RONALD REAGAN WASHINGTON NATIONAL DULLES TOLL ROAD DULLES METRORAIL WASHINGTON DULLES INTERNATIONAL Metropolitan Washington Airports Authority (MWAA) Andrew Rountree Chief Financial Officer & Vice President of Finance Road Usage Charging and Transportation Finance Summit April 26-28, 2015 Portland, Oregon
Discussion Agenda Introduction to MWAA Aviation Enterprise Ronald Reagan Washing National Airport (DCA) Washington Dulles International Airport (IAD) Dulles Corridor Enterprise Dulles Metrorail Project Dulles Toll Road (DTR) Closing Remarks 2
History Ronald Reagan Washington National Airport Washington Dulles International Airport Dulles Toll Road Dulles Corridor Metrorail 1986 1987 2007/2008 2014 MWAA Created The Airports Authority is created with consent of U.S. Congress by Acts of D.C and the Virginia General Assembly MWAA Operates DCA & IAD MWAA assumed operating responsibility for DCA and IAD under a 50-year lease; subsequently extended through 2067 Control of DTR In 2007, Funding Partners agree to fund capital costs of a 23 mile extension of the WMATA Metrorail system Metrorail Phase 1 Metrorail Phase 1 opened for passenger service in July 2014 VDOT transferred operational and financial control of the Dulles Toll Road to MWAA for a term through 2058 3
Authority s Governance and Management 17-Member Board of Directors Appointing Authority # Members President of the U.S. 3 Governor of Virginia 7 Mayor of Washington D.C. 4 Governor of Maryland 3 Approximately 1,500 staff managed by a Board-appointed CEO MWAA s mission is to plan, provide and actively manage world class access to the global aviation system in a way that anticipates and serves the needs of the National Capital area 4
Washington D.C. Metropolitan Area BWI IAD Dulles Toll Road DCA Estimated Economic Impact of DCA, IAD, DTR and Metrorail Project: Almost 228,000 direct jobs, $7.7 B in labor income, and $1.9 B in taxes for the Metropolitan area Source: MWAA 2012 Economic Impact Study 5
Aviation Enterprise Ronald Reagan Washington National Airport Washington Dulles International Airport 6
Air Service at Dulles International Premier international gateway to the Nation s Capital Dom Intl Total Airlines 21 28 49 Cities 88 43 131 Daily Departures 256 56 312 Source: DIIO, Scheduled Activity as of December 29, 2014 7
2014 Dulles Activity Growth in Region will be accommodated at Dulles The Airports Authority experienced the 5 th consecutive year of system-wide enplanement growth Dulles International served a record 3.5 million international enplaned passengers in 2014 - the 11 th consecutive year of international traffic growth 63% of the enplanements at IAD are originating from the area and will have the opportunity to utilize the rail as an alternative mode of transportation Total Enplanements at IAD (in millions) * Millions 12 10 8 6 4 2-2014 2013 2012 2011 2010 2009 2008 Domestic International 8
Dulles Corridor Enterprise 9
Airports Authority s Responsibilities Under the Permit and Operating Agreement Operate, maintain, and improve the Dulles Toll Road for a 50-year term Segregate toll revenues from other MWAA revenues Design, build, and participate in financing the Dulles Metrorail Project Design, build, and finance the other capital improvements to the Dulles Corridor with VDOT and regional plan approval In order to generate required revenue to meet responsibilities set forth above, set toll rates after public consultation The Airports Authority is fully committed to completing construction of the Metrorail Project and operating the Dulles Toll Road in a fiscally responsible manner that minimizes required toll rate increases 10
Dulles Toll Road 13.43 miles eight-lane limited access highway; VA State Route 267 One mainline and 19 exit ramp toll collection plazas Cash and E-Zpass toll collection with over 80% E-Zpass collection rate A heavy commuter road with 96.5 thousand annual transactions in 2014 11
140 Solid History of DTR Revenue Growth Historical Dulles Toll Road Transactions and Gross Toll Revenue, 1985-2014 120 Transactions Revenues Transactions and Toll Revenues (Millions) 100 80 60 40 20 - * * * * * * 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 From CY2004 to CY2014, toll rates increased up to $2.75 per trip resulting in a $107 million (261%) increase in annual toll revenues. Transactions over this same time period only decreased 15% Transactions and revenues have achieved between 95% and 102% of T&R Study forecast since 2011 Note: Analysis by FY ending June 30 for compatibility with historic VDOT data.; * Indicates a year with toll rate increases Source: VDOT and the Airports Authority, CDM Smith 2014 Final Report 12
