TAA Annual Comprehensive Financial Report

ANNUAL COMPREHENSIVE

FINANCIAL REPORT

Years Ended September 30, 2021 and 2020

Tucson Airport Authority

Tucson, Arizona

2 0 21

2021

TUCSON AIRPORT AUTHORITY

ANNUAL COMPREHENSIVE FINANCIAL REPORT

Prepared by the Finance Department

Years Ended September 30, 2021 and 2020

Tucson, Arizona

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Mission Statement

Provide a sustainable airport system and constantly pursue initiatives that promote and grow business opportunities.

Vision

Landing Prosperity in Southern Arizona

ii TUCSON AIRPORT AUTHORITY 2021 ACFR

2021 Board of Directors and Members

ACTIVE MEMBERS

Bruce I. Ash

President

Paul Ash Management

Co., L.L.C.

Henry K. Boice

(Ret.) President

Northern Trust Company

Larry Cesare

Partner/General Manager

B.H.C. Hotel Management

Francis X. Chambers

Director

AvPORTS

*Steven R. Cole

President

Southwest Appraisal

Associates

D. June Crawford

(Ret.) President

Copygraphix, Inc.

Michael J. Duran

(Ret.) Vice President &

Chief Development Officer

Tucson Medical Center

& TMC Foundation

Vance L. Falbaum

Sr. Vice President &

Financial Advisor

RBC Wealth Management

John L. Fendenheim

Owner

Fendenheim Enterprises

Guillermo P. Figueroa

Senior Network

Implementation Program

Manager

Lumen Technologies

Tony Finley

Chief Financial Officer

Long Companies/

Long Realty Co.

Michael W. Franks

President

Seaver Franks Architects

David E. Hameroff

Attorney

The Hameroff Law

Firm, P.C.

Michael F. Hannley

Founder

Bank of Tucson

Brandt Hazen

President

Hazen Enterprises, Inc.

Steven Holmes

Superintendent

Sunnyside Unified School

District

* Lisa Lovallo

Vice President and

Market Manager

Cox Southern Arizona

* Lisa H. Israel

President Emeritus

La Posada at

Park Center, Inc.

Herb Kai

Manager

Kai Family Entities

Francine Katz

Chief Development Officer,

Tucson Jewish Community

Center

Gary Kippur

President

Tucson Iron & Metal

Lee D. Lambert

Chancellor

Pima Community College

Larry M. Lang

President

Diversified Design &

Construction, Inc.

David Lyons

Executive Vice President

Regional President

National Bank of Arizona

Michael McGrath

Partner

Mesch, Clark &

Rothschild P.C.

Omar Mireles

President

HSL Asset Management

Ned L. Norris, Jr.

Chairman

Tohono O’odham Nation

Tim J. Overton

Broker

Allen & Young

Business Brokerage

Steve Pagnucco

Vice President, Operations

Universal Avionics

R. Tony Penn

President/CEO

United Way of Tucson

and Southern Arizona

Lea Márquez Peterson

Principal

Márquez Peterson Group

Commissioner

Arizona Corporation

Commission

Ricardo Platt

Vice President, Development

Ed2 Corp.

Stephen E. Quinlan

Chairman Emeritus

Long Realty Company

Principal

Whisper Canyon Holdings,

C.L.C.

Joaquin Ruiz

Vice President Global

Environmental Futures

University of Arizona

Ronald K. Sable

President

Concord Solutions Ltd.

Calline Sanchez

Vice President Worldwide

Systems Lab Services and

Technical Universities IBM

David C. Smallhouse

Managing Partner

Miramar Ventures, L.L.C.

Lucinda J. Smedley

Publisher/Principal

TREND Report/Real

Estate Consulting Group

Michael Stilb

President/

Managing Director

CBRE-MAS

Izaro Urreiztieta

Senior Vice President

PNC Financial Services

Mercy A. Valencia Ed.D.

(Ret.) Assistant Vice President

Real Estate Administration

University of Arizona

Katherine R. Ward

Principal

GV Strategic Advisors

Ellen K. Wheeler, J.D.

Retired

BOARD OF DIRECTORS

CHAIR

Bruce L. Dusenberry

President

Horizon Moving Group

VICE CHAIR

Michael S. Hammond

President/CEO

Cushman & Wakefield

PICOR Commercial

Real Estate Services

SECRETARY

Keri L. Silvyn

Partner

Lazarus & Silvyn, P.C.

TREASURER

William R. Assenmacher

CEO

CAID Industries,

Incorporated

IMMEDIATE PAST CHAIR,

DIRECTOR

Taunya Villic ana

Co-Founder/CEO

Affinity Wealth Management

DIRECTOR

Robert L. Draper

President

O’Rielly Chevrolet, Inc.

DIRECTOR

Judy Rich

President and CEO

TMC HealthCare and Tucson

Medical Center

DIRECTOR

Phillip Swaim

President

Swaim Associates, Ltd.

DIRECTOR

Todd Jackson

Attorney

Jackson & Oden, P.C.

DIRECTOR

Sally G. Fernandez

President

Safety Dynamics, Inc.

iii

EMERITUS MEMBERS

Judith K. Abrams

* Larry R. Adamson, Esq.

* Laura T. Almquist

* Hal W. Ashton

Edith Sayre Auslander

Raymond Bernal

* Edwin L. Biggers

* Elizabeth T. Bilby

* Fred T. Boice

* Susan G. Boswell

John H. Bremond

Archibald M. Brown, Jr.

Chanda S. Budhabhatti

James J. Burns

Jack C. Camper

* John L. Carter

Paul W. Cella

Joseph R. Cesare

Stephen W. Christy

Ginny L. Clements

Jim H. Click, Jr.

Jack D. Davis

Richard Davis

Patty Doar

* Darryl B. Dobras

* Katie Dusenberry

Stephen Eggen, Jr.

* Arnold R. Elias

* Robert A. Elliott

George Favela

Steven D. Fell

Louise L. Francesconi

Edward S. Frohling

Peter V. Gallo

Jaime Esteban Gibbons

David Goldstein

Arthur L. Gonzales

Elizabeth Gonzalez

Dr. Thomas Grogan

Barbara L. Harper

Duff Hearon

Lawrence M. Hecker

* Richard F. Imwalle

* Charles Jackson

Daisy M. Jenkins

Robert Johnston

Darryl O. Jones

Rosemary J. Koberlein

Meg Olson Lee

Jan Lesher

Dr. Peter Likins

Humberto S. Lopez

David M. Lovitt, Jr.

Richard Lukso

Sharon B. Megdal, Ph.D.

Octavio A. Molera

Chris Monson

Rebecca R. Montaño

* Gary M. Munsinger, Ph.D.

Rick T. Myers, Jr.

James E. Neihart

* R. B. O’Rielly

Richard D. Parlett

Judy Patrick

* Mary Levy Peachin

Charles M. Pettis

Gregory A. Pivirotto

* Ernesto V. Portillo

* Timothy J. Prouty

James F. Ronstadt

* Karl G. Ronstadt

Roberto C. Ruiz

Warren S. Rustand

* James M. Sakrison

* Rubin Salter, Jr.

John P. Schaefer, Ph.D.

* Past President / Chairman

S. L. Schorr

* Ted Sitterley, Jr.

* Jacob F. Struble

Steven Thu

Steven D. Touché

Richard S. Walden

Jonathan D. Walker

Michael R. Wattis

Paul Weitman

David T.C. Wright

* Thomas A. Zlaket

iv TUCSON AIRPORT AUTHORITY 2021 ACFR

Table of Contents

INTRODUCTION SECTION

Transmittal Letter

Organization 1

Economic Conditions and Outlook 2

State and Local Economic Outlook 2

Air Service at Tucson International Airport 3

Financial Impact of Reduced Travel Related to COVID-19 4

Major Initiatives 4

Capital Improvement Program 4

Major Maintenance Program 6

Federal and State Funding 8

Passenger Facility Charge Program 8

Financial Policies and Practices 9

Budgetary Controls 9

Long-Term Financial Planning 10

Capital Financing and Debt Management 11

Internal Controls......................................................................................................................................................... 11

Other Information 11

Requests For Information 11

Awards and Acknowledgements 12

Certiﬁ cate of Achievement 13

Organizational Structure 14

Airlines and Tenants 15

FINANCIAL SECTION

Independent Auditors’ Report 16

Management’s Discussion and Analysis 18

Basic Financial Statements

Statements of Net Position 33

Statements of Revenues, Expenses and Changes in Net Position 35

Statements of Cash Flows 36

Notes to Financial Statements

Note 1 Organization and Reporting Entity 38

Note 2 Summary of Signiﬁ cant Accounting Policies 38

Note 3 Cash, Cash Equivalents and Investments 44

Note 4 Capital Assets 48

Note 5 Unearned Revenues 50

Note 6 Bonds Payable 50

Note 7 Pension and Other Post Employment Beneﬁ t (OPEB) Plans 52

Note 8 Passenger Facility Charges 66

Note 9 Risk Management 66

Note 10 Commitments 66

Note 11 Environmental Matters, Litigation, and Contingencies 67

Note 12 Concentrations 69

Note 13 Restricted Net Position 70

FINANCIAL SECTION (continued)

Required Supplementary Information

Schedule of the TAA’s Proportionate Share of the Net Pension Liability - Cost Sharing Plan (ASRS) 76

Schedule of the TAA’s Proportionate Share of the Net OPEB Liability - Cost Sharing Plan (ASRS) 78

Multiyear Schedule of Changes in Net Pension Liability (Asset) and

Related Ratios Agent Retirement (PSPRS) - Fire Department 80

Multiyear Schedule of Changes in Net OPEB Liability (Asset) and

Related Ratios Agent Retirement (PSPRS) - Fire Department 82

Multiyear Schedule of Changes in Net Pension Liability (Asset) and

Related Ratios Agent Retirement (PSPRS) - Police Department 84

Multiyear Schedule of Changes in Net OPEB Liability (Asset) and

Related Ratios Agent Retirement (PSPRS) - Police Department 86

Schedule of the TAA’s Proportionate Share of the

Net Pension Liability – Cost Sharing Plan (PSPRS Fire - Tier 3) 88

Schedule of the TAA’s Proportionate Share of the

Net OPEB Liability – Cost Sharing Plan (PSPRS Fire - Tier 3) 90

Schedule of the TAA’s Proportionate Share of the

Net Pension Liability – Cost Sharing Plan (PSPRS Police - Tier 3) 92

Schedule of the TAA’s Proportionate Share of the

Net OPEB Liability – Cost Sharing Plan (PSPRS Police - Tier 3) 94

STATISTICAL SECTION

Financial Trends

Net Position and Changes in Net Position 98

Revenue Capacity

Principal Revenue Sources 100

Principal Revenue Source Ratios 102

Rates and Charges 102

Debt Capacity

Ratios of Outstanding Debt, Debt Service and Debt Limits 104

Airport Revenue Bond Coverage Per Bond Resolutions 106

Demographic and Economic Information

Population in the Air Service Area 108

Unemployment Rates in the Air Service Area 108

Major Employers in the Air Service Area 110

Operating Information

TAA Employees 112

Airport Information – Tucson International Airport 114

Airport Information – Ryan Airﬁ eld 116

Passenger, Cargo and Mail Summary 118

Aircraft Operations Summary 120

Enplaned Passengers By Scheduled Carrier 120

Scheduled Carrier Landed Weights 122

Scheduled Air Service Information 124

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INTRODUCTION

INTRODUCTION 1

September 30, 2022

Board of Directors

Tucson Airport Authority

7250 S. Tucson Blvd, Suite 300

Tucson, Arizona 85756

Ladies and Gentlemen:

It is our pleasure to present the Annual Comprehensive Financial Report (Annual Report) of the Tucson

Airport Authority, Inc. (TAA) for the ﬁ scal year (FY) ended September 30, 2021. Responsibility for both the

accuracy of the data and completeness and fairness of the presenta on, including all disclosures, rests with

management of the TAA. To the best of our knowledge and belief, the enclosed informa on is accurate and

complete in all material respects and reported in a manner designed to present fairly the ﬁ nancial posi on,

results of opera ons, and cash ﬂ ows in accordance with Generally Accepted Accoun ng Principles (GAAP).

GAAP requires that management provide a narra ve overview and analysis to accompany the ﬁ nancial

statements in the form of a Management’s Discussion and Analysis (MD&A). This introductory le er

should be read in conjunc on with the MD&A, which can be found immediately following the report of the

independent auditors in the ﬁ nancial sec on of the Annual Report.

BeachFleischman PLLC, the TAA’s independent auditor, has rendered an unmodiﬁ ed opinion that the

ﬁ nancial statements for the year ended September 30, 2021, present fairly, in all material respects, the

ﬁ nancial posi on, changes in net posi on and cash ﬂ ows.

BeachFleischman also performed the federal single audit of all federally funded grant programs.

Par cipa on in the single audit program is mandatory as a condi on for con nued funding eligibility.

Similarly, BeachFleischman performed the audit of the TAA’s Passenger Facility Charge program.

BeachFleischman has rendered an unmodiﬁ ed opinion regarding both the federal single audit and the

Passenger Facility Charge program in separate reports.

Organization

The TAA was established on April 12, 1948, as a civic, non-proﬁ t corpora on, as provided for under Arizona

law, to develop, promote, operate, and maintain airports and air transporta on facili es adjacent to the

City of Tucson (City) and in Pima County (County). Under Arizona law, the TAA is authorized to acquire,

own, control, equip, improve, maintain, operate, and regulate airports and enter into agreements with

corpora ons engaged in the air transporta on industry for the opera on of airports. The TAA operates

Tucson Interna onal Airport (TUS) and Ryan Airﬁ eld (RYN) as an essen al government func on under

Arizona law.

The TAA’s bylaws call for ac ve membership of up to 60 individuals who are residents of TUS’s service

area. Membership vacancies are ﬁ lled through a nomina on process and elec on by ac ve members at

each annual mee ng. Members are eligible to be an Ac ve Member for a term of ﬁ  een (15) years with a

possible one- me extension of ﬁ ve (5) years, for a total of twenty (20) years. Following a member’s ac ve

term of service to TAA, which can be requested as early as a er ten (10) years of ac ve service, Members

are then eligible to become a non-vo ng Emeritus Member.

2 TUCSON AIRPORT AUTHORITY 2021 ACFR

The TAA’s Board of Directors (Board) consists of no more than eleven and no less than seven TAA members.

The composi on of the Board includes the Immediate Past Chair as a vo ng member for one year. The

remaining directors are elected by ac ve TAA members, typically to staggered terms of three years, and

may serve a maximum of 10 years. Directors receive no salary or compensa on for their services, but by

resolu on of the Board may be reimbursed for actual expenses paid or obligated to be paid in connec on

with services rendered solely for the beneﬁ t of the TAA.

The Board appoints the Chief Execu ve Oﬃ cer (CEO), who serves at its pleasure. The Oﬃ ce of the CEO

includes the departments of Air Service Development and Marke ng, Communica ons and External

Rela ons. The remaining TAA staﬀ is organized into six divisions, each managed by a Vice President

appointed by and repor ng directly to the CEO. These six divisions are Opera ons, Finance, Legal

Services, Planning and Engineering, Business and Commercial Development, and People Opera ons. The

organiza onal chart that follows this le er reﬂ ects the opera onal structure as of September 30, 2021.

The TAA’s airport system consists of TUS and RYN. TUS is a cer ﬁ cated commercial service airport

facilita ng opera on of both commercial passenger airlines and cargo carriers. The primary catchment

area for TUS includes the Tucson metropolitan area, southern Arizona, and northern Sonora, Mexico. TUS

encompasses 7,986 acres of land and is located eight miles south of the City’s central business district. The

TAA maintains an agreement with the Morris Air Na onal Guard 162nd Fighter Wing of the Arizona Air

Na onal Guard for access and its use of the airﬁ eld at TUS through an Airport Joint Use Agreement (AJUA).

RYN is located 12 miles southwest of downtown Tucson and serves as a general avia on reliever airport for

TUS. It encompasses 1,904 acres of land and accommodates a wide variety of general avia on and military

ac vity.

Economic Conditions and Outlook

State and Local Economic Outlook

Economic condi ons are an important factor in how o en people travel. This, in turn, impacts passenger

levels at airports, how much money passengers and visitors spend at airports, and airline decisions on

maintaining and adding new service at individual airports. The U.S. Census Bureau deﬁ nes the Tucson

Metropolitan Sta s cal Area (MSA) as encompassing all of Pima County. The County covers an area of

approximately 9,200 square miles and, according to the Arizona Oﬃ ce of Economic Opportunity, had

an es mated popula on of 1,058,318 as of July 1, 2021, which represents an increase of 0.6% from July

1, 2020. The Tucson metro area consists of about 495 square miles that contain more than 95% of the

County’s popula on, including the incorporated municipali es of Tucson, Marana, Oro Valley, Sahuarita

and South Tucson. Thirty-ﬁ ve percent of the County’s popula on resides in unincorporated areas. The

metro area is the origin or des na on of nearly all airport users.

