Lehigh Valley International Airport Queen City Airport Braden Airpark OPERATING AND CAPITAL BUDGETS APPROVED NOVEMBER 29, 2016

Lehigh Valley International Airport Queen City Airport Braden Airpark 2017 OPERATING AND CAPITAL BUDGETS APPROVED NOVEMBER 29, 2016

SECTION TABLE OF CONTENTS PAGES 1. Table of Contents 1-3 Strategic Framework Organizational Chart 2. 2017 LNAA Budget Summary by Cost Center 4 3. 2017 LVIA Statement of Operating Revenues 5-11 4. 2017 LNAA Operating Expense Budget 12-16 5. 2017 Queen City Airport and Braden Airpark 17 19 Revenue and Expense Budget 6. Insights to Full Time Equivalent (FTE) Information 20-22 7. 2017 Budgeted Month by Month Cash Flow Report 23 25 2017 Uses of Cash 2017 Available Cash 8. Appendix A: 26-36 2017 Airline Rates and Charges Bond Rate Maintenance Covenant 9. Exhibit A: 2017-2021 Capital Improvement Program 37 41 Exhibit B: 2017 Projects - Rated Page 1 of 41

STRATEGIC FRAMEWORK Vision: To be a model aviation system, providing the highest levels of service to our diverse customers while serving as a gateway to the community, region and world. Mission: To plan and provide for the current and future air transportation needs of the greater Lehigh Valley by constructing, maintaining and operating safe, efficient, modern and attractive airport facilities, and to promote reliable, competitively-priced air transportation services and to fulfill this mission in an efficient and cost-effective manner. Strategic Focus Areas Core Values Core Competencies Air Service Integrity Agility Financial Sustainability Respect Automation Customer Experience Trust Collaboration Facilities, Equipment and Teamwork Diversification Infrastructure Operational Safety and Service Innovation Security Organization Governance, Culture and People Humility Communications Strategic Focus Areas Fundamental elements or program areas vital for achieving long-term vision. Core Values Framework for day-to-day decision making / Guides our actions and behaviors. Core Competencies Proficiencies that enable an organization to deliver unique value to customers and stakeholders. Performance Measures Criteria used for the measurement of the results (outcomes) and efficiency of processes, services or programs. November 1, 2016 Page 2 of 41

BOARD OF GOVERNORS AUDITOR SOLICITOR EXECUTIVE DIRECTOR COMMUNICATIONS / PUBLIC INFORMATION OFFICER EXECUTIVE ASSISTANT DIRECTOR FINANCE & ADMINISTRATION DIRECTOR BUSINESS DEVELOPMENT DIRECTOR COMMERCIAL SERVICES DIRECTOR OPERATIONS & SAFETY DIRECTOR PLANNING & PROGRAMMING DIRECTOR INFORMATION SYSTEMS & TECHNOLOGY FINANCE / ACCOUNTING AIR SERVICE DEVELOPMENT FIXED-BASE OPERATOR / GENERAL AVIATION SERVICES AIRPORT OPERATIONS / COMPLIANCE AIRPORT PLANNING LAN / WAN / WIRELESS COMMUNICATIONS HUMAN RESOURCES / PAYROLL ADVERTISING / MARKETING AIRLINE SUPPORT SERVICES ARFF / EMS ENGINEERING DESIGN / CONSTRUCTION CABLE / FIBER INFRASTRUCTURE ASSET / RISK MANAGEMENT STAKEHOLDER RELATIONS / COMMUNITY ENGAGEMENT AIR CARGO SERVICES SECURITY ACCESS / I.D. BADGING PROJECT / GRANT MANAGEMENT AIRSIDE SYSTEMS (FUEL MONITORING, AIRFIELD LIGHTING, RING DOWN) PROCUREMENT COMPLIANCE CUSTOMER EXPERIENCE / VOLUNTEERS PASSENGER SERVICES OPERATIONS CENTER / DISPATCH ENVIRONMENTAL AFFAIRS & SUSTAINABILITY LANDSIDE SYSTEMS (PAGING SYSTEM, MUFIDS, CUTE, 2- WAY RADIO SYSTEM) PARKING / GROUND TRANSPORTATION TERMINAL CONCESSIONS / PROPERTIES / REAL ESTATE DEVELOPMENT QUEEN CITY AIRPORT POLICE / LAW ENFORCEMENT BUSINESS / FINANCE (EMAIL, INTRANET, DOC. MGMT, CELL/LAND TELEPHONY) BRADEN AIRPARK MAINTENANCE / CUSTODIAL SAFETY / SECURITY (CCTV, ACCESS CONTROL, EMERG. PHONES, BADGING, FCR) MAINTENANCE / FACILITIES (CMMS, BUILDING AUTOMATION) Page 3 of 41 PROPOSED 2017

Lehigh Northampton Airport Authority Statement of Income -- LVI, Queen City & Braden Airports Preliminary Budget 2017 LVIA OPERATING REVENUES: 2017 2016 Budget Var Budget Var % 2016 Variance Variance % Budget Projection to Projection to Projection Budget to Budget to Budget A B C D (C/B) E F G (F/E) Airfield 5,045,920 4,595,044 450,876 9.81% 3,831,325 1,214,595 31.70% Terminal 5,591,971 5,375,740 216,231 4.02% 5,845,703 (253,732) (4.34%) Parking and Roadways 4,586,999 4,456,599 130,400 2.93% 4,703,073 (116,074) (2.47%) Aviation Leased Areas 2,410,861 2,541,407 (130,546) (5.14%) 2,426,054 (15,193) (0.63%) Non-Aviation Leased Areas 404,553 230,913 173,640 75.20% 374,469 30,084 8.03% Ground Handling 4,616,122 2,996,783 1,619,339 54.04% 3,009,780 1,606,342 53.37% Aviation Services 3,743,429 3,483,720 259,709 7.45% 3,306,127 437,302 13.23% Advertising 303,114 208,665 94,449 45.26% 306,000 (2,886) (0.94%) Total Revenues 26,702,969 23,888,871 2,814,098 11.78% 23,802,531 2,900,438 12.19% COST OF SALES 2,644,823 2,396,129 248,694 10.38% 2,464,443 180,380 7.32% Net Revenue 24,058,146 21,492,742 2,565,404 11.94% 21,338,088 2,720,058 12.75% LVIA OPERATING EXPENSES: Airfield 4,031,241 3,694,592 336,649 9.11% 3,425,684 605,557 17.68% Terminal 4,671,773 3,898,662 773,111 19.83% 4,584,078 87,695 1.91% Parking and Roadways 1,177,029 1,123,678 53,351 4.75% 1,184,505 (7,476) (0.63%) Aviation Leased Areas 989,722 929,397 60,325 6.49% 1,067,494 (77,772) (7.29%) Non-Aviation Leased Areas 224,215 130,216 93,999 72.19% 167,973 56,242 33.48% Ground Handling 3,792,334 2,772,037 1,020,297 36.81% 2,126,212 1,666,122 78.36% Aviation Services 822,710 737,323 85,387 11.58% 533,271 289,439 54.28% Advertising 110,184 89,166 21,018 23.57% 208,789 (98,605) (47.23%) Administration 3,134,812 2,564,466 570,346 22.24% 2,522,172 612,640 24.29% Total Expenses 18,954,020 15,939,537 3,014,483 18.91% 15,820,178 3,133,842 19.81% LVIA Income (Loss) From Operations 5,104,126 5,553,205 (449,079) (8.09%) 5,517,910 (413,784) (7.50%) OTHER AIRPORTS Queen City Income (Loss) 133,464 192,234 (58,770) (30.57%) 196,563 (63,099) (32.10%) Braden Airpark Income (Loss) (71,806) (79,876) 8,070 (10.10%) 7,051 (78,857) (1118.38%) Events (Loss) (30,000) (69,158) 39,158 (56.62%) 0 (30,000) 0.00% Air Store (Loss) 0 167 (167) (100.00%) 0 0 0.00% Other Airports Inc (Loss) From Operations 31,658 43,367 (11,709) (27.00%) 203,614 (171,956) (84.45%) All Airports Inc (Loss) From Operations 5,135,784 5,596,572 (460,788) (8.23%) 5,721,524 (585,740) (10.24%) NON OPERATING INCOME (EXPENSE): Net Interest (32,001) 4,095 (36,096) (881.47%) (121,651) 89,650 (73.69%) Miscellaneous 30,000 41,278 (11,278) (27.32%) 0 30,000 0.00% Total Non Operating Income (Expense) (2,001) 45,373 (47,374) (104.41%) (121,651) 119,650 (98.36%) Net Income (Loss) Before Depreciation 5,133,783 5,641,945 (508,162) (9.01%) 5,599,873 (466,090) (8.32%) Bond Fund Expense 0 0 0 0.00% 0 0 0.00% Depreciation (Net of Grants) 4,595,077 4,144,388 450,689 10.87% 4,136,919 458,158 11.07% LNAA Net Income (Loss) 538,706 1,497,557 (958,851) (64.03%) 1,462,954 (924,248) (63.18%) Page 4 of 41