Dulles Metrorail Project The Metrorail is a vital project for the Capital Region 23.1-mile extension of 106-mile Metrorail system, with 11 stations added in two phases Project partners are: The Airports Authority* Fairfax County* Loudoun County* Commonwealth of Virginia* Federal Government* Washington Metropolitan Area Transit Authority ( WMATA ) Dulles Toll Road revenues provide a portion of construction funding for the Dulles Metrorail Project and other transportation improvements in the Dulles Corridor * Funding Partners 13
April 2014 - Substantial completion achieved May 2014 - WMATA operational readiness date achieved Metrorail Project Update Phase 1 Silver Line opened for passenger service July 2014 - West Falls Church Yard substantial completion achieved July 2014 - WMATA revenue operations date achieved Some activities extend beyond revenue service date 14
Metrorail Project Update cont d Phase 2 activities have commenced July 2013 - Main Alignment Design- Build Notice to Proceed (NTP) August 2014 - WMATA Rail Yard and Maintenance Facility Design-Build NTP March 2015 - Site Preparation for the WMATA Rail Yard and Maintenance Facility Design-Build Contract Substantial Completion 15
Allocation of Dulles Metrorail Project Costs SOURCES OF CAPITAL FUNDS $ Millions PHASE 1 PHASE 2 (1) RAIL PROJECT BUDGET TIFIA Loan Total % of Total Federal $ 900 $ - $ 900 15.8% Commonwealth of Virginia (2) 252 323 575 10.1% Fairfax County 400 515 915 16.1% 403 Loudoun County - 273 273 4.8% 195 MWAA (Aviation Funds) - 233 233 4.1% - MWAA (Dulles Toll Road) $ 1,354 $ 1,434 $ 2,788 49.0% $ 1,278 TOTAL SOURCES OF FUNDS (3) $ 2,906 $ 2,778 $ 5,684 100.0% $ 1,876 33.0% Fixed amount Fixed percentage of total cost Residual (1) Phase 2 Parking Garages are assumed to be funded directly by the Counties and are not included in the $5.684 billion project budget (2) Does not include $150 million of Commonwealth funds that will be used to pay interest on Dulles Toll Road revenue bonds (3) Totals may not sum due to rounding 16
TIFIA Loan Agreement Update Successfully negotiated and executed a $1.28 billion Loan Executed on August 20, 2014 Provides up to $1.278 billion of Dulles Toll Road financing for Phase 2 of the Metrorail Project Interest rate is 3.21%. Interest does not accrue until Loan proceeds are drawn and no debt service payments are required before April 1, 2019 The first mandatory principal payment is October 1, 2023 and the final maturity is October 1, 2044 The Loan is subject to mandatory prepayment from certain reserves after substantial completion of Phase 2 Total disbursements as of Q1/2015 are approximately $150 million In December 2014, Fairfax and Loudoun Counties executed an additional $598 million in TIFIA Loans which will be used to partially finance their respective Metrorail Project commitments 17
Expected Debt Profile Upon Metrorail Project Completion Ratings $ Millions Ratings Series 2009 Series 2010 Series 2014 TIFIA Loan TOTAL * First Senior A2 / A Current Interest Bonds $198 - - $198 Capital Appreciation Bonds (CABs) - - - - Current Interest Bonds - - $422 $422 Second Senior Baa1 / BBB+ Capital Appreciation Bonds (CABs) $207 $55 - $262 Convertible CABs $158 $138 - $296 Subordinate Junior Baa2 / BBB Baa2 / BBB- Build America Bonds (BABs) $400 - - $400 Current Interest Bonds - - - - Capital Appreciation Bonds (CABs) - - - - Build America Bonds (BABs) - $150 - $150 TIFIA Bonds - - $1,278 $1,278 $963 $343 $422 $1,278 $3,006 * Amounts include bonds issued to fund reserve accounts and issuance costs. Net proceeds for construction total approximately $2.788 billion. 18
Challenges Along The Way Very complex funding plan involving multiple funding partners and multiple agreements Transfer of Dulles Toll Road from Virginia to Operation by MWAA Legal separation among Aviation and Dulles Corridor Activities Establishing the Dulles Toll Road as a stand alone credit for debt issuance Early Rail alignment and cost decisions among funding partners were ultimately settled with US Secretary of Transportation involvement Multiple legal challenges 2007 to present 19
Why it Works Dulles Toll Road as a Metrorail Funding Partner The Dulles Toll Road is seamlessly integrated within a major commuter transportation corridor consisting of the Toll Road itself, the Metrorail extension, the Dulles Access Highway, and Dulles International Airport Toll road revenues are put to use within the Dulles Corridor and with no profit or Return on Equity motives The Dulles Toll Road s participation in the plan of finance for Metrorail enjoys broad political support at all levels of government 20
Reagan National Airport Dulles Metrorail Project Dulles Toll Road Dulles International Airport