Tourism and recrea on are important components of the Tucson economy. The area has a sunny, dry

climate with moderate temperatures annually, on average, crea ng ideal condi ons for year-round play at

approximately ﬁ  y golf courses in and around the city. Tourism has been a signiﬁ cant contributor to past

growth in annual passenger traﬃ c at TUS.

The Tucson area is also home to a diverse group of employers in industry sectors such as aerospace,

defense, biotechnology, and mining. Davis-Monthan Air Force Base in Tucson and Fort Huachuca Army

Intelligence Center southeast of Tucson are also two of the area’s largest employers. The University of

Arizona, Pima Community College, and a large healthcare sector are other signiﬁ cant sources of jobs for

southern Arizona residents.

According to a May 26, 2022 report by Dr. George W. Hammond, Director of the Economic and Business

Research Center at the University of Arizona, the Arizona economy maintained a strong yet uneven

recovery from the recession brought on by the COVID-19 pandemic.

Organization (continued)

INTRODUCTION 3

State and Local Economic Outlook (continued)

The job count in Arizona as of April 2022 was 48,700 more than its February 2020 peak; however, jobs

in the Tucson, Sierra Vista-Douglas, and Flagstaﬀ metropolitan areas remain below pre-pandemic levels.

Furthermore, the na onal inﬂ a on rate was es mated to be 4.7% for calendar year 2021 with an addi onal

increase of 6.8% projected for calendar year 2022. Growth projec ons for Arizona jobs, personal income,

and popula on, however, remain posi ve through at least 2024.

Air Service at Tucson International Airport

TUS is the principal commercial service airport serving metropolitan Tucson, southern Arizona and

northern Sonora, Mexico. The TAA considers Pima County as its primary airport service area.

The TAA focuses its strategic air service development eﬀ ort on achievable goals that are consistent

with the community’s needs and the dynamics of the airline industry. TUS is subject to compe  on for

airline services and passengers residing in the Tucson service area, with the Phoenix Sky Harbor Airport

110 highway miles to the north. TUS’s compe  ve posi on is strengthened economically through its

rela onships with key air service stakeholders that include Visit Tucson, a regional des na on marke ng

organiza on, the Metropolitan Tucson Chamber of Commerce, the Southern Arizona Leadership Council

and Sun Corridor, Inc., (a regional economic development organiza on).

The TAA’s primary air service objec ves are to accommodate demand by increasing nonstop ﬂ ights

throughout the U.S. to new and exis ng hub des na ons with new and incumbent carriers, while reducing

both leakage and spillage of passengers to Phoenix. “Leakage” refers to passengers consciously choosing to

use an airport other than the airport closest to their home for reasons such as more ﬂ ight op ons or lower

fares. “Spillage” refers to passengers using another airport because they are unable to ﬁ nd a seat available

at their home airport when they want to travel. Emphasis has also been directed toward a rac ng carriers

that could serve key interna onal des na ons in Mexico and Canada.

The airlines that provide regularly scheduled service to TUS include network carriers, their owned regional

carrier subsidiaries, and contract regional carriers. As no single carrier holds a dominant market posi on,

compe  on remains robust along Tucson’s top origin and des na on routes.

The eﬀ ects of the COVID-19 pandemic con nued to impact TUS’s passenger volumes in 2021; however,

annual traﬃ c stabilized compared to the prior year. TUS experienced large decreases in passenger traﬃ c

(compared to pre-pandemic periods) for the ﬁ rst few months of the ﬁ scal year with a marked recovery in

the second half of the year. Total annual passenger traﬃ

c fell from 2,283,777 in FY 2020 to 2,257,581 in FY

2021, a decrease of 1.15%. This compares to 3,783,535 annual passengers in FY 2019 – a decrease of 40.3%.

Total scheduled inbound/outbound seat capacity in FY 2021 decreased 7.4% from FY 2020, a er a decrease

of 25.1% in FY 2020 compared to FY 2019.

Nineteen des na on airports were served nonstop from TUS in FY 2021, which was three less than in FY

2020. The nonstop des na ons served in FY 2021 were:

Economic Conditions And Outlook (continued)

• Atlanta (ATL)

• Chicago-Midway (MDW)

• Chicago O’Hare (ORD)

• Dallas/Ft. Worth (DFW)

• Denver (DEN)

• Houston Bush (IAH)

• Houston Hobby (HOU)

• Indianapolis (IND)

• Las Vegas (LAS)

• Los Angeles (LAX)

• Minneapolis/St. Paul (MSP)

• Oakland (OAK)

• Phoenix (PHX)

• Portland (PDX)

• Provo (PVU)

• Salt Lake City (SLC)

• San Diego (SAN)

• San Francisco (SFO)

• Sea le (SEA)

4 TUCSON AIRPORT AUTHORITY 2021 ACFR

Air Service at Tucson International Airport (continued)

Air service at TUS improved during the second half of FY 2021 from the decline brought on by the COVID-19

pandemic. As health safety restric ons loosened in the later months of the ﬁ scal year, passengers returned

to the airport in increasing numbers. Airlines struggled in that  me to return to full capacity because of

staﬃ ng reduc ons and decisions to temporarily decommission aircra during the ini al stages of the

pandemic. Airlines con nue to deal with staﬃ ng shortages and global inﬂ a onary pressures.

The  ming and pace of a recovery in demand for air service in the U.S. and worldwide is not yet possible to

predict with any degree of certainty. However, assuming demand for air service does return to levels that

existed prior to the COVID-19 pandemic, the TAA is conﬁ dent that most, if not all, routes will be restored

to previous service levels and that suﬃ cient demand exists for year-round daily service to a myriad of

domes c des na ons. Less than daily year-round service to a limited number of des na ons in Mexico

and seasonal service from one or more Canadian ci es are also considered viable. Addi onally, strong

performance of certain exis ng seasonal routes such as Minneapolis and Portland suggest opportuni es to

maintain these routes year-round.

Financial Impact on the TAA of Reduced Travel Related To COVID-19

Like other commercial service airports throughout the country, a signiﬁ cant share of the TAA’s revenues is

driven by commercial airline ﬂ ights and associated purchases of goods and services by passengers at TUS.

The con nued eﬀ ects of the COVID-19 pandemic were felt in FY 2021 as revenues remained below pre-

pandemic levels. The TAA has made plans to withstand con nued nega ve condi ons in FY 2022.

In FY 2021, the TAA completed its draw down of the funds it was awarded by the Federal Avia on

Administra on (FAA) from the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The CARES

Act provided relief in the form of grants to reimburse airport opera ng and capital expenditures, to

maintain employment levels, and help oﬀ set the impact of revenue losses from the drama c reduc on

in air travel. The TAA received $22.6 million in CARES Act grants. The TAA ini ated its draw down of

the funds it was awarded under the Coronavirus Response and Relief Supplemental Appropria on Act

(CRRSAA), which was an extension of relief in the form of airport grants for purposes like those authorized

in the CARES Act. The TAA received $6.0 million in CRRSAA grants. In March 2021, the federal government

enacted the American Rescue Plan Act (ARPA), which authorized addi onal grant funding to airports for

similar purposes as the CARES Act and CRRSAA. The TAA has been awarded $15.8 million in ARPA grants.

One of the signiﬁ cant condi ons for airports accep ng these grants is that they must maintain employment

levels at a minimum of 90% of pre-pandemic levels through September 30, 2021. The TAA maintained the

required minimum employment levels as deﬁ ned by the three relief acts.

The federal relief funds provided through the three programs described above, posi ons the TAA to

con nue opera ng TUS and RYN in a manner like the pre-COVID period. The total dollars awarded are

expected to provide for ongoing relief and con nuity of opera ons for mul ple years, even if air travel

recovery con nues at its currently reduced pace.

Major Initiatives

CAPITAL IMPROVEMENT PROGRAM

The TAA Board approves development programs and projects, and management executes the development

plans for TUS and RYN. As such, the Board approved the Master Plan update for TUS in 2013 and RYN in

2020, respec vely, that outlined the development plans to address future airport capital needs. The TUS

Master Plan also included a land use plan which iden ﬁ es the highest and best use of property owned by

Economic Conditions And Outlook (continued)

INTRODUCTION 5

the TAA and iden ﬁ es land which should be acquired in the future for expansion. The TAA addresses the

Master Plan and any new capital spending needs that arise through its Capital Improvement Program (CIP),

which is updated and adopted annually. TAA staﬀ execute the project plans as outlined in the respec ve

master plans.

Capital improvement projects require funding apart from rou ne opera ng expenses. Such projects entail

the purchase, construc on, or replacement of the physical assets of the TAA. The purpose of the CIP

process is to evaluate, priori ze, and coordinate proposed projects for a ﬁ ve-year period. The compila on

of the CIP has as its primary goal the development of a detailed capital budget for the current ﬁ scal year

and a plan for capital development during the four subsequent years. The Board, by approving the CIP, sets

a strategy and schedule for budge ng and construc ng facili es at TUS and RYN.

Funding for CIP projects can come from a variety of sources including grants from the Federal Avia on

Administra on (FAA), the Arizona Department of Transporta on (ADOT) and other governmental agencies,

or from Passenger Facility Charges (PFCs) and TAA opera ng revenues.

FY 2021 COMPLETED CIP CONSTRUCTION AND PROJECTS AT TUS (GREATER THAN $75,000)

10112255 EIS for Relocated Runway 11R and Associated Taxiways | Cost: $3,370,192.

Scope: Environmental Impact Study (EIS) for reloca on of Runway 11R and associated taxiway

enhancements. Included inventory of environmental resources within the project area, an assessment of

alterna ves, an analysis of impacts, and the iden ﬁ ca on of poten al mi ga on measures and/or ﬁ ndings

of no signiﬁ cant impact.

Consultant: Landrum and Brown.

10113364 Reconstruct HIDTA, Universal and Helicopter Pad Pavement Areas | Cost: $540,196.

Scope: Reconstruc on of approximately 114,600 square feet of asphalt apron pavement in General

Avia on Area B1 that serves mul ple hangars. Included marking and re-striping.

Consultant: Ninyo & Moore Geotech.

Contractor: Granite Construc on

10119021 Jet Bridge Replacement | Cost: $563,753.

Scope: Installed and commissioned a replacement passenger boarding bridge at Gate B1.

Contractor: John Bean Technologies Corpora on

10119202 Runway 11L/29R Shoulder Widening | Cost: $925,939.

Scope: Widened the runway shoulders on Runway 11L to 50’ to mi gate the issue with Foreign Object

Debris (FOD) created and associated with cleanup caused by wide body four engine aircra .

Consultant: AECOM.

Contractor: Granite Construc on.

FY 2021 COMPLETED CIP CONSTRUCTION AND PROJECTS AT RYN (GREATER THAN $75,000)

20112259 Ryan Master Plan Update | Cost: $706,688.

Scope: Updated the exis ng 20-year Master Plan for Ryan Airﬁ eld. Avia on ac vity forecasts, development

alterna ves, ﬁ nancial plan, strategic plan, and security assessment elements were included in the update.

Consultant: Mead & Hunt.

FY 2021 CIP AT TUS – ONGOING AND NEW PROJECTS (GREATER THAN $500,000)

U.S. Customs and Border ProtecƟ on (CBP) RelocaƟ on | Cost: $1.8 million.

Major Initiatives (continued)

6 TUCSON AIRPORT AUTHORITY 2021 ACFR

Renova ons to the ﬁ rst ﬂ oor of the former Execu ve Terminal building to relocate general avia on

customs processing facili es, CBP oﬃ ces and Global Entry enrollment oﬃ ce.

Consultant: DLR Group Architecture

Contractor: Canyon Building and Design

Reconstruct Taxiway D, Shoulders & Connectors | Cost: $12.8 million.

Reconstruct (mill and overlay) Taxiway D Shoulders and Connectors.

Consultant: Dibble Engineering

Contractor: Granite Construc on

Airﬁ eld Safety Enhancement (ASE) Program | Cost: $300 million.

The ASE Program includes improvements to the Tucson Interna onal Airport (TUS) airﬁ eld to meet current

FAA airﬁ eld design and safety standards. The program will be completed in phases over mul ple years

depending on availability of grant funds.

Consultant(s): WSP USA, Jacobs Engineering Group, Garver LLC, RS&H, Inc., HDR Engineering

Contractor: Granite Construc on

Electronic Video InformaƟ on Display System (EVIDS)/Audio Paging Replacement | Cost: $2.8 million.

Replace EVIDS and Audio Paging System for the TUS terminal complex.

Contractor: Arizona Sound and Light, Inc.

FY 2021 CIP AT RYN – ONGOING AND NEW PROJECTS (GREATER THAN $500,000)

On-Airport Sanitary Sewer CollecƟ on System | Cost: $1,023,783.

Install piping and connect to a new trunk sewer line from the exis ng connec on point at the northeast

corner of RYN’s property to the Administra on Oﬃ ce area.

Consultant: Crown West Land Group

Contractor: KE&G

APMS-Pavement PreservaƟ on-Runway 6R/24L | Cost: $947,379.

Crack seal and apply rubberized asphalt emulsion seal coat to RW 6R/24L. Re-stripe pavement markings.

Consultant: Kimley-Horn Associates

Install Precision Approach Path Indicators (PAPI) at Ryan Airﬁ eld (RYN) | Cost: $573,302.

PAPIs will be installed at approach to Runway 6R, 6L and 24R to enhance the level of ﬂ ight safety by

providing addi onal visual approach slope guidance at RYN’s primary and secondary runways.

Consultant: CR Engineers, Inc.

Contractor: Rural Electric Inc.

MAJOR MAINTENANCE PROGRAM

The TAA Board has governance oversight of the TAA; TAA management is responsible for the maintenance

of TUS and RYN. Accordingly, the Board approves a Major Maintenance Program (MMP) as part of each

year’s budget process, and the TAA staﬀ execute or implement the program, respec vely. MMP projects

require funding apart from rou ne maintenance opera ons. The purpose of the MMP is to evaluate,

priori ze, and coordinate proposed projects for a ﬁ ve-year period.

FY 2021 COMPLETED MM PROJECTS AT TUS (GREATER THAN $75,000)

10214546 GA Valencia Landscaping | Cost: $90,961.

Major Initiatives (continued)

INTRODUCTION 7

Scope: Installed gravel and plant landscaping along Valencia to Millionaire.

Contractor: Northwest Landscaping

10215653 Sealcoat Economy Lot – Phase 1 | Cost: $209,920.

Scope: Power-cleaned and seal coated 829,660 square feet of asphalt payment at the Economy Parking Lot

Contractor: Sunland Asphalt

10216850 New IDF-17 Concourse B | Cost: $640,804.

Scope: Designed and built 500 sq.  . of exis ng space on the Concourse B opera ons level to provide

new space for IDF Room #17. Project includes ITT IDF equipment, grounding, racks, cabinets, emergency

UPS power/panel, outlets, dedicated/redundant in-rack air condi oning, AEMCS connec on, TAB, ﬁ re

protec on, modiﬁ ca ons to ligh ng, ﬁ re alarm, telecom, and ACS (Access Control System).

Consultant: DWL Architects

Contractor: Core Construc on

10217934 Air Handler Unit (AHU) 1 and 2 Replacement | Cost: $666,933.

Scope: Replaced the exis ng AHU 1 and 2 air handlers in Bag Alley with new Trane AHU’s. Demoli on of

exis ng AHU-1 and 2 and associated VFDs.

Consultant: Adams & Associates Engineering

Contractor: Sun Mechanical

10217954 RAC Expansion and Joint Sealer Repair | Cost: $845,896.

Scope: Replaced the expansion joints on the second and third levels of the parking garage.

Consultant: Kimley-Horn and Associates, Inc.

Contractor: Granite Construc on

10217978 Update Family Restrooms on A and B Concourses | Cost: $933,962.

Scope: Added family restrooms pre- and post-security and on Concourses A and B.

Consultant: Herzog Associates.

Contractor: Marsh Development

10219001 Pavement Management System Update | Cost: $400,673.

Scope: Pavement Condi on Inspec on (PCI) and updated TAA’s Pavement Management System for all

airside and landside pavements at TUS and landside pavements at RYN.

Consultant: Kimley-Horn Associates, Inc.

10219024 Concourse A and B Service Hallway and Elevator Upgrades | Cost: $163,339.

Scope: Upgraded ﬁ nishes in service hallways with galvanized wainscot panels and vinyl ﬂ ooring. Also

updated ﬁ nishes in elevator interiors.

Contractor: Chase Building Team and KONE, Inc.

10219075 RAC Building Air CondiƟ oning (AC) Replacements | Cost: $419,035.

Scope: Redesigned the exis ng central cooling system and installed a new complete system with two 32-

ton systems that work in unison.

Contractor: EMCOR Services Arizona

10219079 Jet Bridge Repairs (A3, B1, B9) | Cost: $76,613.

Scope: Upgraded and repaired Jet Bridges A3, A4, B1 and B9.

Contractor: John Bean Technologies Corpora on

Major Initiatives (continued)

8 TUCSON AIRPORT AUTHORITY 2021 ACFR

10219246 Bridge InspecƟ ons | Cost: $78,500.

Scope: Safety inspec on and evalua on of two bridges, three box culverts and the main departure

vehicular deck bridge.

