents contributions made under the contract plus interest at the contract rate, less funds used to pay benefits or administrative expenses charged by the Principal Life Insurance Company. The pension plan’s unallocated separate accounts are valued at fair value.


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Concentrations of Credit Risk The Authority maintains its cash and cash equivalents with a large financial institution. All accounts are guaranteed by the Federal Deposit Insurance Corporation up to $100,000 per bank. The Authority has cash deposited that exceeds the federally insured amount, however, management does not anticipate non-performance by the financial institution. Additionally, the Authority has unrestricted and restricted investments in federal government agencies that have a high credit standing. The Authority does not believe there is a significant risk of non-performance from these agencies. Inventories of Materials and Supplies Inventories of materials and supplies are valued at the lower of cost, using the moving-average method, or market. Restricted Assets Certain assets are restricted in accordance with the provisions of the bond covenants and in accordance with FAA restrictions, or as required by law. Assets restricted under the bond covenant are designated primarily for payment of debt service. When both restricted and unrestricted resources are available for use, it is the Authority’s policy to use restricted resources first, then unrestricted resources as they are needed. Capital Assets Assets with a cost of $1,000 or more are capitalized and recorded at cost, or the fair value at receipt for contributions. They are depreciated under the straight-line method over the following estimated useful lives: Building and structures 10 – 40 years Avigation easements 40 years Runways, taxiways and ramps 20 – 30 years Land improvements 10 – 20 years Fencing 7 – 10 years Lights and signs 7 – 10 years Equipment, furniture and fixtures 5 – 10 years Computers 3 – 5 years Project costs are capitalized and included in construction in progress as the costs are incurred and maintenance and repair costs are expensed as incurred. The accumulated project costs are transferred to capital assets upon completion. The gain or loss recognized on assets retired or otherwise disposed of is reflected in operations and the associated cost and related accumulated depreciation are removed from the accounts.


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The Airport Authority purchases certain residential parcels of land that are considered to be within the area designated as “noise impacted” surrounding the Airport, as well as administers a program of sound insulation of eligible homes in the 65 DNL area in exchange for avigation easements recorded on the property. The cost of acquisition, structure demolition and other costs associated with the purchase are eligible under the Federal Aviation Administration (FAA) Noise Compatibility Plan (NCP) for reimbursement. The FAA funds approximately 90% of these costs with the remainder reimbursed by Passenger Facility Charges (PFC) and Authority funds. The FAA retains a continuing interest in the purchased properties equal to its original funding percentages, and restricts the use of such properties to purposes which are compatible with noise levels associated with the operation of airports. The total costs associated with these noise abatement acquisitions are approximately $12.9 million at September 30, 2006 and 2005, and is recorded under the caption “land” in the accompanying Statements of Net Assets. At the present time, the Authority has completed all noise compatibility programs with all interested and eligible residents and considers the NCP complete. Construction in progress consists mainly of terminal modifications to enhance baggage screening security, taxiway and runway construction, and construction of a new facilities building. Deferred Bond Issuance Costs Deferred bond issue costs are amortized over the life of the bonds using the effective interest method for the 2003 bonds and straight line method for the 2006 bonds. Capital Contributions Contributions and grants are funds donated by various governmental agencies and Airport tenants for specific improvement to the Airport facilities (Improvements). In the normal course of business, the Authority applies for and receives money from the FAA under Airport Improvement Program grant agreements. Costs incurred under these agreements are subject to review and approval by the FAA. Contributions and grants for improvements are reported in the Statements of Revenues, Expenses and Changes in Net Assets after non-operating revenues and expenses as capital contributions. Passenger Facility Charges On June 29, 1992, the Authority received approval from the FAA to impose a $3.00 Passenger Facility Charge (PFC) at the Airport effective September 1, 1992. The authorization to impose the PFC is contingent on continued compliance with the terms of the Federal Aviation Regulations. A use application was filed with the FAA and a decision of approval was granted on December 15, 1995. In addition, another impose and use PFC application was filed and approved by the FAA in its Record of Decision dated October 3, 2000. On February 22, 2002 an amendment to that application was administratively approved by the FAA that increased the charge level from $3.00 to $4.50 per enplaned passenger and increased the approved collection amount. Revenue Recognition Airfield Landing Fee Charges – Landing fees are principally generated from scheduled airlines and non-scheduled commercial aviation and are based on the landed weight of the aircraft. The estimated landing fee structure is determined annually pursuant to an agreement between the Authority and the signatory airlines based on the operating budget of the Authority and is adjusted at year end for the actual landed weight of all aircraft. Landing fees are recognized as revenue when the related facilities are utilized (see Note 7).


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Terminal Rents, Out parcel Rentals, Concessions and Ground Transportation – Rental and Concession fees are generated from airlines, parking lots, food and beverage, retail, rental cars, advertising and other commercial tenants. Leases are for terms from one to fifty years and generally require rentals based on the volume of business, with specific minimum annual rental payments required. Rental revenue is recognized over the life of the respective leases and concession revenue is recognized based on reported concessionaire revenue. Other – All other types of revenues are recognized when earned.

Federal/State Compensation As a result of the terrorist acts of September 11, 2001 (September 11) the federal and state governments have provided compensation to the Authority to replace lost revenue and offset capital and operating expenditures for increased security costs (see Note 8). In addition, the Authority received a $1.5 million grant for new airline service (see Note 9).