LEHIGH-NORTHAMPTON AIRPORT AUTHORITY Lehigh Valley International Airport 2017 BUDGET SUMMARY The 2017 Budgeted Net Income before depreciation is $5,133,783 which is $466,090 (8%) lower than the 2016 Budget and $508,162 (9%) lower than the 2016 Projection. Our debt service ratio is 1.62 which covers our required ratio of 1.57. 2017 OPERATING REVENUE BUDGET Total 2017 Operating Revenue Budget (including Braden & Queen City) of $27,892,691 is $2,827,165 more than the 2016 budget and $2,824,827 higher than the 2016 year end projection. The 2017 Airline Rates and Charges are included in the budget packet. Please note the Airline Rates and Charges revenue will vary slightly from the LNAA budgeted revenue due to the differences in cost center rollups. Details follow for each cost center. AIRFIELD LANDING FEES The calculated 2017 landing fee is $4.94, which is $.16 or 3.1% lower than the 2016 budgeted landing fee. Landed weights include the projected increase in air cargo operations for 2017. The calculation of our landing fee is included in the budget package. APRON PARKING FEES The apron parking requirement for 2017 is $.69 per thousand pounds of landed weight. The projected increase from the 2016 budget is the result of the increased apron use from air cargo and commercial traffic. Apron fees are determined based on a percentage of airfield direct and indirect operating expenses. The calculation of our apron fee is included in the budget packet. For 2017, apron fees will be allocated based on landed weight. The previous allocation method was based on the number of landing and the associated aircraft s wing span. The billing change based on landed weight is more consistent with the industry standard for billing apron fees. Page 5 of 41

TERMINAL RENTS: AIRLINES The 2017 terminal rental rate is calculated at $.12 higher than the 2015 rates. On January 1, 2016, budgeted rates were reduced 5%. Effective January 1, 2017 the rates will be increased 5.5%. The 2017 rate will be $70.86/sq. ft. Additionally, the rate per turn will increase 3.7% to $1,115.86/per turn. The calculations of the terminal rental rate and the per turn fee are included in the budget packet. CONCESSION FEES: Rental car and restaurant/newsstand concession fee revenue was budgeted consistent with the 2016 projection. Although we are estimating a 3% increase in enplaned passengers, revenues were not increased for the rental car concession due to the additional construction work being done on the terminal in early 2017. PARKING AND ROADWAYS PARKING LOT FEES Parking revenue for 2017 is budgeted based on projected increase of enplanements of 3% above the 2016 projection or 2.5% below 2016 budgets. The reduction from the 2016 budget reflects the latest trend including the addition of transportation network companies Uber and Lyft. AVIATION AND NON-AVIATION LEASED AREAS HANGAR RENTS, BUILDINGS, LAND RENTS Overall aviation rents were budgeted slightly lower than the 2016 budget primarily based on the reduction in T-Hangar and land rentals. Building rents reflect projected 2017 full occupancy and the associated CPI increase in the current contracts. GROUND HANDLING AIRCRAFT HANDLING Ground handling revenue will increase by 54% from 2016 projected year-end numbers and 53% higher than the 2016 budget. The additional revenue is due to the increased activity projected for the cargo operation. Page 6 of 41

AVIATION SERVICE GROUP FUEL SALES The 2017 budget projected activity in gross fuel sales reflect increased activity and fuel prices. The 2017 budget is 6% higher than the 2016 projection and 8% higher than the 2016 budget. Into-Plane fees were increased 9% higher than the 2016 projection and 12% higher than the 2016 budget based on the additional activity associated with air cargo. ADVERTISNG ADVERTISING In 2016, the airport brought advertising in-house and advertising was moved to its own cost center. The increase in projected revenue for 2017 reflects the momentum of the airport s advertising efforts. Page 7 of 41

Lehigh Northampton Airport Authority 2017 Statement of Operating Revenues - LVIA Preliminary Budget 2017 2017 2016 Budget Var Budget Var % 2016 Variance Variance % Budget Projection to Projection to Projection Budget to Budget to Budget A B C D (C/B) E F G (F/E) OPERATING REVENUES: Airfield: Landing Fees 4,468,812 4,052,625 416,187 10.27% 3,387,965 1,080,847 31.90% Apron Parking Fees 487,047 418,858 68,189 16.28% 319,800 167,247 52.30% Land Rents 90,060 123,560 (33,500) (27.11%) 123,560 (33,500) (27.11%) Total Airfield Fees 5,045,919 4,595,043 450,876 9.81% 3,831,325 1,214,594 31.70% Terminal: Rent - Airlines 3,421,019 3,229,148 191,871 5.94% 3,532,304 (111,285) (3.15%) Rent - Concession & Other 518,421 471,976 46,445 9.84% 469,443 48,978 10.43% Concession Fee - Rental Cars 1,374,405 1,392,267 (17,862) (1.28%) 1,455,018 (80,613) (5.54%) Concession Fee - Restaurant/Newsstand 220,605 217,336 3,269 1.50% 237,150 (16,545) (6.98%) Concession Fee - Other 27,121 35,003 (7,882) (22.52%) 116,961 (89,840) (76.81%) Utility Fees & Other 30,399 30,009 390 1.30% 34,828 (4,429) (12.72%) Total Terminal Rents 5,591,970 5,375,739 216,231 4.02% 5,845,704 (253,734) (4.34%) Parking and Roadways 4,586,999 4,456,599 130,400 2.93% 4,703,073 (116,074) (2.47%) Aviation Leased Areas: Hangar No. 1 Rent 56,738 56,738 0 0.00% 0 56,738 0.00% Hangar No. 2 Rent 33,995 32,398 1,597 4.93% 27,720 6,275 22.64% Hangar No. 3 Rent 262,589 257,293 5,296 2.06% 258,071 4,518 1.75% Hangar No. 5 Rent 21,112 20,497 615 3.00% 20,496 616 3.01% Hangar No. 7 Rent 276,857 276,356 501 0.18% 313,344 (36,487) (11.64%) Hangar No. 8 Rent 188,007 192,156 (4,149) (2.16%) 231,156 (43,149) (18.67%) Hangar No. 9 Rent 751,848 735,019 16,829 2.29% 739,011 12,837 1.74% Hangar No. 10 Rent 491,989 494,461 (2,472) (0.50%) 473,364 18,625 3.93% T-Hangars 191,610 184,922 6,688 3.62% 201,444 (9,834) (4.88%) Air Cargo Building & Land Rents 100,870 256,129 (155,259) (60.62%) 123,432 (22,562) (18.28%) Ramp, Gatecard and Other Income 35,246 35,439 (193) (0.54%) 38,016 (2,770) (7.29%) Total Aviation Leased Areas 2,410,861 2,541,408 (130,547) (5.14%) 2,426,054 (15,193) (0.63%) Non-Aviation Leased Areas: Building Rents 404,553 230,913 173,640 75.20% 374,469 30,084 8.03% Total Rents 404,553 230,913 173,640 75.20% 374,469 30,084 8.03% Ground Handling and Other 4,616,122 2,996,783 1,619,339 54.04% 3,009,780 1,606,342 53.37% Aviation Services: Gross Fuel Sales 1,361,598 1,281,925 79,673 6.22% 1,259,711 101,887 8.09% Landing Fees 145,588 132,352 13,236 10.00% - 145,588 0.00% Into Plane Fees 2,030,969 1,862,969 168,000 9.02% 1,807,650 223,319 12.35% Hangar & Ramp Rentals 200,927 200,927-0.00% 238,560 (37,633) (15.78%) Miscellaneous Income 4,349 5,547 (1,198) (21.60%) 206 4,143 2011.17% Total Aviation Services 3,743,431 3,483,720 259,711 7.45% 3,306,127 437,304 13.23% Advertising 303,114 208,665 94,449 45.26% 306,000 (2,886) (0.94%) Total Operating Revenue 26,702,969 23,888,870 2,814,099 11.78% 23,802,532 2,900,437 12.19% Cost of Sales 2,644,823 2,396,129 248,694 10.38% 2,464,443 180,380 7.32% Net Operating Revenue 24,058,146 21,492,741 2,565,405 11.94% 21,338,089 2,720,057 12.75% Page 8 of 41

