* NOTE TO ALL PUBLIC ATTENDEES:

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1 AGENDA Greenville-Spartanburg Airport Commission Regular Meeting Greenville-Spartanburg International Airport Conference Room C at Administrative Offices Monday, November 24, :00 a.m. * NOTE TO ALL PUBLIC ATTENDEES: The public may speak on any item on the agenda. There are request cards located outside the public seating area. These cards must be completed and presented to the Recording Secretary prior to the item being heard. Your comments will be addressed prior to the Airport Commission s discussion and you will have 5 minutes to address the Airport Commission. Thank you for your attention. I. CALL TO ORDER: II. CONSENT AGENDA: A. Approval of the Greenville-Spartanburg Airport Commission September 22, 2014 Regular Meeting Minutes (document). B. Acceptance of Audit Committee October 31, 2014 Meeting Minutes (document). III. PRESENTATIONS: A. Recognitions/Awards. IV. OLD BUSINESS: A. Approval to Purchase GSP Digital Signage.

2 GREENVILLE-SPARTANBURG AIRPORT COMMISSION AGENDA Monday, November 24, 2014 Page 2 V. NEW BUSINESS: A. Acceptance of the Greenville-Spartanburg International Airport Financial Audit and schedules of Expenditures for the Fiscal Years Ended June 30, 2014 (document). B. Audit Committee Recommendation Regarding Extension of Auditor Contract (document). C. Landscape Master Plan (document). D. Adoption of the Greenville-Spartanburg Airport District Strategic Business Plan (document). VI. PRESIDENT/CEO REPORT: A. Aviation Industry Update. B. Terminal Art Program Update. C. Air Service Meeting Update. VII. INFORMATION SECTION: (Staff presentations will not be made on these items. Staff will be available to address any questions the Commission may have). A. September 2014 Traffic Reports (document). B. September 2014 Monthly Financial Report (documents). C. November 2014 Development/Project Status Report (document). D. November 2014 Communications Status Report (document). E. November 2014 Properties and Development Report (document). F. November OSHA Reportable Injury Report (document). G. Customer Service Satisfaction Survey 3 rd Quarter (document). H. Industry Presentation(s)/Article(s) of Interest (documents). I. Potential Items for the Next Regular Scheduled Commission Meeting: Airport Environs Presentation VIII. COMMISSION MEMBER REPORTS: IX. EXECUTIVE SESSION: The Airport Commission may hold an Executive Session for the purpose of receiving legal advice on various matters and to discuss future contractual items.

3 GREENVILLE-SPARTANBURG AIRPORT COMMISSION AGENDA Monday, November 24, 2014 Page 2 X. ADJOURNMENT: This agenda of the Greenville-Spartanburg Airport Commission is provided as a matter of convenience to the public. It is not the official agenda. Although every effort is made to provide complete and accurate information to this agenda, the Airport Commission does not warrant or guarantee its accuracy or completeness for any purpose. The agenda is subject to change before or at the Airport Commission Meeting.

4 GREENVILLE-SPARTANBURG AIRPORT COMMISSION MINUTES SEPTEMBER 22, 2014 The Greenville-Spartanburg Airport Commission met on September 22, 2014 at 9:00 a.m. in the Greenville-Spartanburg Airport District Office Conference Room C located at 2000 GSP Drive, Suite 1, Greer, SC MEMBERS PRESENT: Minor Shaw, Hank Ramella, Bill Barnet, and Doug Smith MEMBERS ABSENT: Valerie Miller and Leland Burch STAFF AND LEGAL COUNSEL PRESENT: Dave Edwards-President/CEO, Kevin Howell-Vice President/COO, Jack Murrin-Vice President Administration and Finance/CFO, Scott Carr-Director of Properties and Development, Larry Estridge-WCSR, Betty O. Temple-WCSR, Alan Sistare-GSP Fire Dept., Michael Seigler-GSP Fire Dept., and Wanda Jones-Executive Assistant. GUESTS PRESENT: Don Warren-Skanska-Moss, Steve Van Beek-ICF Int l, Mark Waller-Infrastructure Consulting & Engineering, and Dennis Wiehl- Mead & Hunt. CALL TO ORDER: Chair Minor Shaw called the meeting to order at 9:00 a.m. Mr. Larry Estridge introduced Mrs. Betty O. Temple; Mrs. Temple will succeed Mr. Estridge in the role of Legal Counsel after the transition period. CONSENT AGENDA: A motion was made, seconded, and unanimous vote received to approve the regular meeting minutes from the July 14, 2014 Commission Meeting, the Strategic Business Plan Workshop of July 22, 2014 and September 3, A motion was made, seconded, and unanimous vote received to approve the Meeting/Dates/Time for Calendar The meeting dates are: January 15, 2015, March 18, 2015, May 18, 2015, July 13, 2015, September 14, 2015, November 9, PRESENTATIONS: A. Fire/Fire Safety Disaster Planning. Captain Seigler discussed the responsibility of the GSP Fire Department which is Safety for everyone at GSP and maintain a high level of readiness at all times. The levels of service include: ARFF (14 CFR FAR 139), Fire/Rescue (ISO Class 2)

5 Medical (licensed DHEC), Hazardous Material Mitigation, and Confined Space Rescue. Services are provided on and off airport property. The Fire Department has answered the following calls from 2012 to date: CALLS As of 9/21/2014 ALERTS FIRES/ALARMS MEDICAL MISC TOTAL MUTAL AID Captain Seigler discussed other services the Fire Department is responsible for: 500 +/- Monthly Fire Extinguisher Inspections, Quarterly Fire & Safety Inspections, Quarterly Sprinkler Inspections, Monthly Elevator Inspections, 17 Monthly Spill Kit Inspections, Quarterly Fuel Truck and Fuel Farm Inspections, Refueling Inspections, approve hot work permits and issue confined space entry permits. The Fire Department participates in a Full Scale Preparedness drill every three (3) years and Table Tops Preparedness every year between the full scale drills. Captain Seigler asked for questions. Mr. Barnet asked how many people would need to be added to get a better ISO rating. Fire Chief Sistare stated staff would need to be doubled. Mr. Barnet asked if a better ISO rating would bring lower insurance rates. Chief Sistare stated yes. The Commission thanked the entire Fire Department for a great job. NEW BUSINESS: A. GSP Digital Billboard Signage Proposal. Mr. Edwards stated the GSP Digital Billboard Signage Proposal is in response to how the District can better reach the community. The digital billboard would give the District an opportunity to send messaging 24/7. Mr. Edwards stated some of the benefits of a digital billboard include: no production costs, flexibility, dynamic content, multiple messages, and medium value. Mr. Ramella asked if the District will be selling advertising in addition to the Airport District messaging. Mr. Edwards stated Staff has been in contact with Spartanburg County and the District can sell advertising to anyone who is on airport property. Mr. Edwards clarified that no value amount has been set for selling advertising.

6 Mr. Edwards stated that the electrical cost for the digital billboard will be $ a month based on the Duke Power Assessment of.095 per kwh. Mr. Barnet asked if solar power is an option. Mr. Edwards stated staff will need to look into that item to see if it would be an option. Three (3) proposals were received for the Digital Billboard. Fairway, Hilton, and St. Clair. An evaluation criteria/score sheet was used to rank the companies who submitted proposals. St. Clair Signs was chosen for a total cost of $420, Mr. Edwards stated the billboard is unique and will give the ability to drive home some targeted messaging to those in our primary catchment area. Chair Shaw asked if the placement of the digital billboard will interfere with any future plans on the property. Mr. Edwards stated no. After a brief discussion, the Commission decided to table the Digital Billboard Signage Proposal until the November Commission Meeting. PRESIDENT/CEO REPORT: Mr. Edwards stated that airlines continue to be extremely profitable. On the airportside, the focus continues to be on the FAA re-authorization bill and what will happen in It is a major Bill and we continue to push for Congress to deal with the bill timely. Mr. Edwards reported to date that CEO meetings have been held with: Milliken, Fluor, Hubbell Lighting, AFL, and Michelin. The meetings have been very positive and all companies have committed to helping with information that will better target their needs going forward. One particular item discussed with Fluor is putting in place a Corporate Ambassador Partnership Program. This program would allow Fluor to badge some of their employees to allow them access to the gate area. Once at the gate, this program would allow Fluor employees to greet their VIP s and bring them through the facility. Staff has sent the proposed program to Fluor and is waiting on their review. This program can be rolled out to other companies. Mr. Edwards stated Mr. Stanis Smith with Stantec has been engaged for art consultant services and the decision needs to be made who will be part of the art task force going forward. Mr. Edwards stated he and Mr. Edward Shelswell-White are continuing to move forward on the development of the Community Outreach Program. Focus Group meetings for both business and leisure customers will be set up as well as a survey. The focus groups and the survey should give staff some great information that can be used to evaluate and target how to reach individuals and businesses in the community. Mr. Edwards stated that he attended the Upstate Chamber Coalition Event in Washington, DC. Mr. Edwards was able to spend some time with Senator Scott outlying some options for reauthorization.

7 INFORMATION SECTION: Mr. Edwards stated traffic continues to be positive. The economy parking lot has been filling up on a regular basis with Tuesday and Wednesday being the peak days. Occasionally the garages are reaching capacity. Staff is keeping an eye on the parking situation. ADJOURNMENT: There being no further business, a motion was made, seconded, and adopted to go into Executive Session to discuss contractual matters at 10:30 a.m. At approximately 12:00 p.m. public session resumed, with no further business. The meeting was adjourned at 12:02 p.m.

8 GREENVILLE-SPARTANBURG AIRPORT COMMISSION AUDIT COMMITTEE MINUTES OCTOBER 31, 2014 On October 31, 2014, the Greenville-Spartanburg Airport Commission s Audit Committee met at 2:00 p.m. in the Greenville-Spartanburg Airport District Office Conference Room C located at 2000 GSP Drive, Suite 1, Greer, SC Committee Members Present: Bill Barnet (Chair), Minor Shaw, Valerie Miller Staff Present: David Edwards-President/CEO, Jack Murrin-Vice President Administration and Finance/CFO, Wanda Jones-Executive Assistant External Audit Representation: Alan Robinson-Partner, Cherry Bekaert Mr. Barnet opened the meeting and turned the meeting over to Mr. Robinson. Mr. Robinson presented the June 30, 2014 Audited Financial Statements. The external auditors offered a clean and an unqualified audit opinion with no exceptions or surprises. The audit was on-time and on schedule. Mr. Robinson praised the internal team for its cooperation and professional management of the District books. Mr. Barnet asked Mr. Robinson if he was comfortable with the Wingspan Construction Project. Mr. Robinson stated in the affirmative, and as long as the construction is going on Cherry Bekaert will focus their attention on this issue. The audit of the project went very well this year. Mr. Barnet asked Mr. Robinson to comment on the GASB rules. Mr. Robinson stated that GASB 67 & 68 deals with the South Carolina Retirement System non-cash pension liabilities which went into effect on July 1, The SC Retirement System has a multi-billion dollar unfunded liability. The current estimated District s liability is $12.5 million. This rule will force entities to look at changing contribution rates, and the curtailment of benefits for new employees. Staff is monitoring these pronouncements carefully. Mr. Barnet asked if vendor testing went well. Mr. Robinson summarized that Federal Express, Avis/Budget, and ABM Parking were tested this year. Cherry Bekaert looked at the lease agreements of the vendors who were tested and made sure the earnings, recording and charging of revenue were being done in line with lease agreements. In 2015, the vendor testing will include: Allegiant Air, Stevens Aviation, and MSE. Mr. Murrin noted the contract with Cherry Bekaert will expire in A discussion followed on the committee s thoughts on recommendations to the full Commission for confirmation of the relationship.

9 Mr. Barnet asked if Mr. Robinson is required to rotate from his role as lead auditor. Mr. Robinson stated he is not required to change. The Audit Committee will discuss the contract and make a recommendation. The committee then met separately with Mr. Robinson, Mr. Murrin, and Mr. Edwards in private sessions. After a brief discussion, the Audit Committee adjourned the meeting at 2:45 p.m.

10 MEMORANDUM TO: From: Members of the Airport Commission Rosylin Weston, V.P. Communications DATE: November 24, 2014 ITEM DESCRIPTION Old Business Item A Approval to Purchase GSP Digital Signage BACKGROUND The GSP Airport District Communications Department continues to look for new ways to reach Upstate consumers about the value of and the reasons to fly out of GSP International Airport. In addition, the Airport Commission has suggested that staff take a more aggressive approach to marketing GSP to the region. A digital sign positioned strategically on airport property for the exclusive delivery of airport messaging will: Provide the impact of traditional outdoor messaging with the flexibility of internet advertising. Become an iconic symbol similar to the Gaffney Peach Provide the opportunity to update messages weekly, daily or even hourly Provide the opportunity to display multiple messages Provide the opportunity to deliver real-time information Deliver GSP messages in a big, bold unavoidable format, 24 hours per day, 7 days a week reminding consumers that GSP is their hometown airport ISSUE At their previous meeting, the Airport Commission deferred action on this item and asked Staff to gather additional information about the effectiveness of digital signage advertising and fine-tune the overall look of the sign. In the meantime, Commission members would take the time to look at the general location for the proposed sign to better understand the visibility of the sign from Interstate 85. Attached is a summary from Erwin Penland on the effectiveness of digital signage and proposed new signage concepts. Staff will have a scaled-down version of the digital sign and sample content in the parking lot on the day of the meeting for the

11 Greenville-Spartanburg Airport Commission Old Business Item A Approval to Purchase Digital Sign Page 2 Commission members to evaluate. ALTERNATIVES The GSP Airport District could decide to rent one (1) double-sided digital billboard annually for $546, This fee is subject to market rate changes. FISCAL IMPACT Based on quotes received from three (3) vendors, the estimated capital cost to purchase and install one double-sided digital billboard on airport property is $420, RECOMMENDED ACTION It is respectfully requested that the Airport Commission resolve to approve the Airport District staff move forward with the negotiation and purchase of one double-sided digital billboard in an amount not-to-exceed $450,000 to be located on airport property adjacent to Interstate 85. Attachments 2000 GSP Drive, Suite 1 Greer, SC Greenville: Spartanburg: Fax:

12 Outdoor Advertising for GSP International Airport and the Average Air Traveler Outdoor advertising on I-85 would be valuable for GSP International Airport because: 1. Air travelers see more outdoor than the average person 2. Many potential GSP customers who use CLT travel on i-85 to get there We can determine if the average air traveler is exposed to outdoor advertising by looking at how many Miles Traveled, with respect to being in the car, they have indicated. The results are combined into quintiles to identify the heaviest miles traveled audience down to the lightest miles traveled audience Miles traveled 1st Quintile (heaviest) Avg Air Traveler in the GSAA Market 108 Miles traveled 2nd Quintile (heavy) Miles traveled 3rd Quintile (medium) Miles traveled 4th Quintile (light) Any domestic air round trip in 12 mos Miles traveled 5th Quintile (lightest) The 100 index indicates the average adult response. Indices above 100 indicate a likelihood of our target to exhibit the behavior when compared to the average adult. In this case, the Air Traveler is 33 more likely than the average adult to fall into the heaviest quintile for miles traveled. Through the same study, we see that 60 of air travelers drive on I-85 and are 38 more likely than the average adult to drive on I-85. Given the proximity of the GSP International Airport to I-85, and the likelihood of air travelers to be on this highway, there is an obvious advantage for the GSP International Airport to have space for messages geared towards the air traveler target. Avg Air Traveler in the GSAA Market While 62 of air travelers have flown out of GSP Intl Airport, 31 of air travelers have flown out of Charlotte, traveling up I Used Asheville as point of departure past 12 months Used CLT as point of departure past 12 months Used GSP as point of departure past 12 months Used Atlanta as point of departure past 12 months Any domestic air round trip in 12 mos

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15 MEMORANDUM TO: FROM: Members of the Airport Commission Jack G. Murrin, VP of Administration & Finance/CFO DATE: November 24, 2014 ITEM DESCRIPTION New Business Item A Acceptance of Greenville-Spartanburg International Airport Financial Audit and Schedules of Expenditures for the Fiscal Years Ended June 30, 2014 and BACKGROUND Article 7 Certain Covenants of the District, Section 716, of the 1988 GSP Master Bond Resolution mandates that the District shall annually, within 120 days after the close of each Fiscal Year, cause an audit to be made of its books and accounts by an independent and recognized certified public accounting firm. Also, as a recipient of FAA grant funds, the requirement for an audit is further established by incorporation of grant assurance #13 and by reference to Federal Regulation 49 CFR Part 18. Sponsors that expend $500,000 or more in an year in Federal funds must have a single or program-specific audit conducted for that year in accordance with the Single Audit Act of 1984 (as amended) and OMB Circular A-133 "Audits of States, Local Governments and Nonprofit Organization". The $500,000 threshold represents all Federal funding sources. ISSUES The Audit Committee met on October 31, 2014 and was presented with the audit findings. The audit was clean and unqualified. Representatives of the Cherry, Bekaert & Holland audit firm will present the Audit findings and answer questions the Airport Commission may have GSP Drive, Suite 1 Greer, SC Greenville: Spartanburg: Fax:

16 Greenville-Spartanburg Airport Commission New Business Item A Acceptance of Greenville-Spartanburg International Airport Financial Audit and Schedules of Expenditures for the Fiscal Years Ended June 30, 2012 and 2011 Page 2 ALTERNATIVES None recommended. FISCAL IMPACT None. RECOMMENDED ACTION It is respectfully requested that the Airport Commission accept the audit report as presented GSP Drive, Suite 1 Greer, SC Greenville: Spartanburg: Fax:

17 GREENVILLE SPARTANBURG AIRPORT DISTRICT FINANCIAL STATEMENTS AND SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS As of and for the Years Ended June 30, 2014 and 2013 And Report of Independent Auditor

18 GREENVILLE SPARTANBURG AIRPORT DISTRICT TABLE OF CONTENTS REPORT OF INDEPENDENT AUDITOR MANAGEMENT S DISCUSSION AND ANALYSIS BASIC FINANCIAL STATEMENTS Statements of Net Position Statements of Revenues, Expenses, and Changes in Net Position Statements of Cash Flows Notes to Financial Statements FEDERAL FINANCIAL ASSISTANCE Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Report on Compliance for Each Major Federal Program; Report on Internal Control over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by OMB Circular A Schedule of Expenditures of Federal Awards Notes to the Schedule of Expenditures of Federal Awards Schedule of Findings and Questioned Costs Schedule of Status of Prior Year Findings and Questioned Costs... 36

19 Report of Independent Auditor To the Commissioners of Greenville-Spartanburg Airport District Greer, South Carolina Report on the Financial Statements We have audited the accompanying financial statements of the Greenville-Spartanburg Airport District (the Airport ), a political subdivision of the State of South Carolina, as of June 30, 2014 and 2013, and the related statements of revenues, expenses, and changes in net position and cash flows for the years then ended, and the related notes to the financial statements, which collectively comprise the Airport s basic financial statements as listed in the table of contents. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the Airport, as of June 30, 2014 and 2013, and the results of its operations and its cash flows thereof for the years then ended in accordance with accounting principles generally accepted in the United States of America.