Consultant: Dibble & Associates Consul ng

10219250 Pullouts and RIP RAP Along Los Reales Road | Cost: $126,339.

Scope: Placement of pavement and concrete curb for pullouts along Los Reales Road and place RIP RAP to

control drainage areas.

Contractor: Granite Construc on and Northwest Landscaping

10220259 Outbound Baggage Belt Overhaul | Cost: $445,019.

Scope: Complete overhaul of the Southwest Airlines outbound baggage belt system by relacing all cri cal

components such as conveyor belts, bearings, tensioning rollers, main drive motors and programmable

logic controllers.

Contractor: ERMC Avia on, Inc.

10220339 Jet Bridge Improvements (A4 & B4) | Cost: $151,028.

Scope: Upgraded and repaired Jet Bridges A4 and B4.

Contractor: John Bean Technologies Corpora on

10220415 Replace Core Switches for Enterprise Network| Cost: $144,080.

Scope: Upgraded two exis ng Cisco 6880 core network switches to a set of four new Catalyst 9500

switches conﬁ gured as two separate and connected Stackwise Virtual cluster pairs of Catalyst 9500

switches.

Contractor: Sen nel Technologies

FY 2021 COMPLETED MMP PROJECTS AT RYN (GREATER THAN $75,000)

20215735 Replace IATA Building HVAC Roof Top Units | Cost: $253,342.

Scope: Replaced exis ng HVAC units for IATA building.

Contractor: Pueblo Mechanical and Controls

FEDERAL AND STATE FUNDING

The TAA par cipates in the FAA’s Airport Improvement Program (AIP), which provides Airport and Airway

Trust Fund funds for airport development, airport planning, and noise compa bility programs. The FAA

oﬀ ers both en tlement and discre onary grants for eligible projects. Grants received under this program

in FY 2021 totaled $32,799,824. The FAA has awarded $183,065,140 in grants to the TAA during the past

ten years.

The State of Arizona also provides grant assistance to airports. These grants may cover up to half of the

TAA’s required match for AIP projects or full funding for projects of smaller size and scope. Grants received

under this program in FY 2021 totaled $1,338,930. ADOT has awarded $14,898,877 million to the TAA

during the past ten years.

PASSENGER FACILITY CHARGE PROGRAM

In 1990, Congress approved the Avia on Safety and Capacity Expansion Act which authorized domes c

airports to impose Passenger Facility Charges (PFCs) fees on enplaned passengers to generate revenues

for airport projects that increase capacity, enhance compe  on among and between air carriers, enhance

Major Initiatives (continued)

INTRODUCTION 9

safety or security, or mi gate noise impacts. Airport sponsors planning to impose PFCs must apply to the

FAA and meet speciﬁ c requirements set forth in the enabling legisla on. Airport operators may impose

PFCs a er receiving wri en approval and authoriza on from the FAA.

The TAA currently has approval from the FAA to collect $117,744,485 under PFC applica on 97-01-C-03-TUS,

$44,194,512 under PFC applica on 06-02-C-00-TUS, and $17,351,019 under PFC applica on 17-03-C-00-

Major Initiatives (continued)

TUS, extending through February 1, 2027. As of September 30, 2020, the TAA had earned $141,100,560 in

PFCs since the incep on of the program, plus associated interest.

The FAA’s PFC approvals included authoriza on to u lize PFCs for the payment of principal and interest

on general airport revenue bonds issued to pay construc on costs related to eligible projects. PFCs

are currently being used to pay debt service on subordinate lien revenue bonds for landside terminal

expansion in 2001, land acquisi ons completed in 2005 and a concourse renova on project completed in

2008.

Financial Policies and Practices

BUDGETARY CONTROLS

An annual budget is prepared on a residual cost basis as established by Sec on 5.03(a) of the Airport Use

Agreement dated April 27, 1977, and amended therea er to September 30, 2023, for all accounts and

funds established by the agreement. The annual budget serves as a founda on for the TAA’s ﬁ nancial

planning and control. All appropria ons, except for those for open project accounts, lapse at the end

of each ﬁ scal year. Since there is no legal requirement for the TAA to report on a budgetary basis, no

addi onal budget informa on is presented in the accompanying ﬁ nancial statements.

Sec on 4 of the City of Tucson Agreement (Lease) dated October 14, 1948, requires the TAA to present a

biennial version of the budget to the Mayor and City Council for informa on purposes. The annual budget

is approved by the Board prior to its implementa on and, in accordance with the Airport Use Agreement,

is presented to the Airline and Airport Aﬀ airs Commi ee (AAAC) for review.

The “Residual Cost” approach forms the basis of the TAA’s contractual rela onship with signatory airlines.

This approach is common, but not universal, among U.S. airport operators. It is a methodology that

encompasses the following concepts:

Residual Cost | A method of determining which costs are the responsibility of the airlines as payment to

the TAA for providing, opera ng, and managing the airport system (TUS and RYN). The result is coverage of

all TAA opera ng and capital improvement costs on a break-even basis.

Airline Reserve Fund | The excess, if any, of revenues over costs calculated in accordance with the Airport

Use Agreement at the end of each year.

Majority-In-Interest (MII) | A vo ng formula used by the signatory airlines in considering approval of

signiﬁ cant capital expenditures and use of Airline Reserve Fund monies. The use agreement deﬁ nes MII as

a numerical majority of the signatory airlines that represent more than 50% of the total landed weight at

the airport.

Exclusive Rights | Rights provided to individual airlines through the Airport Use Agreement for the use of

exclusive space to accommodate their opera ons and paid for in the form of rents.

PreferenƟ al Rights | Rights provided to individual airlines through the Airport Use Agreement for the use

10 TUCSON AIRPORT AUTHORITY 2021 ACFR

Financial Policies and Practices (continued)

To provide ﬁ nancial resources adequate to meet the TAA’s needs, the Airport Use Agreement includes a

formula for the calcula on of rates and charges, including landing fees. This formula, the “Airport System

Income Requirement,” serves as a template in crea ng the annual budget and is commonly referred to

simply as the “Airport System.”

The formula consists of four elements:

• Opera on and Maintenance Expenses — in addi on to day-to-day opera ng requirements, this

item provides for capital needs, short-term debt obliga ons, and any other requirements not

included elsewhere in the formula.

• Debt Service Requirements — includes 125% of the principal and interest payments due in

accordance with senior lien revenue bond resolu ons and debt amor za on schedules. The 25%

excess is called “coverage.” For subordinate lien revenue bonds where other revenue sources

such as PFCs are not pledged for debt service, the excess coverage requirement is 10%. Providing

coverage fulﬁ lls a covenant in the bond resolu ons that requires this surplus as assurance to bond

holders that adequate funds will be available to pay debt service requirements on a  mely basis.

In the normal course of business, the coverage is not needed and it ﬂ ows through the airport

system.

• Fund Replenishments — provides for the funding and refunding of the various reserve funds

required by the TAA’s senior and subordinate lien bond resolu ons and the Airport Use

Agreement.

• Adjustments — 100% of opera ng income ﬂ ows through the airport system. At year-end, certain

revenues deﬁ ned in the use agreement are transferred out of the airport system into the Special

Reserve Fund and are excluded from the residual cost calcula on. These revenues include:

• 52% of the net income generated from designated “industrial area” developments, which are

geographic loca ons at TUS.

• Interest income earned from the investment of monies accumulated in the Special Reserve

Fund and Insurance Reserve Fund.

Together, these four elements (Debt Service, Opera ons & Maintenance, Fund Replenishment, and

Adjustments) comprise the “Total Gross Requirement.” This requirement is then reduced by all of the

available resources that include:

• Opera ng income.

• Beginning cash balance that is the coverage from the prior year, adjusted by any overage or

shor all from opera ons.

The net amount resul ng from this calcula on is the residual amount that is used to calculate landing fees

required to be paid by the signatory airlines in order to “balance” the budget.

LONG-TERM FINANCIAL PLANNING

One of the tools the TAA uses for long-term planning is the Master Plan. This document was prepared

with the input of TAA staﬀ , the signatory airlines and other key tenants and stakeholders. The Master Plan

projects airport growth and then speciﬁ es the physical improvements that are needed to meet these

projec ons of future demand. It consists of a technical report that speciﬁ es the logic and reasoning for the

proposed capital improvements as well as large scale drawings that illustrate the physical layout of the

improvements. The ﬁ nancial implica ons of the Master Plan are important because they serve as the basis

for reques ng federal funds for the construc on of capital improvements proposed in the plan.

INTRODUCTION 11

The TAA’s most recent update of the Master Plan provides a ﬂ exible and cost-eﬀ ec ve guide for the future

development of TUS through the year 2030. Capital improvements recommended by the plan are demand

driven. This means that although there are many projects proposed by the plan, only those that are needed

because of actual increase in demand will be constructed. The TAA Board of Directors adopted an updated

RYN Master Plan Update in December of 2020. The RYN Airport Layout Plan (ALP), as part of the Master

Plan Update, was approved and signed by the FAA on March 31, 2021. The plan is available for viewing on

the TAA’s website: ﬂ ytucson.com.

The Airport Master Plan forms the basis for a mul -year Capital Improvement Plan, which is updated

on a regular basis. The plan typically contains at least ﬁ ve years of projec ons, longer, if necessary,

for a par cular need such as a bond-ﬁ nancing project or airline use agreement nego a ons. Capital

Improvement Plan assump ons are based on the best informa on available of needs on a project-by-

project basis extending through the planning horizon.

CAPITAL FINANCING AND DEBT MANAGEMENT

Capital improvements that require long-term ﬁ nancing are typically funded using either TAA reserves

or airport revenue bonds. Unrestricted Special Reserve Fund balances that are the result of the sharing

of industrial area revenues with airline tenants give the TAA considerable ﬂ exibility in ﬁ nancing capital

improvements. The most signiﬁ cant beneﬁ t is that the TAA’s share (amounts not reimbursed with

grants or passenger facility charges) of most capital improvements is ﬁ nanced internally rather than

through issuance of airport revenue bonds. This prac ce avoids bond issuance and interest costs, creates

administra ve eﬃ ciencies, and results in a lower total cost of ﬁ nancing for airline tenants. Reserve funds

are restored as the costs of improvements are amor zed, with interest, over their useful lives and paid

back to the TAA by the airline tenants through rates and charges.

Capital expenditures for FY 2021 were ﬁ nanced through a combina on of federal and state grants, internal

ﬁ nancing from unrestricted reserve funds, and funds generated through the Airport System Income

Requirement formula.

INTERNAL CONTROLS

Management of the TAA is responsible for establishing and maintaining adequate internal controls

designed to ensure that assets are protected from loss, the , or misuse; to promote eﬃ ciency of

opera ons; to comply with applicable laws and regula ons; and to ensure that accurate accoun ng records

are kept, allowing for the prepara on of ﬁ nancial statements in accordance with GAAP. The internal

control structure is designed to provide reasonable, but not absolute, assurance that these objec ves are

met. The TAA works to ensure that its internal control processes are suﬃ ciently documented and that the

performers of the controls are trained to perform them.

Other Information

REQUESTS FOR INFORMATION

This ﬁ nancial report, along with the audited ﬁ nancial statements, is designed to provide a general overview

of the Tucson Airport Authority.

Ques ons concerning the informa on contained in this report should be addressed to:

Tucson Airport Authority Finance Department

7250 S. Tucson Blvd., Suite 300

Tucson, Arizona 85756

Financial Policies and Practices (continued)

12 TUCSON AIRPORT AUTHORITY 2021 ACFR

AWARDS AND ACKNOWLEDGEMENTS

The Government Finance Oﬃ cers Associa on of the United States and Canada (GFOA) awarded a

Cer ﬁ cate of Achievement for Excellence in Financial Repor ng to the TAA for its Annual Report for the

ﬁ scal year ended September 30, 2020. This was the 27th consecu ve year that the TAA achieved this

pres gious award. To be awarded a Cer ﬁ cate of Achievement, a government must publish an easily

readable and eﬃ ciently organized Annual Report. This report must sa sfy both GAAP and applicable legal

requirements.

A Cer ﬁ cate of Achievement is valid for a period of one year only. We are conﬁ dent that the current Annual

Report con nues to meet the Cer ﬁ cate of Achievement Program’s requirements; it will be submi ed to

the GFOA to determine its eligibility for another Cer ﬁ cate of Achievement.

This report is oﬀ ered in a PDF format, allowing the user to download it and save, print, or view it online at

the airport website: www.ﬂ ytucson.com.

The publica on of this Annual Report reﬂ ects the level of excellence and professionalism of the TAA

Finance Department. In addi on, it is appropriate to express apprecia on to all members of the TAA staﬀ

who contributed to the prepara on of this Annual Report and the accomplishments that we are privileged

to report.

Thank you for your con nuing interest and support of the staﬀ ’s eﬀ orts to conduct the ﬁ nancial opera ons

of the Tucson Airport Authority in a responsible and progressive manner.

Respec ully submi ed,

Dane e M. Bewley, A.A.E. Kirk Eickhoﬀ , CPA

President/Chief Execu ve Oﬃ cer Vice President and Chief Financial Oﬃ cer

INTRODUCTION 13

Government Finance Officers Association

Certificate of

Achievement

for Excellence

in Financial

Reporting

Presented to

Tucson Airport Authority

Arizona

For its Annual Comprehensive

Financial Report

For the Fiscal Year Ended

September 30, 2020

Executive Director/CEO

14 TUCSON AIRPORT AUTHORITY 2021 ACFR

Organizational Structure

Executive Vice President

and Chief Operating

Oﬃ cer

Bruce Goetz

Vice President

Planning & Engineering

Michael Smejkal

Facility DevelopmentPolice

Airside Operations

Airport

Communications

Center

Maintenance &

Custodial Services

Fire

Civil Development

Environmental

Services

Airport Planning

Vice President Finance

and Chief Financial

Oﬃ cer

Kirk Eickhoﬀ

Finance/Accounting

Programs & Regulatory

Compliance

Information

Technology

People Operations

Vice President

Business & Commercial

Development and Chief

Commercial Oﬃ cer

John Voorhees

Properties/

Concessions/Ground

Transpor tation

Board of Directors

and TAA Membership

Support

Government Aﬀ airs

Procurement/

Warehouse

Board of Directors

President and Chief

Executive Oﬃ cer

Danette Bewley

Executive Assistant

Cathy Borders

Air Service Development,

Marketing, Communica-

tions, External Relations,

and Community Relations

Safety Programs

Vice President People

Operations and Chief

People Oﬃ cer

Twyla Salaiz

Vice President Legal and

General Counsel

Christopher Schmaltz

INTRODUCTION 15

PASSENGER

AIRLINES

Alaska Airlines

American Airlines

Delta Air Lines

Frontier Airlines

Mesa Airlines

Sierra Paciﬁ c

SkyWest Airlines

Southwest Airlines

Sun Country Airlines

United Airlines

CARGO AIRLINES

Ameriﬂ ight

Federal Express

CAR RENTALS

Alamo

Avis

Budget

Dollar

Enterprise

Hertz

National

RYAN AIRFIELD

Aero Smith

Aero Experts

Air Center West

Aircrafters

Air Ventures Ltd.

Air West, Inc.

Alpha Air, Inc.

Aviation Pursuits

Cherokee Cabañas

Corsair Condos

Dangle Aviation

Double Eagle Aviation

Duncan & Associates

Jim’s Aircraft

Kelly’s Aviation

Marjet, Inc.

Mobile Aire Hangars

North American Aerial

Surveys

Richie’s Café

Sonora Avionics

Tuc son Upholster y

United Indian Missions

Velocity Air, Inc.

Vistawest Hangars

Serco Inc.

TUCSON

INTERNATIONAL

AIRPORT

AT&T

A.E. Petsche Company,

Inc.

Ace Parking

Management, Inc.

AERGO-TUS, LLC

Aerospace Hangar, LLC

Aerovation

Airport Information

Centre

Amalong, Terry

Apple Autos

Arizona Aero-Tech

Morris Air National

Guard

Arizona Aviation

Associates

Ascent Aviation

Services

Arizona Department of

Public Safety

Ashton Company

Atlantic Aviation

Bags, Inc.

Bombardier Aerospace/

Learjet Inc.

Broward Aviation

City of Tucson

Civil Air Patrol

Delaware North

Delta Global Logistics

Double Eagle Aviation

Flight School

Federal Aviation

Administration

FlightSafety

International, Inc.

General Services

Administration

Granite Construction

Company

Handy Hangars

The Hudson Group

Hughes Federal Credit

Union

Jet, LLC

Lamar Advertising

Lan-Dale Co.

Luggage Services &

Logistics

Lyft

Airlines and Tenants As Of September 30, 2021

Matheson Flight

Extenders, Inc.

Military Lounge

Million Air

Mitsubishi Heavy

Industrial – RJ Aviation

Pima Community

College

Pima County Sheriﬀ ’s

Department

PrimeFlight Aviation

Services

Prospect International

Airport Services, Inc.

Raytheon Missiles &

Defense

Real Air Hangar, Inc.

Rolls Royce

Simplicity USA Ground

Services

Smarte Carte, Inc.