7,000,000 Lehigh-Northampton Airport Authority 2017/2016 LVIA Revenue Budgets 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000-2017 2016 Page 9 of 41

Lehigh-Northampton Airport Authority 2017 Revenue Sources Advertising, $303,114, 1% Aviation Services, $3,743,429, 14% Airlines, $5,045,920, 19% Ground Handling, $4,616,122, 17% Terminal, $5,591,971, 21% Aviation/Non- Aviation Leased, $2,815,414, 11% Parking and Roadways, $4,586,999, 17% Page 10 of 41

4.5 Average Cargo Flights Per Day By Month 4 4 4 4 4 4 4 4 4 4.13 4 4 4.13 3.5 Average Cargo Flights Per Day 3 2.5 2 1.5 1.61 2.23 3.16 2.74 2.07 2 1.33 2 3.19 1 1 1 0.5 0.6 0 0 0 0 0 Flight/Day 2016 Budget 2017 Budget flights/day Page 11 of 41

LEHIGH-NORTHAMPTON AIRPORT AUTHORITY Lehigh Valley International Airport 2017 OPERATING EXPENSE BUDGET Total 2017 Operating Expense Budget (including Braden & Queen City) of $19,398,638 is up $3,145,283 from the 2016 Budget and up $3,074,975 from the year end projection. The changes in some of the major expense categories are detailed below. SALARIES AND WAGES Salaries and wages reflect a 19% increase over the year-end projection and a 22% increase from the 2016 budget. The increase reflects several adjustments: 1. Ground Handling consistent with the (4) projected daily flights for the cargo operation in 2017. 2. 20% increase in FTEs versus 2016 budget. 3. Increases in wages to reflect market competiveness and recent legislative changes. 4. Assumed 3% increase in salary and wages for the Teamsters Union on July 1, 2017. The 3% is an estimate; the current CBA (collective bargaining agreement) ends June 30, 2017. 5. Salary and wage increases of 3.5% for Police on January 1, 2017 and 3.5% increase for Aircraft, Rescue and Firefighting (ARFF) on September 1, 2017; these numbers are per their current CBAs. 6. Non-Union includes a 2.5% increase effective January 1, 2017 and an additional 2.5% merit pool for high performers. EMPLOYEE BENEFITS 2017 Benefits are budgeted at a 25% increase from the 2016 projection and a 9% increase to the 2016 budget. The main contributors were: 1. Workman s compensation contribution of 7.2% of payroll. 2. Pension benefits estimated at 7% of all full time salaries. 3. 20% increase in FTEs versus 2016 budget. 4. An 8% increase in medical insurance premiums. 5. Self- insured unemployment claims estimated at 2.5% of salaries. 6. Employee contributions were increased to 6% in 2017 for non-union employees. The ARFF and Police contributions were increased with their latest CBA. We assumed the Teamsters would contribute similar to the other Unions at the commencement of their new CBA. 7. A rebate of $100,000 from the 2016 medical self-insurance. Page 12 of 41

PROFESSIONAL SERVICES The 2017 budget reflects a 11% increase versus 2016 year-end projections and a 23% increase to the 2016 budget. The increase of professional services is necessary with the Multimodal and other infrastructure improvements in 2017. Additionally, the Authority is planning to conduct an employee compensation analysis to help create a strategic human resource plan for the coming years. LEGAL SERVICES The 2017 Budget reflects a 16% increase from the 2016 year-end projection and a 11% decrease to the 2016 budget. Rates reflect the reduction in legal services with the conclusion of the Willow Brook Farms (WBF) litigation. AUDIT AND FINANCIAL SERVICES The 2017 Budget reflects a 3% decrease from the 2016 year-end projection and a 2% decrease from the 2016 budget. CONTRACT SERVICES The contract services 2017 budget has been increased 20% from the 2016 projection and 50% increase from the 2016 budget. The majority of the increase is due to outside consulting work necessary for environmental compliance, the Multimodal project, other 2017 capital projects, and an average number of snow events for 2017. ADVERTISING EXPENSE The advertising budget is for external affairs, general promotion of the airport and new expenses associated with in house advertising. The 2017 budget is 61% higher than the 2016 projection and 66% higher than the 2016 budget. The increase is consistent with the additional projected advertising revenue. TRAINING AND SEMINARS The training and seminars budget reflects a 69% increase versus the 2016 year-end projection and 16% reduction over the 2016 budget. BUSINESS AND TRAVEL EXPENSES The business and travel expense budget reflect a 48% increase versus the 2016 yearend projections and 4% higher than the 2016 budget. HOSPITALITY The hospitality budget reflects a 33% increase versus the 2016 year-end projection and a 26% in the 2016 budget. The hospitality account was added in 2016 to track the care and welfare of non-staff members. EQUIPMENT RENTAL Equipment rental costs were increased significantly in 2017 to meet the new contract requirements of our cargo operations. The 2017 budget is 35% higher than the year end projection and 196% increase over the 2016 budget. Page 13 of 41

MATERIALS & SUPPLIES Material and supplies increased 22% from the 2016 year-end projections and decreased 19% from the 2016 budget. Material and supplies are directly impacted by the number of snow events during the year. In 2016, there was only one significant snow storm. MAINTENANCE & REPAIRS Maintenance & Repairs budget has decreased 5% from the 2016 year-end projections and increased 16% from the 2016 budget. Maintenance and repair costs remain high due to age of the Authority s equipment. The two largest cost center budgets are airfield and terminal maintenance. In the airfield, marking paint and lighting repairs are major items. In the terminal, infrastructure repairs are the major items. UTILITIES Overall heating gas and oil, electricity, and water were budgeted at approximately an 6% increase versus the 2016 year-end projection. INSURANCE The 2017 budget reflects increases in police, public officials, crime, and automobile insurance. PAYMENT IN LIEU OF TAXES Required payments to Catasauqua School District and Hanover Township equal 10% of our parking revenue and 2017 is budgeted accordingly. INTEREST EXPENSE Interest expense reflects a 56K over 2016 year end projections. The additional interest is due to the hangar construction loan expected to be closed on the next few months. CREDIT CARD FEES Credit card fees are incurred on sales of fuel and other FBO services, as well as parking lot revenue and will vary proportionately with the revenue. Page 14 of 41