20 Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management s discussion and analysis on pages 3 through 12 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audits were conducted for the purpose of forming our opinion on the financial statements as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of the basic financial statements. The schedule of expenditures of federal awards is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 20, 2014 on our consideration of the Airport s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Airport s internal control over financial reporting and compliance. Greenville, South Carolina October 20,

21 GREENVILLE SPARTANBURG AIRPORT DISTRICT MANAGEMENT S DISCUSSION AND ANALYSIS JUNE 30, 2014 AND 2013 The following Management Discussion and Analysis ( MD&A ) of Greenville-Spartanburg Airport District ( GSP, District or the Airport ) activities and financial performance for the fiscal years ended June 30, 2014 and 2013, is presented in accordance with the Governmental Accounting Standards Board Statement No. 34, Basic Financial Statements Management s Discussion and Analysis For State and Local Governments. The intent of the MD&A is to provide the reader with an introduction and overview to the financial statement package. Following this MD&A are the basic financial statements of the Airport together with the notes thereto, which are essential to a full understanding of the data contained in the financial statements. In addition to the basic financial statements and accompanying notes, this section also presents certain required supplementary information regarding debt service requirements to maturity. Overview of Annual Financial Report Management s Discussion and Analysis serves as an introduction to the basic financial statements. The MD&A represents management s examination and analysis of the Airport s financial condition and performance. Summary financial statement data, key financial and operational indicators used in the Airport s budgeting and other management tools were used for this analysis. The Airport s financial statements include a Statement of Net Position; a Statement of Revenues, Expenses, and Changes in Net Position; a Statement of Cash Flows; and Notes to Financial Statements. The Statement of Net Position presents the financial position of the Airport on a full accrual historical cost basis and provides information about the nature and amount of resources and obligations at the end of a year. The Statement of Revenues, Expenses, and Changes in Net Position present the results of the business activities over the course of the fiscal year and information as to how the net position changed during the year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows. This statement also provides certain information about the Airport s recovery of its costs. The Airport s rates and charges are based on a cost recovery methodology provided in its airline use agreements. The primary objective of the rates and charges model is to determine the costs not covered by non-airline sources and to annually compute landing fees and terminal rents which will provide sufficient funding to reimburse the Airport. The Statement of Cash Flows presents changes in cash and cash equivalents, resulting from operational, financing, and investing activities. This statement presents cash receipts and cash disbursement information, without consideration of the earnings event, when obligations arise, or depreciation of capital assets. The Notes to Financial Statements provide disclosures and other information that is essential to a full understanding of material data provided in the statements. The notes present information about the Airport s accounting policies, significant account balances, activities, material risks, obligations, commitments, contingencies and subsequent events, if any. The financial statements were prepared by the Airport s staff from the detailed books and records of the Airport. 3

22 GREENVILLE SPARTANBURG AIRPORT DISTRICT MANAGEMENT S DISCUSSION AND ANALYSIS JUNE 30, 2014 AND 2013 FINANCIAL HIGHLIGHTS STATEMENTS OF NET POSITION, JUNE 30, 2014 AND 2013 June Change Assets: Cash and investments $ 61,034,325 $ 79,192,211 $ (18,157,886) (22.93) Bond funds 377, ,221 11, Receivables 3,050,010 5,740,258 (2,690,248) (46.87) Capital assets net 165,081, ,687,991 28,393, Other 511, , , Total assets $ 230,055,083 $ 222,294,379 $ 7,760, Liabilities: Current liabilities $ 5,192,067 $ 5,875,424 $ (683,357) (11.63) Long-term liabilities 5,411,629 5,864,508 (452,879) (7.72) Total liabilities 10,603,696 11,739,932 (1,136,236) (9.68) Net position: Net investment in capital assets 162,020, ,377,516 28,642, Restricted 1,930,726 1,737, , Unrestricted 55,500,408 75,439,779 (19,939,371) (26.43) Total net position $ 219,451,387 $ 210,554,447 $ 8,896, As can be seen from the above, the Airport has a very strong Statement of Net Position. Liquidity continues to be very strong. Total net position is $219,451,387 of which $55,500,408 is unrestricted. Total assets at June 30, 2014 were $230,055,083, which included $15,100,984 in cash and receivables, $46,516,797 million in investments, $377,355 in investments held by US Bank (GSP s Revenue Bond Trustee), and $165,081,479 in capital assets. Total liabilities were $10,603,696, $2,034,388 of which related to GSP s 2001 rental car facility bond issue outstanding at year end. The difference between the $230,055,083 in assets and the $10,603,696 in liabilities is categorized as Net Position ($219,451,387) and is composed of $162,020,253 of net investment in capital assets, $1,930,726 in restricted assets to be used for capital projects, and $55,500,408 in unrestricted assets. 4

23 GREENVILLE SPARTANBURG AIRPORT DISTRICT MANAGEMENT S DISCUSSION AND ANALYSIS JUNE 30, 2014 AND 2013 FINANCIAL HIGHLIGHTS STATEMENTS OF NET POSITION, JUNE 30, 2013 AND 2012 June Change Assets: Cash and investments $ 79,192,211 $ 87,843,801 $ (8,651,590) (9.85) Bond funds 366, ,406 11, Receivables 5,740,258 3,306,167 2,434, Capital assets net 136,687, ,784,897 14,903, Other 307, ,219 (184,521) (37.49) Total assets $ 222,294,379 $ 213,781,490 $ 8,512, Liabilities: Current liabilities $ 5,875,424 $ 3,856,559 $ 2,018, Long-term liabilities 5,864,508 6,289,256 (424,748) (6.75) Total liabilities 11,739,932 10,145,815 1,594, Net position: Net investment in capital assets 133,377, ,872,574 17,504, Restricted 1,737, , , Unrestricted 75,439,779 86,900,006 (11,406,227) (13.19) Total net position $ 210,554,447 $ 203,635,675 $ 6,918, As can be seen from the above, the Airport has a very strong Statement of Net Position. Liquidity continues to be very strong. Total net position is $210,554,447 of which $75,439,779 is unrestricted. Total assets at June 30, 2013 were approximately $222,294,379, which included $8,898,638 in cash and receivables, $73,382,918 in investments, $366,221 in investments held by US Bank (GSP s Revenue Bond Trustee), and $136,687,991 in capital assets. Total liabilities were $11,739,932, $2,240,614 of which related to GSP s 2001 rental car facility bond issue outstanding at year end. The difference between the $222,294,379 in assets and the $11,739,932 in liabilities is categorized as Net Position ($210,554,447) and is composed of $133,377,516 of net investment in capital assets, $1,737,152 in restricted assets to be used for capital projects, and $75,439,779 unrestricted assets. 5

24 GREENVILLE SPARTANBURG AIRPORT DISTRICT MANAGEMENT S DISCUSSION AND ANALYSIS JUNE 30, 2014 AND 2013 FINANCIAL HIGHLIGHTS STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION, JUNE 30, 2014 AND 2013 June Change Operating revenues: Landing and other airside fees $ 2,994,349 $ 2,241,484 $ 752, Space and ground rental fees 8,011,832 6,526,942 1,484, Concessions revenue 12,597,222 12,383, , Expense reimbursements 1,024, , , Other revenue 1,057,549 1,117,666 (60,117) (5.38) Total operating revenues 25,685,052 22,937,609 2,747, Operating expenses: Direct operating expenses 13,079,341 12,288, , Loss on disposal of assets 2,027,434 59,975 1,967,459 3, Depreciation 10,050,973 9,657, , Total operating expenses 25,157,748 22,006,657 3,151, Operating income 527, ,952 (403,648) (43.36) Non-operating income (expense) 178,663 1,357,178 (1,178,515) (86.84) Income before capital contributions 705,967 2,288,130 (1,582,163) (69.15) Capital contributions 8,190,973 4,630,642 3,560, Increase in net position $ 8,896,940 $ 6,918,772 $ 1,978, Total operating revenues were $25,685,052 for the fiscal year ended June 30, 2014, up from $22,937,609 as compared to the prior year. This increase was the result of higher space and ground rentals from the rental car companies, a full year of space rentals from Southwest Airlines and an increase in landing rates, a byproduct of increased airfield costs. Total direct operating expenses were $13,079,341 for the fiscal year ended June 30, 2014, up 6.43 from $12,288,756 as compared to the prior year. This increase was largely due to employee benefits, business incentives and advertising expenses. The loss on disposal of assets was $2,027,434 for the fiscal year ended June 30, 2014, up 3, from $59,975 as compared to the prior year. This increase represented a major terminal asset disposal in fiscal year ended June 30, Total non-operating income was $178,663 for the fiscal year ended June 30, 2014, down from $1,357,178 as compared to the prior year. This is due to a decrease in excess Contract Facility Charge ( CFC ) revenues from the rental car companies, as a result of covering the space and ground rent as mentioned above. 6

25 GREENVILLE SPARTANBURG AIRPORT DISTRICT MANAGEMENT S DISCUSSION AND ANALYSIS JUNE 30, 2014 AND 2013 Depreciation expense was $10,050,973 for the fiscal year ended June 30, 2014, as compared to $9,657,926 in the fiscal year ended June 30, The debt service coverage ratio was 3,355, which exceeded the 125 required by the debt covenants of GSP s various bond issues. The blended result of increased operating revenues and total operating expenses, along with a decrease in non-operating income, as discussed above, resulted in GSP s net income before capital contribution of $705,967 and $2,288,130 for fiscal year ended June 30, 2014 and fiscal year ended June 30, 2013, respectively. 7

26 GREENVILLE SPARTANBURG AIRPORT DISTRICT MANAGEMENT S DISCUSSION AND ANALYSIS JUNE 30, 2014 AND 2013 FINANCIAL HIGHLIGHTS STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION, JUNE 30, 2013 AND 2012 June Change Operating revenues: Landing and other airside fees $ 2,241,484 $ 2,422,773 $ (181,289) (7.48) Space and ground rental fees 6,526,942 5,931, , Concessions revenue 12,383,451 12,200, , Expense reimbursements 668, , , Other revenue 1,117,666 1,182,843 (65,177) (5.51) Total operating revenues 22,937,609 22,268, , Operating expenses: Direct operating expenses 12,288,756 11,759, , Loss on disposal of assets 59, ,644 (121,669) (66.98) Depreciation 9,657,926 9,240, , Total operating expenses 22,006,657 21,181, , Operating income 930,952 1,087,140 (156,188) (14.37) Non-operating income (expense) 1,357,178 1,262,000 95, Income before capital contributions 2,288,130 2,349,140 (61,010) (2.60) Capital contributions 4,630,642 2,707,491 1,923, Increase in net position $ 6,918,772 $ 5,056,631 $ 1,862, Total operating revenues were $22,937,609 for the fiscal year ended June 30, 2013, up 3.01 from $22,268,416 as compared to the prior year. This increase was primarily the result of increased terminal space rent, the byproduct of increased indirect administrative costs spread. Total direct operating expenses were $12,288,756 for the fiscal year ended June 30, 2013, up 4.5 from $11,759,238 as compared to the prior year. This increase was largely due to new employee benefits. Depreciation expense was $9,657,926 for the fiscal year ended June 30, 2013, as compared to $9,240,394 in the fiscal year ended June 30, The debt service coverage ratio was 2,941, which exceeded the 125 required by the debt covenants of GSP s various bond issues. The blended result of increased operating revenues, depreciation expense and operating expenses, as discussed above, resulted in GSP s net income before capital contribution of $2,288,130 and $2,349,140 for fiscal year ended June 30, 2013 and fiscal year ended June 30, 2012, respectively. 8

27 GREENVILLE SPARTANBURG AIRPORT DISTRICT MANAGEMENT S DISCUSSION AND ANALYSIS JUNE 30, 2014 AND 2013 Description of significant capital and long term debt expenditures The Airport District is currently in the midst of a major terminal renovation with a project budget of about $123 million. The expected completion date is tentatively scheduled at the end of the 2nd quarter, Significant capital expenditures are underway and are reflected in increased Construction In Progress from $22.0 million at June 30, 2013 to $63.0 million at June 30, The Airport District has incurred no additional long-term debt expenditures in either the fiscal year ended June 30, 2014 or June 30, The only expenditures related to long-term debt are those of normal debt service. Changes in Credit Ratings and Debt Limitations The Airport District has an A2 credit rating with a stable outlook from Moody s. There were no changes in our credit ratings or associated debt limitations in either the fiscal years ended June 30, 2014 or June 30, All foreseeable capital projects within a ten year horizon are projected to be funded internally with Airport District reserve funds and/or with FAA grant funds. Looking Ahead Aviation Industry Overview The airline industry is particularly susceptible and sensitive to many variables we find in our world today: Terrorist events, like 9/11 Domestic and global economic conditions Pandemics and other health concerns Aircraft accidents Fleet & maintenance issues / aircraft orders and delays Customer service issues / failures & resultant negative press Extreme volatility of fuel prices Volcanic activity Merger, acquisitions, bankruptcies of airlines Any one of these can impact airline traffic dramatically, as recent experience has abundantly proven. Yet, when you combine these factors in an ever-changing world, you can expect very volatile results. Airlines have attempted to minimize financial losses through these periods of extreme volatility by lowering operating costs, merging, canceling unprofitable routes, charging for baggage/food/etc., and grounding older, less fuel-efficient aircraft. Overall, it appears that many aviation industry prognosticators believe that: Air fares are likely to stay high most of this decade Airline capacity will shrink causing planes to get even more crowded. Passenger miles flown on domestic flights are expected to decrease or remain static this year and grow an average 2.0 per year over the next two decades Over the next two decades, U.S. airline travel is expected to nearly double Further airline consolidation in North America is likely Two of the larger risks facing airlines, especially those in Europe, include rising oil prices and Europe s sovereign debt crisis. 9

28 GREENVILLE SPARTANBURG AIRPORT DISTRICT MANAGEMENT S DISCUSSION AND ANALYSIS JUNE 30, 2014 AND 2013 The Federal Aviation Administration ( FAA s ) Aerospace Forecast for contains the following Forecast Highlights : Since the beginning of the century, the commercial air carrier industry has suffered several major shocks that have led to reduced demand for air travel. These shocks include the terror attacks of September 11, skyrocketing prices for fuel, debt restructuring in Europe and the United States (U.S.), and a global recession. To manage this period of extreme volatility, air carriers have fine-tuned their business models with the aim of minimizing financial losses by lowering operating costs, eliminating unprofitable routes and grounding older, less fuel efficient aircraft. To increase operating revenues, carriers have initiated new services that customers are willing to purchase. Carriers have also started charging separately for services that were historically bundled in the price of a ticket. The capacity discipline exhibited by carriers and their focus on additional revenue streams bolstered the industry to profitability in 2013 for the fourth consecutive year. Going into the next decade, there is cautious optimism that the industry has been transformed from that of a boom-to-bust cycle to one of sustainable profits. As the economy recovers from the most serious economic downturn and slow recovery in recent history, aviation will continue to grow over the long run. Fundamentally, demand for aviation is driven by economic activity. As economic growth picks up, so will growth in aviation demand. The 2014 FAA forecast calls for U.S. carrier passenger growth over the next 20 years to average 2.2 percent per year, unchanged from last year s forecast. After another year of slow growth in 2014, growth over the next five years will be higher than the long run rate as we assume U.S. economic growth accelerates. One of the many factors influencing the muted recovery is the uncertainty that surrounds the U.S. and the global economy. The global economy has been hit by a number of headwinds during the past few years, from recession in Europe to a soft landing in China and inconsistent performance in other emerging economies. This has not helped the pace of U.S. economic growth given the increasing importance of its trade with Europe and the rest of the world. Despite this and the ambiguity surrounding its own fiscal imbalances, the U.S. economy has managed to avoid a double dip recession and trudges along the path of slow recovery. System capacity in available seat miles (ASMs) the overall yardstick for how busy aviation is both domestically and internationally is projected to increase by 1.5 percent this year after posting a 0.8 percent increase in 2013; it will then grow at an average annual rate of 2.7 percent through In the domestic market, capacity growth in 2014 is forecast to be 1.0 percent and then grow at an average annual rate of 2.1 percent for the remainder of the forecast period. Domestic mainline carrier capacity is projected to increase 0.8 percent in 2014 after rising 1.3 percent in For the regional carriers, domestic capacity growth is projected to be 2.2 percent in 2014 after declining 2.8 percent in Commercial air carrier domestic revenue passenger miles (RPMs) are forecast to increase 0.9 percent in 2014, and then grow at an average of 2.2 percent per year through 2034; domestic enplanements in 2014 will increase 0.6 percent, and then grow at an average annual rate of 1.9 percent for the remainder of the forecast period. The average size of domestic aircraft is expected to increase by 1.3 seats in FY 2014 to seats. Average seats per aircraft for mainline carriers are projected to increase by 1.2 seats as network carriers continue to reconfigure their domestic fleets. While demand for seat aircraft continues to increase, we expect the number of 50 seat regional jets in service to fall, increasing the average regional aircraft size in 2014 by 1.4 seats to 57.5 seats per mile. Passenger trip length in all domestic markets will increase by 2.6 miles during the same period. 10

29 GREENVILLE SPARTANBURG AIRPORT DISTRICT MANAGEMENT S DISCUSSION AND ANALYSIS JUNE 30, 2014 AND 2013 The long term outlook for general aviation is favorable even though the slow growth of the U.S. economy, contributed by uncertainties caused by debt ceiling crises, sequestration, government shutdown, and the European recession have affected the near term growth, particularly for the turbo jet sector. While it is slightly lower than predicted last year, the growth in business aviation demand over the long term continues, driven by a growing U.S. and world economy especially in the turbo jet, turboprop, and turbine rotorcraft markets. As the fleet grows, the number of general aviation hours flown is projected to increase an average of 1.4 percent a year through After sputtering in the early part of 2013, both the U.S. and global economies began to show improvement in the latter half of 2013 and appear poised to grow faster in Assuming energy prices remain relatively stable, U.S. carrier profitability should increase as an improving economy in its fifth year of recovery leads to strengthening demand, which coupled with continuing capacity discipline results in higher fares (and increased ancillary revenues). Over the long term, we see a competitive and profitable aviation industry characterized by increasing demand for air travel and airfares growing more slowly than inflation, reflecting over the long term a growing U.S. economy. Source: FAA Forecast Highlights Moody s Investor Service Airport Industry Outlook Moody s has assigned a stable outlook for the short-term (12-18 months) U.S. Airport industry sector. This outlook is summarized in the following press release on December 10, 2013: Global Credit Research - 10 Dec 2013 New York, December 10, The outlook for the US airport industry remains stable as airlines push up enplanements by adding to their total number of seats, says Moody's Investors Service in its "2014 Outlook -- US Airports." As the US economy posts slight gains, Moody's expects enplanements to continue growing. "The first quarter of next year will see the first increase in the number of flights in almost three years," says Earl Heffintrayer, a Moody's Assistant Vice President and Analyst. "The enplanement growth in 2014 will support the additional debt airports have taken on in the past two years." The growth in enplanements, along with de-leveraging at midsize and small airports, will blunt the impact of higher debt service at the large hub airports, says Moody's. Numerous major hubs have taken on more debt to fund terminal renovation projects. Rated airports, excluding combined airport and port enterprises, have issued about $4.7 billion of new debt since the end of fiscal However, approximately $4.4 billion of that was at large hub airports. Moody's calculates total debt service at rated airports will grow from $5.1 billion in fiscal 2013 to a peak of $5.7 billion in fiscal The large hub airports, however, continue to have greater growth in enplanements than smaller hub airports. Moody's changed its outlook for US airports to stable from negative in February The outlook expresses Moody's expectations for the fundamental business conditions in the industry over the next 12 to 18 months. Possible but unlikely events that would probably shift the outlook back to negative include reductions in airline services should oil prices increase above $135 a barrel, and reductions in government operational or grant funding, which would lead to increased debt funding. 11