Southwest Airport

Services

SOS Security

Southwest Heliservices

Swissport Fueling

Services

Transpor tation Securit y

Administration

Tucson Aviation, LLC

Tuc son E xecutive

Center

Tuc son Fuel Facilities,

LLC

Tucson Jet Center

Tuc son Police

Department

Two-Shakes of a

Lambs Tail Baggage

Delivery Service

Uber

Tuc son Stagecoach

Express

Universal Avionics

U.S. Customs &

Border Protection

U.S. REIF Tucson

Commerce Center

VIP Cab

Verizon Wireless

Victor II, Ltd.

Wright Flight, Inc.

Yellow Cab

FINANCIAL

SECTION

16 TUCSON AIRPORT AUTHORITY 2021 ACFR

Independent Auditors’ Report

FINANCIALS 17

Independent Auditors’ Report (continued)

18 TUCSON AIRPORT AUTHORITY 2021 ACFR

The following discussion and analysis of the ﬁ nancial performance and ac vity of the Tucson Airport

Authority, Inc. (TAA) provides an introduc on to the TAA’s ﬁ nancial statements for the ﬁ scal year ended

September 30, 2021 (FY 2021). Informa on for the two preceding ﬁ scal years ended September 30, 2020

and 2019 (FY 2020 and FY 2019, respec vely) has been included to provide a be er insight into the overall

ﬁ nancial posi on of the TAA.

The TAA is a business-type ac vity and, as such, the Basic Financial Statements and Required

Supplementary Informa on (RSI) consist of Management’s Discussion and Analysis (MD&A), the

Statements of Net Posi on, the Statements of Revenues, Expenses and Changes in Net Posi on, the

Statements of Cash Flows, and the Notes to Financial Statements. This MD&A has been prepared by

management and should be read and considered in conjunc on with the TAA’s basic ﬁ nancial statements.

AIRPORT ACTIVITIES & HIGHLIGHTS

Passenger and air carrier ac vity decreased in both FY 2021 and FY 2020 at the Tucson Interna onal

Airport (TUS) a er an increase in FY 2019. Total passengers decreased by 1.1% for FY 2021, which followed

a decrease of 39.6% for FY 2020 and an increase of 6.5% for FY 2019. The TAA noted a marked recovery

from the impacts of the COVID-19 pandemic when compared to FY 2020. Daily nonstop departures

increased to 43 at the end of FY 2021, which is a signiﬁ cant recovery from the count of 24 at the end of FY

2020, though slightly down from the count of 47 daily nonstop departures recorded at the end of FY 2019.

In general, average nonstop departures are impacted by a number of factors and vary from day-to-day

and month-to-month. The average daily seat capacity in FY 2021 was a 7.6% decrease over FY 2020, which

followed a 24.9% decrease over FY 2019, and a 9.6% increase in FY 2019 compared to FY 2018.

Total aircra opera ons (take-oﬀ s and landings) at TUS increased 14.3% in FY 2021 a er decreasing 6.7%

in FY 2020 and increasing 0.2% in FY 2019. Total FY 2021 opera ons comprised 74,758 general avia on

opera ons, 45,023 air carrier and air taxi (passenger airline, cargo airline, and charter) opera ons and

20,401 military opera ons. In contrast to air carrier and air taxi opera ons that generate landing fee

revenue, general avia on and military opera ons do not directly generate revenue for the TAA. The

increase in opera ons for FY 2021 was primarily a ributed to an increase in military and general avia on

of 21.1% and 19.5%, respec vely. The decrease in opera ons for FY 2020 was primarily a ributed to a

decrease in air carrier and military opera ons of 25.9% and 9.7%, respec vely, which was par ally oﬀ set by

an increase of 5.1% in general avia on.

Landed weight decreased by 2.7% in FY 2021 from FY 2020 to 1,633,047 one-thousand pound units, a er

decreasing by 25.2% in FY 2020 and increasing by 7.9% in FY 2019. In addi on to changes in overall air

traﬃ c resul ng from the COVID-19 pandemic in FY 2021, the changes across all years have been caused by

varia ons in passenger carrier air service through a combina on of increases and/or decreases in ﬂ ights

and the size of aircra used for ﬂ ights.

Mail and express cargo shipments increased by 7.0% in FY 2021 from FY 2020, following a decrease of 4.0%

in FY 2020 and an increase of 4.0% in FY 2019. The changes in mail and express cargo shipments in each

of these years were primarily a result of changes experienced by Federal Express, the single major cargo

carrier opera ng scheduled ﬂ ights at TUS.

Eight major domes c passenger carriers served TUS as of both September 30, 2021 and September 30,

2020 and six as of September 30, 2019. American Airlines and Southwest Airlines have dominated in both

passenger ac vity and landed weight over the three repor ng periods. These two carriers accounted for

59.5% of passenger traﬃ c in FY 2021, 62.1% FY 2020 and 63.5% in FY 2019.

Management’s Discussion and Analysis

September 30, 2021

FINANCIALS 19

AIRPORT ACTIVITIES & HIGHLIGHTS (continued)

Management’s Discussion and Analysis (continued)

September 30, 2021

Passengers by Airline (Thousands)

2021 2020 2019

1,400

1,200

1,000

800

600

400

200

American Southwest Delta United Alaska Other

Total Passengers and Landed Weight (Thousands)

Passengers Landed Weight

3,500

3,000

2,500

2,000

1,500

1,000

500

2021 2020 2019

Activities & Highlights 2021 2020 2019

Total passengers 2,257,581 2,283,777 3,783,535

% increase/decrease(-) -1.1% -39.6% 6.5%

Average daily seat capacity 4,308 4,663 6,212

% increase/decrease(-) -7.6% -24.9% 9.6%

Aircraft operations 140,182 122,631 131,416

% increase/decrease(-) 14.3% -6.7% 0.2%

Landed weight (1,000 lb. Units) 1,633,047 1,677,958 2,243,559

% increase/decrease(-) -2.7% -25.2% 7.9%

Mail & express cargo (pounds) 67,643,468 63,246,903 65,916,153

% increase/decrease(-) 7.0% -4.0% 4.0%

20 TUCSON AIRPORT AUTHORITY 2021 ACFR

Management’s Discussion and Analysis (continued)

September 30, 2021

AIRPORT ACTIVITIES & HIGHLIGHTS (continued)

Operations by Type (Thousands)

2021 2020 2019

Air Carrier Air Taxi Military General Aviation

Landed Weight by Airline (Thousands)

2021 2010 2019

1,000

800

600

400

200

American Southwest United Delta Federal Alaska

Express

Aircraft Operations (Thousands)

145

140

135

130

125

120

115

110

105

2021 2020 2019

FINANCIALS 21

Total opera ng revenues decreased $2.5 million (6.5%) in FY 2021 over FY 2020 and decreased $8.4 million

(17.8%) in FY 2020 over FY 2019. Decreases in opera ng revenues in FY 2020 were primarily related to

decreases in space rental revenue during the pandemic as rent relief (including waivers of minimum

annual guarantees) was provided to tenants during FY2021. Decreases in opera ng revenues in FY 2020

were primarily related to decreases in concessions and landing fees due to travel restric ons during the

pandemic.

Total opera ng expenses in FY 2021 decreased by $2.8 million (8.5%) over FY 2020. The decrease was

largely a ributable to decreases in personnel and other opera ng expenses par ally oﬀ set by an increase

in contractual services. Total opera ng expenses in FY 2020 increased by $0.4 million (1.2%) over FY 2019,

with increases in personnel and other opera ng expenses par ally oﬀ set by a decrease in contractual

services.

SUMMARY OF OPERATIONS AND CHANGES IN NET POSITION

Management’s Discussion and Analysis (continued)

September 30, 2021

FINANCIAL HIGHLIGHTS

The TAA’s assets and deferred ou lows exceeded liabili es and deferred inﬂ ows at the end of FY 2021

by $439.4 million, compared to $423.9 million and $396.0 million at the end of FY 2020 and FY 2019,

respec vely. Unrestricted net posi on for ﬁ scal years 2021, 2020 and 2019 was $106.9 million, $99.6

million and $86.2 million, respec vely. The TAA experienced increases in net posi on of $15.5 million, $27.8

million and $9.0 million for FY 2021, FY 2020 and FY 2019, respec vely, compared to the previous years.

The FY 2021 decrease is largely a ributable to a decrease in both non-opera ng revenues of $6.0 million

due to a large gain on disposed ﬁ xed assets in FY 2020 and a decrease in capital contribu ons of $5.1

million due to large draws on federal grant funding in FY 2020. The FY 2020 increase is largely a ributable

to capital contribu ons of $16.8 million and other nonopera ng grants-in-aid of $14.2 million, oﬀ set by an

$8.4 million decrease in opera ng revenues due to the global response to the COVID-19 pandemic.

The TAA’s total noncurrent liabili es decreased by $40.5 million in FY 2021 over FY 2020 and decreased

by $0.1 million in FY2020 over FY 2019. These decreases reﬂ ect changes in the net pension liability, long-

term debt and noncurrent environmental liabili es. Par cular to FY 2021, the TAA made a lump sum

contribu on payment of $27.2 million to the Public Safety Personnel Re rement System (PSPRS) during

the year for its ﬁ re department and police department pension plans to reduce the associated net pension

liabili es for each.

Summary of Operations and Changes in Net Position 2021 2020 2019

Operating revenues $ 36,328,027 $ 38,869,374 $ 47,261,051

Operating expenses 30,484,383 33,313,961 32,907,346

Operating income before

depreciation & amortization 5,843,644 5,555,413 14,353,705

Depreciation & amortization 20,148,835 19,514,629 18,393,628

Operating (loss) (14,305,191) (13,959,216) (4,039,923)

Nonoperating revenues 20,400,093 26,394,334 12,364,496

Nonoperating expenses (2,205,762) (1,354,548) (2,664,201)

Income (loss) before capital contributions

3,889,140 11,080,570 5,660,372

Capital contributions 11,614,274 16,763,540

3,386,455

Increase in net position 15,503,414 27,844,110 9,046,827

Net position, beginning of year

423,861,783 396,017,673

386,970,845

Net position, end of year $ 439,365,197 $ 423,861,783 $ 396,017,672

22 TUCSON AIRPORT AUTHORITY 2021 ACFR

Management’s Discussion and Analysis (continued)

September 30, 2021

FINANCIAL POSITION

Increase % Increase

Summary of Net Position 2021 2020 (decrease) decrease (-)

Assets

Current (unrestricted) $

154,267,021 $ 176,314,340 $ (22,047,319) -13.9%

Current (restricted) 23,678,719 23,014,065 664,654 2.9%

Net capital assets

335,774,792 331,407,192 4,367,600 1.3%

Net Pension/OPEB Asset

1,711,563 0 1,711,563 100.00%

Other noncurrent assets 88,995 298,252 (209,257) -70.2%

Total assets

515,521,090 531,033,849 (17,224,322) -3.2%

Deferred outﬂ ows of resources

4,180,444 6,091,332 (1,910,888) -31.4%

Total assets and deferred outﬂ ows of resources $ 519,701,534 $ 537,125,181 $ (19,135,210) -3.6%

Liabilities

Current (payable from unrestricted assets)

16,842,881 17,556,125 (713,245) -4.1%

Current (payable from restricted assets) 392,447 402,420 (9,973) -2.5%

Noncurrent

55,643,245 94,435,684 (40,504,000) -42.9%

Total liabilities

72,878,574 112,394,229 (41,227,218) -36.7%

Deferred inﬂ ows of resources 7,457,762 869,169 6,588,593 758.0%

Total liabilities and deferred inﬂ ows of resources

80,336,336 113,263,398 (34,638,625) 721.4%

Net position

Net investment in capital assets

309,147,343 301,652,819 7,494,524 2.5%

Restricted 23,286,272 22,611,645 674,627 3.0%

Unrestricted 106,931,583 99,597,319 7,334,264 7.4%

Net position $

439,365,198

423,861,783

15,503,415 3.7%

Non-opera ng revenues in FY 2021 decreased 22.7% compared to FY 2020. This was mainly due to a

decrease gain on disposi on of ﬁ xed assets in FY 2021 compared to FY 2020. FY 2020 increased 113.5%

compared to FY 2019. This was primarily a ributable to an increase in the gain on disposi on of capital

assets resul ng from a one- me land sale and other non-opera ng revenue, which includes federal

assistance related to the pandemic. Non-opera ng expenses increased by 62.8% in FY 2021 due to

increased environmental expenses. This follows a decrease in FY 2020 by 49.2% compared to FY 2019,

which was primarily due to decreases in environmental expense and interest expense in that year.

Capital contribu ons in FY 2021 decreased by 30.7% from FY 2020 and FY 2020 increased by 395.0% over

FY 2019. Year-to-year variances in capital contribu ons are determined by factors such as grant availability

and project  ming and are not generally expected to be consistent between years.

FINANCIALS 23

Management’s Discussion and Analysis (continued)

September 30, 2021

FINANCIAL POSITION (continued)

Increase % Increase

Summary of Net Position 2020 2019 (decrease) decrease (-)

Assets

Current (unrestricted) $

176,314,340

158,585,935

17,728,405 11.2%

Current (restricted)

23,014,065 21,646,775 1,367,290 6.3%

Net capital assets 331,407,192 321,124,814 10,282,378 3.2%

Other noncurrent assets 298,252 501,534 (203,282) -40.5%

Total assets

531,033,849 501,859,059 29,174,790 5.8%

Deferred outﬂ ows of resources 6,091,332 3,992,003 2,099,329 52.6%

Total assets and deferred outﬂ ows of resources $ 537,125,181 $ 505,851,062 $ 31,274,119 6.2%

Liabilities

Current (payable from unrestricted assets)

17,556,125 13,853,564 3,702,561 26.7%

Current (payable from restricted assets) 402,420 149,762 252,658 168.7%

Noncurrent

94,435,684 94,486,891 (51,207) -0.1%

Total liabilities 112,394,229 108,490,217 3,904,012 3.6%

Deferred inﬂ ows of resources 869,169 1,343,173 (474,004) -35.3%

Total liabilities and deferred inﬂ ows of resources

113,263,398 109,833,390 3,430,008 3.1%

Net position

Net investment in capital assets

301,652,819 288,319,668 13,333,151 4.6%

Restricted 22,611,645 21,497,013 1,114,632 5.2%

Unrestricted

99,597,319 86,200,991 13,396,328 15.5%

Net position $ 423,861,783 $ 396,017,672 $ 27,844,111 7.0%

24 TUCSON AIRPORT AUTHORITY 2021 ACFR

FINANCIAL POSITION (continued)

Current unrestricted assets decreased in FY 2021 over FY 2020 $22.0M and increased in FY 2020 over FY

2019 by $17.7 million. The FY 2021 decrease was primarily due to a decrease in cash and cash equivalents

of $56.2 million, par ally oﬀ set by an increase in investments of $42.4 million. The FY 2020 increase was

due mainly to an increase in cash and cash equivalents of $43.5 million and grants receivable of $16.5

million, par ally oﬀ set by a $40.8 million decrease in investments. Current restricted assets increased by

$0.7 million in FY 2021 following an increase of $1.4 million in FY 2020. The increase in FY 2021 resulted

from an increase in investments in both the Passenger Facility Charge (PFC) fund and Land Acquisi on

fund, oﬀ set by a decrease in cash in both funds. The increase in FY 2020 resulted from an increase in cash,

oﬀ set by a decrease in investments. Net capital assets increased by $4.4 million in FY 2021 over FY 2020

and increased by $10.3 million in FY 2020 over FY 2019, both years being impacted by projects in the TAA’s

capital improvement program.

Current liabili es payable from unrestricted assets in FY 2021 decreased $0.7 million compared to FY

2020. There was li le change in current liabili es payable from restricted assets in FY 2021 compared to FY

2020, with both years totaling $0.4 million. Current liabili es payable from unrestricted assets in FY 2020

increased $3.7 million compared to FY 2019. Current liabili es payable from restricted assets in FY 2020

increased $0.3 million compared to FY 2019. Total noncurrent liabili es decreased by $38.8 million in FY

2021 compared to FY 2020 and decreased by $0.1 million in FY 2020 compared to FY 2019. The decrease

in FY 2021 was primarily due to a decrease in the net pension liability of $36.8 million. The TAA made a

lump sum payment during FY 2021 to PSPRS of $27.2 million to reduce the net pension liability for both its

ﬁ re department and police department pension programs. The decrease in FY 2020 was primarily due to

normal debt service, oﬀ set by an increase in net pension/other post-employment beneﬁ ts (OPEB) liability.

The largest por on of the TAA’s net posi on, 70.4% for FY 2021, 71.2% for FY 2020 and 72.8% for FY

2019, represents its investment in capital assets (e.g., land, buildings, machinery and equipment), less

outstanding debt used to acquire those assets. The TAA uses these assets to provide services to its

passengers, visitors and tenants that generate future revenue streams. Although the TAA’s investment in

its capital assets is reported net of related debt, the resources needed to repay this debt must be provided

from opera ons, since the capital assets themselves cannot be used to re re these liabili es.