Lehigh Northampton Airport Authority 2017 Budgeted Statement of Operating Expenses - LVIA Preliminary Budget 2017 OPERATING EXPENSES: 2017 2016 Budget Var Budget Var % 2016 Variance Variance % Budget Projection to Projection to Projection Budget to Budget to Budget A B C D (C/B) E F G (F/E) Salaries and Wages 7,812,161 6,568,371 1,243,790 18.94% 6,401,547 1,410,614 22.04% Payroll Taxes 597,630 502,110 95,520 19.02% 489,718 107,912 22.04% Employee Benefits 3,241,352 2,595,503 645,849 24.88% 2,978,151 263,201 8.84% Subtotal 11,651,143 9,665,984 1,985,159 20.54% 9,869,416 1,781,727 18.05% Professional Services 437,060 392,880 44,180 11.25% 355,571 81,489 22.92% Legal Services 181,000 156,420 24,580 15.71% 204,120 (23,120) (11.33%) Audit and Financial Services 110,000 113,773 (3,773) (3.32%) 108,000 2,000 1.85% Public Relations 46,500 35,877 10,623 29.61% 53,500 (7,000) (13.08%) Contract Services 852,165 708,128 144,037 20.34% 569,689 282,476 49.58% Advertising Expense 327,614 203,642 123,972 60.88% 197,240 130,374 66.10% Printing 18,910 12,864 6,046 47.00% 12,850 6,060 47.16% Postage 5,340 3,687 1,653 44.83% 5,935 (595) (10.03%) Dues and Subscriptions 104,465 83,110 21,355 25.69% 76,461 28,004 36.63% Office Supplies 51,290 47,177 4,113 8.72% 41,881 9,409 22.47% Telephone 103,238 89,053 14,185 15.93% 90,177 13,061 14.48% Training and Seminars 113,455 67,170 46,285 68.91% 135,450 (21,995) (16.24%) Business and Travel Related 84,008 56,548 27,460 48.56% 80,591 3,417 4.24% Hospitality 25,325 18,987 6,338 33.38% 20,148 5,177 25.69% Equipment Rental 1,313,330 972,814 340,516 35.00% 443,235 870,095 196.31% Materials & Supplies 477,196 391,293 85,903 21.95% 588,141 (110,945) (18.86%) Maintenance Repairs 724,286 761,030 (36,744) (4.83%) 623,416 100,870 16.18% Heating Gas and Oil 345,096 306,855 38,241 12.46% 447,748 (102,652) (22.93%) Electricity 648,667 615,897 32,770 5.32% 615,908 32,759 5.32% Water 98,228 91,654 6,574 7.17% 95,914 2,314 2.41% Refuse Collection 44,069 44,086 (17) (0.04%) 41,340 2,729 6.60% Uniforms 60,310 38,437 21,873 56.91% 59,299 1,011 1.70% Insurance 420,156 375,977 44,179 11.75% 371,621 48,535 13.06% Real Estate Taxes 108,949 108,950 (1) (0.00%) 90,618 18,331 20.23% Payment in Lieu of Taxes 448,300 437,886 10,414 2.38% 470,158 (21,858) (4.65%) Interest Expense * 74,001 17,795 56,206 315.85% 121,651 (47,650) (39.17%) Credit Card Fees 157,199 143,777 13,422 9.34% 142,400 14,799 10.39% Bad Debt Expense 0 0 0 0.00% 0 0 0.00% Miscellaneous 40,630 31,913 8,717 27.31% 44,340 (3,710) (8.37%) Total Operating Expenses 19,071,930 15,993,664 3,078,266 19.25% 15,976,818 3,095,112 19.37% Allocated to QC (25,482) (21,085) (4,397) 20.85% (20,306) (5,176) 25.49% Allocated to Braden (18,426) (15,246) (3,180) 20.86% (14,683) (3,743) 25.49% Total Operating Expenses after Allocation 19,028,022 15,957,333 3,070,689 19.24% 15,941,829 3,086,193 19.36% *Interest Expense is included in Net Interest under Non-operating Income (Expense) on the Summary Page 15 of 41

Lehigh-Northampton Airport Authority 2017/2016 Expense Budgets 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 2017 2016 Page 16 of 41

Queen City Airport and Braden Airpark Queen City Airport We assumed revenue to be flat versus the 2016 projection and a (4%) decrease from the 2016 budget. Fuel costs expect to go up 5% versus the 2016 projection. We improved the allocation of the labor cost between LVIA, Queen City, and Braden Airpark. The 2017 budget includes an average cost for snow events and an increase in infrastructure. Braden Airpark We assumed revenue to increase 6% versus the 2016 projection and a (14%) decrease from the 2016 budget. Fuel costs expect to go up 5% versus the 2016 projection. We improved the allocation of the labor cost between LVIA, Queen City, and Braden Airpark. The 2017 budget includes an average cost for snow events and an increase in infrastructure. Page 17 of 41

Lehigh Northampton Airport Authority Queen City Preliminary Budget 2017 2017 2016 Budget Var Budget Var % 2016 Variance Variance % Budget Projection to Projection to Projection Budget to Budget to Budget A B C D (C/B) E F G (F/E) Revenue: Hanger & Ramp Rentals 472,983 472,808 175 0.04% 453,912 19,071 4.20% Fuel Sales-FBO 560,407 558,700 1,707 0.31% 623,857 (63,450) (10.17%) Pilot Supplies Sales 16 16 0 0.00% 2,221 (2,205) (99.28%) Miscellaneous Income 750 750 0 0.00% 2,221 (1,471) (66.23%) Total Revenue 1,034,156 1,032,274 1,882 0.18% 1,082,211 (48,055) (4.44%) Cost of Sales: Fuel Cost 342,410 326,103 16,307 5.00% 375,112 (32,702) (8.72%) Hanger Parts & Goods Sold 1,572 1,362 210 15.42% 2,484 (912) (36.71%) Labor costs 289,632 280,585 9,047 3.22% 276,497 13,135 4.75% Total Cost of Sales 633,614 608,050 25,564 4.20% 654,093 (20,479) (3.13%) Net Operating Revenue 400,542 424,224 (23,682) (5.58%) 428,118 (27,576) (6.44%) Operating Expenses: Salaries & Wages 50,435 38,772 11,663 30.08% 24,782 25,653 103.51% Payroll Taxes 3,858 2,966 892 30.07% 1,896 1,962 103.48% Employee Benefits 24,631 7,863 16,768 213.25% 13,732 10,899 79.37% Subtotal 78,924 49,601 29,323 59.12% 40,410 38,514 95.31% Miscellaneous Professional Fee 4,280 12,615 (8,335) (66.07%) 300 3,980 1326.67% Contract Services 12,830 6,377 6,453 101.19% 33,050 (20,220) (61.18%) Advertising Expense 300 117 183 156.41% 300 0 0.00% Dues & Subscriptions P&E 0 200 (200) (100.00%) 400 (400) (100.00%) Office Expenses P&E 600 578 22 3.81% 500 100 20.00% Telephone Expense P&E 3,558 3,368 190 5.64% 7,750 (4,192) (54.09%) Training & Seminars P&E 1,450 37 1,413 3818.92% 0 1,450 0.00% Travel & Business Expenses P&E 1,550 110 1,440 1309.09% 280 1,270 453.57% Hospitality 950 417 533 127.82% 70 880 1257.14% Equipment Rental P&E 14,316 9,718 4,598 47.31% 2,785 11,531 414.04% Materials & Supplies P&E 18,895 17,086 1,809 10.59% 37,500 (18,605) (49.61%) Maintenance & Repairs 51,397 61,111 (9,714) (15.90%) 33,500 17,897 53.42% Utilities-Heat 9,084 9,528 (444) (4.66%) 11,498 (2,414) (20.99%) Utilities-Light & Power 22,967 24,130 (1,163) (4.82%) 25,125 (2,158) (8.59%) Utilities-Water 1,216 1,104 112 10.14% 682 534 78.30% Uniform Purchase & Expense 3,280 250 3,030 1212.00% 1,500 1,780 118.67% Insurance 0 50 (50) (100.00%) 0 0 0.00% Credit Card Fees 15,599 14,223 1,376 9.67% 15,199 400 2.63% Bad Debt Expense 0 0 0 0.00% 0 0 0.00% Miscellaneous Expenses P&E 400 283 117 41.34% 400 0 0.00% Allocated 25,482 21,085 4,397 20.85% 20,306 5,176 25.49% Total Operating Expenses 267,078 231,988 35,090 15.13% 231,555 35,523 15.34% Net Income (Loss) from Operations 133,464 192,236 (58,772) (30.57%) 196,563 (63,099) (32.10%) NON-OPERATING COSTS: Depreciation 98,322 93,640 4,682 5.00% 113,883 (15,561) (13.66%) Total Non-Operating Costs 98,322 93,640 4,682 5.00% 113,883 (15,561) (13.66%) Net Income after depreciation 35,142 98,596 (63,454) (64.36%) 82,680 (47,538) (57.50%) Page 18 of 41