2. Cash, Cash Equivalents and Investments

Deposits All of the Authority’s public deposits are held in qualified public depositories pursuant to Florida Statutes, Chapter 280. Qualified public depositories are required to pledge collateral to the State Treasurer with a market value equal to 50% of the average daily balance of all public deposits in excess of any federal deposit insurance. In addition, to the extent that total public deposits exceed the total amount of the regulatory capital accounts of a bank or the regulatory net worth of a savings association, the required collateral shall have a market value equal to 125% of the deposits. In event of default by a qualified public depository, all claims for public deposits would be satisfied by the State Treasurer from the proceeds of federal deposit insurance, pledged collateral of the public depository in default and, if necessary, a pro rata assessment to the other qualified public depositories in the collateral pool. Therefore, the cash and time deposits are fully insured or collateralized.

The carrying value of the Authority’s deposits at September 30, 2006 and 2005 are approximately $6.4 million and $7.3 million respectively. Of the bank balance, $1.5 million was covered by federal depository insurance, $4.9 million was covered by collateral pursuant to Florida Statutes, Chapter 280.

In addition to cash deposits, the Authority maintains cash on hand for the purpose of making change on transactions. The amount of cash on hand as of September 30, 2006 and 2005 was $900.


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Investments As of September 30, 2006 and 2005, the Authority has the following investments and maturities:

FY 2005 FY 2006 Less than More thanFair Value Fair Value 1 Year 1-3 Years 3 Years

UnrestrictedFederal Home Loan Bank 2,914,680$ -$ -$ -$ -$ Federal National Mortgage Assoc. 2,890,320 2,904,390 - 2,904,390 - Federal National Mortgage Assoc. 1,938,120 - - - Federal National Mortgage Assoc. 2,941,890 2,924,070 - 2,924,070 Federal Home Loan Mortgage Corp. 1,957,140 - - - - Federal Home Loan Bank 974,690 973,130 - 973,130 - Federal Home Loan Mortgage Corp. - 4,992,600 - 4,992,600 - Federal Home Loan Bank - 1,987,500 - - 1,987,500 Commercial Paper - 1,991,800 1,991,800 -

Total Unrestricted 13,616,840 15,773,490 1,991,800 8,870,120 4,911,570

RestrictedFederal Home Loan Mortgage Corp. 621,195 617,404 - - 617,404 Federal Home Loan Mortgage Corp. 4,853,156 - - - SBA 6,126 - - - -

Total Restricted 5,480,477 617,404 - - 617,404

Total Investments 19,097,317$ 16,390,894$ 1,991,800$ 8,870,120$ 5,528,974$

Investment Type

Following is a summary of restricted cash and investments at September 30, 2006 and 2005:

2006 2005

Passenger Facility Charges 2,831,849$ 2,858,921$ Noise Mitigation Program 2,701,134 2,976,137 Debt Service (P&I) 156,737 1,047,819 Debt Service (Reserve) 617,500 5,480,477 Tenant Escrow 280,738 275,414 Bond Escrow 149,418 -

6,737,376$ 12,638,768$

September 30,

Investments of the Authority conform to the provisions of Section 5(21) of Chapter 91-358, Laws of Florida (the “Sarasota-Manatee Airport Authority Act”), and Florida Statutes, Section 218.415.

Interest Rate Risk. As a means of limiting its exposure to fair value losses arising from rising interest rates, the Authority’s investment policy limits its risk by maintaining an investment portfolio with limited volatility. Accordingly, no security shall have an estimated average return of principal exceeding five years. The weighted average duration of principal return for the portfolio shall generally be less than two years. However, securities in restricted accounts will have a maximum maturity consistent with the nature of the restricted accounts.


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Credit Risk. The Authority is authorized under Florida Statutes, Section 218.415(16) and Section 5(21) of Chapter 91-358, Laws of Florida to invest in certain investments. All of the Authority’s investments carried a credit rating of AAA by Standard & Poor’s and Aaa by Moody’s as of September 30, 2006.

Custodial Credit Risk. For an investment, custodial credit risk is the risk that in the event of the failure of the counterparty, the Authority will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The Authority’s investments are either held in the name of the Authority or held in trust under the Authority’s name.

Concentration of Credit Risk. The Authority’s investment policy establishes limitations on portfolio composition in order to control concentration of credit risk. The policy allows 100% of the portfolio to be invested in U.S. Treasury bills or notes, 75% to be invested in near cash accounts such as the State investment pool or money market and 3c7 accounts, 65% to be invested in other U.S. Government agencies, 40% to be invested in certificates of deposit, 30% to be invested in commercial paper, and 25% to be invested in bankers acceptances. No more than 30% of the entire portfolio may be purchased or sold through one security dealer or bank. The Authority purchased 30% of the portfolio from Bear Stearns, 18% from Raymond James & Associates, 18% from Morgan Keegan, 12% from Citigroup Global Market, 12% from JPM Chase and 10% from FTN Financial.

The Authority places no limit on the amount they may invest in any one issuer. More than 5% of the Authority’s investments are in Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, Federal Home Loan Bank, and Commercial paper. These investments are 36%, 34%, 18% and 12% respectively, of the Authority’s total investments. Deposits and Investments – Pension Trust Fund The Governmental Accounting Standards Board, in Statement No. 40 (GASB 40), requires state and local governments to disclosure certain risks. The disclosures required by GASB 40 provide readers with information concerning the credit and interest risks associated with the plan’s deposits and investments.