30 GREENVILLE SPARTANBURG AIRPORT DISTRICT MANAGEMENT S DISCUSSION AND ANALYSIS JUNE 30, 2014 AND 2013 Source: Moody s Investor Service month outlook on US Airport Industry Outlook for US airports remains stable in 2014 December 10, 2013 Greenville Spartanburg International Airport ( GSP ) Outlook Although profitability levels have been strong historically, management is focused on and remains committed to providing increased levels of air service for the surrounding population base. We continue to work diligently towards attracting greater levels of air service for the Upstate region and are ever mindful about posturing ourselves from a competitive standpoint in the face of increased competition from Charlotte and Atlanta. A major project initiative currently underway is a redesign of our aging terminal facilities. This project started in 2012 and has a completion date tentatively scheduled for the 2nd quarter, Management agrees with the FAA forecasts and continues to plan for long-term growth in accordance with local initiatives/demands, planning forecasts, and the approved 2003 Airport Master Plan update. Management s assessment of our long-term forecast continues to be favorable largely due to our lack of debt, competitive airline rates & charges, aggressive air service development efforts, regional economic trends, healthy catchment area/size, and many other factors. Management is committed to providing our customers with the highest level of service possible in these challenging and exciting times and look forward to the future.. 12

31 GREENVILLE SPARTANBURG AIRPORT DISTRICT STATEMENTS OF NET POSITION JUNE 30, 2014 AND ASSETS Current assets: Cash $ 14,517,528 $ 5,809,293 Receivables 583,456 3,089,345 Inventories and prepaid insurance 511, ,698 Investments 46,516,797 73,382,918 Notes receivable - current portion 206, ,475 Total current assets 62,335,921 82,784,729 Restricted assets: Receivables 225, ,824 Investments - held by Trustee 377, ,221 Total restricted assets 603, ,045 Notes receivable - net of current portion 2,034,388 2,240,614 Capital assets - at cost: Land 38,909,689 40,534,358 Buildings and equipment 109,448, ,565,416 Runways 68,012,061 67,846,864 Construction-in-progress 62,776,367 22,048,412 Total capital assets 279,147, ,995,050 Less accumulated depreciation (114,065,630) (131,307,059) Capital assets - net 165,081, ,687,991 Total Assets $ 230,055,083 $ 222,294,379 The accompanying notes to the financial statements are an integral part of this statement. 13

32 GREENVILLE SPARTANBURG AIRPORT DISTRICT STATEMENTS OF NET POSITION JUNE 30, 2014 AND LIABILITIES Current liabilities: Payable from unrestricted assets: Accounts payable and accrued liabilities $ 4,608,487 $ 5,313,729 Unearned credits - current portion 206, ,475 Total payable from unrestricted assets 4,814,713 5,509,204 Payable from restricted assets: Accrued interest payable 97, ,220 Revenue bonds - current portion 280, ,000 Total payable from restricted assets 377, ,220 Total current liabilities 5,192,067 5,875,424 Unearned credits - net of current portion 2,034,388 2,240,614 Long-term employee benefits 802, ,894 Revenue bonds payable - net of current portion 2,575,000 2,855,000 Total liabilities 10,603,696 11,739,932 NET POSITION Net investment in capital assets 162,020, ,377,516 Restricted: Held by Trustee 280, ,003 Contract facility charges 1,650,723 1,477,149 Total restricted 1,930,726 1,737,152 Unrestricted 55,500,408 75,439,779 Total net position $ 219,451,387 $ 210,554,447 The accompanying notes to the financial statements are an integral part of this statement. 14

33 GREENVILLE SPARTANBURG AIRPORT DISTRICT STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION YEARS ENDED JUNE 30, 2014 AND Operating revenues: Airside $ 2,994,349 $ 2,241,484 Space and ground rental 8,011,832 6,526,942 Concessions 12,597,222 12,383,451 Other 2,081,649 1,785,732 Total operating revenues 25,685,052 22,937,609 Operating expenses before loss on disposal of assets and depreciation: Airfield 273,926 26,563 Terminal building 1,725,825 1,782,034 Administrative 4,120,058 3,816,812 Maintenance and operations 3,104,747 2,973,643 Fire and crash department 1,040,878 1,007,352 Security 1,160,393 1,021,931 Other direct expenses 1,653,514 1,660,421 Total operating expenses before loss on disposal of assets and depreciation 13,079,341 12,288,756 Operating income before loss on disposal of assets and depreciation 12,605,711 10,648,853 Net loss on disposal of assets 2,027,434 59,975 Depreciation 10,050,973 9,657,926 Operating income 527, ,952 Nonoperating revenues (expenses): Contract facility charges 318,044 1,514,162 Interest on accounts 55, ,342 Change in fair value of investments (651) 8,822 Interest and other financing costs - net (194,711) (277,148) Nonoperating revenues - net 178,663 1,357,178 Income before capital contributions 705,967 2,288,130 Capital contributions 8,190,973 4,630,642 Increase in net position 8,896,940 6,918,772 Net position: Beginning of year 210,554, ,635,675 End of year $ 219,451,387 $ 210,554,447 The accompanying notes to the financial statements are an integral part of this statement. 15

34 GREENVILLE SPARTANBURG AIRPORT DISTRICT STATEMENTS OF CASH FLOWS YEARS ENDED JUNE 30, 2014 AND Cash flows from operating activities: Cash received from providing services $ 28,190,939 $ 20,313,259 Cash payments to suppliers for goods and services (5,142,380) (3,592,417) Cash payments to employees for services (6,767,704) (6,490,356) Net cash provided by operating activities 16,280,855 10,230,486 Cash flows from capital and related financing activities Acquisition and construction of capital assets (42,517,261) (24,678,922) Net proceeds from sale of investments - held by Trustee (11,134) (11,815) Principal payments on bonds (260,000) (240,000) Interest payment on bonds (203,577) (221,282) Capital contributions 8,190,973 4,630,642 Contract facility charges 306,928 1,519,138 Net cash used in capital and related financing activities (34,494,071) (19,002,239) Cash flows from investing activities Net purchase and maturity of investment securities 26,865,470 9,096,916 Investment income 55, ,341 Net cash provided by investing activities 26,921,451 9,208,257 Net increase in cash 8,708, ,504 Cash: Beginning of year 5,809,293 5,372,789 End of year $ 14,517,528 $ 5,809,293 Reconciliation of operating income to net cash provided by operating activities: Operating income $ 527,304 $ 930,952 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation 10,050,973 9,657,927 Net loss on disposal of capital assets 2,027,434 59,975 Change in assets and liabilities: Trade and other receivables 2,505,889 (2,624,350) Inventories and prepaid insurance (204,216) 120,471 Trade accounts payable and accrued liabilities 1,340,124 2,054,784 Other long-term liabilities 33,347 30,727 Total adjustments 15,753,551 9,299,534 Net cash provided by operating activities $ 16,280,855 $ 10,230,486 The accompanying notes to the financial statements are an integral part of this statement. 16

35 GREENVILLE SPARTANBURG AIRPORT DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014 AND 2013 Note 1 Organization The Greenville-Spartanburg Airport District (the Airport ) is a political subdivision of the State of South Carolina (the State ). Commissioners of the Airport are recommended for appointment by a majority of the Greenville and Spartanburg County Delegations and appointed by the governor of the State. Note 2 Summary of significant accounting and reporting policies Basis of Presentation Due to its organizational structure, the Airport is subject to the application of accounting pronouncements issued by the Governmental Accounting Standards Board ( GASB ). 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 and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash For purposes of the statements of cash flows, certain highly liquid investments (including restricted assets) not otherwise defined as an investment by State of South Carolina statute (see Investments below) with an original maturity of three months or less, are considered to be cash equivalents and are recorded at fair market value. The cash equivalents as of June 30, 2014 and 2013 were $30,093,046 and $52,122,348, respectively. Inventories Inventories are stated at the lower of cost (first-in, first-out method) or market. Investments The Airport s investments, consisting of U.S. Treasury bills and notes at June 30, 2014 and 2013, are carried at fair value. All investments are carried in the Airport s name and held by the dealer/safekeeping agent. Investment maturities are currently spread up to six months in such a fashion that a portion of the portfolio matures each month and, as such, are reported in current assets in the accompanying statements of net assets. Investments Held by Trustee Investments Held by Trustee represent funds held by a trustee under bond indenture agreements as required by provisions of the Series 2001 Bonds. Such trusteed funds include debt service reserve, construction, and principal and interest accounts. These investments consist primarily of U.S. Treasury securities. 17

36 GREENVILLE SPARTANBURG AIRPORT DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014 AND 2013 Note 2 Summary of significant accounting and reporting policies (continued) GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, effective for periods beginning after December 15, 2012, identifies deferred outflows and inflows that are to be separated from assets and liabilities under GASB Statement No. 63 and provides for immediate recognition of certain costs and fees. This standard also provides financial reporting guidance related to the impact of the financial statement elements deferred outflows of resources and deferred inflows of resources, such as changes in the determination of the major fund calculations and limiting the use of the term deferred in financial statement presentations. This statement was implemented during the year beginning July 1, 2013, and had no material impact on the financial statements. Upcoming Pronouncements The GASB has issued several statements which have not yet been implemented by the Airport. Those statements which may have a future impact on the Airport include: GASB Statement No. 68, Accounting and Financial Reporting for Pensions an amendment of GASB Statement No. 27, effective for periods beginning after June 15, 2014, replaces the requirements of Statement No. 27 and No. 50 as they relate to pensions that are provided through pension plans administered as trusts or equivalent arrangements that meet certain criteria. The standard requires government employers to recognize as a liability, for the first time, their long-term obligation for pension benefits. The employer liability is to be measured as the difference between the present value of projected benefit payments to be provided through the pension plan for past periods of service less the amount of the pension plan s fiduciary net position, with obligations for employers with cost sharing plans based on their proportionate share of contributions to the pension plan. The standard also requires more immediate recognition of annual service cost, interest and changes in benefits for pension expense, specifies requirements for discount rates and actuarial methods and changes disclosure requirements. 18

37 GREENVILLE SPARTANBURG AIRPORT DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014 AND 2013 Note 2 Summary of significant accounting and reporting policies (continued) Capital Assets Capital assets are stated at historical cost. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets ranging from 3 to 25 years. The Airport s threshold for capitalization is $10,000. Repair and maintenance costs are expensed when incurred. Changes in accumulated depreciation during 2014 and 2013 are as follows: Fixed Assets Acquired by Other Fixed Total Fixed FAA Grants Assets Assets Accumulated depreciation July 1, 2012 $ 63,555,105 $ 59,342,192 $ 122,897,297 Fiscal year 2013 depreciation 5,522,496 4,135,430 9,657,926 Less 2013 capital asset write-offs (119,265) (1,128,899) (1,248,164) Accumulated depreciation June 30, ,958,336 62,348, ,307,059 Fiscal year 2014 depreciation 5,519,354 4,531,619 10,050,973 Less 2014 capital asset write-offs (7,108,535) (20,183,867) (27,292,402) Accumulated depreciation June 30, 2014 $ 67,369,155 $ 46,696,475 $ 114,065,630 Contract Facility Charge Contract Facility Charges ( CFCs ) are levied by the Airport pursuant to a Memorandum of Understanding signed with the rental car companies serving the Airport. This rate is adjusted from time to time as deemed necessary by airport management in order to cover the related annual expenses. The CFC rate was $4.00 per contract rental day as of June 30, 2013 and Up to the date of beneficial occupancy, April 1, 2003, the amounts received were recorded as non-operating revenues when earned and were to be used for construction of the rental car facility in addition to funding the debt service requirements of the associated Series 2001 Bonds. Subsequent to April 1, 2003, CFCs received are recorded as space and ground rental operating revenue in addition to non-operating revenue related to the continued funding of the related Series 2001 Bonds. The Airport is to receive the CFCs for the term of the related bonds (through fiscal 2020). The Memorandum of Understanding between the Airport and rental car companies serving the Airport also provides for the reimbursement of the construction costs which the Airport funded out of operations. The Airport is to be reimbursed over a 20-year period, payable monthly, including a 5.5 per annum finance charge. Upon receipt, the Airport records such reimbursement as operating revenue in the accompanying statements of revenues, expenses, and changes in net position. The Airport has recorded the total amount of reimbursement outstanding from the rental car companies at June 30, 2014 and 2013, as notes receivable and unearned credits totaling $2,240,614 and $2,436,089, respectively, in the accompanying statements of net position. 19

38 GREENVILLE SPARTANBURG AIRPORT DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014 AND 2013 Note 2 Summary of significant accounting and reporting policies (continued) For the years ended June 30, 2014 and 2013, the Airport has recorded CFCs related to space and ground rental as operating revenue of $1,099,942 and $686,072, respectively, in addition to non-operating revenue consisting of the following: Funding of Series 2001 Bonds $ 463,577 $ 472,443 Reimbursement of Airport-funded construction costs 329, ,460 CFC surplus receipts/(deficit) (474,793) 712,259 $ 318,244 $ 1,514,162 Additionally, as of June 30, 2014 and 2013, the Airport had received but not yet spent CFCs totaling $1,424,783 and $1,262,325, respectively, which are reported as restricted in the accompanying statements of net position until expended. Net Position Net position is classified as net investment in capital assets, restricted and unrestricted. Restricted net position represents constraints on resources that are either externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or imposed by law. Capital Contributions Certain expenditures for airport capital improvements are significantly funded through the Airport Improvement Program ( AIP ) of the Federal Aviation Administration ( FAA ) or from various State allocations or grant programs. Capital funding provided under government grants is considered earned as the related allowable expenditures are incurred. Grants for capital asset acquisition and facility development and rehabilitation are reported in the accompanying statements of revenues, expenses, and changes in net assets, after non-operating revenues (expenses), as capital contributions. Operating Revenues and Expenses All of the Airport s activities relate to the operation of the airport except for the investment of residual cash and investments and financing-related activities. Accordingly, all of the Airport s revenues and expenses, except for investment income and financing-related costs and charges, are classified as operating in the accompanying statements of revenues, expenses, and changes in net assets. Revenue Recognition Airside and space and ground rental revenues consist of amounts received under Airline Operating Agreements with the major airlines serving the Airport, certain fixed fees for nonscheduled airlines and private users of the Airport, and certain fixed fees for other ancillary services provided. The Airline Operating Agreements stipulate that landing fees and space rental revenues will be based on maintenance and operations costs, as defined in the agreements. Additionally, the Series 2000 and 2001 Bonds contain a restrictive covenant which provides that the aggregate of airline fees and charges together with other revenues, including nonairline revenues, for each fiscal year should be sufficient to pay the operating expenses and to make all deposits and payments under bond ordinances. Airside and space and ground rental fees are recognized as revenue when the related services are provided and facilities utilized. 20

39 GREENVILLE SPARTANBURG AIRPORT DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014 AND 2013 Note 2 Summary of significant accounting and reporting policies (continued) Concessions and other revenue consist primarily of rental car, parking, and other ancillary services revenue. Such revenue is generally based on a fixed percentage of tenant revenues subject to certain minimum monthly fees or a fixed fee schedule. Concessions and other revenue are recognized when earned. Other Direct Expenses Other direct expenses consist primarily of the upkeep of the cargo, rental car, and parking lot facilities. Other direct expenses are recognized when incurred. Post-Employment Benefits During the 2010 fiscal year, GSP implemented a new personnel policy in which it will pay for a portion of an eligible retiree s health insurance premiums between ages 60 to 65 who also have at least 10 years of service with GSP. The liability related to this new benefit was not material; however, a liability related to this benefit is included in the long-term employee benefits in the statements of net position. Compensated Absences Employees earn vacation leave at a rate of 80 to 160 hours per year dependent upon length of service. Unused vacation hours can be carried over from year to year up to a maximum of 480 hours and are payable upon termination, resignation, retirement, or death in accordance with the Airport s personnel policy. The noncurrent portion of the accrued liability related to vacation hours is included in long-term employee benefits and the current portion in accrued liabilities in the statements of net position. Regular full-time employees accumulate sick leave at the rate of 96 hours per year and can accrue up to 720 hours. All employees who properly resign, are laid off, or otherwise separated from the Airport in good standing are entitled to be paid 33 of any unused sick balance not to exceed 240 hours. An accrual for sick leave has been made as of June 30, 2014 and has been categorized into a short-term and long-term portion. Sick leave can be taken for medical appointments, personal illness or illness of a member of the immediate family. Sick leave may be used in the determination of length of service for retirement benefit purposes. The noncurrent portion of the accrued liability related to sick leave is included in long-term employee benefits and the current portion in accrued liabilities in the statements of net position. Note 3 Cash and other financial instruments All the cash deposits of the Airport are in a single financial institution and are carried at cost plus interest which approximates fair value. The carrying amount of cash deposits is separately reported as cash in the accompanying statements of net position. These deposits are either insured or collateralized by using one of two methods. Under the Dedicated Method, all deposits are collateralized with securities held by the Airport. Under the Pooling Method, which is a collateral pool, all uninsured deposits are collateralized with securities held by the State Treasurer s agent in the name of the State Treasurer. Airport cash accounts are part of a nightly multi-account sweep with a major financial institution s automated investment system repurchase agreement. The balance of the overnight agreement was $13,202,373 and $7,578,947 as of June 30, 2014 and 2013, respectively. The overnight repurchase agreements are collateralized by the underlying U.S. government securities utilizing the Dedicated Method. Under the dedicated method, the bank custodian is required to pledge specific securities for collateralized balances in excess of the amounts covered by the Federal Depository Insurance Corporation. At June 30, 2014 and 2013, the carrying amount for Airport s cash totaled $17,259,382 and $7,071,618, respectively. Of the Airport s bank balance, $250,000 was covered by federal depository insurance, while the remainder of the Airport s deposits were covered by collateral held under the Dedicated Method. 21