Lehigh Northampton Airport Authority Braden Airpark Preliminary Budget 2017 2017 2016 Budget Var Budget Var % 2016 Variance Variance % Budget Projection to Projection to Projection Budget to Budget to Budget A B C D (C/B) E F G (F/E) Revenue: Hanger & Ramp Rentals 102,182 100,003 2,179 2.18% 113,744 (11,562) (10.16%) Fuel Sales-FBO 53,384 46,716 6,668 14.27% 67,040 (13,656) (20.37%) Total Revenue 155,566 146,719 8,847 6.03% 180,784 (25,218) (13.95%) Cost of Sales: Fuel Cost 36,121 34,400 1,721 5.00% 42,851 (6,730) (15.71%) Hanger Parts & Goods Sold 144 141 3 2.13% 0 144 0.00% Labor costs 87,569 57,713 29,856 51.73% 50,912 36,657 72.00% Total Cost of Sales 123,834 92,254 31,580 34.23% 93,763 30,071 32.07% Net Operating Revenue 31,732 54,465 (22,733) (41.74%) 87,021 (55,289) (63.54%) Operating Expenses: Salaries & Wages 11,502 10,110 1,392 13.77% 6,061 5,441 89.77% Payroll Taxes 880 773 107 13.84% 464 416 89.66% Employee Benefits 5,618 2,820 2,798 99.22% 3,359 2,259 67.25% Subtotal 18,000 13,703 4,297 31.36% 9,884 8,116 82.11% Miscellaneous Professional Fee 3,240 51,496 (48,256) (93.71%) 0 3,240 0.00% Professional Fees-Public Rel. 500 0 500 0.00% 0 500 0.00% Contract Services 2,560 750 1,810 241.33% 1,500 1,060 70.67% Advertising Expense 0 0 0 0.00% 0 0 0.00% Office Expenses P&E 240 100 140 140.00% 300 (60) (20.00%) Telephone Expense P&E 2,928 3,005 (77) (2.56%) 2,808 120 4.27% Training & Seminars P&E 300 259 41 15.83% 500 (200) (40.00%) Travel & Business Expenses P&E 0 31 (31) (100.00%) 0 0 0.00% Hospitality 600 0 600 0.00% 0 600 0.00% Equipment Rental P&E 2,400 2,323 77 3.31% 2,285 115 5.03% Materials & Supplies P&E 10,500 4,798 5,702 118.84% 11,000 (500) (4.55%) Maintenance & Repairs 26,200 19,804 6,396 32.30% 15,000 11,200 74.67% Utilities-Light & Power 7,423 8,073 (650) (8.05%) 14,132 (6,709) (47.47%) Utilities-Water 1,668 2,202 (534) (24.25%) 1,035 633 61.16% Refuse Services 2,064 1,963 101 5.15% 1,392 672 48.28% Uniform Purchase & Expense 1,650 341 1,309 383.87% 500 1,150 230.00% Insurance 0 375 (375) (100.00%) 0 0 0.00% Credit Card Fees 1,639 1,310 329 25.11% 1,742 (103) (5.91%) Bad Debt Expense 0 0 0 0.00% 0 0 0.00% Miscellaneous Expenses P&E 3,200 8,563 (5,363) (62.63%) 3,210 (10) (0.31%) Allocated 18,426 15,246 3,180 20.86% 14,683 3,743 25.49% Total Operating Expenses 103,538 134,342 (30,804) (22.93%) 79,971 23,567 29.47% Net Income (Loss) from Operations (71,806) (79,877) 8,071 (10.10%) 7,050 (78,856) (1118.52%) NON-OPERATING COSTS: Debt Service 127,772 127,772 0 0.00% 127,772 0 0.00% Depreciation 71,280 67,886 3,394 5.00% 23,235 48,045 206.78% Total Non-Operating Costs 199,052 195,658 3,394 1.73% 23,235 48,045 206.78% Net Income after depreciation & debt service (270,858) (275,535) 4,677 (1.70%) (16,185) (126,901) 784.07% Page 19 of 41

Full Time Equivalents (FTEs) by Department % Department 2017 Budget (A) Current (B) * Variance (A-B) Variance (A vs. B) Planning 3.0 2.0 1.0 50% Maintenance (A) 20.8 16.8 4.0 24% Maintenance (L) 13.5 11.1 2.4 21% Custodial 12.9 12.7 0.2 1% Police 14.4 12.4 2.0 16% ARFF** 8.0 8.9-0.9-10% Operations Center 6.0 6.6-0.6-9% Operations Admin. 5.7 5.5 0.2 4% Operations Officers 5.6 4.2 1.4 33% IT 5.0 4.0 1.0 25% Aviation Services- QC 6.6 5.9 0.7 12% Aviation Services- FBO 25.3 24.0 1.3 5% Aviation Services-LV 12.4 10.2 2.3 22% Business Development 1.6 1.0 0.6 60% Aviation Services-Braden 2.2 2.0 0.2 10% Parking 6.5 5.5 1.0 18% Passenger Services 9.8 11.2-1.4-13% Cargo 43.4 44.8-1.4-3% Properties 2.1 1.0 1.1 110% Executive Board 4.1 3.0 1.1 37% HR 1.8 1.9-0.1-5% Finance 7.7 7.2 0.5 7% Marketing 1.0 1.1-0.1-9% Advertisng 0.5 0.5 0.0 0% Customer Experience 3.1 3.2-0.1-3% Grand Total 223.0 206.8 16.3 8% *Current Based on last two week pay period which ended 11/8/16 **FTE Based on 56 Hours for ARFF Page 20 of 41