Deposits At September 30, 2006, the plan held no deposits. Investments The Authority has delegated to the investment manager, investment discretion for plan assets. GASB 40 requires plan investments to disclose an indication of the level of credit risk, concentration of credit risk, and interest rate risk assumed by the plan. These risk disclosures only pertain to fixed income investments. At September 30, 2006, the Authority had the following investments. Amounts are shown in dollars. Effective duration shown in years as of September 30, 2006. Investments held by the plan were not subject to custodial credit risk or foreign currency risk.


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Fair Value Effective Fair Value Effective2006 Duration 2005 Duration

Fixed Income Investments

Bond and Mortgage Separate Account 4,431,825$ 4.80 3,716,538$ 3.48Inflation Protection Separate Account 181,459 6.29 153,887 6.35High Yield Separate Account 184,670 3.56 158,106 3.84Preferred Securities Separate Account 183,895 5.37 155,212 4.11

Total Fair Value of Fixed Income Investments 4,981,849$ 4,183,743$ Other Investments 4,266,196 3,683,608

Total Investments 9,248,045$ 7,867,351$

Interest Rate Risk. The effective duration of Fixed Income Investments (excluding Money Market and Guaranteed Interest is equal to 4.82). Concentration of Credit Risk/Credit Risk. The following is a credit analysis for the plan’s Fixed Income Investments. The display represents the percentage of assets/bonds which meet the corresponding credit score and the average credit score for each investment.

Fixed Income InvestmentU.S. Govt AAA AA A BBB BB B

Below B NR/NA Average

Bond and Mortgage Separate Account 0.00 61.11 6.69 11.20 12.92 4.20 3.08 0.80 0.00 AAInflation Protection Separate Account 0.00 86.86 0.58 1.09 3.82 5.16 2.22 0.27 0.00 AAA

High Yield Separate Account 0.00 0.00 0.00 0.00 0.53 33.86 56.38 9.23 0.00 BPreferred Securities Separate Account 0.00 2.45 3.34 45.10 45.96 1.38 0.00 0.00 1.77 A At September 30, 2006, the following are investments (other than U.S. Government and U.S. Government guaranteed obligations), in any one organization, that represents five percent or more of net assets available for benefits: 2006 2005 Principal Financial Group $9,248, 045 $7,867,351


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he cost of various easement rights including expenses incurred in sound proofing residences are reported

3. Capital Assets

A summary of changes in capital assets for the years ended September 30, 2006 and 2005 is as follows:

Balance at Transfers Transfers Balance atOctober 1, and and September 30,

2005 Additions Deletions 2006

Land 19,011,487$ (3,634)$ 19,007,853$ Avigation easements 19,287,443 275,001 3,634 19,566,078 Site prep., utilities and drainage 14,190,876 - - 14,190,876 Buildings and structures 53,145,430 10,735 - 53,156,165 Runways, taxiways & ramps 63,527,516 - - 63,527,516 Land improvements 4,751,945 - - 4,751,945 Fencing 448,976 18,675 - 467,651 Lights and signs 1,630,642 - - 1,630,642 Computers 261,327 98,808 (4,110) 356,025 Equipment, furniture and fixtures 15,335,997 135,096 (103,300) 15,367,793

191,591,639 538,315 (107,410) 192,022,544 Less accumulated depreciation (85,254,326) (6,391,066) 98,038 (91,547,354)

106,337,313 (5,852,751) (9,372) 100,475,190 Construction in progress 10,817,873 6,454,674 (107,126) 17,165,421

117,155,186$ 601,923$ (116,498)$ 117,640,611$

Balance at Transfers Transfers Balance atOctober 1, and and September 30,

2004 Additions Deletions 2005

Land 18,612,841$ 721,936$ (323,290)$ 19,011,487$ Avigation easments 17,426,119 2,513,695 (652,371) 19,287,443 Site prep., utilities and drainage 14,190,876 - - 14,190,876 Buildings and structures 49,055,383 4,090,047 - 53,145,430 Runways, taxiways & ramps 51,096,268 12,431,248 - 63,527,516 Land improvements 4,732,499 19,446 - 4,751,945 Fencing 434,173 28,101 (13,298) 448,976 Lights and signs 1,630,642 - - 1,630,642 Computers 250,811 18,740 (8,224) 261,327 Equipment, furniture and fixtures 14,772,445

Tas avigation easements above and are amortized using the straight-line method over their remaining lives, which is determined to be 40 years.

640,867 15,335,997 (77,315) 172,202,057 20,464,080 (1,074,498) 191,591,639

Less accumulated depreciation (78,902,580) (6,447,318) 95,572 (85,254,326) 93,299,477 14,016,762 (978,926) 106,337,313

Construction in Progress 20,671,324 6,939,695 (16,793,146) 10,817,873

113,970,801$ 20,956,457$ (17,772,072)$ 117,155,186$


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epreciation expense for the years ended September 30, 2006 and 2005 was approximately $6,010,000

4. Pension Plan

Plan Description

he Sarasota Manatee Airport Authority Pension Plan (the Plan) is a single-employer defined benefit

lan Membership

s of October 1, 2006 and 2005, the pension plan’s membership consisted of:

requirements of the Plan are established and may be amended by the Board Members of e Authority. The Authority is required to contribute at an actuarially determined rate; the current rate is

tember 30, 2006 and 2005, the Authority's annual pension costs of $850,279 and 901,029 respectively were equal to the Authority's required and actual contributions. The required

he plan:

Dand $6,192,000 respectively.