40 GREENVILLE SPARTANBURG AIRPORT DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014 AND 2013 Note 4 Receivables Receivables are recorded at their gross value when earned and are reduced, if applicable, by the estimated portion that is expected to be uncollectible. The allowance for uncollectible amounts, when applicable, is based on collection history, aviation industry trends, and current information regarding the creditworthiness of the tenants and others doing business with the Airport. As of June 30, 2014 and 2013, no allowance for uncollectible amounts was recorded. Receivables (including restricted assets) consisted of the following as of June 30, 2014 and 2013: Trade and contract facility charge $ 583,872 $ 609,981 FAA and other grants - 2,661,168 Interest and other 225,524 33,020 Note 5 Investments $ 809,396 $ 3,304,169 At June 30, 2014 and 2013, the Airport s investment balances, recorded at fair value, were $46,516,797 and $73,382,918, respectively. Of these amounts, at June 30, 2014, $31,423,607 was invested in U.S. Treasury bills and notes and $15,093,190 in the Capital Bank CDARS (Certificate of Deposit Account Registry Service) program. Of these amounts, at June 30, 2013, $46,259,420 was invested in U.S. Treasury bills and notes, $12,052,836 in the South Carolina Local Government Investment Pool program, and $15,070,662 in the Capital Bank CDARS program. All investments held at June 30, 2014 and 2013 have maturities of less than one year and have an AAA rating. In addition, investments with fair values of $377,355 and $366,221 as of June 30, 2014 and 2013, respectively, were held by a trustee. Types of Allowable Investments in accordance with the South Carolina State Statutes and the Airport District s approved investment policy, the following investments are permitted: 1. Checking accounts in U.S. federally insured banks and savings and loans not to exceed federally insured amounts; 2. Money market funds that invest in U.S. Government backed securities; 3. U.S. Treasury Obligations to include U.S. Treasury bills and notes, or any other obligation or security issued by or backed by the full faith and credit of the U.S. Treasury; 4. Federal Agency Obligations including bonds, notes, debentures, or other obligations or securities issued by, or backed by, full faith and credit of any U.S. Government agency or sponsored enterprise. 5. South Carolina Local Government Investment Pool ( SCLGIP ) limited to 25 of investment portfolio. 22

41 GREENVILLE SPARTANBURG AIRPORT DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014 AND 2013 Note 5 Investments (continued) Interest Rate Risk As a means of limiting its exposure to fair value losses arising from rising interest rates, the Airport generally limits a portion of its investment portfolio to maturities of less than 12 months. Also, the Airport s purchases of securities are laddered with staggered maturity dates. Credit Risk The Airport has no written policy regarding credit risk. However, a conservative investment strategy is maintained. Currently, most investments are in T-bills, securities backed by U.S. Treasuries, or deposits which fall within the Federal Deposit Insurance Corporation ( FDIC ) limits. Custodial Credit Risk For an investment, the custodial credit risk is the risk that in the event of the failure of the counterparty, the Airport will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. Since a large majority of the Airport s investments are with the U.S. Treasury Department in the form of T-bills, or other securities backed by the U.S. Treasury, management views custodial credit risk as minimal, and consequently, has no written policy on this particular form of risk. Concentration of Credit Risk The Airport places no limit on the amount that the Airport may invest in any one issuer, with the exception of the 25 limitation on the SCLGIP. All of the Airport s investments are in, or backed by, U.S. Treasury bills and the SCLGIP. Note 6 Capital assets A summary of changes in capital assets during fiscal 2014 and 2013 is as follows: Transfers/ June 30, 2013 Additions Disposals June 30, 2014 Capital assets not being depreciated: Land $ 40,534,358 $ 281,126 $ (1,905,795) $ 38,909,689 Construction-in-process 22,048,412 40,987,236 (259,281) 62,776,367 Total capital assets not being depreciated 62,582,770 41,268,362 (2,165,076) 101,686,056 Capital assets being depreciated: Buildings and equipment 137,565,416 1,083,399 (29,199,823) 109,448,992 Runways 67,846, ,062 47,135 68,012,061 Total capital assets being depreciated 205,412,280 1,201,461 (29,152,688) 177,461,053 Total accumulated depreciation (131,307,059) (10,050,972) 27,292,401 (114,065,630) Net capital assets $ 136,687,991 $32,418,851 $ (4,025,363) $ 165,081,479 23

42 GREENVILLE SPARTANBURG AIRPORT DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014 AND 2013 Note 6 Capital assets (continued) Transfers/ June 30, 2012 Additions Disposals June 30, 2013 Capital assets not being depreciated: Land $ 40,113,111 $ 421,247 $ - $ 40,534,358 Construction-in-process 7,237,846 17,189,207 (2,378,641) 22,048,412 Total capital assets not being depreciated 47,350,957 17,610,454 (2,378,641) 62,582,770 Capital assets being depreciated: Buildings and equipment 127,210,069 7,130,506 3,224, ,565,416 Runways 70,121,168 - (2,274,304) 67,846,864 Total capital assets being depreciated 197,331,237 7,130, , ,412,280 Total accumulated depreciation (122,897,297) (9,657,926) 1,248,164 (131,307,059) Net capital assets $ 121,784,897 $ 15,083,034 $ (179,940) $ 136,687,991 Interest costs charged to expense for the years ended June 30, 2014 and 2013 totaled $194,711 and $213,098, respectively. Note 7 Revenue bonds A summary of the revenue bond changes during fiscal 2014 and 2013 is as follows: Outstanding Net Cash Outstanding Current June 30, 2013 Disbursements June 30, 2014 Portion Revenue bonds: Series 2001B $ 3,115,000 $ (260,000) $ 2,855,000 $ 280,000 Total $ 3,115,000 $ (260,000) $ 2,855,000 $ 280,000 Outstanding Net Cash Outstanding Current June 30, 2012 Disbursements June 30, 2013 Portion Revenue bonds: Series 2001B $ 3,355,000 $ (240,000) $ 3,115,000 $ 260,000 Total $ 3,355,000 $ (240,000) $ 3,115,000 $ 260,000 24

43 GREENVILLE SPARTANBURG AIRPORT DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014 AND 2013 Note 7 Revenue bonds (continued) Series 2001 Bonds In August 2001, the Airport issued $4,990,000 of taxable revenue bonds ( Series 2001B Bonds ). Proceeds of the issuances were used to construct a new rental car facility and related improvements. Interest is payable semiannually on July 1 and January 1. Annual principal installments are due on July 1 and commenced on July 1, The Series 2001B Bonds is composed of serial bonds which bear interest at rates between 4.4 and 6.2 annually. In addition, the Series 2001B Bonds include $3,355,000 of 6.82 term bonds due July 1, Under the terms of the Series 2001 Bonds, the Airport is subject to certain covenants including, but not limited to, limitations on the transfer or sale of assets, limitations on the incurrence of additional indebtedness, maintenance of adequate insurance coverage on property, and maintenance of a minimum level of net revenues, as defined, to aggregate annual debt service. As of June 30, 2014 and 2013, the Airport was in compliance with these restrictive covenants. The future debt service requirements of the Series 2001 Bonds are as follows as of June 30, 2014: Note 8 Unearned credits Principal Interest Total 2015 $ 280,000 $ 194,711 $ 474, , , , , , , , , , , , , ,255, ,933 1,429,933 Total $ 2,855,000 $ 944,911 $ 3,799,911 In accordance with the Rental Car bond resolution, the Airport lent the service center project $3,500,000 plus $400,000 in capitalized interest. $3,900,000 was recorded as a Notes Receivable and Deferred Revenue as of June 30, This amount is being amortized over 20 years at 5.5 and repaid out of CFC funds. The portion that reduced Notes Receivable and Unearned Revenue for the fiscal years ended June 30, 2014 and June 30, 2013, is $195,475 and $185,284, respectively, with a remaining balance of $2,240,614 and $2,436,089, respectively. Note 9 Capital contributions For the years ended June 30, 2014 and 2013, the Airport recognized capital contributions primarily from the FAA totaling $8,190,973 and $4,630,642, respectively, in its statements of revenues, expenses, and changes in net assets. 25

44 GREENVILLE SPARTANBURG AIRPORT DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014 AND 2013 Note 10 Commitments and contingencies The Airport is party to various legal action in the ordinary course of business from time to time. Management believes that such matters will not have a material adverse effect on the Airport s financial condition, results of operations or cash flows. The Airport s ability to derive net revenues from operations depends upon various factors, many of which are not within the control of the Airport. The primary sources of net revenues are parking revenues and the Airline Operating Agreements between the Airport and the airlines. The Airline Operating Agreements provide for the landing fees, terminal rentals, and ramp fees to be charged to the airlines. Should an airline default under the terms of the Airline Operating Agreement, management believes it can take certain actions to mitigate any potential adverse impact. At any point in time, the U.S. economy, excess airline capacity, and industry-wide competition through airfare discounting may create significant constraints on the operations of the airlines. Due to these factors, the financial results of the Airport are largely dependent upon conditions in the national economy and the U.S. airline industry. The scheduled debt service requirements on the 2001 Bonds are guaranteed by third-party insurers. Debt service on the Series 2001 Bonds is insured by Financial Security Assurance, Inc. The ultimate ability of such insurers to meet their obligations with respect to the debt service requirements will be predicated on their future financial condition. Additionally, the Airport receives significant financial assistance from federal governmental agencies in the form of grants and other awards. The disbursement of resources received under such programs generally requires compliance with terms and conditions specified in the grant agreements and is subject to audit by grantor agencies. Management believes the Airport is in compliance with all such terms and conditions. The Airport had entered into commitments for construction contracts for $72,984,931, of which $15,095,471 is outstanding at June 30, Note 11 Pension plan and post retirement benefits All Airport permanent employees are members of the South Carolina Retirement System (the Plan ), a costsharing multiple-employer defined benefit pension plan administered by the Retirement Division of the State Budget and Control Board. The Plan offers retirement and disability benefits, cost of living adjustments on an ad hoc basis, life insurance benefits, and survivor benefits. The Plan s provisions are established under Title 9 of the South Carolina Code of Laws. A Comprehensive Annual Financial Report containing financial statements and required supplementary information for the Plan is issued and is publicly available by writing to the South Carolina Retirement System, P.O. Box 11960, Columbia, South Carolina Plan members were required to contribute 7.5 (8.0 as of July 2014) of their annual covered salary to the Plan, and the Airport contributes 10.6 (10.9 as of July 2014), which is an actuarially determined rate. The Airport s Plan-matching contribution in fiscal years 2014, 2013 and 2012 was approximately $585,900, $533,700 and $464,500, respectively, and equaled the required contributions for those years. The Airport matches 100 of employee contributions to their 401(k) and/or 457 plans up to 5 of the employee s gross income. The Airport s 401(k) matching contribution in the fiscal years ended June 30, 2014 and 2013 was $98,331 and $86,790, respectively. 26

45 GREENVILLE SPARTANBURG AIRPORT DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014 AND 2013 Note 12 Restricted assets Certain proceeds from the Airport s debt service accounts and reserve funds held by their bond trustee, as well as its CFC receipts and receivables not yet spent at year-end, are classified as restricted assets on the statements of net position because their use is limited by applicable bond covenants and concession agreements. The Investments Held by Trustee account is used to represent resources set aside to subsidize potential deficiencies from the Airport s operations that could adversely affect debt service payments. The Cash and Receivables accounts represent contract facility charges that have either been received or earned by the Airport but not yet spent as of June 30, 2014 and These funds are to be used by the Airport to either prepay their 2001 revenue bonds or to fund additional improvements to the rental car facilities at the Airport. Note 13 Risk management The Airport, like other business enterprises, is exposed to various risks including, but not limited to, fire, accident, natural disasters, fraud, torts, error & omissions, environmental incidents, cybercrime, damage/destruction of assets, as well as other causal factors. The following polices are carried by the Airport to protect against such risks and are competitively bid out each year with an insurance brokerage firm: General liability, war risk, non-owned aircraft liability, and hangarkeepers, Commercial Crime (Dishonesty, Forgery, Computer and Funds Transfer Fraud), Public officials liability (Directors & Officers ( D&O ) liability, Professional Liability Insurance), Workers Compensation, Auto comprehensive/collision/liability, Building and personal property, Environmental mitigation, Terminal Improvement Program Builder s Risk, and Inland marine The Airport has not significantly reduced any of its insurance coverage from the prior year, and settled claims have not exceeded the Airport s insurance coverage in the past five years. ***** 27

46 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Commissioners of Greenville-Spartanburg Airport District Greer, South Carolina We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the businesstype activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Greenville Spartanburg Airport District (the Airport ), as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise the Airport s basic financial statements, and have issued our report thereon dated October 20, Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Airport s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Airport s internal control. Accordingly, we do not express an opinion on the effectiveness of the Airport s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Airport s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. 28

47 Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Greenville, South Carolina October 20,

48 INDEPENDENT AUDITOR S REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A 133 To the Commissioners of Greenville-Spartanburg Airport District Greer, South Carolina REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM We have audited Greenville-Spartanburg Airport District s (the Airport ) compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of the Airport s major federal programs for the year ended June 30, The Airport s major federal programs are identified in the summary of auditor s results section of the accompanying schedule of findings and questioned costs. Management s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditor s Responsibility Our responsibility is to express an opinion on compliance for each of the Airport s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the Airport s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the Airport s compliance. Opinion on Each Major Federal Program In our opinion, the Airport complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, REPORT ON INTERNAL CONTROL OVER COMPLIANCE Management of the Airport is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the Airport s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A- 133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Airport s internal control over compliance. 30

49 A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Purpose of this Report The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. Greenville, South Carolina October 20,

50 GREENVILLE SPARTANBURG AIRPORT DISTRICT SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2014 Total Federal Expenditures Grant Status Grant Funds Received from Granting Agency Total Project Costs Incurred July 1, 2013 Cumulative July 1, 2013 July 1, 2013 Cumulative Maximum Project Number and Description CFDA to to to to to Federal (Notes 1 and 2) Number June 30, 2014 June 30, 2014 June 30, 2014 June 30, 2014 June 30, 2014 Participation Department of Transportation - Airport Improvement Program: Grant No Rehabilitate Terminal Building (design) $ - $ 7,992,080 $ - $ 1,064,376 $ 3,770,082 $ 3,770,082 Grant No Rehabilitate Terminal Building - (Constr) Phase I ,868,251-1,596,792 3,565,266 3,565,266 Grant No Rehabilitate Terminal Building - (Constr) Phase II; ,063,727 46,063,727 7,875,621 7,875,621 7,875,621 11,750,913 Rehabilitate Terminal Aprol Transportation Security Administration N/A 120,450 2,117, , ,220 2,037,727 2,102,915 Total $ 46,184,177 $ 64,041,589 $ 7,985,841 $ 10,647,009 $ 17,248,696 $ 21,189,176 See notes to schedule of expenditures of federal awards. 32

51 GREENVILLE SPARTANBURG AIRPORT DISTRICT NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS JUNE 30, 2014 Note 1 Summary of significant accounting policies Basis of Presentation The accompanying schedule of expenditures of federal awards for the year ended June 30, 2014, for projects in effect from August 15, 2011 through June 30, 2014, was prepared using the accrual basis of accounting, taking into consideration costs incurred and payable at year end. Grant Descriptions The Greenville-Spartanburg Airport District (the Airport ) and the Federal Aviation Administration (FAA) entered into the following agreements: a. Grant agreement dated August 15, 2011 (Project # ), provided funds to rehabilitate the Terminal Building. Under the provisions of the grant agreement, the FAA is to reimburse the Airport for 95 of allowable costs (60) not to exceed $3,770,082. b. Grant agreement dated September 13, 2012 (Project # ), provided funds to rehabilitate the Terminal Building. Under the provisions of the grant agreement, the FAA is to reimburse the airport for 90 of the allowable costs (60) not to exceed $3,565,266. c. Grant agreement dated August 13, 2013 and September 5, 2013 (Project # ), provides funds to rehabilitate the Terminal Building. Under the provisions of the grant agreement, the FAA is to reimburse the airport for 90 of the allowable costs (60) not to exceed $11,750,913. The Airport and the Transportation Security Administration (TSA) are parties to a Law Enforcement Officer Agreement dated September 2, 2003, which provides reimbursement for the cost of law enforcement officers at the Airport s passenger screening locations. This agreement was extended multiple times, with the most recent being October 1, 2010 to September 30, Under the provisions of the agreement, the TSA is to reimburse the Airport for 100 of the cost of law enforcement, not to exceed $361,350. Note 2 Status of Projects As of June 30, 2014, the following projects were open: Project # Transportation Security Administration Note 3 Audits Performed by Other Organizations There were no audits performed by other organizations of the Airport s federal award program for the year ended June 30, ****** 33

52 GREENVILLE SPARTANBURG AIRPORT DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS JUNE 30, 2014 Section I. Summary of Auditor s Results Financial Statements Type of auditor s report issued: Unmodified Internal control over financial reporting: Material weakness(es) identified? yes X no Significant deficiency(ies) identified? yes X none reported Noncompliance material to financial statements noted? yes X no Federal Awards Internal control over major programs: Material weakness(es) identified? yes X no Significant deficiency(ies) identified? yes X no Noncompliance material to federal awards: yes X no Type of auditor s report issued on compliance for major programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with Section 510(a) of OMB Circular A-133? yes X no Identification of major programs: CFDA# Program Name Department of Transportation- Airport Improvement Program 34

53 GREENVILLE SPARTANBURG AIRPORT DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS JUNE 30, 2014 Section I. Summary of Auditor s Results (continued) Dollar threshold used to distinguish between type A and type B programs: $ 300,000 Auditee qualified as low-risk auditee? X yes no Section II. Financial Statement Findings No findings reported. Section III. Federal Award Findings and Questioned Costs No findings reported. 35

54 GREENVILLE SPARTANBURG AIRPORT DISTRICT SCHEDULE OF STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS JUNE 30, 2014 Section IV. Summary of Prior Year Findings There were no prior year findings. 36

55 MEMORANDUM TO: FROM: Members of the Airport Commission Jack G. Murrin, VP of Administration & Finance/CFO DATE: November 24, 2014 ITEM DESCRIPTION New Business Item B Audit Committee Recommendation regarding Extension of Auditor contract BACKGROUND Article 7 Certain Covenants of the District, Section 716, of the 1988 GSP Master Bond Resolution mandates that the District shall annually, within 120 days after the close of each Fiscal Year, cause an audit to be made of its books and accounts by an independent and recognized certified public accounting firm. Historically, the District has maintained long-term relationships with their auditors. We were with Arthur Andersen for over 20 years before we moved to Deloitte Touche. We were with Deloitte Touche for 9 years before Dave started at GSP. Upon Dave s arrival, we submitted an RFP for auditing services, and selected our current auditing firm, Cherry Bekaert. Cherry Bekaert was originally awarded a five year contract beginning with the audit of the District s FYE June 30, We are currently in the final year of their contract (FYE June 30, 2015). ISSUES Planning for the award of an auditing contract begins well before any work commences. If we are to change auditing firms, the RFP should be issued and the auditing firm selected no later the first quarter of contract year #1, which, in this case, would be no later than the 3 rd quarter of next year. The main issue to consider is the impact of the Terminal Improvement Program (TIP). Besides becoming very familiar with our accounting systems, policies, and procedures, 2000 GSP Drive, Suite 1 Greer, SC Greenville: Spartanburg: Fax:

56 Greenville-Spartanburg Airport Commission New Business Item B Acceptance of Greenville-Spartanburg International Airport Financial Audit and Schedules of Expenditures for the Fiscal Years Ended June 30, 2012 and 2011 Page 2 the current auditing firm has overseen the TIP program from inception. Bringing a new auditing firm in mid-project will present some challenges, and possibly additional costs. ALTERNATIVES The alternatives are: 1. Submit a new RFP for auditing firms within the next 6 months for a new 5 year contract 2. Extend the contract with our current auditing firms for a period of 3 years 3. Extend the contract with our current auditing firm on a year to year basis FISCAL IMPACT Uncertain if we submit a new RFP, we are not certain what the results will be. In FYE 6/30/201, we paid $54,100 with Deloitte Touche. We submitted the RFP, and selected the low bidder, Cherry Bekaert, for $29,500. The auditing fees by year for Cherry Bekaert have been $29,500 in year #1, $30,400 in year #2, $31,300 in year #3, $31,900 in year #4 (the fye 6/30/2014 just completed), and will be $32,700 next year. As previously mentioned, the low bidder might, because of TIP, and coming in midstream of the project, be significantly higher than remaining with Cherry Bekaert. Cherry Bekaert has represented to us that if granted a contract extension, than the fees will escalate at no more than CPI. RECOMMENDED ACTION Our relationship with Cherry Bekaert has been very favorable. They have consistently delivered on-time, and have exceeded our expectations, going above and beyond what they are contractually obligated to do. Management presented this issue to the Audit Committee on Friday, October 31, 2014 and discussed the alternative solutions. It is the Audit Committee s recommendation that the Airport Commission accept a 3 year extension through the FYE June 30, 2018 audit of our contract with Cherry Bekaert as long as they keep their cost increases at or below CPI (Consumer Price Index) GSP Drive, Suite 1 Greer, SC Greenville: Spartanburg: Fax:

57 MEMORANDUM TO: FROM: Members of the Airport Commission Kevin E. Howell, Vice President/COO DATE: November 24, 2014 ITEM DESCRIPTION - New Business Item C Approval of Final Rankings for GSP Campus Landscape Master Plan BACKGROUND The GSP Campus Landscape Master Plan (LMP) is a budgeted capital project and upon completion will provide Staff and the Commission a planning guide for future improvements on the campus, set goals and the vision for future landscape at GSP and ensure the entire campus property is consistent in quality and type of landscaping. The major objectives of the GSP Campus Landscape Master Plan are: to develop a campus landscape management approach that unifies the entire campus; to establish landscape standards that protect and enhance the image and character of GSP; to develop a planned approach for dealing with the maintenance and replacement of aging and mature trees in key areas such as the primary entrance road, in the terminal parking lots and in the immediate terminal vicinity; to develop a landscape management system that provides an integrated and environmentally sensitive approach that helps the District achieve its goals of environmental sustainability; and to create a companion tool to the GSP Airport Master Plan and GSP Land Use Planning and Development Study, GSP360 Beyond the Runway GSP Drive, Suite 1 Greer, SC Greenville: Spartanburg: Fax:

58 Greenville-Spartanburg Airport Commission New Business Item C Approval of Final Rankings for GSP Campus Landscape Master Plan Page 2 Staff prepared a Request for Proposals (RFP) and asked all three (3) on-call consultants to respond. Proposals were received from AVCON, Michael Baker International and WK Dickson. The Selection Committee (comprised of the President/CEO, VP/COO, Director of Facilities, Properties Manager, Facilities Manager and Grounds Supervisor) reviewed the proposals and ranked them in accordance to the evaluation criteria as outlined in the RFP. The evaluation criteria utilized is shown below: RFP Evaluation Criteria: 1. Previous experience with similar projects and proven management and technical expertise, including specialized experience in campus landscape master planning with institutions and organizations (25 points) 2. Demonstrated performance in providing well-organized, accurate and coordinated planning documents (20 points) 3. Qualifications and experience of staff directly involved in this project (15 points) 4. Proposer s apparent resources, staffing and capacity to meet the needs of this project (10 points) 5. Overall quality and completeness of proposal (10 points) 6. Client reference checks (10 points) 7. Price (10 points) ISSUES In accordance with administrative policy, it is Staff s role to conduct the solicitation process and make a recommendation of a final ranking to the Commission. The Commission has final approval of the ranking. The Committee s recommended final ranking is: 1 W.K. Dickson & Co., Inc. 2 AVCON, Inc. 3 Michael Baker International The Committee recommended WK Dickson as the highest ranked firm on this RFP for the following reasons: the Committee felt the WK Dickson team was the strongest team in terms of previous experience in comparable landscape planning type projects with similar size and scope; the WK Dickson team provided a solid team of local and regional sub consultants with subject matter expertise that covers all of the envisioned scope / 2000 GSP Drive, Suite 1 Greer, SC Greenville: Spartanburg: Fax:

59 Greenville-Spartanburg Airport Commission New Business Item C Approval of Final Rankings for GSP Campus Landscape Master Plan Page 3 subject areas of the LMP and the WK Dickson key team members are comprised of very qualified personnel from firms with adequate time resources and capacity to perform this project. Upon approval of the final rankings, Staff will attempt to negotiate an agreement with the highest ranked firm. In the event an agreement cannot be reached with the highest ranked firm, GSP will formally terminate the negotiations and proceed to negotiate with the second-highest ranked firm and so on. ALTERNATIVES No alternatives are recommended at this time. FISCAL IMPACT Approval of the final ranking itself does not have a direct fiscal impact. However once the rankings are approved Staff will negotiate and finalize a work authorization with the highest ranked firm. The work authorization will be within the project budget of $200, It should be noted that the District does not intend to use the entire budget for the LMP authorization. An important goal of this project it to deliver the planning work as cost efficiently as possible and apply any remaining available funds towards an initial Phase 1 for actual implementation. RECOMMENDED ACTION It is respectfully requested that the Airport Commission resolve to (1) approve the final rankings for the GSP Campus Landscape Master Plan as presented above; (2) authorize Staff to negotiate and finalize agreements with the highest ranked firm (if an acceptable agreement cannot be reached with the highest ranked firm, negotiations will be formally terminated and will then proceed with the next ranked firm and so forth); and (3) authorize the President/CEO to execute all necessary documents GSP Drive, Suite 1 Greer, SC Greenville: Spartanburg: Fax:

60 MEMORANDUM TO: FROM: Members of the Airport Commission David Edwards, President/CEO DATE: November 24, 2014 ITEM DESCRIPTION - New Business Item C Adoption of the Greenville-Spartanburg Airport District Strategic Business Plan BACKGROUND Over the last 12 months, the GSP Airport Commission and GSP Airport District Staff have been working on a Strategic Business Plan for the Greenville Spartanburg Airport District. This Strategic Business Plan will guide both the Airport Commission and Staff over the next six (6) years. ISSUES The Airport Commission should formally adopt the final Strategic Business Plan to solidify the overall business direction for the Airport District. The Airport Commission will be provided will annual performance updates beginning in July ALTERNATIVES No alternatives are recommended at this time. FISCAL IMPACT None specifically identified at this time. However, the costs to achieve specific goals and objectives that are included in the plan will be incorporate into the GSP Airport District s annual operating budget GSP Drive, Suite 1 Greer, SC Greenville: Spartanburg: Fax:

61 Greenville-Spartanburg Airport Commission New Business Item D Adoption of the Greenville-Spartanburg Airport District Strategic Business Plan Page 2 RECOMMENDED ACTION It is respectfully requested that the Airport Commission resolve to adopt the Strategic Business Plan for the Greenville-Spartanburg Airport District GSP Drive, Suite 1 Greer, SC Greenville: Spartanburg: Fax:

62 MEMORANDUM TO: FROM: Members of Airport Commission David Edwards, President/CEO DATE: November 24, 2014 PRESIDENT/CEO S REPORT: A. Aviation Industry Update. B. Terminal Art Program Update. C. Air Service Meeting Update GSP Drive, Suite 1 Greer, SC Greenville: Spartanburg: Fax:

63 MEMORANDUM TO: FROM: Members of the Airport Commission David Edwards, President/CEO DATE: November 24, 2014 ITEM DESCRIPTION Information Section Item A September Traffic Report SUMMARY For September 2014 passenger traffic was up 2.7 over the same month in Cargo traffic was up 12.6 for September 2014 over September Load factors continue to be strong with an overall average of Southwest s load factor was 79.6 for the month, which continues their strong performance trends recently. Providing a look forward into the service levels for December 2014 is a schedule comparison for the month vs the same month last year including flights and seats by airline and non-stop market served. While there were minor adjustments to seat capacity, the largest impact on flights and seats continues to be Southwest s reduction of service to Nashville and the elimination of Cleveland service by United. As such flight capacity is down 6.8 and seats are down at 5.1. [This Area Intentionally Left Blank] 2000 GSP Drive, Suite 1 Greer, SC Greenville: Spartanburg: Fax:

64 Greenville-Spartanburg Airport Commission Information Section Item A September 2014 Traffic Report Page 2 A comparison of the North America National Passenger Traffic Growth Averages for 2014 to GSP s Passenger Traffic Growth is depicted below: Attached are copies of the detailed traffic report for September GSP Drive, Suite 1 Greer, SC Greenville: Spartanburg: Fax:

65 Monthly Traffic Report Greenville-Spartanburg International Airport September 2014 Percentage Percentage Category Sep 2014 Sep 2013 Change *CYTD-2014 *CYTD-2013 Change *MOV *MOV Percentage Change Passenger Traffic Enplaned 81,045 78, , ,990 Deplaned 78,975 76, , ,497 Total 160, , ,413,454 1,380, , , , , ,899,793 1,865, Cargo Traffic (Pounds) Express and Mail Enplaned Deplaned Subtotal 6,242 3, ,955 3, ,197 6, ,437,574 37, ,074 31,285 2,421,648 69, ,447,960 51, ,205 43,617 2,443,165 95, Freight Enplaned Deplaned Subtotal 2,757,998 2,467, ,134,000 1,877, ,891,998 4,344, ,424,185 24,058,928 19,232,231 18,706,039 42,656,416 42,764, ,293,324 32,187,867 25,836,935 26,024,854 58,130,259 58,212, Total 4,900,195 4,351, ,078,064 42,834, ,573,424 58,308, *CYTD = Calendar Year to Date and *Mov12 = Moving Twelve Months. Monday, November 17, 2014 Page 1 of 2

66 Monthly Traffic Report Greenville-Spartanburg International Airport September 2014 Percentage Percentage Category Sep 2014 Sep 2013 Change *CYTD-2014 *CYTD-2013 Change *MOV *MOV Percentage Change Aircraft Operations Airlines Commuter /Air Taxi 987 1,139 1,962 2, ,413 17,127 8,703 18, ,599 23,213 11,810 25, Subtotal 2,949 3, ,540 27, ,812 37, General Aviation ,696 7, ,910 9, Military , Subtotal ,385 8, ,785 10, Total 3,836 4, ,925 35, ,597 47, Fuel Gallons 100LL Jet A (GA) Subtotal Jet A (A/L) Total 4,551 59,117 63,668 2,857 63, , , ,731 22, , , ,834 32, , ,668 66, , , , , ,302,586 7,532, ,886,305 10,403, , , ,831,384 8,164, ,624,796 11,277, *CYTD = Calendar Year to Date and *Mov12 = Moving Twelve Months. Monday, November 17, 2014 Page 2 of 2

67 Scheduled Airline Enplanements, Seats, and Load Factors Greenville-Spartanburg International Airport September 2014 Sep 2014 Sep 2013 Percentage Change *CYTD-2014 *CYTD-2013 Percentage Change Allegiant Air Enplanements 6,026 5, ,150 58, Seats 7,048 6, ,392 62, Load Factor American Airlines Enplanements 3,954 3, ,955 34, Seats 4,288 4, ,104 38, Load Factor Delta Air Lines Enplanements 29,759 27, , , Seats 35,027 36, , , Load Factor Southwest Airlines Enplanements 12,973 14, , , Seats 16,289 23, , , Load Factor Monday, November 17, 2014 *CTYD = Calendar Year to Date and *Mov12 = Moving Twelve Months.

68 Sep 2014 Sep 2013 Percentage Change *CYTD-2014 *CYTD-2013 Percentage Change United Airlines Enplanements 11,456 11, , , Seats 14,044 14, , , Load Factor US Airways Enplanements 16,877 15, , , Seats 18,883 19, , , Load Factor Totals Enplanements Seats Load Factor 81,045 78, , , , , , , Monday, November 17, 2014 *CTYD = Calendar Year to Date and *Mov12 = Moving Twelve Months.

69 Monthly Enplanements By Year Greenville-Spartanburg International Airport Enplanements Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec (Blank) (Blank) (Blank) Monday, November 17, 2014

70 Monthly Seats By Year Greenville-Spartanburg International Airport Seats Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec (Blank) (Blank) (Blank) Monday, November 17, 2014

71 Monthly Load Factors By Year Greenville-Spartanburg International Airport Load Factor Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec (Blank) (Blank) (Blank) Monday, November 17, 2014

72 Total Monthly Passengers By Year Greenville-Spartanburg International Airport Total Passengers Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec (Blank) (Blank) (Blank) Monday, November 17, 2014

73 Scheduled Airline Market Shares (Enplanements) Greenville-Spartanburg International Airport Report Period From September 2014 Through September Allegiant Air American Airlines Delta Air Lines Southwest Airlines United Airlines US Airways Monday, November 17, 2014

74 Airline Flight Completions Greenville-Spartanburg International Airport September 2014 Airline Scheduled Flights Cancellations Due To Field Mechanical Weather Other Total Cancellations Percentage of Completed Flights Allegiant Air Alliance Air Charter American Airlines Ameristar Jet Charter Berry Aviation Delta Air Lines Federal Express Monday, November 17, 2014

75 Airline Scheduled Flights Cancellations Due To Field Mechanical Weather Other Total Cancellations Percentage of Completed Flights Freight Runners Express IFL Group Kalitta Air Kolo Canyons Air Service Martinaire McNeely Charter Service Priority Air Charter Royal Air Freight Southwest Airlines Monday, November 17, 2014

76 Airline Scheduled Flights Cancellations Due To Field Mechanical Weather Other Total Cancellations Percentage of Completed Flights United Airlines UPS US Airways USA Jet Total 1, Monday, November 17, 2014

77 Schedule Weekly Summary Report for all nonstop Passenger (All) flights from GSP for travel December 2014 vs. December 2013 All flights, seats, and ASMs given are per week. Travel Period Dec 2014 Dec 2013 Diff Percent Diff Mktg Al Orig Dest Miles Ops/Week Seats Ops/Week Seats Ops/Week Seats Ops/Week Seats AA GSP DFW , , DL GSP ATL , , DL GSP DTW , , DL GSP LGA (1) (50) (8.3) (8.3) G4 GSP FLL G4 GSP PGD (2) (332) (100.0) (100.0) G4 GSP PIE G4 GSP SFB UA GSP CLE (6) (300) (100.0) (100.0) UA GSP EWR UA GSP IAD ,050 (7) (350) (33.3) (33.3) UA GSP IAH UA GSP ORD , , US GSP CLT , ,957 0 (201) 0.0 (6.8) US GSP DCA US GSP PHL (2) (100) (13.3) (13.3) WN GSP BNA (6) (858) (100.0) (100.0) WN GSP BWI , , WN GSP HOU ,001 (1) (143) (14.3) (14.3) WN GSP MDW , , TOTAL , ,911 (21) (1,164) (6.8) (5.1)

78 MEMORANDUM TO: FROM: Members of the Airport Commission Jack G. Murrin, VP of Administration & Finance/CFO DATE: November 24, 2014 ITEM DESCRIPTION Information Section Item B September Monthly Financial Report SUMMARY Operating Income was up by 7.23 when compared to the budget for Year-to-Date August Operating Expenses were down by over the budgeted amount for the period. Net operating income was up versus the budget through September For the period ending September 2014 which is 3 months of the fiscal year a total of about $3.63 million has been returned to the bottom line in operating income. Attached is a copy of the detailed financial report for September Please recognize that this is a preliminary report, unaudited, and only represents three months of activity resulting in variances from budget which can be quite volatile GSP Drive, Suite 1 Greer, SC Greenville: Spartanburg: Fax:

79 September 30, 2014 FINANCIAL STATEMENT PACKAGE

80 GREENVILLE SPARTANBURG AIRPORT DISTRICT STATEMENT OF NET POSITION Current Month Current Month Current FY Prior FY 9/30/2014 9/30/2013 Assets Cash Accounts 6,832, ,385, Investments-Airport 51,522, ,133, Bond Trustee Assets 117, , Accounts Receivable 591, , Less: Reserve for Doubtful Accts - Net Accounts Receivable 591, , Inventory 173, , Prepaid Insurance 272, , Notes Receivable-RAC District Funds 2,189, ,387, Property, Plant & Equipment (PP&E) 282,174, ,944, Less: Accumulated Depreciation (116,666,617.49) (133,837,900.07) Net PP&E 165,507, ,106, TOTAL ASSETS 227,207, ,763, LESS: Liabilities Accounts Payable 907, , Revenue Bonds Payable 2,618, ,903, Benefit Liability 802, , TOTAL LIABILITIES 4,328, ,497, LESS: Deferred Inflows of Resources Deferred Revenues 2,189, ,387, TOTAL DEFERRED INFLOWS OF RESOURCES 2,189, ,387, NET POSITION Invested in Capital Assets, net of Related Debt 162,932, ,251, Restricted: A/P - Capital Projects - Restricted 73, , Contract Facility Charge 1,645, ,192, Total Restricted: 1,719, ,262, Unrestricted 56,037, ,365, TOTAL NET POSITION 220,689, ,878, Interim Report: Prepared on a "Non-GAAP" Basis for Internal Use only UNAUDITED

81 GREENVILLE SPARTANBURG AIRPORT DISTRICT PROFIT and LOSS STATEMENT FISCAL YEAR TO DATE September 30, 2014 September 30, 2014 Actual Budget Actual - Budget Change INCOME Landing Area: Landing Fees 586, , (11,354.21) Aircraft Parking Fees 92, , , FBO Into-Plane & Fuel Flowage 26, , , Subtotal Landing Area 705, , , Space & Ground Rentals 2,037, ,023, , Auto Parking 2,276, ,052, , (a) Commercial Ground Transportation 25, , (17,191.40) Concessions: Advertising 72, , , Food & Beverage 94, , , Rental Car 833, , , (b) Retail 102, , , Other #DIV/0! Subtotal Concessions 1,102, , , Expense Reimbursements 295, , , Other Income 236, , , (c) Total Operating Income 6,680, ,229, , EXPENSES Salary & Benefits 1,652, ,875, (222,572.68) (d) Professional Services 72, , (38,864.95) (e) Promotional Activities 177, , Administrative 151, , (57,673.21) (f) Insurance 99, , Contractual Services 321, , (148,350.08) (g) Rentals & Leases 7, , (6,515.80) Repairs & Maintenance 58, , (22,097.89) Supplies & Equipment 113, , (58,488.65) (h) Utilities 392, , , (i) Total Operating Expenses 3,047, ,510, (463,186.66) NET OPERATING INCOME 3,633, ,719, , Interim Report: Prepared on a "Non-GAAP" Basis for Internal Use only UNAUDITED