Insights on Additions to Personnel Overall The Authority is adding an additional 38 (20%) full time equivalents (FTEs) versus the 2016 budget and 16 (8%) FTEs versus current staffing. The majority of the increase in staffing is attributable to the increase in air cargo operations. The cargo operation not only requires direct labor support but indirect support through increased police, operations, and administration. With increased attention on developing new tactics for earning revenue and a focus shifted to tackling large scale projects, additional staff is required for maintaining the highest quality of day to day operations at Lehigh Valley International Airport. The Authority will look for efficiencies by automating many of its current tasks. An increase in staff is necessary over the next few years to bridge the gap of technology and infrastructure development which was lacking due to the recession and many years of litigation. Aviation Services-FBO 1 FT Fuel Farm Specialist Required based on increase in weekly fuel loads. 2 PT Fuelers- Required to support the cargo operation. Aviation Services-LV 2 FTEs - Required to support the additional Allegiant activity. Executive Board 1 FT Special Projects Coordinator- required to coordinate, manage and/or support special events, activities, and studies including determining the impact of regulatory requirements. Information Technology 1 FT Tech Support Required to handle upgrades of new software, troubleshooting and provide overall depth to a previously understaffed department. Maintenance Airside 1 FT Supervisor - Required to manage airfield maintenance personnel, maintenance shop purchasing and inventory. 1 FT Mechanic - Addition of engine mechanic to support Air Cargo Ground Service Equipment (24/7). 1 FT Laborer - Addition of entry level laborer to increase support of airfield snow removal & grass cutting. 1 PT Mechanic - Addition of engine mechanic to support Air Cargo Ground Service Equipment (24/7). Page 21 of 41

Maintenance Landside 1 FT Supervisor - Required to manage landside maintenance and custodial personnel. 1 FT Painter - Addition of ongoing painting needs of ABE. Operations Officers 2 PT Operations Officers - Required to increase daily Operations coverage from 20hr/day to 24hr/day to support Air Cargo. Parking 1 FTE - Required to increase staffing up to the 2017 budget levels Planning 1 FT Project Manager/Engineer Required to coordinate, manage, and review capital projects and initiatives. This person will also review engineering documents submitted by others to ensure compliance and conformity to the Airport Authority standards. Police 2 FT Police Officers - Required to increase daily coverage of airport mainly to support increased Ground Handling at night from Air Cargo Operations. 1 PT Police Officers - Required to increase daily coverage of airport mainly to support increased Ground Handling at night from Air Cargo Operations. Properties 1 FT Properties Assistant - Required to work on lease administration and address tenant issues. The properties assistant will free up the Manager to spend more time working on business development efforts while adding needed depth to the department... Page 22 of 41

Lehigh-Northampton Airport Authority 2017 Budgeted Month by Month Cash Flow Projection a Year 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 b Month JAN FEB MAR APRIL MAY JUNE JULY AUGUST SEPT OCT NOV DEC Totals c Beginning Cash $ 10,200,000 $ 10,230,203 $ 9,328,975 $ 8,209,366 $ 7,804,493 $ 7,000,869 $ 5,939,541 $ 6,622,628 $ 6,905,462 $ 6,667,734 $ 6,585,547 $ 6,227,568 1 LNAA Total Operating Revenues $ 2,061,907 $ 2,116,584 $ 2,260,039 $ 2,329,731 $ 2,234,130 $ 2,245,390 $ 2,321,649 $ 2,362,344 $ 2,158,887 $ 2,234,773 $ 2,209,350 $ 2,168,182 $ 26,702,966 2 LNAA Oper. Expenses & COS Labor $ (1,646,783) $ (1,849,360) $ (1,823,429) $ (1,719,233) $ (1,627,493) $ (1,798,418) $ (1,792,102) $ (1,699,955) $ (1,782,047) $ (2,068,645) $(1,766,321) $ (2,025,054) $ (21,598,840) 3 Fuel Inventory Purchases $ (168,000) $ (168,000) $ (168,000) $ (168,000) $ (168,000) $ (168,000) $ (168,000) $ (168,000) $ (168,000) $ (168,000) $ (168,000) $ (168,000) 4 Queen City Income (Loss) $ 10,150 $ 11,976 $ 123 $ 2,526 $ 12,944 $ 11,758 $ 19,172 $ 11,788 $ 14,096 $ 11,054 $ 14,224 $ 13,654 $ 133,465 5 Braden Airpark Income (Loss) $ (4,899) $ (6,079) $ (8,828) $ (6,008) $ (4,985) $ (7,186) $ (4,413) $ (4,409) $ (7,751) $ (5,887) $ (4,460) $ (6,901) $ (71,806) 6 Event (Loss) $ - $ - $ - $ - $ - $ (15,000) $ - $ - $ - $ - $ - $ (15,000) $ (30,000) 7 Net Interest $ (69) $ (30,863) $ (63) $ (61) $ (30,468) $ (55) $ (53) $ (30,068) $ (81) $ (79) $ (29,702) $ (89) $ (121,651) 8 Debt Service $ (275,261) $ (275,261) $ (275,261) $ (275,261) $ (275,261) $ (275,261) $ (275,261) $ (275,261) $ (275,261) $ (275,261) $ (275,261) $ (275,261) $ (3,303,132) 9 TD Bank Loan Payments $ (55,580) $ (55,580) $ (55,580) $ (55,580) $ (3,900) $ (226,220) 10 Transfers from PFC to Operating $ 200,000 $ 200,000 $ 400,000 $ 100,000 $ 100,000 $ 200,000 $ 1,200,000 11 CFC Funds $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 300,000 12 Bond Project Funds $ - Funds Available before Capital Purchases, Lease Payments, & Grant 13 Receipts $ 10,346,465 $ 9,998,620 $ 9,282,976 $ 8,542,480 $ 7,966,460 $ 7,419,097 $ 6,065,533 $ 6,944,067 $ 6,870,305 $ 6,520,689 $ 6,590,377 $ 6,144,099 CIP Cash Flow Items: 14 Lease Payments $ (55,337) $ (148,720) $ (72,685) $ (92,762) $ (191,491) $ (115,456) $ (125,805) $ (219,505) $ (143,471) $ (166,042) $ (258,709) $ (182,676) $ (1,772,659) 15 Capital Purchases/Local Contributions $ (1,121,625) $ (1,121,625) $ (1,121,625) $ (1,121,625) $ (1,005,500) $ (1,885,500) $ (340,500) $ (340,500) $ (290,500) $ (290,500) $ (290,500) $ (269,041) $ (9,199,041) 16 FAA/PA Grant Receipts $ 1,060,700 $ 600,700 $ 120,700 $ 476,400 $ 231,400 $ 521,400 $ 1,023,400 $ 521,400 $ 231,400 $ 521,400 $ 186,400 $ 476,400 $ 5,971,700 17 Ending Cash $ 10,230,203 $ 9,328,975 $ 8,209,366 $ 7,804,493 $ 7,000,869 $ 5,939,541 $ 6,622,628 $ 6,905,462 $ 6,667,734 $ 6,585,547 $ 6,227,568 $ 6,168,782 $ (5,000,000) 18 Required Bond Cash Reserve $ 3,679,000 $ 3,679,000 $ 3,679,000 $ 3,679,000 $ 3,679,000 $ 3,679,000 $ 3,679,000 $ 3,679,000 $ 3,679,000 $ 3,679,000 $ 3,679,000 $ 3,679,000 19 Restricted for AIP Use Only $ 2,235,000 $ 2,235,000 $ 2,235,000 $ 2,235,000 $ 2,235,000 $ 2,235,000 $ 2,235,000 $ 2,235,000 $ 2,235,000 $ 2,235,000 $ 2,235,000 $ 2,235,000 20 Unrestricted Cash (15-14) $ 4,316,203 $ 3,414,975 $ 2,295,366 $ 1,890,493 $ 1,086,869 $ 25,541 $ 708,628 $ 991,462 $ 753,734 $ 671,547 $ 313,568 $ 254,782 Notes to Items: 8 Debt Service with BMO Harris. 9 Final Payment on TD Terminal Loan is $3,900 in May 2017. 14 Lease Payments include capital items for the Constellation Energy Project and use of the Tetra Lease Line of Credit. 15 Capital Purchases updated to include 2017 Capital Improvement Plan (CIP). 18 Bond Cash Requirement must be met on 12/31 of every year; Bond Cash Reserve = 1/6 of 2017 Budgeted Expenses + $500,000. 19 Approximately $2,235,000 of Funds Available are reserved for federally approved AIP projects. Other Notes: A Bank Lines of Credit are not shown on exhibit but may be potential sources of Cash. B Bond Construction Project Fund has approximate $4.2 million balance. If Project Funds are used, they will be shown on line #12. C Restricted AIP Funds & Residual Bond Project Funds will be used to offset applicable Capital projects. D Net Changes to Receivables and Payables assumed to be zero. E Net LNAA cash used for capital is $5,000,000 marked in orange Page 23 of 41