Tpension plan controlled by the provisions adopted pursuant to the Authority Agreement. The Plan is governed by the Authority, which is responsible for the management of plan assets. The Plan is administered by The Principal Financial Group. The Plan provides retirement, disability, and death benefits to Plan members and beneficiaries. The Principal Financial Group provides the Authority with a financial report that includes financial statements and required supplementary information for the Plan. The report is available to the public and can be obtained directly from the Authority. Active members of the Plan do not contribute to the Plan. P A

2006 2005

Active employees 92 107Retirees and beneficiaries currently receiving benefits 16 13Terminated employees entitled to benefits, not yet receiving 24 9

Total 132 129

Funding Policy The contribution th19.7% of annual covered payroll. Annual Pension Cost For the year ended Sep$contributions for 2006 and 2005 were determined as part of the actuarial valuations dated October 1, 2005 and 2004, respectively, using the aggregate cost method. This method does not identify and separately amortize unfunded actuarial liabilities. This decrease resulted from a decrease in covered payroll, and greater than assumed return on plan investments. The following is three-year trend information for t

Year ended Pension % of PC Net PensionSeptember 30, Cost (PC) constibuted Obligation

2004 799,694$ 100% -$ 2005 901,029 100% - 2006 850,279 100% -


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Other The actuarial value of plan assets is determined using a four-year smoothing technique. Administrative and investment expenses are funded with contributions and investment income.

5. Intangible and Other Assets

Following is a summary of intangible and other assets at September 30, 2006 and 2005:

Accumulated AccumulatedCost Amortization Cost Amortization

Computer Licenses 30,401$ 3,478$ 2,295$ 956$ Airline Incentive 760,689 760,689 760,689 608,439 Master Plan 752,367 394,512 1,492,056 1,015,654 Other Studies 98,190 78,552 98,190 58,915

1,641,647 1,237,231 2,353,230 1,683,964

Carrying Value 404,416$ 669,266$

2006 2005

Amortization of intangible assets was approximately $670,000 and $721,000 for the years ended September 30, 2006 and 2005 respectively.

6. Long-Term Debt

A summary of changes in long-term indebtedness for the years ended September 30, 2006 and 2005 is as follows:

Revenue Bonds: Amounts dueSept. 30, 2005 Increases Reductions Sept. 30, 2006 within one year

2006 -$ 27,330,000$ -$ 27,330,000$ 2,945,000$ 2003 5,475,000 - (545,000) 4,930,000 565,000 1996 34,265,000 - (34,265,000) - -

At Par 39,740,000 27,330,000 (34,810,000) 32,260,000 3,510,000 Unamortized loss on refunding (1,838,390) - (439,703) (2,278,093) -

Net 37,901,610 27,330,000 (35,249,703) 29,981,907 3,510,000 Capital Lease 15,663 - (3,238) 12,425 3,260

Total 37,917,273$ 27,330,000$ (35,252,941)$ 29,994,332$ 3,513,260$

Revenue Bonds: Amounts due Sept. 30, 2004 Increases Reductions Sept. 30, 2005 within one year

2003 6,015,000$ -$ (540,000)$ 5,475,000$ 545,000$ 1996 37,195,000 - (2,930,000) 34,265,000 3,070,000

At Par 43,210,000 - (3,470,000) 39,740,000 3,615,000 Unamortized loss on refunding (2,298,289) - 459,899 (1,838,390) -

Net 40,911,711 - (3,010,101) 37,901,610 3,615,000 Capital Lease 4,532 15,719 (4,588) 15,663 3,260