An addi onal por on of the TAA’s net posi on, 5.3% for both FY 2021 and FY 2020 and 5.4% for FY 2019,

represents resources that are subject to restric ons from government grantors, bond resolu ons and

State and Federal regulators on how they may be used. The changes in restricted net posi on over the

three-year period are primarily a ributable to passenger facility charge funds that are accumula ng for

re rement of debt used to ﬁ nance completed terminal expansion and concourse renova

on projects,

oﬀ set by decreases in assets restricted for payment of environmental remedia on expenses. The

remaining unrestricted net posi on balances of $106.9 million for FY 2021, $99.6 million for FY 2020 and

$86.2 million for FY 2019 may be used for any lawful purpose of the TAA.

REVENUES

In FY 2021, total revenues of $68.3 million were less than the prior ﬁ scal year by 16.7%, whereas FY 2020

revenues of $82.0 million were more than FY 2019 by 30.2%.

Opera ng revenues decreased in FY 2021 over FY 2020 by $2.5 million (6.5%). Revenue category changes

included decreases in space rentals of $2.7 million and airport services of $0.3 million, and an increase in

concession revenue of $0.5 million. The largest decrease over prior year was for space rentals (18.2%) and

it is generally a ributable to rent relief that was provided to airport tenants during FY 2021 due to the

COVID-19 pandemic.

Management’s Discussion and Analysis (continued)

September 31, 2021

FINANCIALS 25

Management’s Discussion and Analysis (continued)

September 30, 2021

Opera ng revenues decreased in FY 2020 over FY 2019 by $8.4 million (17.8%). Revenue category

changes included decreases in landing fees of $1.0 million, concession revenue decreases of $6.7 million,

and other opera ng revenue decreases of $0.7 million. The landing fees decreased from the prior year

(33.7%), concession revenues (36.2%) and other opera ng revenue decreases (19.7%) are generally

a ributable to the declining traﬃ c at the airport due to restric ons in domes c and interna onal travel

during the COVID-19 pandemic.

The following charts show the major sources and the percentage of operating revenues for ﬁ scal years 2021 and 2020:

Increase % Increase

Revenues by Major Source 2021 2020 (decrease) decrease (-)

Landing fees $ 1,973,618 $ 2,037,041 $ (63,423) -3.1%

Space rentals 11,906,284 14,560,223 (2,653,939) -18.2%

Land rent 3,705,607 3,789,349 (83,742) -2.2%

Concession revenue 12,386,429 11,878,384 508,045 4.3%

Airport services 3,354,818 3,611,852 (257,034) -7.1%

Other operating revenues 3,001,271 2,992,525 8,746 0.3%

Total operating revenues 36,328,027 38,869,374 (2,541,347) -6.5%

Interest income 485,673 2,330,044 (1,844,371) -79.2%

Net increase (decrease) in fair value

of investments (169,672) 47,394 (217,066) -458.0%

Passenger facility charges 4,628,663 4,265,140 363,523 8.5%

Gain on disposition of ﬁ xed assets (22,866) 5,538,871 (5,561,737) -100.4%

Nonoperating grants-in-aid 15,478,295 14,153,997 1,324,298 9.4%

Other nonoperating revenue - 58,888 (58,888) 0.0%

Total nonoperating revenues 20,400,093 26,394,334 (5,994,241) -22.7%

Capital contributions 11,614,274 16,763,541 (5,149,267) -30.7%

Total revenues $ 68,342,394 $ 82,027,249 $ (13,684,855) -16.7%

Operating Revenues FY 2021

Other Operating Revenues

8.3%

Airport Services

9.2%

Concession Revenue

34.1%

Landing Fees

5.4%

Space Rentals

32.8%

Land Rent

10.2%

Operating Revenues FY 2020

Other Operating Revenues

7.7%

Airport Services

9.3%

Concession Revenue

30.6%

Landing Fees

5.2%

Space Rentals

37.5%

Land Rent

9.7%

26 TUCSON AIRPORT AUTHORITY 2021 ACFR

Management’s Discussion and Analysis (continued)

September 30, 2021

REVENUES (continued)

Nonopera ng revenues consist mainly of income on investments, gain on disposi on of capital assets, federal grant

assistance related to the pandemic reported in other nonopera ng revenue, and passenger facility charges (PFCs).

PFC revenue ﬂ uctuates based on passenger levels. FY 2021 nonopera ng revenues decreased $6.0 million (22.7%)

over FY 2020 due to lower gain on disposi on of capital assets of $5.6 million a ributable to a one- me land sale in

FY 2020 and a decrease in interest income of $1.8 million due to various factors in the larger economy, oﬀ set by an

increase in federal grant assistance by $1.4 million. FY 2020 nonopera ng revenues increased $14.0 million (113.5%)

over FY 2019 due to higher gain on disposi on of capital assets of $5.5 million a ributable to a one- me land sale

and an increase in federal grant assistance by $13.9 million, oﬀ set by a decrease in PFC revenue of $3.0 million and

lower interest income and net increase in fair value of investments that combined represented a decrease of $2.5

million from FY 2019.

The following charts show the major sources and the percentage of operating revenues for ﬁ scal years 2020 and 2019:

Operating Revenues FY 2019

Other Operating Revenues

8.0%

Airport Services

6.9%

Concession Revenue

39.4%

Landing Fees

6.5%

Space Rentals

31.8%

Land Rent

7.4%

Increase % Increase

Revenues by Major Source 2020 2019 (decrease) decrease (-)

Landing fees $ 2,037,041 $ 3,070,839 $ (1,033,798) -33.7%

Space rentals 14,560,223 15,046,170 (485,947) -3.2%

Land rent 3,789,349 3,515,665 273,684 7.8%

Concession revenue 11,878,384 18,624,434 (6,746,050) -36.2%

Airport services 3,611,852 3,278,715 333,137 10.2%

Other operating revenues 2,992,525 3,725,228 (732,703) -19.7%

Total operating revenues 38,869,374 47,261,051 (8,391,677) -17.8%

Interest income 2,330,044 3,079,094 (749,050) -24.3%

Net increase (decrease) in fair value

of investments 47,394 1,753,938 (1,706,544) -97.3%

Passenger facility charges 4,265,140 7,229,199 (2,964,059) -41.0%

Gain on disposition of ﬁ xed assets 5,538,871 45,589 5,493,282 12049.6%

Nonoperating grants-in-aid 14,153,997 256,676 13,897,321 5414.3%

Other nonoperating revenue 58,888 - 58,888 0.0%

Total nonoperating revenues 26,394,334 12,364,496 14,029,838 113.5%

Capital contributions 16,763,541 3,386,455 13,377,086 395.0%

Total revenues $ 82,027,249 $ 63,012,002 $ 19,015,247 30.2%

Operating Revenues FY 2020

Other Operating Revenues

7.7%

Airport Services

9.3%

Concession Revenue

30.6%

Landing Fees

5.2%

Space Rentals

37.5%

Land Rent

9.7%

FINANCIALS 27

CAPITAL CONTRIBUTIONS

Capital contribu ons consist of various federal and state grants and vary from year-to-year depending on

grant availability and  ming of projects.

EXPENSES

Total expenses for FY 2021 decreased 2.5% from FY 2020 due primarily to decreases in most opera ng

expenses, oﬀ set by increases in nonopera ng expenses. Opera ng expenses decreased $2.8 million (8.5%).

The increase in opera ng expenses was a result of decreases across all opera ng expense categories

except contractual services. Nonopera ng expenses were $0.9 million (62.8%) higher in FY 2021 than FY

2020, caused primarily by an increase in environmental expenses of $0.9 million.

Management’s Discussion and Analysis (continued)

September 30, 2021

The following charts show the major operating expense categories for the TAA for FY 2021 and FY 2020

Other Operating Expenses

4.4%

Materials & Supplies

5.6%

Contractual

Services

20.2%

Personnel

69.8%

Operating Expenses FY 2020

Increase % Increase

Expenses by Major Category 2021 2020 (decrease) decrease (-)

Personnel $ 20,489,377 $ 23,272,979 $ (2,783,602) -12.0%

Contractual services 7,516,420 6,726,582 789,838 11.7%

Materials and supplies 1,533,550 1,859,050 (325,500) -17.5%

Other operating expenses 945,036 1,455,350 (510,314) -35.1%

Total operating expenses 30,484,383 33,313,961 (2,829,578) -8.5%

Depreciation and amortization 20,148,835 19,514,629 634,206 3.2%

Interest expense 871,573 960,095 (88,522) -9.2%

Environmental expenses 1,334,189 394,453 939,736 238.2%

Total nonoperating expenses 2,205,762 1,354,548 851,214 62.8%

Total expenses $ 52,838,980 $ 54,183,138 $ (1,344,158) $ -2.5%

Other Operating Expenses

3.1%

Materials & Supplies

5.0%

Contractual

Services

24.7%

Personnel

67.2%

Operating Expenses FY 2021

28 TUCSON AIRPORT AUTHORITY 2021 ACFR

EXPENSES (continued)

Total expenses for FY 2020 increased 0.4% from FY 2019 due primarily to increases in most opera ng

expenses, oﬀ set by decreases in nonopera ng expenses. Opera ng expenses increased $0.4 million (1.2%).

The increase in opera ng expenses was a result of increases across all opera ng expense categories except

contractual services. Nonopera ng expenses were $1.3 million (49.2%) lower in FY 2020 than FY 2019,

caused mainly by decreases in interest expense of $0.1 million and environmental expense of $1.2 million.

Management’s Discussion and Analysis (continued)

September 30, 2021

The following charts show the major opera ng expense categories for the TAA for FY 2020 and FY 2019

Other Operating Expenses

2.9%

Materials & Supplies

4.9%

Contractual

Services

23.4%

Personnel

68.9%

Operating Expenses FY 2019

Increase % Increase

Expenses by Major Category 2020 2019 (decrease) decrease (-)

Personnel $ 23,272,979 $ 22,646,456 $ 626,523 2.8%

Contractual services 6,726,582 7,710,016 (983,434) -12.8%

Materials and supplies 1,859,050 1,595,222 263,828 16.5%

Other operating expenses 1,455,350 955,652 499,698 52.3%

Total operating expenses 33,313,961 32,907,346 406,615 1.2%

Depreciation and amortization 19,514,629 18,393,628 1,121,001 6.1%

Interest expense 960,095 1,077,162 (117,067) -10.9%

Environmental expenses 394,453 1,587,039 (1,192,586) -75.1%

Total nonoperating expenses 1,354,548 2,664,201 (1,309,653) -49.2%

Total expenses $ 54,183,138 $ 53,965,175 $ 217,963 $ 0.4%

Other Operating Expenses

4.4%

Materials & Supplies

5.6%

Contractual

Services

20.2%

Personnel

69.8%

Operating Expenses FY 2020

FINANCIALS 29

CAPITAL ASSETS

Net capital assets increased $4.4 million (1.3%) in FY 2021 over FY 2020. The increase resulted from

spending on capital improvement program projects. The most signiﬁ cant FY 2021 CIP projects were

undertaken on the airﬁ eld and included taxiway construc on and a con nua on of the mul -year airﬁ eld

safety enhancement project (ASE).

Addi onal detailed informa on regarding capital asset ac vity may be found in Note 5 to the ﬁ nancial

statements.

Management’s Discussion and Analysis (continued)

September 30, 2021

Net capital assets increased $10.3 million (3.2%) in FY 2020 over FY 2019. The increase resulted from spending

on capital improvement program projects. The most signiﬁ cant FY 2020 CIP projects were undertaken on the

airﬁ eld and included taxiway construc on and design and groundbreaking for the mul -year airﬁ eld safety

enhancement project (ASE). Land assets decreased in FY 2020 due to a one- me disposi on.

Increase % Increase

Net Capital Assets 2021 2020 (decrease) decrease (-)

Land $ 51,555,292 $ 51,555,292 $ (0) 0.0%

Air avigation easement 29,990,090 29,990,090 - 0.0%

Land improvements 211,389,499 203,936,506 7,452,993 3.7%

Buildings and improvements 269,243,354 266,982,123 2,261,231 0.8%

Utilities 5,951,108 5,951,108 (0) 0.0%

Computer software 7,088,492 6,421,357 667,135 10.4%

Furniture, ﬁ xtures, machinery and

equipment 49,984,905 47,836,856 2,148,049 4.5%

Artwork 493,188 481,798 11,390 2.4%

Construction in progress 46,291,185 34,708,397 11,582,788 33.4%

Gross capital assets 671,987,111 647,863,527 24,123,584 3.7%

Less accumulated depreciation 336,212,319 316,456,335 19,755,984 6.2%

Net capital assets $ 335,774,792 $ 331,407,192 $ 4,367,600 1.3%

Increase % Increase

Net Capital Assets 2020 2019 (decrease) decrease (-)

Land $ 51,555,292 $ 52,751,886 $ (1,196,594) -2.3%

Air avigation easement 29,990,090 29,990,090 - 0.0%

Land improvements 203,936,506 199,468,904 4,467,602 2.2%

Buildings and improvements 266,982,123 263,382,099 3,600,025 1.4%

Utilities 5,951,108 5,951,108 0 0.0%

Computer software 6,421,357 6,345,878 75,479 1.2%

Furniture, ﬁ xtures, machinery and

equipment 47,836,856 46,849,972 986,884 2.1%

Artwork 481,798 481,798 - 0.0%

Construction in progress 34,708,397 13,505,421 21,202,976 157.0%

Gross capital assets 647,863,527 618,727,156 29,136,371 4.7%

Less accumulated depreciation 316,456,335 297,602,341 18,853,994 6.3%

Net capital assets $ 331,407,192 $ 321,124,815 $ 10,282,377 3.2%

30 TUCSON AIRPORT AUTHORITY 2021 ACFR

Management’s Discussion and Analysis (continued)

September 30, 2021

DEBT ACTIVITY

At the end of FY 2021, the TAA had total long-term debt outstanding of $26.6 million. The debt consists of

bonds that are secured by a pledge of passenger facility charge revenues and general airport revenues, and

unamor zed premium. The decrease of $3.1 million (10.5%) from FY 2020 is a result of normal debt service

and amor za on of the bond premium.

At the end of FY 2020, the TA A had total long-term debt outstanding of $29.8 million. The debt consists of

bonds that are secured by a pledge of passenger facility charge revenues and general airport revenues, and

unamor zed premium. The decrease of $3.1 million (9.3%) from FY 2019 is a result of normal debt service

and amor za on of the bond premium.

Addi onal detailed informa on regarding long-term debt ac vity may be found in Note 7 to the

ﬁ nancial statements.

Increase % Increase

Outstanding Long-term Debt 2021 2020 (decrease) decrease (-)

TAA revenue bonds:

Series 2018 subordinate lien $ 26,475,000 $ 29,540,000 $

(3,065,000)

-10.4%

Unamortized premium 152,449 214,373

(61,924)

-28.9%

Total long-term debt $ 26,627,449 $ 29,754,373 $

(3,126,924)

-10.5%

Increase % Increase

Outstanding Long-term Debt 2020 2019 (decrease) decrease (-)

TAA revenue bonds:

Series 2018 subordinate lien $ 29,540,000 $ 32,520,000 $

(2,980,000)

-9.2%

Unamortized premium 214,373 285,147

(70,774)

-24.8%

Total long-term debt $ 29,754,373 $ 32,805,147 $

(3,050,774)

-9.3%

FINANCIALS 31

DEBT SERVICE COVERAGE

Debt service coverage is a covenant of the TAA’s bond resolu ons requiring that annual net airport system

revenues be maintained at 1.25  mes the senior lien debt service requirement and at 1.10  mes the

subordinate lien debt service requirement. This coverage serves as an indicator to bondholders that funds

are available for  mely debt service payments. Net airport system revenue is calculated based on the

airport use and lease agreement between the TAA and its signatory airlines and includes several addi ons

to and subtrac ons from revenue and expense amounts reported in the basic ﬁ nancial statements.

In FY 2021, net airport system revenues available for subordinate lien bond debt service was 2.57  mes

subordinate lien debt service, compared to 2.77 and 3.98 for FY 2020 and FY 2019, respec vely. The TAA

had no senior lien debt outstanding during ﬁ scal years 2021, 2020 and 2019. Variances in the debt service

coverage year-over-year are primarily a ributable to normal debt service and changes in net airport

system revenue.

AIRLINE RATES AND CHARGES

The TAA has a long-term residual cost airport use agreement with the major passenger airlines (signatory

airlines). This agreement provides a method for securing the ﬁ nancial stability of the TAA through a

schedule of rates and charges. Following are some of the key rates and charges included in the agreement:

During FY 2020, the TAA nego ated an extension of the previously expired airline use agreement with the

signatory airlines. The extension expired on September 30, 2021. A new extension was executed in October

2021 and con nues under the same terms of the previously expired agreement for two addi onal years, to

allow for  me to nego ate a new agreement. The current extension will expire on September 30, 2023.