82 GREENVILLE SPARTANBURG AIRPORT DISTRICT REVENUES AND EXPENSES TREND GRAPHS $2.5 CY Historical Operating Revenues (by Month by Year) Millions $2.0 $ $1.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Millions $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 CY Historical Operating Expenses (by Month by Year) $0.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Interim Report: Prepared on a "Non-GAAP" Basis for Internal Use only UNAUDITED

83 September 30, 2014 YTD ACTUAL VS YTD BUDGET FOOTNOTES (a) Auto Parking OVER BUDGET $224, Conservative budgeting (b) Rental Car OVER BUDGET $108, Conservative budgeting (c) Other Income OVER BUDGET $57, Ground handling (charter & non-tenant) 47K over budget YTD - Charter equipment rental 14K over budget YTD (d) Salary & Benefits UNDER BUDGET $222, Timing: Accrued one entire payroll plus two days booked back to June 2014 (e) Professional Services UNDER BUDGET $38, Consulting 29K under budget YTD-timing - Legal 8K under budget YTD-timing (f) Administrative UNDER BUDGET $57, Travel/Training 43K under budget-timing YTD - Dues & Subscriptions 10K under budget YTD (g) Contractual Services UNDER BUDGET $148, Parking Mgmt Agreement Expenses 66K under budget-june 2014 expenses paid in July booked back to June - Janitorial Services 35K under budget YTD - Nursery & Landscaping 13K under budget YTD - Elevator & Escalator 21K under budget YTD (h) Supplies & Equipment UNDER BUDGET $58, Timing: Many of our expenses paid in July were booked back to June for year-end purposes. (i) Utilities OVER BUDGET $91, Cyclic nature-high usage in summer Note: Please recognize that this is a preliminary report, unaudited, and only represents three months of activity, resulting in variances which can be quite volatile. Interim Report: Prepared on a "Non-GAAP" Basis for Internal Use only UNAUDITED

84 Greenville-Spartanburg Airport District September 30, 2014 Issue Maturity Interest Cost Basis or EOM FMV Date Date Rate BOY FMV Par FMV Adj US Treasury UST T-Bill 4-wk 9/4/ /2/ ,999, ,000, ,999, /4/ /2/ ,999, ,000, ,999, /4/ /2/ ,999, ,000, ,999, /11/ /9/ ,999, ,000, ,999, /18/ /16/ ,000, ,000, ,999, (11.11) 9/18/ /16/ ,000, ,000, ,999, (11.11) FRNs 1/31/2014 1/31/ ,998, ,000, ,998, Subtotal-UST 34,998, ,000, $ 34,998, Issue Cost Cumulative Date Basis Yield Balance SC Local Gov Inv Pool: 9/16/2011 2,000, ,000, /17/ ,000, ,000, /26/2013 (6,000,000.00) 6,000, /11/2014 (6,000,000.00) - 4/11/2014 (63,659.16) Add: Life-to-date Interest 63, Subtotal-UST $ - Issue Cost Cumulative Date Basis Yield Balance NBSC: UST T-Bill 1/20/2014 7/24/2014 1,262, ,262, /22/2013 8/21/ , ,986, in-transit adjmt to balance (561,217.00) 1,424, Subtotal-UST $ 1,424, Capital Bank ICS: Issue Cost Cumulative Date Basis Yield Balance 9/20/2011 2,990, ,990, /18/ ,010, ,000, Add: Base Capital Bank non-interest bearing account 10, Add: YTD Interest 88, Less: Fees (45.00) Subtotal-UST $ 15,098, $ 51,522, Total Weighted blended yield = Interim Report: Prepared on a "Non-GAAP" Basis for Internal Use only UNAUDITED

85 GREENVILLE SPARTANBURG AIRPORT DISTRICT Terminal Improvement Project cash basis cash basis cash basis through: 9/30/2014 FYE YTD FYE YTD FYE YTD FYE YTD FYE Budgeted 6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016 Total Skanska $ 9,570,188 $ 35,931,932 $ 4,129,399 $ 49,631,519 RS&H $ 2,916,235 $ 2,650,023 $ 5,566,258 Baker (aka LPA) $ 1,367,784 $ 2,742,449 $ 331,025 $ 4,441,258 Jacobs $ 961,516 $ 885,315 $ 942,348 $ 117,077 $ 2,906,256 RJ Design $ 65,350 $ 220,050 $ 285,400 At&t $ 205,594 $ 205,594 A3 Communications $ 170,341 $ 170,341 Air-Transport IT Services $ 424,339 $ 424,339 G2 Secure Staff $ 8,508 $ 85,979 $ 19,806 $ 114,293 CDW Government $ 1,911 $ 62,649 $ 3,062 $ 67,622 Michael M. Simpson $ 49,696 $ 9,957 $ 59,653 Phoenix Mechanical $ 57,500 $ 57,500 Parsons Brincke $ 50,000 $ 50,000 Project Link $ 42,509 $ 4,946 $ 47,455 McGriff $ 32,890 $ 6,930 $ 39,820 Tidewater Lumber $ 30,434 $ 1,908 $ 468 $ 32,810 I-SYS $ 31,277 $ 31,277 TPM $ 29,212 $ 29,212 Duke Energy $ 22,088 $ 22,088 Source Group $ 21,196 $ 21,196 Other $ 400 $ 57,128 $ 64,692 $ 14,260 $ 136,479 Total $ 123,762,496 $ 3,878,151 $ 14,786,745 $ 40,535,386 $ 5,140,089 $ - $ 64,340,370 Cumulative $ Spent $ 3,878,151 $ 18,664,896 $ 59,200,282 $ 64,340,371 $ 64,340,371 of Budget spent Construction $ 9,635,538 $ 35,934,969 $ 4,238,248 $ 49,808,755 Professional $ 3,877,751 $ 5,002,818 $ 3,667,600 $ 311,039 $ 12,859,207 Owners Reserve $ 400 $ 148,389 $ 932,817 $ 590,802 $ 1,672,408 Total $ - $ 3,878,151 $ 14,786,745 $ 40,535,385 $ 5,140,089 $ - $ 64,340,371 Cumulative $ Spent $ 3,878,151 $ 18,664,896 $ 59,200,281 $ 64,340,371 $ 64,340,371 $ 0 $ 0 $ 0 $ - $ - $ (0) TIP Public Relations Expenses through: 9/30/2014 FYE FYE FYE FYE FYE Budgeted 6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016 Total Crawford Strategies $ 261,000 10,900 61,157 75,948 17, ,604 Launch Something $ 279,730 25,870 90,133 23,045 12, ,704 Total $ 540,730 36, ,290 98,993 30, ,309 Cumulative $ Spent $ 36,770 $ 188,060 $ 287,053 $ 317,309 $ 317,309 of Budget spent RAC CFC Obligations through: 9/30/2014 FYE FYE FYE FYE FYE Budgeted 6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016 Total 189,553 3,055,535 25,862 3,270,950 RS&H 218,800 41,816 5, ,916 Other 56,558 56,558 Total $ 3,495, ,353 3,153,909 31, ,593,424 Cumulative $ Spent $ 408,353 $ 3,562,262 $ 3,593,424 $ 3,593,424 $ 3,593,424 of Budget spent Interim Report: Prepared on a "Non-GAAP" Basis for Internal Use only UNAUDITED

86 GREENVILLE SPARTANBURG AIRPORT DISTRICT Other Operating and Maintenance Reserve Funds FY $ Amount $ Amount Authorized Date Used YTD Emergency Repair/Replacement/Operations Fund $ 750,000 7/23/2014 $ 1,962 LPA Group-Economy Parking Lot drainage issues $ 1,962 $ 748,038 Remaining Reserve Business Development Obligations/Incentives $ 600,000 $ - $ 600,000 Remaining Reserve Interim Report: Prepared on a "Non-GAAP" Basis for Internal Use only UNAUDITED

87 MEMORANDUM TO: FROM: Members of the Airport Commission Kevin Howell, Vice President / COO DATE: November 24, 2014 ITEM DESCRIPTION Information Section Item C November 2014 Development/Project Status Report SUMMARY Terminal Improvement Program (TIP): Status Construction continues on the Enabling Package and Bag Claim / South Bridge Packages. A notice to proceed (NTP) for the Core Phase was issued to SKM effective October 31, Project Budget $125,000, Estimated Completion Date Summer 2016 Enabling: SKM continues to work on several completion items from the Enabling Phase. The contractor also continues to work on Enabling punchlist work and closeout simultaneously. Bag Claim / South Bridge: The Bag Claim / South Bridge Phase continues to progress towards completion as SKM tries to wrap up several completion items. The interior front knee wall is underway as well as the cloud and overhead lighting in Bag Claim and completion of the new entrance/exit vestibules. Exterior work also continues, including glass and canopy installation, landscaping and irrigation, the crossover canopies to both parking garages, signage, PA and lighting located beneath the curbside canopies GSP Drive, Suite 1 Greer, SC Greenville: Spartanburg: Fax:

88 Greenville-Spartanburg Airport Commission Information Section Item C November 2014 Project Status/Update Page 2 SKM is concurrently working on the Pre-Core Package which includes mechanical, electrical and plumbing infrastructure items that are necessary to begin the Core Phase. Pre-Core work is being wrapped up. A Notice to Proceed (NTP) was issued to SKM for the Core effective October 31, South Cargo Modernization Project: Status Bidding Project Budget $1,500, Estimated Completion Date to be determined The South Cargo Modernization Project includes general improvements to a portion of the South Cargo Building. Project bid documents are complete and Staff is beginning the procurement and bidding phase. Bidding is anticipated to be completed in December to allow a January NTP. Facilities Building Expansion Project: Status Construction Phase Project Budget $2,575, Estimated Completion Date to be determined The Facilities Department Building Expansion Project includes construction of an additional building for equipment storage and an addition of an administrative building for the Facilities Department. This project is led by WK Dickson, one of the District s on-call consulting teams. WK Dickson is supported by several local firms, including DP3 for architecture and Seamon Whiteside - Civil, Burdette - Electrical, Peritus Mechanical and MMSA - Structural. Mavin Construction has mobilized and is currently working on site/civil work including stormwater detention and building site preparation. Apron Rehabilitation Project (Year 1): Status Construction Phase Project Budget $2,000, Estimated Completion Date January, GSP Drive, Suite 1 Greer, SC Greenville: Spartanburg: Fax:

89 Greenville-Spartanburg Airport Commission Information Section Item C November 2014 Project Status/Update Page 3 The Apron Rehabilitation Project includes the Year 1 recommended items outlined in the 2012 LPA Apron Pavement Study. Year 1 / priority items included rehabilitation of the Terminal Apron trench drain and the General Aviation Apron taxilane near Stevens. The contractor has completed a majority of the taxilane improvements near Stevens and the general aviation ramp and has completed the terminal apron repairs adjacent to Gates A1, B1, B2 and B3 and the airside garden. Work is currently underway adjacent to gate B-4. Upon completion of the current work area, the contractor will relocate and continue work on the A concourse side. Weather has had minor impacts to the project, but the contractor continues to progress towards completion in late December / early January depending on further weather. Economy Lot Drainage Improvements Project: Status Construction Phase Project Budget $90, Estimated Completion Date December 2014 The Economy Lot Drainage Improvements Project is an Emergency Repair Project that became necessary due to underground water seepage to the surface that is causing pavement deterioration and potentially unsafe conditions for pedestrians in the event of sub-freezing temperatures this winter. Staff worked with Michael Baker Co. to prepare a set of bidding documents and advertised the project for bidding. Capital Construction of Spartanburg was awarded the project and work began the week of November 10. Staff is working with Capital Construction to expedite the work before colder weather enters the area GSP Drive, Suite 1 Greer, SC Greenville: Spartanburg: Fax:

90 MEMORANDUM TO: FROM: Members of the Airport Commission Rosylin Weston, Vice President - Communications DATE: November 24, 2014 ITEM DESCRIPTION Information Section Item D October 2014 Communications Report News Stories Broadcast, Print and Online: WSPA TV 11 Firearms Found, Confiscated at GSP This Year WHNS TV- Hot Sauce, Grenades among Items at GSP Airport WHNS TV- WW II, Korean War Vets Depart GSP to Spend the Day in DC UBJ New to The Street: RJ Rockers Flight Room, Thomas Creek Grill and Hudson Spartanburg Herald-Journal Police Dog at GSP New Releases or Alerts: TSA to Display/Discuss Prohibited Items at GSP Website Statistics: WINGSPAN BLOG 10/01/14-10/31/ Visitors 70 were new visitors 967 pages were viewed by visitors to the blog. The largest spike came as a result of a construction update post Elevatingtheupstate.com 10/01/14-10/31/14 (Mobile Site) 90 Sessions, 72 New Visitors Average Visit Duration 01:27 Minutes Most visitors arrived direct. This means visitors were searching for elevatingtheupstate.com Elevatingtheupstate.com 10/1/14-10/31/ Sessions, 85 New Visitors Average Visit Duration was 02:14 minutes Most visitors arrived by clicking the link located on gspairport.com 2000 GSP Drive, Suite 1 Greer, SC Greenville: Spartanburg: Fax:

91 Greenville-Spartanburg Airport Commission Information Section Item D November, 2014 Communications Report Page 2 GSPAirport.com 10/01/14 10/31/14 85,594 Sessions-76 were new visitors Average Page View per Visit 3.49 Pages Average Duration on-site 01:30 minutes 22,710 Visits to Mobile Site Facebook 10/1/14-10/31/14 62 new Likes 66,354 people have engaged with the GSP Page meaning they clicked on a story or created one Renewals: Terminal Advertising Program Updates: Contract Renewals Thrifty Car Rental at $ per month for 1 year Newly Signed Advertisers Sixt Car Rental at $ per month for 1 year Custard Boutique at $ per month for 1 year Pratt Industries at $ per month for 1 year McBee Station at $ per month for 1 year Customer Service Complaints Summary Too many cars parked curbside in front of the terminal waiting so there was no place for customer to actively load and unload Waited too long for bags to arrive in baggage claim Hotel shuttle too far away from curb Allegiant Air Representative rude, counter not open for ticket sales Thanks Again Rewards Program: 486 Qualified Transactions $ 11, Qualified transactions in dollars and cents $ Average amount per concession transaction $ Average amount per parking transaction Happy Or Not 10/01/14-10/31/14 The Happy Or Not meters were strategically placed at the exits of Thomas Creek Grill and RJ Rockers Flight Room. The screen on each meter had one question for departing customers- How Was Your Visit? The customer was provided with 4 response options, Very Happy, Happy, Not Happy, and Very Unhappy. 2,806 Total Responses 2,271 or 81 Very Happy 243 or 9 Happy 2000 GSP Drive, Suite 1 Greer, SC Greenville: Spartanburg: Fax:

92 MEMORANDUM TO: FROM: Members of the Airport Commission Scott C. Carr, A.A.E., Director Properties and Development DATE: November 24, 2014 ITEM DESCRIPTION Information Section Item E November 2014 Properties and Development Report SUMMARY AirIT Gate Installation Project Status AirIT was onsite installing hardware the week of October 13, Airlines were onsite to complete their software testing the week of October 20, Project Budget $68,000 Completion Date October 31, 2014 The Airport District has contracted with AirIT to extend their Extended Airline System Environment (EASE) from the temporary ticket counters to Gates A7, A9, and B1. This will permit any airline to process passengers through these three gates. As the ongoing terminal apron project continues and upcoming concourse renovations begin, this will allow the Airport District to temporarily relocate airline gates that are impacted by construction activity. Following construction, these gates will be used as shared use gates for airline offschedule operations, charter flights, etc GSP Drive, Suite 1 Greer, SC Greenville: Spartanburg: Fax:

93 Greenville-Spartanburg Airport Commission Information Section - Item E November 2014 Properties and Development Report Page 2 AT&T Communications Line Cutovers Status All of the T1 lines have been cutover to the new demark room. DSL and POTS lines are in the process of being cutover but are 95 complete. AT&T is still working on a few outstanding lines. Project Budget $250,000 Estimated Completion Date November 21, 2014 As part of the TIP, AT&T has installed all new network infrastructure to the new MPOE room. The Airport District is working with tenants to cutover all communications lines on the airport campus from the current MPOE room to the new one. This is required as the present MPOE room will be demolished as part of the upcoming core phase of the TIP. Cargo Modernization Project Phase #1: Status UPS is in the process of finalizing what direction that they want to move forward with on the new facility. A final answer from them is imminent. Project Budget $1,500,000 Estimated Completion Date To Be Determined Project consists of relocating UPS from the south cargo building and ramp to the north cargo ramp and constructing new facilities. The new leasehold area will be sized to handle up to two Boeing aircraft simultaneously, loading and unloading of up to eight 53 foot tractor trailer trucks, and new administrative office and support space. Sprint Wireless Cell Phone Antenna Equipment Upgrade & Capacity Enhancement Project: Status New cabling and telecommunication equipment is in place. Waiting for new fiber optics line easement agreement to be finalized so that installation can begin. Project Budget All costs are being covered by Sprint Wireless. Estimated Completion Date To Be Determined Sprint Wireless is in the process of upgrading the existing antenna equipment located on top of Parking Garage A. The project also includes an increase in network capacity to handle increased call volume in the area and reduce the number of dropped and failed calls GSP Drive, Suite 1 Greer, SC Greenville: Spartanburg: Fax:

94 Greenville-Spartanburg Airport Commission Information Section - Item E November 2014 Properties and Development Report Page 3 The project requires that a new fiber optics line be installed by Spirit Telecom. This new line will begin at the intersection of State Route 14 and GSP Drive and run along GSP Drive up to Parking Garage A GSP Drive, Suite 1 Greer, SC Greenville: Spartanburg: Fax:

95 MEMORANDUM TO: FROM: Members of the Airport Commission Marsha Madore, Human Resources Manager DATE: November 24, 2014 ITEM DESCRIPTION Information Section Item F November, 2014 SUMMARY Monthly Report No injuries in October Calendar Year-to-Date injuries to report 8/8/2014 Doug Ross (Police Department, Police Officer) Intoxicated passenger was resisting arrest. Received hand and jaw contusions. No lost time. 6/3/2014 Nathan Steigel (Police Department, Police Sergeant) Safe rolled onto his foot from a moving dolly. Fractured the right big toe. Lost time = 2 shifts. May, 2014 No injuries to report 4/25/2014 Steve Dunn (Facilities Department, Facilities Technician III Electrical) Crush injury resulting in a fracture of the 4 th finger. Returned to work 6/16/14. 2/20/2014 Butch Mann (Facilities Department, Facilities Technician IV-HVAC) stepped off a ladder wrong and sustained a knee injury returned to work 4/10/14. 2/24/2014 Jonathan Vanderford (Facilities Department, Grounds Technician I) rolled his foot on the curb severely sprained ankle returned to work 3/27/14. 2 Year Historical Annual OSHA Report Submissions: Total Hours Worked by all # OSHA Reportable Work Related # OSHA Reportable Work Related Annual Calendar Year Average # Employees Employees Injuries Illnesses , # Days away from Work 2000 GSP Drive, Suite 1 Greer, SC Greenville: Spartanburg: Fax:

96 Greenville-Spartanburg Airport Commission Information Section Item F Page , GSP Drive, Suite 1 Greer, SC Greenville: Spartanburg: Fax:

97 CUSTOMER SATISFACTION TRACKING RESEARCH 3 rd QUARTER 2014 September 16, 2014 Prepared for: Rosylin Weston Director of Public Relations Greenville-Spartanburg International Airport 2000 GSP Drive, Suite 1 Greer, SC rweston@gspairport.com Prepared by: Research Inc Atlanta Highway Suite 333 Alpharetta, GA kbright@researchincorporated.com

98 TABLE OF CONTENTS INTRODUCTION... 1 METHODOLOGY... 2 SATISFACTION... 4 SUGGESTED IMPROVEMENTS RESPONDENT PROFILE QUESTIONNAIRE... 34

99 INTRODUCTION Greenville Spartanburg (GSP) International Airport desires to deliver top-notch service to Upstate travelers. Towards this end, GSP would like to Measure satisfaction with the services offered at the airport. Identify ways the airport can be improved to better serve traveler needs. Track changes over time. This document presents the findings from a quantitative intercept study conducted quarterly among airline passengers and consumers who visit GSP International Airport to drop off or greet airline passengers. 1

100 METHODOLOGY WHO Airline passengers and consumers visiting the airport to meet or drop off airline passengers. WHAT One-on-one intercepts. WHEN Intercept interviews were conducted on one day of each month on an alternating schedule, comprising two weekdays and one weekend day each quarter. See below. January February March April May June July August September October November December 2014 Q1 Q2 Q3 Q4 Saturday Sunday Monday Sunday Monday Tuesday Wednesday Thursday Saturday Sunday Monday Tuesday 7 am to 10 am 18 10:01 am to 1 pm 18 1:01 pm to 4 pm 18 4:01 pm to 7 pm 18 7:01 pm to 10:00 pm INTERVIEWS Passengers Greeters 5 5 WHERE GSP International Airport. HOW Research Inc. was responsible for research design, report preparation and report presentation. Representatives from GSP had the opportunity to approve questionnaire design and methodology at all stages of the research. Data was verified, coded and tabulated. Findings were analyzed by senior analysts at Research, Inc. 2

101 SATISFACTION 3

102 OVERALL SATISFACTION 1 Airport travelers and meeters/greeters were asked to rate their overall satisfaction with GSP International Airport by using a 1 to 7 scale, with 7 indicating they are very satisfied and 1 meaning they are not satisfied at all. Findings reveal that most (83) airport patrons are very satisfied (a 6 or 7 rating) with GSP International Airport in are somewhat satisfied (a 4 or 5 rating). Only 2 is dissatisfied. VERY SATISFIED ("6" OR "7") 83 SOMEWHAT SATISFIED ("4" OR 5") 15 YEAR-TO-DATE 2014 NOT AT ALL SATISFIED ("1", "2", OR "3") 2 Satisfaction with GSP Airport increased from 2 nd quarter to 3 rd quarter (1200) 2007 (1200) 2008 (1200) QUARTER 2009 (1200) 2010 (1200) 2011 (1200) 2012 (1200) 2013 (1200) YTD 2014 (600) 1 st QTR 2014 (300) 2 nd QTR 2014 (300) 3 rd QTR 2014 (300) VERY SATISFIED ( 6, OR 7 ) RATING RATING SOMEWHAT SATISFIED ( 5, OR 4 ) 5 RATING RATING DISSATISFIED ( 1, 2, OR 3 ) RATING RATING RATING Blue shading indicates a significant difference from the total study at the 95 confidence interval. Yellow shading indicates a significant difference from the previous year at the 95 confidence interval. 1 Please indicate your overall satisfaction with the GSP International Airport by using a 1 to 7 scale. Let a 7 indicate you are extremely satisfied with the airport and a 1 indicate you are not satisfied at all. You can use any number in between. 4

103 OVERALL SATISFACTION 2 (CONTINUED) Satisfaction ratings reveal that people who traveled for leisure purposes are more likely to be very satisfied with GSP International Airport than business travelers. TYPE OF TRAVEL YTD 2014 (900) BUSINESS TRAVELERS (239) LEISURE TRAVELERS (546) COMBO (25)* VERY SATISFIED ( 6 or 7 ) [NET] RATING RATING SOMEWHAT SATISFIED ( 4 OR 5 ) [NET] 5 RATING RATING DISSATISFIED ( 1, 2, OR 3 ) [NET] RATING RATING RATING Blue shading indicates a significant difference from total study at the 95 confidence interval. *Caution: Small base. Consumers 65 years of age and older are more likely than passengers in other age groups to be very satisfied with GSP Airport. AGE YTD 2014 (900) (69) (250) (486) 65+ (64) VERY SATISFIED ( 6 or 7 ) [NET] RATING RATING SOMEWHAT SATISFIED ( 4 OR 5 ) [NET] RATING RATING DISSATISFIED ( 1, 2, OR 3 ) [NET] RATING RATING RATING Blue shading indicates a significant difference from total study at the 95 confidence interval. *Caution: Small base. 2 Please indicate your overall satisfaction with the GSP International Airport by using a 1 to 7 scale. Let a 7 indicate you are extremely satisfied with the airport and a 1 indicate you are not satisfied at all. You can use any number in between. 5

104 OVERALL SATISFACTION 3 Consumers with annual incomes less than $35,000 are most likely to be very satisfied (a rating of 7 ) with the airport than other consumers. INCOME YTD 2014 (900) LESS THAN $35,000 (83) $35,000 TO $74,999 (213) $75,000 OR MORE (497) VERY SATISFIED ( 6 or 7 ) [NET] RATING RATING SOMEWHAT SATISFIED ( 4 OR 5 ) [NET] RATING RATING DISSATISFIED ( 1, 2, OR 3 ) [NET] RATING RATING RATING Blue shading indicates a significant difference from total study at the 95 confidence interval. 3 Please indicate your overall satisfaction with the GSP International Airport by using a 1 to 7 scale. Let a 7 indicate you are very satisfied with the airport and a 1 indicate you are not satisfied at all. You can use any number in between. 6

105 SATISFACTION WITH AIRPORT SERVICES 4 RATING A 6 OR 7 All airport patrons were asked to use a 1 to 7 scale to indicate their satisfaction with GSP International Airport s performance in 12 different areas. Findings reveal that airport patrons are most satisfied with the skycaps and the Welcome Center in They are least likely to be very satisfied with the parking in general and ground transportation. SKYCAPS 100 WELCOME CENTER 97 FRIENDLINESS OF EMPLOYEES SECURITY AT PARKING SPEED OF SERVICE 89 CLEANLINESS 89 SECURITY AT GATES 86 SIGNAGE 85 LANDSCAPING 85 RESTAURANT 79 PARKING 76 GROUND TRANSPORTATION 75 RATING "6" OR "7" ON A "1" TO "7" SCALE YEAR-TO-DATE Please use the same 1 to 7 scale to indicate your satisfaction with the various vendors and services at the GSP International Airport. Note: Respondents who refused to answer this question are excluded from the data. 7

106 SATISFACTION WITH AIRPORT SERVICES 5 RATING A 6 OR 7 Comparisons of 2 nd quarter and 3 rd quarter 2014 performance ratings reveal that satisfaction decreased in 8 of the 12 areas measured. However, note some of the bases are extremely small (15:1194) 2011 (18:1199) QUARTER 2012 (14:1197) 2013 (13:1197) YTD 2014 (8:900) 1 st QTR 2014 (2:300) 2 nd QTR 2014 (4:300) 3 rd QTR 2014 (4:300) SKYCAPS (n=29) WELCOME/INFORMA- TION CENTER (n=68) FRIENDLY EMPLOYEES (n=894) SECURITY AT PARKING (n=12) SPEED OF SERVICE (n=899) CLEANLINESS (n=900) SECURITY AT GATES (n=796) SIGNAGE (n=873) LANDSCAPING (n=831) WINDOWS RESTAURANT (n=58) PARKING (n=611) GROUND TRANSPORTATION (n=8) N=# of respondents answering the question year-to-date. Yellow shading indicates a significant difference from the previous year at the 95 confidence interval. 5 Please use the same 1 to 7 scale to indicate your satisfaction with the various vendors and services at the GSP International Airport. Note: Respondents who refused to answer this question are excluded from the data. 8

107 SATISFACTION WITH AIRPORT SERVICES 6 RATING A 6 OR 7 Passengers who travel for leisure are more likely than business travelers to be very satisfied with most of the airport s services. TYPE OF TRAVEL YTD 2014 (8:900) BUSINESS TRAVELERS (1:161)* LEISURE TRAVELERS (5:360)* COMBO (0:19)* SKYCAPS (n=29) WELCOME/INFORMA-TION CENTER (n=68) FRIENDLY EMPLOYEES (n=894) SECURITY AT PARKING (n=12) SPEED OF SERVICE (n=899) CLEANLINESS (n=900) SECURITY AT GATES (n=796) SIGNAGE (n=873) LANDSCAPING (n=831) WINDOWS RESTAURANT (n=58) PARKING (n=611) GROUND TRANSPORTATION (n=8) *Caution: Small base. N= # of total respondents answering question year-to-date. 6 Please use the same 1 to 7 scale to indicate your satisfaction with the various vendors and services at the GSP International Airport. Note: Respondents who refused to answer this question are excluded from the data. 9

108 SATISFACTION WITH AIRPORT SERVICES 7 This table presents all the performance ratings given for the various services at GSP International Airport in Positively, few customers are dissatisfied (a 1, 2, or 3 rating) with any aspect of the airport s services. YEAR-TO-DATE SKYCAPS (n=29) WELCOME/INFORMA-TION CENTER (n=68) FRIENDLY EMPLOYEES (n=894) SPEED OF SERVICE (n=899) CLEANLINESS (n=900) LANDSCAPING (n=831) GROUND TRANSPORTATION (n=8) SIGNAGE (n=873) SECURITY AT GATES (n=796) SECURITY AT PARKING (n=12) WINDOWS RESTAURANT (n=58) PARKING (n=611) Please use the same 1 to 7 scale to indicate your satisfaction with the various vendors and services at the GSP International Airport. Note: Respondents who refused to answer this question are excluded from the data. 10

109 RESTAURANT/SNACK BAR PURCHASE 8 In 2014, airport patrons were asked if they had visited the restaurant or the snack bar on the second floor on the day they were intercepted. Findings reveal that while 6 dined in the restaurant and 1 visited the snack bar, 93 claim they have not dined in either establishment. NEITHER 93 ATE IN RESTAURANT 6 ATE IN SNACK BAR 1 YEAR-TO-DATE 2014 Passengers who travel for leisure are slightly more likely than business travelers to have visited a food and beverage establishment in TYPE OF TRAVEL 2007 (1200) 2008 (1200) 2009 (1200) 2010 (1200) 2011 (1200) 2012 (1200) 2013 (1200) YTD 2014 (900) BUSINESS TRAVELERS (239) LEISURE TRAVELERS (546) COMBO (25)* ATE IN RESTAURANT TODAY ATE AT SNACK BAR TODAY NEITHER *Caution: Small base. Yellow shading indicates a significant difference from the previous year at the 95 confidence interval. Blue shading indicates a significant difference from total study at the 95 confidence interval. 8 Did you eat in the restaurant or snack bar today? Note: Respondents who refused to answer this question are excluded from the data. 11

110 GATE SNACK BAR PURCHASE 9 In 2014, airport patrons were asked if they had made a purchase from the snack bars in the gate areas. Findings reveal that the majority (86) claim they have not purchased anything from the snack bars. ATE IN NEW SNACK AREA 14 NOT EAT IN NEW SNACK AREA 86 YEAR-TO-DATE 2014 TYPE OF TRAVEL 2007 (1078) 2008 (1080) 2009 (1079) 2010 (1080) 2011 (1080) 2012 (1200) 2013 (1080) YTD 2014 (810) BUSINESS TRAVELERS (239) LEISURE TRAVELERS (546) COMBO (25)* EATEN OR PURCHASED FOOD AT NEW GATE AREA SNACK BAR HAVE NOT EATEN OR PURCHASED FOOD Yellow shading indicates a significant difference from previous year at the 95 confidence interval. Note: This question was added in August Blue shading indicates a significant difference from total study at the 95 confidence interval. *Caution: Small base. 9 Have you eaten or purchased food from the new gate area snack bars? Note: Respondents who refused to answer this question are excluded from the data. 12

111 GATE SNACK BAR SATISFACTION 10 In 2014, airport patrons were asked to use a 1 to 7 scale to indicate their satisfaction with the snack bars in the gate area. Findings reveal that two in three (68) consumers are very satisfied (a rating of 6 or 7 ). VERY SATISFIED ("6" OR "7") 68 SOMEWHAT SATISFIED ("4" OR 5") 23 NOT AT ALL SATISFIED ("1", "2", OR "3") 9 YEAR-TO-DATE 2014 Leisure travelers are more likely to be very satisfied with the gate snack bars than business travelers. TYPE OF TRAVEL YEAR END 2009 (228) YEAR END 2010 (176) YEAR END 2011 (117) YEAR END 2012 (168) YEAR END 2013 (154) YTD 2014 (117) BUSINESS TRAVELERS (31) LEISURE TRAVELERS (80) COMBO (6)* VERY SATISFIED ( 6, OR 7 ) [NET] RATING RATING SOMEWHAT SATISFIED ( 5, OR 4 ) [NET] 5 RATING RATING DISSATISFIED ( 1, 2, OR 3 ) [NET] RATING RATING RATING Yellow shading indicates a significant difference from previous year at the 95 confidence interval. Note: This question was added in August Blue shading indicates a significant difference from total study at the 95 confidence interval. *Caution: Small base. 10 On the same 1 to 7 scale, how would you rate the new gate area snack bar? Note: Respondents who refused to answer this question are excluded from the data. 13

112 SATISFACTION WITH AIRPORT VENDORS 11 RATING A 6 OR 7 Airport patrons were asked to use a 1 to 7 scale to indicate their satisfaction with various airport vendors. Findings reveal that airport patrons were most satisfied with the services provided by Delta, Avis, Budget and Vision (100) in However, note many of the bases are extremely small. DELTA 100 AVIS BUDGET VISION SOUTHWEST NATIONAL/ALAMO HERTZ ENTERPRISE 92 THOMAS GRILL 92 DUNKIN DONUTS 86 US AIRWAYS 74 ALLEGIANT AIR UNITED EXPRESS AMERICAN EAGLE THRIFY 33 RATING "6" OR "7" ON A "1" TO "7" SCALE YEAR-TO-DATE 2014 *Small bases. 11 Please use the same 1 to 7 scale to indicate your satisfaction with each of the following airlines and rental cars that you interacted with today. Note: Respondents who refused to answer this question are excluded from the data. 14

113 SATISFACTION WITH AIRPORT VENDORS 12 RATING A 6 OR 7 (CONTINUED) Satisfaction with the various vendors varies by whether a customer is a business or leisure traveler. Note that leisure travelers tend to be more satisfied in general than business travelers. TYPE OF TRAVEL 2010 (1:406)* 2011 (0:311)* 2012 (0:413)* 2013 (0:346)* YTD 2014 (1:265)* BUSINESS TRAVELERS (1:88)* LEISURE TRAVELERS (0:169)* COMBO (0:8)* DELTA (n=8) AVIS (n=3) VISION (n=1) N/A N/A N/A N/A BUDGET (n=3) SOUTHWEST (N=155) N/A NATIONAL/ALAMO (n=17) HERTZ (n=15) ENTERPRISE (n=12) THOMAS GRILL (n=36) N/A N/A N/A N/A DUNKIN DONUTS (n=7) N/A N/A N/A N/A US AIRWAYS (n=175) ALLEGIANT AIR (n=93) UNITED EXPRESS (n=175) AMERICAN EAGLE (n=87) THRIFTY (n=3) *Caution: Small base. N= # of total respondents answering question year-to-date. 12 Please use the same 1 to 7 scale to indicate your satisfaction with each of the following airlines and rental cars that you interacted with today. Note: Respondents who refused to answer this question are excluded from the data. 15

114 SUGGESTED IMPROVEMENTS 16

115 SUGGESTED IMPROVEMENTS 13 Passengers and greeters were asked how the services at GSP International Airport could be improved to better meet their needs. Their most common suggestion in 2014 is to improve the availability of flights and to improve services. Note that most consumers (71) had no suggestions. IMPROVE FLIGHTS/AIRLINES 9 MORE/BETTER SERVICES 6 MORE SIGNS 4 BETTER CUSTOMER SERVICES BETTER BAGGAGE HANDLING INCREASE PARKING MORE/CLEANER RESTROOMS 1 LOWER PRICES 1 IMPROVE SECURITY 0 ADD COVERED WALKWAYS 0 CLEANER AIRPORT 0 OTHER 5 DON'T KNOW 71 YEAR-TO-DATE How could the products and services at this airport be improved to better serve your needs? 17

116 SUGGESTED IMPROVEMENTS 14 (CONTINUED) When comparing 2 nd quarter 2014 with 3 rd quarter 2014, travelers are more likely to complain about flight cancellations and the need of improved signage this quarter than last quarter (1200) 2010 (1200) QUARTER 2011 (1200) 2012 (1200) 2013 (1200) YTD 2014 (900) 1 st QTR 2014 (300) 2 nd QTR 2014 (300) 3 rd QTR 2014 (300) FLIGHTS/AIRLINES [NET] More direct flights Fewer cancellations/delays Cheaper flights Have accurate flight information More airline affiliation MORE/BETTER SERVICES [NET] More food selection More electrical outlets Place to watch TV/movies Improve food quality More smoking areas More variety stores/services More entertainment in general Maintain facility better MORE SIGNS SHUTTLE FROM PARKING BETTER CUSTOMER SERVICES [NET] Need friendlier customer service More professional customer service Better/faster customer service BETTER BAGGAGE HANDLING INCREASE PARKING ADD COVERED WALKWAYS LOWER PRICES Cheaper parking Food prices too high Lower prices IMPROVE SECURITY MORE/CLEANER RESTROOMS MORE/BETTER SEATING ADD CURBSIDE CHECK-IN/SKY CAPS LONGER RESTAURANT/BAR HOURS OTHER DON T KNOW Yellow shading indicates a significant difference from the previous year at the 95 confidence interval. Blue shading indicates a significant difference from total study at the 95 confidence interval. 14 How could the products and services at this airport be improved to better serve your needs? 18