Total 40,916,243$ 15,719$ (3,014,689)$ 37,917,273$ 3,618,260$


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Revenue Bonds Series 1984-B Revenue Bonds totaling $72.8 million were issued by the Authority in December 1984 in order to finance construction on new airport terminal facilities to handle current and projected traffic levels. During calendar year 1988, the Authority determined that $11.8 million of the annual variable rate bonds would not be needed for completion of the construction project. The $11.8 million was retired on February 1, 1989 from proceeds of the bonds and interest thereon. On June 30, 1993, the Authority issued $8.7 million in Revenue Refunding Bonds with an interest rate ranging from 3.0% to 5.3% to refinance $7.5 million of its outstanding Series 1984-B Revenue Bonds with an interest rate ranging from 6.8% to 7.8%. The refinancing resulted in an accounting loss of approximately $1.16 million which was deferred in accordance with GASB Statement No. 23 and being amortized over the life of the new bonds which was equivalent to the remaining life of the old bonds. On May 7, 1996, the Authority issued $53.68 million in Airport System Revenue Refunding Bonds with an interest rate ranging from 3.6% to 5.4% and issued $1.2 million in Airport System Taxable Revenue Bonds with an interest rate ranging from 5.6% to 6.1% to refinance all of the remaining outstanding Series 1984-B Revenue Bonds. The refinancing resulted in an accounting loss of approximately $6.989 million. The Authority, in accordance with GASB Statement No. 23, was amortizing this loss over the life of the new bond issue, which was equivalent to the remaining life of the old bonds. The Authority, in effect, reduced its aggregate debt service payments by approximately $6.5 million over 18 years and obtained an economic gain (the difference between present values of the old and new debt service payments) of approximately $4.1 million. On October 23, 2003, the Authority sold $6.34 million of revenue refunding bonds with an average coupon of 3.276% and a true-interest-cost of 3.364% to refinance and replace the Series 1993 issue. The refinancing resulted in an accounting loss of approximately $.6 million which has been deferred in accordance with GASB Statement No. 23, and is being amortized over the life of the new bonds which is equivalent to the remaining life of the old bonds. The new bonds will retain the same final maturity date (September 30, 2014) and will save the Authority over a half-million dollars of gross debt service payments over their remaining term. Net present value savings are approximately $317,000 or 5.1% of the refunded principal. In September 2005, the Authority executed a forward starting interest rate swap agreement with SunTrust Capital Markets. Variable rate demand bonds were sold by the Authority on June 28, 2006 to defease the 1996 Revenue Refunding Bonds. The refunding was completed on the 96 Series first call date of August 1, 2006. The swap agreement locks in a fixed rate of 3.139% and will terminate in September 2014, the same date as the 2006 Bonds. Total present value savings are $1.4 million or 4.5% of the refunding issue. The bonds are limited obligations payable solely from the net revenues of the Authority. The Authority is required to maintain a debt coverage ratio of at least 125% as defined in the Bond Resolution. Certain major air carriers serving the airport have entered into Airline Use Agreements which, taken as a whole, provide that the air carriers will make payments sufficient to enable the Authority to meet its rate covenant obligations. At September 30, 2006 and 2005, the Authority met the minimum debt coverage ratio. As to the fixed rate bonds, principal is payable annually on each August 1, and interest is payable semi-annually on each February 1 and August 1. The Authority is required to deposit, ratably over the twelve months preceding each maturity date, a defined amount calculated to pay the principal amount plus accrued interest due at the payment date. Payment of the principal and interest on the fixed rate bonds are guaranteed by a municipal bond insurance policy. As to interest rate swap, interest and swap related payments are made on a monthly basis to the Trustee. Quarterly letter of credit fees and an annual


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remarketing fee are paid in arrears directly to SunTrust Capital Markets. Principal redemptions will be made annually in order to retire the entire amount by 2014. The bonds and respective interest are payable in the following amounts and maturities:

2006 2006 2003 2003Maturity Non-taxable Interest Issue Interest Total

2007 $ 2,945,000 $ 934,145 $ 565,000 $ 156,402 $ 4,600,547 2008 3,130,000 765,445 570,000 145,103 4,610,548 2009 3,240,000 667,194 585,000 131,565 4,623,759 2010 3,355,000 565,490 600,000 115,770 4,636,260 2011 3,475,000 460,177 615,000 97,770 4,647,947

2012-2014 11,185,000 710,828 1,995,000 152,933 14,043,761

27,330,000$ $ 4,103,279 $ 4,930,000 $ 799,543 $ 37,162,822

Capital Lease The Authority has one remaining noncancellable capital lease to purchase equipment. The minimum future lease payments to be paid under this capital lease agreements are as follows:

Year Ending LeaseSeptember 30, Payment

2007 3,260$ 2008 3,260 2009 3,038 2010 2,867

Less amount representing interest - Present value of future minimum lease payments 12,425 Less current maturities (included in accounts payable) (3,260) Total long term portion 9,165$

Arbitrage Rebate The Tax Reform Act of 1986 generally requires earnings from investments of bond proceeds, which exceed the issuer’s bond yield to be rebated to the U.S. Treasury at periodic intervals, usually every five years. Computations are performed to determine the yield on the bonds, the yield on the invested funds and the determination of the resulting arbitrage rebate liability. As of September 30, 2006 and 2005 there was no liability.

7. Leases

Five-year airline leases were signed effective October 1, 1999. Five airlines signed scheduled airline operating agreements and two signed scheduled regional and commuter airline agreements. The agreements provide funding for the ongoing maintenance, operations, debt service with coverage, and capital improvements of the Airport through various rates and charges. In connection with the new leases, the Authority paid approximately $377,000 in incentive payments to the airlines, which was included in intangible and other assets on the statements of net assets and was amortized over the original term of the leases, ending in 2005.


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The airline leases require an annual year-end adjustment to the actual amount of airline rates and charges, wherein charges calculated using budgeted data at the beginning of the fiscal year are reconciled to actual year-end costs, resulting in an under or over collection of revenues with the airlines signatory to the lease agreements. The fiscal year 2001 rate reconciliation resulted in $760,689 owed by the airlines. Considering the financial stresses of the airline industry after the September 11 tragedy and the sizeable amount owed in fiscal year 2002, the Authority successfully negotiated a two-year extension of the leases with the remaining active airlines in exchange for a waiver of the amount owed. Consequently, the $760,689 is included in intangible and other assets on the statements of net assets and is being amortized over the remaining term of the agreements. These lease agreements expired at the end of September 2006, and after several months of negotiations, the Airport Use Agreements were successfully amended and extended five years, to an expiration date of September 2011. There are now five signatory airlines, consisting of AirTran Airways, Continental, Delta, JetBlue Airways, and US Airways.