Lehigh-Northampton Airport Authority 2017 Uses of Cash TD Bank Loan, $226,220, 2% Capital Lease Payments, $1,772,659, 21% CIP Funds (not leased), $3,227,341, 38% Bond Debt Service, $3,303,132, 39% Total Capital Resources: $5,000,000 Page 24 of 41

Lehigh-Northampton Airport Authority 2017 Available Cash CFC, $300,000, 2% EST. 2017 FAA/PA Grant Receipts, $5,971,700, 47% Net Revenue, $5,133,783, 41% PFC, $1,200,000, 10% Total Available Cash $12,605,483 Page 25 of 41

Lehigh Valley International Airport Queen City Airport Braden Airpark APPENDIX A Page 26 of 41

LEHIGH-NORTHAMPTON AIRPORT AUTHORITY 2017 Airline Rates and Charges Lehigh Valley International Airport Provided by Unison Consulting, Inc. Page 27 of 41

TABLE 1 LEHIGH NORTHAMPTON AIRPORT AUTHORITY LEHIGH VALLEY AIRPORT SYSTEM OPERATING EXPENSES Budget Budget Operating Expenses 2016 2017 Salaries and Wages $ 6,432,390 $ 7,874,098 Payroll Taxes 521,467 602,368 Employee Benefits 3,111,700 3,271,601 Subtotal Personnel Costs $ 10,065,557 $ 11,748,067 Professional Services 355,871 445,080 Legal Services 204,120 181,000 Audit and Financial Services 108,000 110,000 Public Relations 53,500 46,500 Contract Services 604,239 867,555 Advertising Expense 197,540 327,914 Printing 12,850 18,910 Postage 5,935 5,340 Dues and Subscriptions 76,861 104,465 Office Supplies 42,681 52,130 Telephone 100,735 109,724 Training and Seminars 135,950 115,205 Business and Travel Related 80,941 85,558 Hospitality 26,875 Equipment Rental 448,305 1,330,046 Materials & Supplies 636,641 506,591 Maintenance Repairs 671,916 801,883 Heating Gas & Oil 459,246 354,180 Electricity 655,165 679,057 Water 97,631 101,112 Refuse Collection 42,732 46,133 Uniforms 61,299 65,240 Insurance 371,621 420,156 Real Estate Taxes 90,618 108,949 Payment in Lieu of Taxes 470,158 448,300 Interest Expense 121,651 74,001 Credit Card Fees 159,341 174,437 Bad Debt Expense Miscellaneous 82,937 44,230 Subtotal Other Operating Expenses $ 6,348,484 $ 7,650,571 Total Operating Expenses $ 16,414,041 $ 19,398,638 COST OF SALES NOT ALLOCATED Cost of Sales Aviation Services 2,294,050 2,644,823 Cost of Sales GA Airports 747,856 757,448 Subtotal Cost of Sales $ 3,041,906 $ 3,402,271 Total Operating Expenses and COS $ 19,455,947 $ 22,800,909 Total Operating Expense Allocation Airfield $ 3,488,759 $ 4,031,241 Terminal 4,693,880 4,671,773 Parking and Roadways 1,188,458 1,177,029 Aviation Leased Areas 1,098,128 989,722 Non Aviation Leased Areas 170,062 224,215 Aviation Services 546,598 822,710 Ground Handling 2,180,421 3,792,334 GA Airports 313,952 370,616 Advertising 209,636 110,184 Administration 2,524,148 3,208,814 Total Operating Expenses $ 16,414,041 $ 19,398,638 Source: Authority Management. Page 28 of 41

TABLE 2 LEHIGH NORTHAMPTON AIRPORT AUTHORITY LEHIGH VALLEY AIRPORT SYSTEM OPERATING REVENUES Budget Budget OPERATING REVENUE 2016 2017 Airfield: Landing Fees $ 3,354,238 $ 4,199,990 Apron Parking Fees 413,351 487,047 Land Rentals 123,560 90,060 Security 56,644 63,634 Other 200,000 205,000 Total Airfield Fees $ 4,147,792 $ 5,045,732 Terminal: Airline Rent $ 2,529,395 $ 2,754,332 Per Turn Fees 315,698 335,060 Passenger Support Services 324,360 331,626 Security 105,196 118,177 Concession& Other Rents 363,884 518,421 Rental Cars 1,455,018 1,374,405 Restaurant/Newsstand 297,150 220,605 Advertising Other 116,961 27,121 Utility Fees & Other 34,828 30,399 Total Terminal Rents $ 5,542,490 $ 5,710,147 Parking & Roadways $ 4,703,073 $ 4,586,999 Aviation Leased Areas: Hangar 1 Rental $ $ 56,738 Hangar 2 Rental 27,720 33,995 Hangar 3 Rental 258,071 262,589 Hangar 4 Rental Hangar 5 Rental 20,496 21,112 Hangar 7 Rental 313,344 276,857 Hangar 8 Rental 231,156 188,007 Hangar 9 Rental 739,011 751,848 Hangar 10 Rental 473,364 491,989 T Hangars 201,444 191,610 Air Cargo Building & Land Rents 123,432 100,870 Ramp & Gatecard Fees 38,016 35,246 Total Aviation Leased Areas $ 2,426,054 $ 2,410,861 Non Aviation Leased Areas: Building Rents $ 374,469 $ 404,553 Total Non Aviation Rents $ 374,469 $ 404,553 Aviation Services: Gross Fuel Sales $ 1,259,711 $ 1,361,598 Landing Fees 145,588 Into Plan Fees 1,807,650 2,030,969 Hangar & Ramp Rentals 238,560 200,927 Miscellaneous Income 206 Total Aviation Services $ 3,306,127 $ 3,739,082 Ground Handling and Other: Ground Handling and Other $ 3,009,780 $ 4,620,471 Total Ground Handling and Other $ 3,009,780 $ 4,620,471 Advertising: Advertising $ 306,000 $ 303,114 Total Advertising $ 306,000 $ 303,114 GA Airports: Hangar & Ramp Rentals $ 567,656 $ 575,165 Fuel Sales FBO 690,897 613,791 Pilot Supplies Sales 2,221 16 Miscellaneous Income 2,221 750 Total GA Airports $ 1,262,995 $ 1,189,722 Total Operating Revenue $ 25,078,780 $ 28,010,681 1.) Revenue projections derived from information provided by Authority management. Page 29 of 41

TABLE 3 LEHIGH NORTHAMPTON AIRPORT AUTHORITY LEHIGH VALLEY AIRPORT SYSTEM LANDING FEE RATE Budget Budget 2016 2017 Direct Operating Expenses $ 3,488,759 $ 4,031,241 Indirect Operating Expenses 504,830 713,961 O&M Reserve Requirement 1 139,917 125,269 Debt Service 15,263 15,261 Debt Service Coverage 3,816 3,815 Amortization of Capital Expenditures 160,000 Total Requirement $ 4,152,584 $ 5,049,547 LESS: Apron Expenses 2 399,359 474,520 LESS: Apron O&M Reserve 13,992 12,527 LESS: Previous Year's Debt Service Coverage 4,792 3,816 LESS: World Fuel Annual Incentive 200,000 205,000 LESS: Land Rent Credit 123,560 90,060 LESS: Security Surcharge (35%) 56,644 63,634 LESS: Landing Fee Itinerant FBO Credit Net Requirement $ 3,354,238 $ 4,199,990 Total Airline Landed Weight (000 lbs.) 657,061 850,162 Airline Landing Fee $ 5.10 $ 4.94 Airline Landing Fees $ 3,354,238 $ 4,199,990 1.) Represents 2 months (1/6) of the incremental change in O&M Expenses. 2.) Equals 10% of Direct and Indirect Airfield expenses. Page 30 of 41