117 SUGGESTED IMPROVEMENTS 15 (CONTINUED) In 2014, leisure travelers are more likely than business travelers to request more availability of food selection. TYPE OF TRAVEL YTD 2014 (900) BUSINESS TRAVELERS (239) LEISURE TRAVELERS (546) COMBO (25)* FLIGHTS/AIRLINES [NET] More direct flights Fewer cancellations/delays Cheaper flights Have accurate flight information More airline affiliation MORE/BETTER SERVICES [NET] More food selection More electrical outlets Place to watch TV/movies Improve food quality More smoking areas More variety stores/services More entertainment in general Maintain facility better MORE SIGNS SHUTTLE FROM PARKING BETTER CUSTOMER SERVICES [NET] Need friendlier customer service More professional customer service Better/faster customer service BETTER BAGGAGE HANDLING MORE/CLEANER RESTROOMS INCREASE PARKING LOWER PRICES Cheaper parking Food prices too high Lower prices ADD COVERED WALKWAYS IMPROVE SECURITY MORE/BETTER SEATING LONGER RESTAURANT/BAR HOURS ADD CURBSIDE CHECK-IN/SKY CAPS OTHER DON T KNOW Blue shading indicates a significant difference from total study at the 95 confidence interval. *Caution: Small base. 15 How could the products and services at this airport be improved to better serve your needs? 19

118 SUGGESTED IMPROVEMENTS 16 (CONTINUED) A sampling of airport patrons comments when asked how the GSP International Airport could better meet their needs follow. Parking is too expensive. They need to get a free shuttle to the airport from the parking area. They need more outlets for phones and computers. I think they should add more food options. They need to have more food options after security. They need better signage to the baggage claim area. There should be more economy parking. They need to have fewer delays. I would like to see more direct flights. I would like to see more direct flights to Dallas. Update the monitors if there are delays. The customer service people could be friendlier. The staff needs to be friendlier. They need better signage especially to the baggage claim area. There is too much construction. There just seem to be a lot of delays out of this airport. I would like to see more healthy food options. I would like to see more updated airline monitors. The staff should smile more. They never seem to smile. The bathrooms could be cleaned up better. They really needed to be serviced. We need more signage when exiting the plane. They need to get their flights as cheap as Charlotte. 16 How could the products and services at this airport be improved to better serve your needs? 20

119 SUGGESTED IMPROVEMENTS 17 (CONTINUED) They need more direct flights. Parking is too expensive and limited. They should have a shuttle from the parking area. They need more staff especially in TSA. They need more plug-in outlets for computers. They need more signage as far as the food options go. I would like to see more healthy food options. Their pricing needs to be more competitive with Charlotte. They have cheaper flights. The signage should be better. I didn t know they had a Dunkin Donuts. The customer service people at the restaurants need to be more friendly. I d like more direct flights to San Francisco. The signage throughout the airport needs to be improved. I didn t know they offered half the food options they do. There are too many delays in and out of this airport. The bathrooms could be cleaner. They should update the monitors when delays occur. I d like to see cheaper and more direct flights. 17 How could the products and services at this airport be improved to better serve your needs? 21

120 FREE WIRELESS INTERNET SERVICE 18 Nearly two-thirds (61) of airport patrons plan to use the airport s free wireless Internet service. NOT USE SERVICE 39 PLAN TO USE FREE WRELESS SERVICE 61 YEAR-TO-DATE 2014 Business travelers are more likely to plan to use the free wireless Internet service available than leisure travelers. TYPE OF TRAVEL 2009 (1200) 2010 (1200) 2011 (1200) 2012 (1200) 2013 (1200) YTD 2014 (900) BUSINESS TRAVELERS (239) LEISURE TRAVELERS (546) COMBO (25)* PLAN TO USE SERVICE DO NOT PLAN TO USE SERVICE Yellow shading indicates a significant difference from the previous year at the 95 confidence interval. Blue shading indicates a significant difference from total study at the 95 confidence interval. 18 Have you or do you plan to use the free wireless internet service? 22

121 GSP WEBSITE 19 The majority (87) of airport patrons have not visited the airport s website. VISITED THE WEB SITE 13 DID NOT VISIT THE WEB SITE 87 YEAR-TO-DATE 2014 Business travelers are more likely than leisure travelers to have visited GSP s website. TYPE OF TRAVEL 2008 (1080) 2009 (1079) 2010 (1080) 2011 (900) 2012 (1080) 2013 (1080) YTD 2014 (810) BUSINESS TRAVELERS (239) LEISURE TRAVELERS (546) COMBO (25)* VISITED WEB SITE HAVE NOT VISITED WEB SITE Yellow shading indicates a significant difference from the previous year at the 95 confidence interval. Blue shading indicates a significant difference from total study at the 95 confidence interval. 19 Have you visited the GSP airport website? 23

122 FLIGHT RESERVATIONS VIA THE WEB SITE 20 Consumers who claim to have visited GSP Airport s web site were asked if they booked a flight through the site. Findings reveal that only one in ten (10) website visitors have booked a flight through the website. DID NOT BOOK A FLIGHT 90 BOOKED A FLIGHT 10 YEAR-TO-DATE 2014 Business travelers are less likely to book a flight through the airport s website than leisure travelers. TYPE OF TRAVEL 2008 (181) 2009 (238) 2010 (184) 2011 (177) 2012 (169) 2013 (134) YTD 2014 (107) BUSINESS TRAVELERS (41) LEISURE TRAVELERS (64)* COMBO (2)* BOOKED A FLIGHT THROUGH THE WEB SITE HAVE NOT BOOKED A FLIGHT THROUGH WEB SITE Yellow shading indicates a significant difference from the previous year at the 95 confidence interval. Blue shading indicates a significant difference from total study at the 95 confidence interval. *Caution: Small base. 20 Have you booked a flight on the GSP airport web site? 24

123 REASONS FOR NOT BOOKING THROUGH THE WEB SITE 21 Respondents who have visited the GSP web site, but did not book their reservation through the site were asked to explain why they did not book a flight through the website. The most common explanation is that they were unaware they were able to do so. DIDN'T KNOW YOU COULD BUY ONLINE 61 ALREADY PURCHASED TICKET 36 DON'T KNOW 2 YEAR-TO-DATE 2014 *Note: N=96 21 Why not? Why didn t you book your flight through the GSP web site? 25

124 FLIGHT RESERVATION BOOKING METHODS 22 Passengers were asked how they booked their flight today. Findings reveal that the most common method for booking a flight is through the airline s website or a travel agent. AIRLINE WEBSITE 57 TRAVEL AGENT 22 EXPEDIA.COM ORBITZ.COM TRAVELOCITY AIRLINE - PHONE PRICELINE CHEAPTICKETS GSP WEBSITE AMERICAN EXPRESS KAYAK HOTWIRE OTHER DON'T KNOW 3 YEAR-TO-DATE 2014 Business travelers are more likely than leisure travelers to book their reservations through a travel agent. TYPE OF TRAVEL 2009 (1080) 2010 (1080) 2011 (1080) 2012 (1080) 2013 (1080) YTD 2014 (810) BUSINESS TRAVELERS (239) LEISURE TRAVELERS (546) COMBO (25)* AIRLINE WEBSITE TRAVEL AGENT EXPEDIA.COM ORBITZ.COM TRAVELOCITY AIRLINE PHONE PRICELINE.COM CHEAPTICKETS GSP WEB SITE KAYAK HOTWIRE AMERICAN EXPRESS TICKET COUNTER OTHER DON T KNOW Yellow shading indicates a significant difference from the previous year at the 95 confidence interval. Blue shading indicates a significant difference from total study at the 95 confidence interval. 22 How did you book your flight today? 26

125 ORIGINATION 23 Passengers who live in the Greenville/Spartanburg area were asked how many flights they originated from GSP International, Atlanta Hartsfield International and Charlotte-Douglas International Airport in the past year. As expected, local passengers originated most of their flights from GSP International Airport. YEAR-TO-DATE 2014 MEAN NUMBER OF FLIGHTS GSP 8.7 CHARLOTTE-DOUGLAS 5.8 ATLANTA HARTSFIELD 4.4 As expected, the mean number of flights booked at GSP International Airport is highest among business travelers. TYPE OF TRAVEL 2009 MEAN 2010 MEAN 2011 MEAN 2012 MEAN 2013 MEAN YTD 2014 MEAN BUSINESS TRAVELERS MEAN LEISURE TRAVELERS MEAN COMBO MEAN GSP INTERNATIONAL AIRPORT [N=287] CHARLOTTE-DOUGLAS INTERNATIONAL AIRPORT [N=83] ATLANTA HARTSFIELD INTERNATIONAL AIRPORT [N=23] *Caution: Small base. 23 During the past year, about how many flights did you originate from 27

126 REASONS FOR FLIGHT ORIGINATION FROM ATLANTA 24 Passengers most common reasons for originating flights from Atlanta is that Hartsfield International has cheaper flights than GSP, while 58 prefer Hartsfield because the airport has more direct flights. PRICE 63 MORE DIRECT FLIGHTS 58 FLIGHT AVAILABILITY 4 SOMEONE ELSE BOOKED 4 YEAR-TO-DATE 2014 TYPE OF TRAVEL 2007 (85) 2008 (100) 2009 (80) 2010 (54) 2011 (62) 2012 (57) 2013 (50) YTD 2014 (24) PRICE MORE DIRECT FLIGHTS FLIGHT AVAILABILITY SOMEONE ELSE BOOKED FAMILY/BUSINESS IN AREA FEWER CANCELED FLIGHTS AIRLINE PREFERENCE DON T KNOW Note: This question was added in June *Caution: Small base. 24 Why did you originate your trip out of Atlanta instead of GSP International? 28

127 REASONS FOR FLIGHT ORIGINATION FROM CHARLOTTE 25 Passengers most common reason for originating flights from Charlotte instead of GSP is cheaper fares and having more direct flights. PRICE 69 MORE DIRECT FLIGHTS 53 FLIGHT AVAILABILITY FEWER CANCELED FLIGHTS 8 7 SOMEONE ELSE BOOKED FAMILY/BUSINESS IN AREA DON'T KNOW YEAR-TO-DATE 2014 TYPE OF TRAVEL 2007 (54) 2008 (143) 2009 (171) 2010 (172) 2011 (180) 2012 (146) 2013 (144) YTD 2014 (83) PRICE MORE DIRECT FLIGHTS FLIGHT AVAILABILITY FEWER CANCELED FLIGHTS SOMEONE ELSE BOOKED FAMILY/BUSINESS IN ARE AIRLINE PREFERENCE OTHER DON T KNOW Note: This question was added in June *Caution: Small base. 25 Why did you originate your trip out of Charlotte instead of GSP International? Added in June

128 PREFERRED ORIGINATION 26 When asked which of the three airports they would prefer to originate their air travel, the vast majority (96) of travelers say they prefer to originate their flight out of GSP. DOESN'T MATTER 1 ATLANTA HARTSFIELD 1 CHARLOTTE DOUGLAS 2 GSP 96 YEAR-TO-DATE 2014 Leisure passengers are slightly more likely than business passengers to prefer to originate their travel from GSP International Airport. TYPE OF TRAVEL 2008 (586) 2009 (574) 2010 (569) 2011 (584) 2012 (566) 2013 (545) YTD 2014 (384) BUSINESS TRAVELERS (118) LEISURE TRAVELERS (174) COMBO (13)* GSP INTERNATIONAL AIRPORT CHARLOTTE-DOUGLAS INTERNATIONAL AIRPORT ATLANTA-HARTSFIELD INTERNATIONAL AIRPORT DOESN T MATTER Yellow shading indicates a significant difference from the previous year at the 95 confidence interval. *Caution: Small base. 26 Which of the following airports do you prefer to originate your air travel? 30

129 RESPONDENT PROFILE 31

130 RESPONDENT PROFILE The following table compares respondents demographics by quarter. YR END 2008 (1200) YR END 2009 (1200) YR END 2010 (1200) YR END 2011 (1200) AGE YR END 2012 (1200) YR END 2013 (1200) YTD 2014 (900) 1 st QTR 2013 (300) 2 nd QTR 2013 (300) 3 rd QTR 2013 (300) 18 TO TO TO INCOME UNDER $35, $35,000 TO $74, $75, GENDER MALE FEMALE Yellow shading indicates a significant difference from the previous year at the 95 confidence interval. Blue shading indicates a significant difference from total study at the 95 confidence interval. 32

131 QUESTIONNAIRE 33

132 FINISH TIME: : INTERVIEW: [1:4] START TIME: : STUDY: [5:8] MINUTES: DATE: / [9:12] GREENVILLE SPARTANBURG INTERNATIONAL AIRPORT INTERCEPTS Revised May 16, 2008 DAY OF WEEK [15:16] Monday TIME OF DAY [13:14] Tuesday Wednesday a.m. to 10 a.m Thursday :01 a.m. to 1 p.m Friday :01 p.m. to 4 p.m Saturday ;01 p.m. to 7 p.m Sunday :01 p.m. to 10 p.m DATA [17:21] Hello. I am with Research Incorporated, a market research firm. We re conducting a study about the services here at the Greenville Spartanburg International Airport, and I wonder if you d like to participate in a brief interview. Thank you. 1. Why did you come to the airport today? Did you come As an airline passenger To meet, greet or send off an airline passenger [22:23] 2. If you are traveling today, is this trip mainly for ***[32:33]*** Business Travel Leisure/Personal Travel A mix of business and leisure travel Are you (the person you are meeting/greeting/sending off) Beginning your/their trip today in Greenville Ending your/their trip today in Greenville [24:25] 4. About how many round trips did you take during the past year? 1 to to to More than NONE [26:27] 5. About what percentage of those round trips that you took during the past year originated from the Greenville Spartanburg International Airport? [RECORD THREE-DIGIT NUMBER.]... [28:30] 1

133 GREENVILLE SPARTANBURG INTERNATIONAL AIRPORT INTERCEPTS 6. Now, please indicate your overall satisfaction with the Greenville Spartanburg International Airport by using a 1 to 7 scale. Let a 7 indicate you are very satisfied with the airport and a 1 to indicate you are not satisfied at all. You can use any number in between. [RECORD ONE-DIGIT RATING. DON T KNOW = 9. ]... [31] 7. Please use the same 1 to 7 scale to indicate your satisfaction with the airport in the following areas. [RECORD ONE-DIGIT RATING. DON T KNOW = 9. ] RATING Friendliness of airport employees [40] Speed of service from airport employees [41] Signage [42] Cleanliness [43] Landscaping [44] Security checkpoint at the parking deck [45] Security checkpoint at the gates [46] Parking [47] Ground Transportation (Limousine & Taxicab) [48] Welcome/Information Center [49] Restaurant (Windows) [50] Skycaps [51] DATA ONLY 8. Did you eat in the restaurant or snack bar on the second floor today? Restaurant Snack Bar NEITHER *[100:103]* 2

134 GREENVILLE SPARTANBURG INTERNATIONAL AIRPORT INTERCEPTS [SKIP IF A GREETER] 9. Now please use the same 1 to 7 scale to rate your satisfaction with each of the following services that you interacted with today. [RECORD ONE-DIGIT RATING. DON T KNOW = 9. ] RATING Thomas Grill [100] Dunkin Donuts [101] Southwest [103] Vision [104] Enterprise [105] American Eagle [106] Continental [107] Delta [108] Northwest [109] United Express [110] US Airways [111] Hertz [112] Thrifty [113] Budget [114] National/Alamo [115] Avis [116] Hudson News [117] Allegiant Air [118] DATA ONLY [ASK Q.10 & Q.11 TO PASSENGERS ONLY] 10. Using the same 1 to 7 scale, how would you rate the new gate area snack bars?... [119] 11. Have you eaten or purchased food from the new gate area snack bars? Yes... 1 No... 2 [120] [ASK EVERYONE] 12. How could the services at this airport be improved to better serve your needs? [PROBE. RECORD RESPONSE VERBATIM.] **[60:77]** 3

135 GREENVILLE SPARTANBURG INTERNATIONAL AIRPORT INTERCEPTS 13. Have you used or do you plan to use the free wireless internet service now available? YES NO [78:79] [SKIP TO Q.24 IF A GREETER] 14. Have you visited the GSP airport s website? **[122:123]** YES NO... [SKIP TO Q.18] Have you booked a flight on the GSP airport website? YES... [SKIP TO Q.17] NO [124:125] [IF NO IN Q.15 ASK Q.16, THEN SKIP TO Q.18] 16. Why not? [PROBE. RECORD VERBATIM RESPONSE.] [126:135] 17. Using the same 1 to 7 scale, where a 7 is the highest rating you can give and a 1 is the lowest, how would you rate your experience booking your flight on the GSP website? [136] 18. How did you book your flight today? Travel agent Airline reservations - telephone Airline website Expedia.com CheapTickets Other: Don t know [137:138] 19. Do you live in the Greenville/Spartanburg area? Yes No... [SKIP TO Q.25] [139:140] 4

136 GREENVILLE SPARTANBURG INTERNATIONAL AIRPORT INTERCEPTS 20. During the past year, about how many flights did you originated from Atlanta Hartsfield International Airport... [150:152] Charlotte-Douglas International Airport... [153:155] GSP International Airport... [156:158] [IF FLEW OUT OF ATLANTA IN Q. 20, ASK:] 21. Why did you originate your trip out of Atlanta instead of GSP International? [DO NOT READ, RECORD POSITIVE RESPONSES.] [159:168] Price or lowest faire Airline preference Flight availability/# of flights per day Family/business in area Fewer cancelled flights More direct flights/no stop or layover Someone else booked flight Other: Don t know [IF FLEW OUT OF CHARLOTTE IN Q. 20, ASK:] 22. Why did you originate your trip out of Charlotte instead of GSP International? [DO NOT READ, RECORD POSITIVE RESPONSES.] Price or lowest faire Airline preference Flight availability/# of flights per day Family/business in area Fewer cancelled flights More direct flights/no stop or layover Someone else booked flight Other: Don t know [169:178] 23. Which of the following airports do you PREFER to originate your air travel? GSP International Airport Atlanta Hartsfield International Airport Charlotte-Douglas International Airport [DO NOT READ.] Doesn t matter [179:184] Now, a few questions for classification purposes only. 24. What zip code do you live in? ***[142:146]*** 5

137 GREENVILLE SPARTANBURG INTERNATIONAL AIRPORT INTERCEPTS 25. Please stop me when I read your age group. [READ LIST] ***[80:81]*** 18 to to to to to and older [DO NOT READ] REFUSED Please stop me when I read the range that best describes your total household income for the past year. Before taxes and other deductions was it...[read LIST] [82:83] Under $25, $25,000 to $34, $35,000 to $49, $50,000 to $74, $75,000 to $99, More than $100, [DO NOT ASK] REFUSED Gender Male Female [84:85] DATA [86:200] Thank you very much for your time. The Greenville Spartanburg International Airport values your opinion. May I have your name, address and phone number in the event my supervisor would like to verify the interview. NAME PHONE # 6

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