The fiscal year 2006 year-end adjustment to actual was zero. The fiscal year 2005 year-end adjustment to actual was an over collection of $35,596. This amount is due to the signatory airlines and is included in accounts payable at September 30, 2005. A portion of the Authority's revenue is provided by non-airline lease and concession agreements. These agreements relate to a portion of the Authority's buildings, land, and the privilege to do business at the Airport and have terms ranging from one to ninety-nine years. Many of the agreements contain contingent rental provisions whereby additional amounts, in excess of stated minimums, are due based upon the lessees’ gross revenue. Minimum future lease payments to be received under these operating lease agreements are as follows:

Year Ending Car RentalSeptember 30, Restaurants Agencies Other Total

2007 207,000$ 306,788$ 1,539,151$ 2,052,939$ 2008 207,000 76,626 1,499,907 1,783,533 2009 207,000 55,702 1,229,067 1,491,769 2010 17,250 55,702 1,202,069 1,275,021 2011 - 9,284 1,167,069 1,176,353

2012-2016 - - 5,558,266 5,558,266 2017-2021 - -- 5,158,136 5,158,136 2022-2026 - -- 3,204,663 3,204,663 2027-2031 -- -- 2,973,765 2,973,765 2032-2036 -- -- 2,127,856 2,127,856 2037-2041 -- -- 963,716 963,716 2042-2046 -- -- 434,680 434,680 2047-2051 434,680 434,680 2052-2056 -- -- 362,355 362,355

Total 638,250$ 504,102$ 27,855,380$ 28,997,732$

Rents received from non-airline leases and concession agreements amounted to approximately $5,011,000 and $4,985,000 for the years ended September 30, 2006 and 2005, respectively. Amounts received under contingent rental clauses were approximately $535,000 for each of the years ended September 30, 2006 and 2005.


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8. Commitments and Contingencies

Following September 11, 2001, the Florida Airport Managers Association (FAMA) Board of Directors met with the Governor in Tallahassee to discuss the impacts of the September 11 tragedy on state airports. As a result of this meeting, the governor of the State of Florida signed legislation on November 16, 2001 that authorized state airports to utilize Florida Department of Transportation (FDOT) grant money to pay for capital and operating costs for security and replacement of lost revenue resulting from the events of September 11. Two fiscal years were included in the legislation, fiscal year 2001-2002 and fiscal year 2002-2003, and all state funds available for airport use from prior years’ awards were eligible for this program. The Governor’s office has subsequently extended the funding to pay for lost revenues and additional security costs through fiscal year 2007. On December 17, 2001, the Authority’s Board approved, and the Authority filed, an Expenditure Plan with the FDOT for reimbursement of lost revenue and security expenses as a result of the events of September 11. The plan included a request for up to $2,000,000 to be set aside from existing capital grants for anticipated lost revenue subsequent to September 30, 2001. This Expenditure Plan was approved by the FDOT on April 24, 2002. Additional allocations of $13,153,304 and $1,973,061 were approved at subsequent dates. The Authority received $132,743 and $1,401,186 in federal and state compensation for the years ended September 30, 2006 and 2005, respectively. The portion that represents the reimbursement of lost revenues ($118,320 for 2006 and $1,352,438 for 2005) is included in non-operating revenues in the Statement of Revenues, Expenses and Changes in Net Assets. The portion that represents reimbursement for security capital expenditures ($14,423 for 2006 and $48,748 for 2005) is included in capital contributions – federal and state grants. The Authority has entered into contracts to purchase property, plant and equipment aggregating approximately $46,945,082 as of September 30, 2006. Of that amount, approximately $24,609,167 has been expended, with the remaining amount anticipated to be expended over the next two years. The majority of these expenditures are expected to be reimbursed to the Authority through grant funding. The Authority is involved in certain legal actions and claims arising in the ordinary course of its business. It is the opinion of management (based on the advice of legal counsel) such litigation and claims will be resolved without material adverse effect on the Authority's net assets, results of operations or cash flows. Grant monies received and disbursed by the Authority are for specific purposes and are subject to review by the grantor agencies. Such audits may result in requests for reimbursement due to disallowance of expenditures. Based on prior experience, the Authority does not believe that such disallowances, if any, would have a material effect on the financial position of the Authority.

9. Revenue Guarantee

In August 2004, the United States Department of Transportation announced that the Airport had been selected to receive a $1.5 million grant under the Small Community Air Service Development Program. The grant was used to provide a revenue guarantee for new airline service with AirTran Airways. In addition, Manatee and Sarasota Counties agreed to reimburse the Authority $250,000 each to assist with advertising for this new air service. AirTran Airways signed a signatory agreement in December 2004 and initiated new non-stop service to Atlanta and Baltimore. AirTran subsequently added service to Chicago Midway in February 2005 and Indianapolis in November 2005. The revenue guarantee paid to AirTran for fiscal years 2006 and 2005 was $74,988 and $1,425,012, respectively, and is included in non-operating expenses. Advertising costs in the amount of $290,611 for fiscal year 2006 and $873,716 for fiscal year 2005 were incurred and are included in marketing expense. Recorded in Federal/State compensation under non-operating income is $120,763 and $1,379,237 for


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fiscal years 2006 and 2005, respectively, received from the Small Community Air Service Development grant, and $500,000 from the two counties.