Management’s Discussion and Analysis (continued)

September 30, 2021

Signatory Airline Rates and Charges 2021 2020 2019

Ticketing per sq. ft. $ 65.21 $ 83.42 $ 83.42

Hold room per gate 95,080.52 121,640.78 121,640.78

Baggage claim per sq. ft. 61.84 79.11 79.11

Baggage makeup per sq. ft. 21.73 27.80 27.80

Into plane hydrant ﬂ owage per gallon N/A N/A N/A

Landing fee per 1,000 lbs. 1.15 1.15 1.32

32 TUCSON AIRPORT AUTHORITY 2021 ACFR

AIRLINE COST PER ENPLANEMENT

Airline Cost Per Enplanement (CPE) is a measure used in the airline and airport industries to show the

average cost an airline incurs to enplane one passenger at a given airport. This ﬁ gure is derived by dividing

total passenger airline revenues earned by the airport by the total number of enplaned passengers.

CPE decreased in FY 2021 over FY 2020 by $1.78 per enplanement and increased in FY 2020 over FY 2019 by

$4.28 per enplanement. The FY 2021 decrease was mainly a result of revised rates provided to the airlines

in the airline use agreement amendment in response to the COVID-19 pandemic. The FY 2020 increase was

mainly a result of decreased passenger volumes.

Management’s Discussion and Analysis (continued)

September 30, 2021

Airline Cost Per Enplanement 2021 2020 2019

Passenger airline revenues $ 11,418,180 $ 13,519,451 $ 14,299,579

Enplaned passengers 1,137,279 1,144,018 1,897,590

Cost per enplanement $ 10.04 $ 11.82 $ 7.54

FINANCIALS 33

Statements of Net Position

September 30, 2021 and 2020

See Accompanying Notes.

ASSETS 2021 2020

Current assets:

Unrestricted assets:

Cash and cash equivalents - Note 3 $ 15,279,421 $ 71,520,407

Investments - Note 3 125,667,536 83,278,353

Accounts receivable, net of allowance for doubtful

accounts of $257,121 for 2021 and $313,380 for 2020 2,317,691 1,976,854

Accrued interest receivable 163,925 185,231

Grants receivable 9,464,454 18,303,874

Inventories - Note 4 395,531 328,256

Prepaid expenses and other assets 978,463 721,365

Total unrestricted current assets 154,267,021 176,314,340

Restricted assets:

Cash and cash equivalents - Note 3 1,835,653 10,132,836

Investments - Note 3 20,923,339 12,423,496

Accounts receivable 876,384 410,268

Accrued interest receivable 43,342 47,465

Total restricted current assets 23,678,719 23,014,065

Total current assets 177,945,739 199,328,405

Noncurrent assets:

Capital assets, not depreciated 128,329,755 116,735,577

Capital assets, depreciated, net 207,445,038 214,671,615

Total capital assets 335,774,793 331,407,192

Deferred rent 88,995 298,252

Net pension/OPEB asset 1,711,563 -

Total noncurrent assets 337,575,351 331,705,444

Total assets

515,521,090 531,033,849

DEFERRED OUTFLOWS OF RESOURCES

Deferred outﬂ ows related to pensions/OPEB 4,180,444 6,091,332

$ 519,701,5 3 4 $ 537,125,181

34 TUCSON AIRPORT AUTHORITY 2021 ACFR

See Accompanying Notes.

Statements of Net Position (continued)

September 30, 2021 and 2020

LIABILITIES 2021 2020

Current liabilities:

Payable from unrestricted assets:

Accounts payable $ 970,307 $ 1,263,230

Accrued expenses 1,707,257 1,855,990

Unearned revenues 2,832,961 2,733,808

Construction contracts payable 4,088,828 5,205,743

Current portion of bonds payable 1,565,000 1,510,000

Current portion of environmental remediation payable, restricted 5,678,529 4,987,354

Total payable from unrestricted assets 16,842,882 17,556,125

Payable from restricted assets:

Current portion of environmental remediation payable, restricted 392,447 402,420

Total payable from unrestricted assets 392,447 402,420

Total current liabilities 17,235,328 17,958,545

Noncurrent liabilities:

Payable from unrestricted assets:

Bonds payable, net of current portion 25,062,449 28,244,373

Net pension/OPEB liability 12,730,870 47,884,399

Environmental remediation payable, net of current portion 17,849,926 18,306,912

Total payable from unrestricted assets 55,643,245 94,435,684

Total liabilities 72,878,574 112,394,229

Deferred inﬂ ows of resources:

Deferred inﬂ ows related to pensions/OPEB 7,457,762 869,169

Total deferred inﬂ ows of resources 7,457,762 869,169

Commitments and contingencies - Notes 13 and 14

Net position:

Net investment in capital assets 309,147,344 301,652,819

Restricted 23,286,271 22,611,645

Unrestricted 106,931,583 99,597,319

Total net position $ 439,365,198 $ 423,861,783

FINANCIALS 35

Statements of Revenues, Expenses and Changes in Net Position

Years ended September 30, 2021 and 2020

See Accompanying Notes.

2021 2020

Operating revenues:

Landing fees $ 1,973,618 $ 2,037,041

Space rentals 11,906,284 14,560,223

Land rent 3,705,607 3,789,349

Concession revenue 12,386,429 11,878,384

Airport services 3,354,818 3,611,852

Other operating revenues 3,001,271 2,992,525

Total operating revenues 36,328,027 38,869,374

Operating expenses:

Personnel expenses 20,489,377 23,272,979

Contractual services 7,516,419 6,726,582

Materials and supplies 1,533,550 1,859,050

Other operating expenses 945,036 1,455,350

Total operating expenses 30,484,382 33,313,961

Depreciation and amortization 20,148,835 19,514,629

Operating (loss) (14,305,190) (13,959,216)

Nonoperating revenues (expenses):

Interest income 485,673 2,330,044

Net increase in fair value of investments (169,672) 47,394

Passenger facility charges 4,628,663 4,265,140

Interest expense and ﬁ scal charges (871,573) (960,095)

Gain /(loss) on disposition of capital assets (22,866) 5,538,871

Environmental remediation expenses (1,334,189) (394,453)

Nonoperating grants-in-aid 15,478,295 14,153,997

Other nonoperating revenue - 58,888

18,194,331 25,039,786

Income before capital contributions 3,889,141 11,080,570

Capital contributions:

Federal 10,707,449 15,808,720

State 906,825 954,821

11,614, 274 16,763,5 41

Change in net position 15,503,415 27,844,111

Net position, beginning of year 423,861,783 396,017,672

Net position, end of year $ 439,365,198 $ 423,861,783

36 TUCSON AIRPORT AUTHORITY 2021 ACFR

See Accompanying Notes.

Statements of Cash Flows

Years ended September 30, 2021 and 2022

2021 2020

Cash ﬂ ows from operating activities:

Receipts from airlines and tenants $ 35,882,080 $ 41,072,196

Federal and state grants-in-aid 450,465 360,737

Payments to suppliers (10,753,858) (10,237,179)

Payments for personnel services (48,862,167) (21,799,749)

Payments for environmental remediation (1,112,484) (1,276,064)

Net cash provided by/(used in) operating activities (24,395,964) 8,119,941

Cash ﬂ ows from capital and related ﬁ nancing activities:

Federal and state capital contribution receipts 11,179,259 13,226,314

Acquisition of capital assets (25,666,340) (28,386,427)

Proceeds from sale of capital assets 13,860 6,885,682

Principal paid on long-term debt (3,065,000) (2,980,000)

Passenger facility charge receipts 4,162,547 4,480,982

Interest paid on long-term debt (933,894) (971,981)

Nonoperating grants-in-aid receipts 24,715,786 1,196,887

Net cash provided by / (used in) investing activities 10,406,218 (6,548,543)

Cash ﬂ ows from investing activities:

Interest on investments 809,727 3,129,849

Maturity and calls of investments 113,751,261 275,531,926

Purchase of investments (165,109,411) (229,225,886)

Net cash provided by (used in) ﬁ nancing activities (50,548,423) 49,435,889

Net increase (decrease) in cash and cash equivalents (64,538,169) 51,007,287

Cash and cash equivalents, beginning 81,653,243 30,645,956

Cash and cash equivalents, ending $ 17,115,074 $ 81,653,243

FINANCIALS 37

Statements of Cash Flows (continued)

Years ended September 30, 2021 and 2020

See Accompanying Notes.

2021 2020

Reconciliation of operating loss to net cash provided by (used in) operating

activities:

Operating (loss) $ (14,305,190) $ (13,959,216)

Adjustments to reconcile operating loss to net cash provided by operating

activities:

Depreciation and amortization 20,148,835 19,514,629

Payments for environmental remediation (1,112,484) (1,276,064)

Changes in operating assets and liabilities:

Accounts receivables (94,636) 1,519,059

Inventories (67,275) (16,952)

Prepaid expenses (257,099) (164,668)

Accounts payable (292,924) 383,699

Accrued expenses (148,735) (109,114)

Unearned revenues 99,153 1,044,500

Net pension liability and related changes in deferred

outﬂ ows and inﬂ ows of resources (28,365,609) 1,184,068

Total adjustments (10,090,774) 22,079,157

Net cash provided by (used in) operating activities $ (24,395,964) $ 8,119,941

Noncash nonoperating, capital, ﬁ nancing and investing activities:

Grants receivable included in capital contributions $ 5,723,101 $ 5,288,086

Additions to capital assets included in accounts payable $ 4,088,828 $ 5,205,743

Net appreciation/(depreciation) in fair value of investments $ (169,672) $ 47,394

Increase/(Decrease) in estimate of environmental remediation liability $ (1,334,189) $ 394,453

38 TUCSON AIRPORT AUTHORITY 2021 ACFR

Notes to Financial Statements

September 30, 2021 and 2020

NOTE 1 – DESCRIPTION OF ORGANIZATION

Tucson Airport Authority, Inc. (TAA), a civic, nonproﬁ t corpora on as provided for under the laws of

the State of Arizona, was established April 12, 1948 for the purpose of developing and promo ng

transporta on and commerce in the State through the opera on and maintenance of airports and related

facili es adjacent to the City of Tucson in Pima County, Arizona. The TAA’s membership consists of up to

60 residents of TUS service area who elect a Board of Directors (Board) which governs the TAA. The TAA

has no taxing power and presently operates two airports: Tucson Interna onal Airport (TUS) and Ryan

Airﬁ eld (RYN).

The land and improvements composing TUS are owned by the City of Tucson (City) and are leased by the

City to the TAA pursuant to a lease dated October 14, 1948, as amended (Airport Lease). Pursuant to

the terms of the Airport Lease, which expires October 14, 2098, the TAA has the obliga on to operate,

maintain and develop TUS as a public facility for the accommoda on of air commerce. In addi on, the

Airport Lease provides for certain other rights, powers and obliga ons as speciﬁ ed therein. Under the

terms of the Airport Lease, the TAA has been required to make only nominal payments to date. Upon

expira on of the Airport Lease, TUS and improvements thereon, except as provided for in the Airport

Lease, return to the custody of the City.

Five passenger airlines u lizing TUS have entered into a Signatory Airport Use Agreement with the TAA and

are referred to as Signatory Airlines. In general, the Airport Use Agreement provides that ﬁ xed rentals are

to be paid monthly by each Signatory Airline for use and occupancy of certain terminal space and other

facili es. In addi on, the Signatory Airlines collec vely pay landing fees which are determined so that

the aggregate landing fees paid in each ﬁ scal year by all Signatory Airlines, a er taking into considera on

other revenues of the TAA, is an amount which provides suﬃ cient opera ng funds to cover annual debt

service bonds, annual opera ng expenses and sa sﬁ es other bond resolu on requirements. The exis ng

Signatory Airport Use Agreement expires on September 30, 2023.

The accompanying ﬁ nancial statements include the accounts of the TAA. There are no poten al

component units, nor has the TAA been determined to be a component unit of any other en ty.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Measurement focus, basis of accounƟ ng and ﬁ nancial statement presentaƟ on:

The accompanying ﬁ nancial statements have been prepared on the accrual basis of accoun ng in

accordance with accoun ng principles generally accepted in the United States of America (GAAP) as

applicable to governmental units. All transac ons are accounted for in a single enterprise fund. Enterprise

funds are used to account for opera ons (1) that are ﬁ nanced and operated in a manner similar to

private business enterprises where the intent of the governing body is that the costs (expenses including

deprecia on) of providing goods or services to the general public on a con nuing basis be ﬁ nanced or

recovered primarily through user charges; or (2) where the governing body has decided that periodic

determina on of revenues earned, expensed incurred, and/or net income is appropriate for capital

maintenance, public policy, management control, accountability or other purposes.

The accoun ng and ﬁ nancial repor ng treatment applied to a fund is determined by its measurement

focus. Proprietary funds are accounted for on a ﬂ ow of economic resources measurement focus. With

this measurement focus, all assets and liabili es associated with the opera on of these funds are included

on the statements of net posi on. In accordance with Governmental Accoun ng Standards Board (GASB)

FINANCIALS 39

Statement No. 63, Financial Repor ng of Deferred Ou low of Resources, Deferred Inﬂ ows of Resources,

and Net Posi on, net posi on is displayed in three components net investment in capital assets, restricted

and unrestricted. Proprietary fund type opera ng statements present increases (e.g., revenues) and

decreases (e.g., expenses) in net posi on.

On proprietary fund ﬁ nancial statements, opera ng revenues are those that ﬂ ow directly from the

opera ons of that ac vity, (i.e., charges to customers or users who purchase or use the goods or services

of that ac vity). Opera ng expenses are those that are incurred to provide those goods or services.

Nonopera ng revenues and expenses are items such as investment income and interest expense that are

not a result of the direct opera ons of the ac vity.

Basis of accoun ng refers to when revenues and expenses are recognized in the accounts and reported

in the ﬁ nancial statements. Basis of accoun ng relates to the  ming of measurements made, regardless

or the measurement focus applied. The accrual basis of accoun ng is u lized by proprietary fund types.

Under this method, revenues are recorded when earned and expenses are recorded at the  me liabili es

are incurred. When both restricted and unrestricted resources are available for use, it is the TAA’s prac ce

to use restricted resources ﬁ rst, then unrestricted resources as they are needed.

Budgets:

The TAA u lized a budget process for planning purposes with adop on by the Board of Directors. Pursuant

to the Airport Lease, the TAA prepares a biennial budget that is presented to the Mayor and Council of the

City for informa onal purposes. An annual budget is also reviewed by representa ves of the Signatory

Airlines. The budget is prepared in suﬃ cient detail to enable its use by management in monitoring

opera ons.

EsƟ mates and assumpƟ ons:

The prepara on of the basic ﬁ nancial statements in conformity with GAAP requires management to make

es mates and assump

 ons that aﬀ ect the reported amounts of assets, deferred ou lows of resources,

liabili es, and deferred inﬂ ows of resources and disclosure of con ngent assets and liabili es at the date

of the basic ﬁ nancial statements and the reported amounts of revenues and expenses during the repor ng

period. On an ongoing basis, management evaluates its es mates and assump ons. Actual results could

diﬀ er from those es mates and assump ons.

Cash and cash equivalents and investments:

The TAA’s cash and cash equivalents are considered to be cash on hand, demand deposits, and highly liquid

investments with a maturity of three months or less when purchased.

Investments are stated at fair value. The TAA’s policy is to invest in cer ﬁ cates of deposit, federal treasury

and agency securi es, cash equivalent mutual funds and repurchase agreements, and to hold such

investments to maturity. In accordance with this policy, investments are purchased so that maturi es will

occur as projected cash ﬂ ow needs arise in connec on with daily opera ons, construc on projects and

bond debt service requirements. Investment earnings are comprised primarily of interest earnings.

Fair value measurements:

Fair value is deﬁ ned as the price to sell an asset or transfer a liability between market par cipants in

an orderly exchange in the principal or most advantageous market for that asset or liability. Mutual

funds are valued at quoted market prices. The fair value for the commingled funds and qualifying

Notes to Financial Statements (continued)

September 30, 2021 and 2020

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

40 TUCSON AIRPORT AUTHORITY 2021 ACFR

alterna ve investments is determined based on the investment’s net asset value as a prac cal expedient.

Considerable judgment is required in interpre ng market data used to develop the es mates of fair value.

Accordingly, the es mates presented in the ﬁ nancial statements are not necessarily indica ve of the

amounts that could be realized in a current market exchange. The use of diﬀ erent market assump ons and

es ma on methodologies may have a material eﬀ ect on the es mated fair value.

Grant and accounts receivable:

The TAA grants unsecured credit to certain of its tenants, the U.S. government and state and local agencies

without interest. Receivables are reported at their gross value when earned as the underlying exchange

transac on occurs. Receivables are reduced by an allowance for the es mated por on that is expected to

be uncollec ble. This es mate is made based on collec on history, avia on industry trends and current

informa on regarding the credit worthiness of the debtors. When collec on ac vity results in receipt of

amounts previously wri en oﬀ against allowance, revenue is recognized for the amount collected.

Inventories:

Inventories consist of fuel for internal use and resale and opera ng and maintenance supplies, and are

recorded at the lower of cost or market with cost determined on an average cost basis.

Bond issuance costs:

Costs of issuing general airport revenue bonds, except prepaid insurance, are expensed as incurred.

Insurance is recorded as a prepaid asset and amor zed over the life of the bonds using the eﬀ ec ve

interest method.