TABLE 4 LEHIGH NORTHAMPTON AIRPORT AUTHORITY LEHIGH VALLEY AIRPORT SYSTEM APRON REQUIREMENT Budget Budget 2016 2017 Direct Operating Expenses $ 399,359 $ 474,520 O&M Reserve Requirement 1 13,992 12,527 Total Requirement $ 413,351 $ 487,047 LESS: Non Signatory Paid Premiums/Diversions Net Requirement $ 413,351 $ 487,047 Total Landed Weight 703,162 Annual Apron Fee $ 0.69 1.) Represents 2 months (1/6) of the incremental change in O&M Expenses. 2.) Beginning in 2017, the Apron monthly requirement will be charged to the airlines based on landed weight. Page 31 of 41

TABLE 5 LEHIGH NORTHAMPTON AIRPORT AUTHORITY LEHIGH VALLEY AIRPORT SYSTEM TERMINAL RENTAL RATE Budget Budget 2016 2017 Direct Operating Expenses $ 4,693,880 $ 4,671,773 Indirect Operating Expenses 631,037 876,006 O&M Reserve Requirement 1 8,255 37,144 Debt Service 848,894 848,791 Debt Service Coverage 212,223 212,198 Amortization of Capital Expenditures 26,576 Total Requirement $ 6,394,289 $ 6,672,488 LESS: Previous Year's Debt Service Coverage 266,550 212,223 LESS: Passenger Support Services 2 324,360 331,626 LESS: Security Surcharge (65%) 105,196 118,177 Net Requirement $ 5,698,183 $ 6,010,461 Total Rentable Space 75,812 75,812 Total Administrative Space 9,009 9,009 Total Rentable and Admin Space 84,821 84,821 Terminal Rental Rate $ 67.18 $ 70.86 Airline Space 52,943 52,943 Airline Rented Space 50,589 50,589 Airline Terminal Rental Revenue $ 3,398,469 $ 3,584,716 1.) Represents 2 months (1/6) of the incremental change in O&M Expenses. 2.) Represents the charges associated with customer service in the Airport (ex. Curbside check in assistance). Page 32 of 41

TABLE 6 LEHIGH NORTHAMPTON AIRPORT AUTHORITY LEHIGH VALLEY AIRPORT SYSTEM PER TURN FEE Budget Budget Space Rent Per Enplanement 2016 2017 Projected Terminal Fees 3,398,469 3,584,716 Projected Enplanements 323,680 363,623 Annual Rental Cost per Enplanement [ A ] $ 10.50 $ 9.86 Projected Enplanements 323,680 363,623 Gates in Use 7 7 Projected Enplanements per Gate [ B ] 46,240 51,946 Average Rental Fee per Gate [ A * B = C ] $ 485,496 $ 512,102 Total Passenger Operations 5,595 5,619 Days 365 365 Passenger Operations per Day 15.33 15.39 Total Gates in Use 7 7 Passenger Operations per Day per Gate 1 2.19 2.20 Days 365 365 Total Turns per Gate per Year [ D ] 799.35 802.67 Projected Gate Cost per Turn [ C/D = E ] $ 607.36 $ 638.00 Estimated Ground Handling Fee Estimated Salary Cost Per Hour $ 18.23 $ 18.59 Benefits/Payroll Tax % 49% 49% Est. Hours per Turn 15 15 Est. Non Salary Expense % 15% 15% Estimated Ground Handling Fee per Turn $ 468.49 $ 477.86 Projected Terminal Fees per Turn $ 607.36 $ 638.00 Estimated Ground Handling Fee per Turn $ 468.49 $ 477.86 Total Fees per Turn $ 1,075.85 $ 1,115.86 Additional Fees Landing Fee (per 1,000 lbs.) $ 5.10 $ 4.94 Apron Fee (per 1,000 lbs. of landed weight) $ 0.69 Security Fee (per enplanement) $ 0.50 $ 0.50 1.) Operations calculated by Unison Consulting as part of the November 2015 traffic forecast. Page 33 of 41

TABLE 7 LEHIGH NORTHAMPTON AIRPORT AUTHORITY LEHIGH VALLEY AIRPORT SYSTEM PASSENGER AIRLINE COST PER ENPLANEMENT Budget Budget 2016 2017 Passenger Airline Landing Fees $ 1,743,787 $ 1,836,889 Airline Terminal Rents 2,529,395 2,754,332 Per Turn Fees 315,698 335,060 Passenger Airline Apron Revenue 413,351 487,047 Passenger Support Services 324,360 331,626 Security Surcharge 1 161,840 181,811 Total Airline Revenues $ 5,488,431 $ 5,926,767 Enplanements 2 323,680 363,623 Airline Cost Per Enplanement $ 16.96 $ 16.30 1.) Security Surcharge is $0.50 per enplaned passenger. 2.) Enplanements calculated based on extrapolated 2016 Actual enplanements. Page 34 of 41

TABLE 8 LEHIGH NORTHAMPTON AIRPORT AUTHORITY LEHIGH VALLEY AIRPORT SYSTEM CASH FLOW Budget Budget 2016 2017 Airline Landing Fees $ 3,354,238 $ 4,199,990 Airline Apron Fees 413,351 487,047 Airline Terminal Rentals 1 2,845,093 3,089,393 Nonairline Revenues 2 15,424,193 16,831,979 Operating Revenues $ 22,036,874 $ 24,608,410 Operating Expenses $ 16,414,041 $ 19,398,638 Net Operating Income $ 5,622,833 $ 5,209,772 Debt Service $ 3,303,657 $ 3,303,657 O&M Reserve Requirement 437,507 497,433 Renewal and Replacement Requirement Subordinated Indebtedness Capital Expenditures Net Deposit to General Fund $ 1,881,669 $ 1,408,682 Net Operating Income $ 5,622,833 $ 5,209,772 Plus: Transfers Coverage from Landing Fee 3,816 3,815 Coverage from Terminal Rate 126,573 126,558 Transfers Net Revenues $ 5,753,222 $ 5,340,145 Debt Service $ 3,303,657 $ 3,303,657 Net Revenue Requirement 3 1.74 1.62 1.) Includes per turn revenue. 2.) Net of cost of sales. 3.) The Net Revenue Requirement per the Series 2015 bond covenant established that the Net Revenue Requirement ratio has to be at least 1.57 the Aggregate Debt Service for such period. Page 35 of 41

LEHIGH-NORTHAMPTON AIRPORT AUTHORITY BOND RATE MAINTENANCE COVENANT Under the covenant the Authority agrees that it shall at all times fix, revise, charge and collect rentals, rates, fees and other charges for the use of the Airport in order that in each Fiscal Year the Net Revenues shall at least equal 1.57 times the Aggregate Debt Service for such period. The 2017 Budget is set at a rate of 1.62 times the aggregate debt service. Following is that computation: * Net Revenues $ 5,340,145 ** Aggregate Debt Service $ 3,303,657 Coverage: Net Revenues / Aggregate Debt Service 1.62 * Refer to Table 8 of the Rates and Charges for the calculation of this number ** Annual amount to be deposited to cover the annual Debt Service requirement. Payments are made in equal monthly installments to trustee. Page 36 of 41