10. Major Airline User

The Authority derived a significant portion of its revenues from a major airline user for the years ended September 30, 2006 and 2005. During 2006, this major airline user handled approximately 31% of the total passenger traffic at the Airport as compared to 43% during 2005. Additionally, this major airline user has a number of separate agreements with the Authority covering various types of property and buildings. Several of those agreements allocate charges to the carrier based upon the airline's market share of passengers and flight activity. Revenues from this airline were approximately $2.7 million and $2.9 million for the years ended September 30, 2006 and 2005, respectively. The majority of these revenues were derived from building rentals and landing fees.

11. Risk Management

The Authority is a member of the Public Risk Management of Florida (PRM), a liability risk pool. PRM administers insurance activities relating to workers' compensation, property, liability, and automobiles. PRM absorbs the risk of loss up to a specified amount annually and purchases excess and other specific coverages from third-party carriers. PRM assesses each member its pro rata share of the estimated amount required to meet current year losses and operating expenses. During the fiscal years ended September 30, 2006 and 2005, the Authority had no significant reductions in insurance coverage from the prior years. In addition, there have been no settlements which exceeded the Authority's insurance coverage in any of the past three fiscal years.

12. Subsequent Events

On October 1, 2006, the Authority entered into a contract with Rural/Metro Fire Department, Inc. to provide the airport with emergency medical and aircraft rescue and firefighting services. This resulted in the layoff of eleven union firefighters and three non-union supervisors. The Authority is currently engaged in effects bargaining with the workers’ collective bargaining agent.

13. Interest Rate Swap

In fiscal year 2005, the Authority entered into a forward-starting interest rate swap agreement with SunTrust Bank. An interest rate swap is a contractual agreement in which one party pays a fixed rate of interest on a notional dollar amount and the other party pays a variable rate of interest on an equal notional dollar amount. An interest rate swap agreement that is forward-starting is executed at a date in advance of the date that the interest begins to accrue. The Authority entered into its forward-starting interest rate in order to immediately establish a fixed interest rate liability on a notional amount intended to match the par amount of variable rate bonds to be issued in the following fiscal year. On September 8, 2005, the Authority entered into the swap, and specified June 29, 2006 as the date on which the interest liability would begin to accrue, which was the date on which it was then anticipated that variable rate bonds would be issued. The terms of the swap provide that the Authority pays semiannually a fixed rate of 3.139% per annum, and receives monthly a variable rate equal to 67% of the one-month London Interbank Offered Rate (LIBOR). The notional dollar amount referenced for the interest calculations is $27,330,000, which amortizes semiannually in order to match the amortization of the bonds. Following the bonds’ issuance and the swap’s effectiveness, the Authority is paying a fixed rate of interest under the swap and a variable rate of interest on the bonds, and receiving a variable rate of


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interest under the swap. The net of the three interest payments approximates the Authority paying a fixed interest rate. The swap is scheduled to terminate on August 1, 2014, the same date on which the bonds will be completely retired. Fair Value: Because interest rates have risen since the Authority entered into the swap, the swap has a positive fair value as of September 30, 2006 of $109,996. The reported fair value was provided by SunTrust Capital Markets, Inc. using the marked-to-market method. Credit Risk: Because the swap has a positive fair value, the Authority is exposed to the credit risk of SunTrust Bank in the amount of the swap’s fair value. SunTrust Bank has ratings of Aa3 (long-term) and VMIG1 (short-term) by Moody’s Investors Services and AA- (long-term) and A-1+ (short-term) by Standard & Poor’s. Basis Risk: The Authority is exposed to basis risk because the variable rate payments payable to it are calculated on the basis of a 67% of LIBOR (a taxable rate index) and the Authority’s variable rate interest obligations on the bonds is determined in the tax-exempt market. Should the relationship between LIBOR and the tax-exempt market change and move to convergence, or should the bonds trade at levels worse (higher in rate) in relation to the tax-exempt market, the Authority’s all-in costs would increase. Termination Risk: The swap does not contain any out-of-the-ordinary termination events that would expose the Authority to significant termination risk. In keeping with market standards, the Authority or the counterparty may terminate the swap if the other party fails to perform under the terms of the contract. If a termination were to occur, at the time of the termination, the Authority would be liable for payment equal to the swap’s fair value, if it had a negative fair value at that time. The counterparty would be liable for any payment equal to the swap’s fair value, if it had positive fair value at that time. In addition, a termination would mean that the Authority’s variable rate bonds would no longer be hedged, and the Authority would be exposed to interest rate risk, unless it entered into a new hedge following termination. Rollover Risk: Because the swap has a scheduled termination date and a notional amount that are tied to the maturity date and principal amounts of the amortizing bonds, there is no rollover risk associated with the swap, other than in the event of a termination. Swap Payments and Associated Debt: As rates vary, the bond’s interest payments and the swap’s interest payments will vary. As of September 30, 2006, debt service requirements of the variable rate bonds and net swap payments, assuming current interest rates remain the same for their term, were as follows:

Fiscal Year Ending September 30 Principal Interest

Interest Rate Swap, Net Total

2007 2,945,000$ 1,015,676$ (116,735)$ 3,843,941$ 2008 3,130,000 904,660 (103,976) 3,930,684 2009 3,240,000 786,942 (90,446) 3,936,496 2010 3,355,000 665,082 (76,440) 3,943,642 2011 3,475,000 538,895 (61,937) 3,951,958 2012 3,590,000 408,223 (46,918) 3,951,305 2013 3,730,000 273,161 (31,395) 3,971,766 2014 3,865,000 132,864 (15,271) 3,982,593