Capital assets:

Capital assets are stated at cost or es mated historical cost if original cost is not available and include

expenditures which substan ally increase the useful lives of exis ng assets. Capital assets, includes

intangible assets, which are without physical substance that provide economic beneﬁ ts through the rights

and privileges associated with their possession, including avia on naviga on easements and computer

so ware. Gi

s or contribu ons of capital assets are recorded at acquisi on value as of the date of the

acquisi on. The TAA’s policy is to capitalize assets with a cost of $2,500 or more. Rou ne maintenance

and repairs are expensed as incurred.

Deprecia on (including amor za on of intangible assets) has been provided using the straight line method

over the following es mated useful lives of the related assets:

U li es 9 - 20 years

Land improvements 3 - 50 years

Buildings and improvements 3 - 50 years

Intangibles 2 - 25 years

Furniture, ﬁ xtures, machinery and equipment 2 - 25 years

Deprecia on and amor za on of capital assets is recorded as an expense in the statements of revenues,

expenses and changes in net posi on.

Interest incurred on debt obliga ons to ﬁ nance construc on projects is expensed during the construc on

period. Interest income from funds obtained through TAA bond proceeds that are restricted for

construc on purposes is ne ed against interest expense incurred on the bonds in determining the amount

of capitalized expense.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Notes to Financial Statements (continued)

September 30, 2021 and 2020

FINANCIALS 41

Capital assets are considered impaired is there is a signiﬁ cant unexpected decline in the service u lity

of the asset. Impaired capital assets that will no longer be used by the TAA are reported at the lower of

carrying or fair value. Impairment losses on capital assets that will con nue to be used by the TAA are

measured using the method that best reﬂ ects the diminished service u lity of the capital asset.

Restricted assets:

Certain resources of the TAA are classiﬁ ed as restricted assets on the statements of net posi on because

their use is limited by applicable bond covenants, Federal Avia on Administra on regula ons or the

environmental consent decree for payment of the respec ve liabili es.

Compensated absences:

The TAA’s personnel policy provides full  me employees with vaca on in varying amounts and, at

termina on, an employee is paid for accumulated (vested) vaca on. Accordingly, compensa on for

vaca on leave is charged to expense as earned by the employee, and accumulated unpaid vaca on leave

payable upon an employee’s termina on is recorded as a current liability.

Long term obligaƟ ons:

Long term debt and other long term obliga ons are reported as noncurrent liabili es in the statements of

net posi on. Bond premiums and discounts are amor zed over the life of the bonds using the straight line

method.

Deferred ouƞ lows and inﬂ ows of resources:

The statements of net posi on include separate sec ons for deferred ou lows of resources and deferred

inﬂ ows of resources. Deferred ou lows of resources represent a consump on of net assets that applies to

future periods that will be recognized as an expense or expenditure in future periods. Deferred inﬂ ows of

resources represent an acquisi on of net assets that applies to future periods and will be recognized as a

revenue in future periods.

Postemployment beneﬁ ts:

For purposes of measuring the net pensions and other postemployment beneﬁ ts (OPEB) liabili

 es or

assets, deferred ou lows of resources and deferred inﬂ ows of resources related to pensions and OPEB,

and pension and OPEB expense, informa on about the plans’ ﬁ duciary net posi on and addi ons to/

deduc ons from the plans’ ﬁ duciary net posi on have been determined on the same basis as they are

reported by the plans. For this purpose, beneﬁ t payments (including refunds of employee contribu ons)

are recognized when due and payable in accordance with the beneﬁ t terms. The plan’s investments are

reported at fair value.

Net posiƟ on:

Net posi on represents the diﬀ erence between assets, liabili es and deferred ou lows/inﬂ ows of

resources. Net investment in capital assets consists of capital assets, net of accumulated deprecia on,

reduced by the outstanding balances of any borrowing used for the acquisi on, construc on or

improvement of those assets. Net posi on is reported as restricted when there are limita ons imposed on

their use either through enabling legisla on or through external restric ons imposed by creditors, grantors

or laws or regula ons of other governments.

Notes to Financial Statements (continued)

September 30, 2021 and 2020

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

42 TUCSON AIRPORT AUTHORITY 2021 ACFR

Notes to Financial Statements (continued)

September 30, 2021 and 2020

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Passenger facility charges:

In 1990, Congress approved the Avia on Safety and Capacity Expansion Act (Act), which authorized

domes c airports to impose a Passenger Facility Charge (PFC) on enplaning passengers. In May 1991, the

Federal Avia on Administra on (FAA) issued the regula ons for the use and repor ng of PFCs. PFCs may

be used for airport projects which meet at least one of the following criteria: preserve or enhance safety,

security or capacity of the na onal air transporta on system; reduce noise or mi gate noise impacts

resul ng from an airport; or furnish opportuni es for enhanced compe  on between or among carriers.

The TAA was granted permission to begin collec on of a $3 per passenger PFC eﬀ ec ve February 1, 1998.

In April 2006, the FAA approved the TAA’s applica on to increase the PFC from $3 to $4.50. The increase

in rate was eﬀ ec ve October 1, 2006. The PFC, less an $0.11 per passenger administra on fee charged by

the airlines for processing, are collected by the airlines and remi ed on a monthly basis to the TAA.

The TAA’s posi on is that PFCs should be treated as revenue because: 1) the TAA earns the PFCs due to a

passenger’s use of the Airport; 2) a er receipt, the TAA has clear  tle to the funds and is not required to

refund or return them; 3) the TAA is en tled to assess late charges on any payment not received by the

deadlines speciﬁ ed in the Act; and 4) the fee is reserved for speciﬁ c purposes as deﬁ ned in the approval

le er received from the FAA. Since the TAA’s applica ons for PFCs were approved as Impose and Use, it is

the posi on of the TAA that revenue should be categorized as nonopera ng revenues and are accounted

for on the accrual basis.

At the present  me, GASB has not released authorita ve guidance on the accoun ng treatment of PFCs.

Environment remediaƟ on costs:

The TAA accounts for environmental remedia on costs in accordance with Governmental Accoun ng

Standards Board Statement No. 49, Accoun ng and Financial Repor

 ng for Pollu on Remedia on

Obliga ons.

New accounƟ ng standards:

Implementa on of the following GASB statements was eﬀ ec ve for ﬁ scal year 2021:

• GASB Statement No. 89, Accoun ng for Interest Cost Incurred before the End of a Construc on Period,

which simpliﬁ es accoun ng for interest cost incurred before the end of construc on and requires

those costs to be expensed in the period incurred. The TAA implemented this Statement in ﬁ scal year

2021 with no eﬀ ect.

• GASB Statement No. 93, Replacement of Interbank Oﬀ ered Rates. The requirements of this

Statement have mul ple eﬀ ec ve dates that are applicable based on speciﬁ c iden ﬁ ed paragraphs

of the statement. The dates range from June 15, 2020 to June 15, 2021. The TAA implemented this

Statement in ﬁ scal year 2021 with no eﬀ ect.

• GASB Statement No. 98, The Annual Comprehensive Financial Report. This Statement establishes

the term annual comprehensive ﬁ nancial report and its acronym ACFR. The TAA implemented this

Statement in ﬁ scal year 2021.

FINANCIALS 43

Implementa on of the following GASB statements was eﬀ ec ve for ﬁ scal year 2020:

• GASB Statement No. 84, Fiduciary Ac vi es establishes criteria for iden fying ﬁ duciary ac vi es of all

state and local governments. The requirements of this Statement were eﬀ ec ve for repor ng periods

beginning a er December 15, 2018. The TAA implemented this Statement, and the clarifying guidance

in the related Implementa on Guide 2019 2, Fiduciary Ac vi es, in ﬁ scal year 2020 with no eﬀ ect.

• GASB Statement No. 90, Majority Equity Interests – an amendment of GASB Statements No. 14 and

No, 61. The requirements of this Statement were eﬀ ec ve for repor ng periods beginning a er

December 15, 2018. The TAA implemented this Statement in ﬁ scal year 2020 with no eﬀ ect.

• Implementa on of the following GASB statements was eﬀ ec ve for ﬁ scal year 2021:Implementa on

Guide No. 2018 1, Implementa on Guidance Update – 2018 provides clarifying guidance for various

previously issued GASB Statements and implementa on guides and was eﬀ ec ve for years beginning

a er June 15, 2019. The TAA implemented this Guide in ﬁ scal year 2020 with no eﬀ ect.

• Implementa on Guide No. 2019 1, Implementa on Guidance Update – 2019 provides clarifying

guidance for various previously issued GASB Statements and was eﬀ ec ve for years beginning a er

June 15, 2019. The TAA implemented this Guide in ﬁ

scal year 2020 with no eﬀ ect.

• GASB Statement No. 95, Postponement of the Eﬀ ec ve Dates of Certain Authorita ve Guidance

postponed eﬀ ec ve dates by one year for Statements originally applicable to periods beginning

a er June 15, 2018 and later. The statement was eﬀ ec ve upon issuance in May 2020 and was

implemented by the TAA in ﬁ scal 2020 with no eﬀ ect.

The GASB issued pronouncements that may impact future ﬁ nancial presenta ons. Management has not

currently determined what impact implementa on of the following statements may have on the ﬁ nancial

statements of the TAA.

• GASB Statement No. 87, Leases, provides new guidance for recogni on of opera ng leases and the

related assets. This Statement requires recogni on of certain lease assets and liabili es for leases that

previously were classiﬁ ed as opera ng leases. The requirements of this Statement are eﬀ ec ve for

repor ng periods beginning a er June 15, 2021.

• GASB Statement No. 91, Conduit Debt Obliga ons, which clariﬁ es the exis ng deﬁ ni on of conduit

debt, provides a single method of repor ng conduit debt obliga ons by issuers, and eliminates

diversity in prac ce associated with commitments extended by issues, arrangements associated

with conduit debt obliga ons, and related note disclosures. The requirements of this Statement are

eﬀ ec ve for repor ng periods beginning a er December 15, 2020.

• GASB Statement No. 92, Omnibus 2020. The eﬀ ec ve dates of this Statement are as follows:

• The requirements related to the eﬀ

ec ve date of Statement No. 87 and Implementa on Guide

2019 3, Leases, reinsurance recoveries, and terminology used to refer to deriva ve instruments

were eﬀ ec ve upon issuance and were implemented by the TAA in ﬁ scal year 2020 with no

eﬀ ect.

• The requirements related to intra en ty transfers of assets, the applicability of Statements No.

73 and 74, the applica on of Statement No. 84 to postemployment beneﬁ t arrangements and

fair value measurements of assets or liabili es, including those associated with asset re rement

obliga ons in a government acquisi on, are eﬀ ec ve for ﬁ scal years beginning a er June 15,

2021. The TAA will implement the requirements in ﬁ scal year 2022.

Notes to Financial Statements (continued)

September 30, 2021 and 2020

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

44 TUCSON AIRPORT AUTHORITY 2021 ACFR

• GASB Statement No. 94, Public Private and Public Public Partnerships and Availability Payment

Arrangements. The requirements of this Statement are eﬀ ec ve for ﬁ scal years beginning a er June

15, 2022.

• GASB Statement No. 96, Subscrip on Based Informa on Technology Arrangements. The requirements

of this Statement are eﬀ ec ve for ﬁ scal years beginning a er June 15, 2022. The TAA will implement

this Statement in ﬁ scal year 2023.

• GASB Statement No. 100, Accoun ng Changes and Error Correc ons an amendment of GASB

Statement No. 62. The primary objec ve of this Statement is to enhance accoun ng and

ﬁ nancial repor ng requirements for accoun ng changes and error correc ons to provide more

understandable, reliable, relevant, consistent, and comparable informa on for making decisions or

assessing accountability. The requirements of this Statement are eﬀ ec ve for accoun ng changes

and error correc ons made in ﬁ scal years beginning a er June 15, 2023.

• GASB Statement No. 101, Compensated Absences. The objec ve of this Statement is to be er meet

the informa on needs of ﬁ nancial statement users by upda ng the recogni on and measurement

guidance for compensated absences. The requirements of this Statement are eﬀ ec ve for ﬁ scal years

beginning a er December 15, 2023.

Notes to Financial Statements (continued)

September 30, 2021 and 2020

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

NOTE 3 – CASH, CASH EQUIVALENTS AND INVESTMENTS

The TAA maintains a cash, cash equivalents and investment pool (Pooled Investment Fund) for all funds

except environmental remedia on trust assets, which are maintained in a separate investment pool

(Master Environmental Trust Fund). The TAA maintains detailed records suﬃ cient to meet any and all

requirements and restric ons on both funds, which include PFC and Capital Projects Funds. Addi onally,

the Board, at its discre on, may internally designate certain funds for speciﬁ c purposes.

Deposits:

At September 30, 2021 and 2020, deposits with ﬁ nancial ins tu ons have a carrying value of $6,598,116

and $6,272,871 and a bank balance of $7,642,106 and $6,360,697. The diﬀ erence represents deposits in

transit, outstanding checks and other reconciling items at September 30, 2021 and 2020.

Custodial credit risk for deposits is the risk that in the event of a bank failure, the TAA’s deposits may not be

collateral securi es in possession of an outside party.

Investments:

The TAA’s investment strategy incorporates certain ﬁ nancial instruments, which involve, to varying degrees,

elements of market risk and credit risk in excess of amounts recorded in the ﬁ nancial statements.

The TAA’s investment policy requires that all deposits at ﬁ nancial ins tu ons, cer ﬁ cates of deposit,

repurchase agreements and money market mutual funds be insured, registered in the TAA’s name or

collateralized to 102% and held by the TAA’s safekeeping agent in the TAA’s name. Collateral is restricted to

United States treasuries, agencies or instrumentali es.

The TAA invests in obliga ons of the U.S. Government and its agencies. Some of these obliga ons are

classiﬁ ed as cash equivalents on the accompanying statements of net posi on as the amounts are in

money market fund pools of such securi es. The amount shown in the table below includes all U.S.

FINANCIALS 45

Notes to Financial Statements (continued)

September 30, 2021 and 2020

Government securi es, regardless of classiﬁ ca on. The TAA’s mutual fund investments are invested

exclusively in short term, U.S. Government Treasury obliga ons. The investments are valued at

amor zed cost, which approximates market. These assets are classiﬁ ed as cash equivalents.

Interest rate risk:

In accordance with its investment policy, the TAA manages its exposure to interest rate risk by regular

(not less than semi annual) evalua on in conjunc on with TAA investment advisors of the TAA’s

cash posi on to determine the amount of short and long term funds available for investment within

the context of the en re por olio and to project the term for such investments. Funds that can be

invested for a longer dura on are to be invested predominantly in high credit quality U.S. obliga ons

with an individual obliga on not to exceed 10 years and a weighted average maturity of all such

investments of not greater than 5 years.

Credit risk:

In the absence of deﬁ ni ve legal requirements, the TAA has elected to conform to Arizona Revised

Statutes (Statutes) concerning the investment of all assets in the Pooled Investment Fund, if such

statutes are more restric ve than its investment policy.

The Master Remedia on Trust Fund Agreement permits the following investments in the Master

Environmental Trust Fund:

1. “Permi ed investments” as outlined in the TAA’s bond resolu on.

2. Such other prudent investments as are consistent with investment policies adopted by the TAA’s

Board of Directors.

3. Money market funds registered under the Federal Investment Company Act of 1940, whose shares

are registered under the Federal Securi es Act of 1933.

Concentra on of credit risk:

In order to provide for diversiﬁ ca on and reduce market and credit risk exposures, the following

diversiﬁ ca on parameters have been established in the TAA’s investment policies:

NOTE 3 – CASH, CASH EQUIVALENTS AND INVESTMENTS (continued)

Asset class Maximum % of portfolio

Certiﬁ cates of deposit 20%

U.S. Treasuries, agencies and instrumentalities 100%

Repurchase agreements 50%

Bankers' acceptances 10%

Guaranteed investment contracts 10%

Money market mutual funds 50%

State and municipal bonds or notes 20%

46 TUCSON AIRPORT AUTHORITY 2021 ACFR

Notes to Financial Statements (continued)

September 30, 2021 and 2020

NOTE 3 – CASH, CASH EQUIVALENTS AND INVESTMENTS (continued)

Fair Value

2021 2020 Ratings

Pooled investment fund: $ % $ %

U.S. Agency securities:

Federal Farm Credit Bank $ 7,457,775 5% $ 33,498,705 35% AAA

Federal Agricultural Mortgage Corp. 19,465,290 13% 2,062,720 2% AAA

Federal Home Loan Bank 44,177,925 30% 12,457,550 13% AAA

Federal Home Loan Mortgage Corp. 27,488,965 19% 22,507,975 24% AAA

Federal National Mortgage Association 10,015,700 7% 10,000,000 10% AAA

U.S. Treasury Bills 37,985,220 26% 15,174,899 16% AAA

$146,590,875 100%$95,701,849 100%

The TAA's investments at September 30, 2021 and 2020 were as follows:

The TAA measures and categorizes its investments using fair value measurement guidelines established by

GAAP. These guidelines establish a three  er hierarchy of inputs to valua on techniques used to measure

fair value, as follows:

Level 1 Inputs are unadjusted quoted prices for iden cal assets or liabili es in ac ve markets that the TAA

has the ability to access.

Level 2 Inputs, other than quoted market prices included within Level 1, are observable, either directly or

indirectly.