27,330,000$ 4,725,503$ (543,118)$ 31,512,385$

Variable Rate Bonds


Required Supplementary Information


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Required Supplementary Information

(1) (2) (3) (4) (5) (6)Actuarial Unfunded UAAL as

Actuarial Actuarial Accrued AAL Funded Annual a % of Valuation Value of Liability (UAAL) Ratio Covered Payroll

Date Assets (AAL) (2)-(1) (1)/(2) Payroll [(2)-(1)]/(5)

10/1/2001 6,385,820$ 6,385,820$ -$ 100% 3,978,974$ 0%10/1/2002 4,785,101 4,785,101 -$ 100% 3,687,455 0%10/1/2003 5,461,267 5,461,267 -$ 100% 4,329,274 0%10/1/2004 6,384,700 6,384,700 -$ 100% 4,130,259 0%10/1/2005 7,645,364 7,645,364 -$ 100% 4,023,418 0%10/1/2006 9,129,373 9,129,373 -$ 100% 3,712,255 0%

Pension Plan Schedule of Funding Progress

AnnualPlan Year Required Actual PercentageEnd Date Contribution Contribution Contributed

9/30/2001 396,695$ 396,695$ 100%9/30/2002 551,438 551,438 100%9/30/2003 639,845 639,845 100%9/30/2004 799,694 799,694 100%9/30/2005 901,029 901,029 100%9/30/2006 850,279 850,279 100%

Pension Plan Schedule of Employer Contributions


Supplemental Schedules

For the Years Ended September 30, 2006 and 2005


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2006 2005

Depreciation and amortization 6,682,295$ 6,912,675$ Salaries and wages 5,148,891 4,964,139 Operating supplies, maintenance and repairs 1,269,476 1,449,802 Health insurance 1,179,393 1,173,720 Electricity 891,455 650,862

Pension 850,279 901,029 Marketing 755,476 1,278,841 General insurance 642,988 609,903 Social security 379,255 372,452 Legal 343,823 265,781

Service contract 307,708 263,029 Professional services 250,995 240,405 Workers’ compensation insurance 138,642 146,885 Customs 125,706 126,394 Travel 93,803 79,807

Advertising and entertainment 81,411 66,793 Telephone 73,554 63,110 Water and sewer 70,977 53,540 Data processing supplies 63,338 55,825 Dues and subscriptions 51,805 45,567

Training 50,880 50,495 Uniforms and identification 49,042 47,528 Office supplies, postage and publishing 41,204 51,486 Accounting and audit fees 34,813 35,000 Disability 34,343 32,603

Sanitation 35,471 30,418 Unemployment insurance 23,060 25,042 Miscellaneous 19,688 25,641 Taxes 14,904 14,205 Bad debt 13,680 105,362

Bond and banking fees 8,885 8,810 Interior plants 4,833 4,471 Public relations 4,363 5,457 Shuttle service 3,283 14,862 Employee service awards 1,812 1,885

Car allowance 1,042 3,554 Equipment rental 1,018 3,077 Employment expenses 492 30,977

Total Operating Expenses 19,744,083$ 20,211,432$

See Report of Independent Certified Public Accountants

Year Ended September 30,

Schedule of Operating Expenses


Schedule of Receipts and Disbursements - Bond Proceeds AccountFor the Year Ended September 30, 2006

Debt Service Sinking FundReserve Principal Interest Total

Proceeds at Beginning of YearOctober 1, 2005 5,480,477$ 660,420$ 387,399$ 6,528,296$

Receipts:Interest earnings 144,097 324,478 937,119 1,405,694 Market value adjustment 43,053 - - 43,053 Operating revenue transfers in (out) (5,050,127) 2,732,354 1,533,744 (784,029)

(4,862,977) 3,056,832 2,470,863 664,718

Disbursements:Interest payments (2,807,806) (2,807,806) Principal payments - (3,615,000) - (3,615,000)

- (3,615,000) (2,807,806) (6,422,806)

Proceeds at End of YearSeptember 30, 2006 617,500$ 102,252$ 50,456$ 770,208$


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Schedule of Receipts and DisbursementsCash - Unrestricted Operating and Investment Accounts

Operations & Renewal & CapitalRevenue Maintenance Replacement Improvements Authority PAR Airline Total

BalanceOctober 1, 2005 -$ 2,083,618$ 2,000,000$ -$ 8,308,567$ 1,401,654$ 13,793,839$

Receipts:Revenue and grants 19,346,391 5,098,265 24,444,656 Gain on sale of investments 161,632 161,632 Transfer from restricted assets 26,082 26,082

Transfers (net) (17,777,360) 14,354,828 1,450,511 1,727,770 244,251 -

Disbursements:

Capital (5,964,498) (5,964,498) Operating (14,161,850) (636,846) (14,798,696) Interest and Principal fund deposit (1,595,113) - - - - - (1,595,113)

Balance

September 30, 2006 $ - $ 2,276,596 2,000,000$ 584,278$ 9,561,123$ 1,645,905$ 16,067,902$


General Purpose

For the Year Ended September 30, 2006

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Documents

SARASOTA MANATEE AIRPORT AUTHORITY · There are now five signatory airlines, consisting of AirTran Airways, Continental, Delta, JetBlue Airways, and US Airways. Rates and Charges