Level 3 Inputs are unobservable and signiﬁ cant to the fair value measurement.

Other investments at fair value Investments for which fair value is measured at net asset value per share

(or its equivalent). Due to the inherent uncertainty of these es mates, these values may diﬀ er materially

from the values that would have been used had a ready market for these investments existed.

At September 30, 2021, the fair value of investments measured on a recurring basis is as follows:

Fair value Level 1 Level 2 Level 3

Pooled investment fund:

U.S. Agency securities:

Federal Farm Credit Bank $ 7,457,775 - $ 7,457,775 -

Federal Agricultural Mortgage Corp. 19,465,290 - 19,465,290 -

Federal Home Loan Bank 44,177,925 - 44,177,925 -

Federal Home Loan Mortgage Corp. 27,488,965 - 27,488,965 -

Federal National Mortgage Association 10,015,700 - 10,015,700 -

U.S. Treasury Bills 37,985,220 - 37,985,220 -

$146,590,875 - $146,590,875 -

FINANCIALS 47

NOTE 3 – CASH, CASH EQUIVALENTS AND INVESTMENTS (continued)

Notes to Financial Statements (continued)

September 30, 2021 and 2020

2021 2020 Ratings

Deposits at ﬁ nancial institutions $ 6,598,116 $ 6,272,871 N/A

Treasury obligation funds 10,507,037 75,370,922 AAA

Cash on hand 9,921 9,450 N/A

Total cash and cash equivalents $ 17,115,074 $ 81,653,243

Fair value Level 1 Level 2 Level 3

Pooled investment fund:

U.S. Agency securities:

Federal Farm Credit Bank $ 33,498,705 $ - $ 33,498,705 $ -

Federal Agricultural Mortgage Corp. 2,062,720 - 2,062,720 -

Federal Home Loan Bank 12,457,550 - 12,457,550 -

Federal Home Loan Mortgage Corp. 22,507,975 - 22,507,975 -

Federal National Mortgage Association 10,000,000 - 10,000,000 -

U.S. Treasury Bills 15,174,899 - 15,174,899 -

$95,701,849$- $95,701,849$-

At September 30, 2020, the fair value of investments measured on a recurring basis is as follows:

Debt securi es classiﬁ ed in Level 2 of the fair value hierarchy are valued using a matrix pricing technique.

Matrix pricing is used to value securi es based on inputs such as yield curve analysis, pricing of comparable

securi es, and op on adjusted spread valua ons to generate a price for a security.

Cash, cash equivalents and investments are classiﬁ ed on the statements of net posi on at September 30,

2021 and 2020 as follows:

Cash and cash equivalents Investments

2021 2020 2021 2020

Unrestricted $ 15,279,421 $ 71,520,407 $ 125,667,536 $ 83,278,353

Restricted

Environmental Remediation Trust 392,447 402,420

Capital Acquisition

Passenger facility charge fund 1,205,441 8,116,940 17,480,382 10,367,630

Capital Projects Fund 237,765 1,613,476 3,442,957 2,055,866

Total Restricted 1,835,653 10,132,836 20,923,339 12,423,496

$17,115,074$81,653,243$146,590,875

95,701,849

Cash and cash equivalents comprised the following at September 30, 2021 and 2020:

48 TUCSON AIRPORT AUTHORITY 2021 ACFR

Notes to Financial Statements (continued)

September 30, 2021 and 2020

NOTE 3 – CASH, CASH EQUIVALENTS AND INVESTMENTS (continued)

At September 30, 2021, the TAA’s investments are scheduled to mature as follows:

Investment maturities (in months)

Fair value Less than 12 12-24 24-36 36-48

Pooled investment fund:

U.S. Treasury and

Agency securities $ 146,590,875 $ 22,240,140 $ 27,968,010 $ 81,516,133 $ 14,866,592

NOTE 4 – CAPITAL ASSETS

Net investment in capital assets as of September 30, 2021 and 2020 was as follows:

2021 2020

Capital assets $ 671,987,112 $ 647,863,527

Less accumulated depreciation (336,212,319) (316,456,335)

Less outstanding debt $ (26,627,449) $ (29,754,373)

$309,147,344$301,652,819

Beginning Ending

balance Increases Decreases balance

Business type activities:

Capital assets not being

depreciated:

Land $ 51,555,292 $ -

$ 51,555,292

Air Avigation Easements 29,990,090 - - 29,990,090

Artwork 481,798 11,390 -

493,188

Construction in progress 34,708,397 11,582,788 -

46,291,185

Total assets not being depreciated 116,735,577 11,594,178 -

128,329,755

Capital assets being depreciated:

Land improvements 203,936,506 7,452,993 - 211,389,499

Buildings and improvements 266,982,123 2,261,231 - 269,243,354

Utilities 5,951,108 - - 5,951,108

Computer software 6,421,357 667,135 - 7,088,492

Furniture, ﬁ xtures, machinery and

equipment 47,836,856 2,563,765 (415,717)

49,984,904

Total assets being depreciated

531,127,950 $ 12,945,124 $ (415,717) $

543,657,357

Less accumulated depreciation for:

Land improvements

(113,662,328) $ (9,068,309) $ - $ (122,730,637)

Buildings and improvements (159,987,045) (7,844,704) - (167,831,749)

Utilities (5,939,586) (1,921) - (5,941,507)

Computer software (6,064,186) (162,664) - (6,226,850)

Furniture, ﬁ xtures, machinery

and equipment (30,803,190) (3,071,237) 392,851

(33,481,576)

Total accumulated depreciation (316,456,335)

(20,148,835) 392,851 (336,212,319)

Total capital assets, depreciated, net 214,671,615 (7,203,711) (22,866) 207,445,038

Total capital assets, net $ 331,407,192

4,390,467

(22,866)

$ 335,774,793

Capital asset ac vity for the year ended September 30, 2021 was as follows:

FINANCIALS 49

NOTE 4 – CAPITAL ASSETS (continued)

Capital asset ac vity for the year ended September 30, 2020 was as follows:

Notes to Financial Statements (continued)

September 30, 2021 and 2020

Beginning Ending

balance Increases Decreases balance

Business type activities:

Capital assets not being

depreciated:

Land

$52,751,886$ 117,831$ (1,314,425) $ 51,555,292

Air Avigation Easements

29,990,090 - - 29,990,090

Artwork

481,798 - - 481,798

Construction in progress

13,505,421 26,653,413 (5,450,437) 34,708,397

Total assets not being depreciated

96,729,195 26,771,244 (6,764,862) 116,735,577

Capital assets being depreciated:

Land improvements

199,468,904 4,467,602 - 203,936,506

Buildings and improvements

263,382,099 3,600,024 - 266,982,123

Utilities

5,951,108 - - 5,951,108

Computer software

6,345,878 75,479 - 6,421,357

Furniture, ﬁ xtures, machinery and

equipment

46,849,972 1,679,906 (693,022) 47,836,856

Total assets being depreciated

$ 521,997,961 $ 9,823,011 $ (693,022) $ 531,127,950

Less accumulated depreciation for:

Land improvements

(104,882,775) $ (8,779,553) $ - $ (113,662,328)

Buildings and improvements

(152,319,803) (7,678,318) 11,076 (159,987,045)

Utilities

(5,935,226) (4,360) - (5,939,586)

Computer software

(5,964,166) (100,020) - (6,064,186)

Furniture, ﬁ xtures, machinery and

equipment

(28,500,372) (2,963,453) 660,635 (30,803,190)

Total accumulated depreciation

(297,602,342) (19,525,704) 671,711 (316,456,335)

Net capital assets being depreciated

224,395,619 (9,702,693) (21,311) 214,671,615

Net capital assets

$ 321,124,814 $ 17,068,551 $ (6,786,173) $ 331,407,192

50 TUCSON AIRPORT AUTHORITY 2021 ACFR

Notes to Financial Statements (continued)

September 30, 2021 and 2020

2021 2020

Forfeiture funds

$ 36,030 $ 35,765

Marketing/Refurbishment funds 696,425 562,242

Tenant rent payments 2,100,506 2,135,801

$ 2,832,961 $ 2,733,808

NOTE 5 – UNEARNED REVENUES

The TAA has been awarded certain amounts by the Pima County Superior Court in connec on with assets

seized by TAA law enforcement oﬃ cers (forfeiture funds) in narco cs inves ga ons. Such amounts have

been recorded as unearned revenues pending approval for expenditure by the Pima County A orney’s

Oﬃ ce.

At September 30, 2021 and 2020, the TAA has received rent from certain tenants and certain other

payments applicable to the subsequent year. Such amounts have been classiﬁ ed as unearned revenue.

Marke ng and refurbishment funds represent unearned revenue received in accordance with the

concession agreements that must be used for marke ng concessions in the terminals and for future

improvements to the concession sites.

A detail of unearned revenues at September 30, 2021 and 2020 follows:

NOTE 6 – BONDS PAYABLE

2021 2020

$37,330,000 Subordinate Lien Airport

Revenue Refunding Bonds, Series 2018.

Bonds due in semi annual amounts, with

principal repayments ranging from $920,000

to $3,345,000, beginning April 1, 2019

through April 1, 2031. Interest is payable

semiannually at 3.243%.

$ 26,475,000 $ 29,540,000

Unamortized premium Series 2018 bonds

152,449 214,373

26,627,449 29,754,373

Less current portion 1,565,000 1,510,000

$ 25,062,449 $ 28,244,373

Bonds payable, business type ac vi es for the year ended September 30, 2021:

Beginning Ending

balance Increases Decreases balance

2018 subordinate lien airport revenue

bonds

$ 29,540,000 $ - $ (3,065,000) $ 26,475,000

Plus unamortized premium

214,373 - (61,924) 152,449

Less current portion

(1,510,000) - (55,000) (1,565,000)

$28,244,373$

$ (3,181,924) $ 25,062,449

FINANCIALS 51

NOTE 6 – BONDS PAYABLE (continued)

Notes to Financial Statements (continued)

September 30, 2021 and 2020

Future principal and interest payments on the unrefunded por on of the Series 2018 bonds are as follows:

The TAA's bond resolu ons require periodic transfers from gross opera ng income to bond funds

restricted for the payment of principal and interest. Other transfers to certain accounts are required by

the bond resolu ons a er payment of opera ng and maintenance expenses. At September 30, 2021 and

2020, the TAA was in compliance with these and other bond resolu on covenants.

Under U.S Treasury regula ons, all governmental tax exempt debt issued a er August 31, 1986 is subject

to arbitrage rebate requirements. The requirements s pulate, in general, that the earnings from the

investment of tax exempt bond proceeds, which exceed related interest expenditure on the bonds, must

be remi ed to the Federal government on every ﬁ  h anniversary of each bond issue. The TAA's prac ce

is to engage an independent consultant to evaluate outstanding tax exempt debt for arbitrage liability and

the TAA is of the opinion that no liability has been incurred as of September 30, 2021 and 2020.

The debt is secured by a lien on net revenues of the airport system.

Year ending September 30, Principal Interest Total

2022 $ 1,565,000 $ 429,292 $ 1,994,292

2023 3,215,000 781,806 3,996,806

2024 3,320,000 676,652 3,996,652

2025 3,430,000 568,172 3,998,172

2026 3,540,000 455,966 3,995,966

2027 2031 11,405,000 915,256 12,320,256

$ 26,475,000 $ 3,827,144 $ 30,302,144

Bonds payable, business type ac vi es for the year ended September 30, 2020:

Beginning Ending

balance Increases Decreases balance

2018 subordinate lien airport revenue

bonds

$ 32,520,000 - $ (2,980,000)

29,540,000

Plus unamortized premium

285,147 - (70,774) 214,373

Less current portion

(1,465,000) - (45,000) (1,510,000)

$31,340,147

$ (3,095,774) $ 28,244,373

52 TUCSON AIRPORT AUTHORITY 2021 ACFR

NOTE 7 – PENSION AND OTHER POSTEMPLOYMENT BENEFITS:

Long-term debt at September 30, 2021 and 2020 follows:

Notes to Financial Statements (continued)

September 30, 2021 and 2020

The TAA par cipates in the Arizona State Re rement System (ASRS) and the Arizona Public Safety

Personnel Re rement System (PSPRS). Each system provides deﬁ ned beneﬁ t and other postemployment

beneﬁ ts based on plan provisions. The TAA accounts for the pension and OPEB beneﬁ ts under GASB 68

and 75, which for presenta on and disclosure purposes have been combined, as OPEB amounts are not

material to the ﬁ nancial statements.

At September 30, 2021, the TAA reported in the statements of net posi on and statements of revenues,

expenses, and changes in net posi on the following amounts related to all Pension/OPEB plans it

par cipants in:

PSPRS – Fire PSPRS – Police

September 30, 2020

ASRS Department Department

Net

Net pension/ /OPEB liability

$12,730,870

$ (426,421) $ (1,285,142) $11,019,307

Deferred outﬂ ows of resources:

Diﬀ erence between projected and actual

investment earnings

$ - $ -$ -

Diﬀ erence between actual and

expected experience

207,432

502,061 870,104 1,579,597

Changes of assumptions related to

pensions

1,750,759 142,723 218,467

2,111,949

Changes in proportion and diﬀ erences

between employer contributions and

proportionate share of contributions

1,223

1,004 6,799 9,026

Contributions subsequent to the

measurement date

327,803 63,259 88,810

479,872

Total deferred outﬂ ows

$ 2,287,217 $ 709,047 $ 1,184,180 $ 4,180,444

Deferred inﬂ ows of resources:

Diﬀ erence between actual and expected

resources

$4,384,922

$ 1,046,783 $ 1,144,741 $ 6,576,446

Changes in proportion and diﬀ erences

between employer contributions and

proportionate share of contributions

322,614

1,748 6,782 331,144

Diﬀ erence between actual and expected

experience

174,884 13,232 315,071 503,187

Changes of assumptions related to

pensions

46,667

318 -46,985

Total deferred inﬂ ows

4,929,087 1,062,081

1,466,594 7,4 57,762

Net deferred outﬂ ows and (inﬂ ows)

$(2,641,870)

$ (353,034) $ (282,414) $ (3,277,318)

Pension/OPEB expense

$914,249$

1,575,044 $1,546,657$4,035,950

FINANCIALS 53

At September 30, 2020, the TAA reported in the statements of net posi on and statements of revenues,

expenses, and changes in net posi on the following amounts related to all Pension/OPEB plans it

par cipants in:

NOTE 7 – PENSION AND OTHER POSTEMPLOYMENT BENEFITS (continued)

Notes to Financial Statements (continued)

September 30, 2021 and 2020

PSPRS – Fire PSPRS – Police

September 30, 2020

ASRS Department Department

Net

Net pension/ /OPEB liability

17,506,107 $ 13,515,076 $ 16,863,216 $ 47,884,399

Deferred outﬂ ows of resources:

Diﬀ erence between projected and actual

investment earnings

1,771,150 $ 308,846 $ 310,699 $ 2,390,695

Other deferred outﬂ ows:

Diﬀ erence between actual and

expected experience

165,074 480,717 1,264,662 1,910,453

Changes of assumptions related to

pensions

48,757 326,892 345,579 721,228

Changes in proportion and diﬀ erences

between employer contributions and

proportionate share of contributions

1,409 - - 1,409

Contributions subsequent to the

measurement date

314,268 305,542 447,737 1,067,547

Total other deferred outﬂ ows

529,5 08 1,113,151 2,0 57,978 3,700,6 37

Total deferred outﬂ ows

2,300,658 $ 1,421,997 $ 2,368,677 $ 6,091,332

Diﬀ erence between actual and expected

experience

145,617 $ 17,801 $ 65,083 $ 228,501

Changes of assumptions related to

pensions

-1,898 4702,368

Changes in proportion and diﬀ erences

between employer contributions and

proportionate share of contributions

638,300 - - 638,300

Total deferred inﬂ ows

783,917 19,699 65,553 869,169

Pension/OPEB expense

1,512,597 $ 1,681,898 $ 2,067,798 $ 5,262,293

Arizona State ReƟ rement System (ASRS):

Plan descrip on:

Substan ally all full  me employees of the TAA (excluding ﬁ re and police personnel) par cipate in the

Arizona State Re rement System (ASRS). The ASRS administers a cost sharing mul ple employer deﬁ ned

beneﬁ t plan, a cost sharing mul ple employer deﬁ ned beneﬁ t health insurance premium beneﬁ t (OPEB)

plan, and a cost sharing mul ple employer deﬁ ned long term disability (OPEB) plan. The Arizona State

Re rement System Board governs the ASRS according to the provisions of A.R.S. Title 38, Chapter 5, Ar cles

2 and 2.1. The ASRS issues a publicly available ﬁ nancial report that includes its ﬁ nancial statements and

required supplementary informa on. That report may be obtained by wri ng to ASRS, P.O. Box 33910,

Phoenix, AZ 85067 3910, calling 1 800 621 3778, or by visi ng h ps://www.azasrs.gov/content/annual

reports.

54 TUCSON AIRPORT AUTHORITY 2021 ACFR

NOTE 7 – PENSION AND OTHER POSTEMPLOYMENT BENEFITS (continued)

Notes to Financial Statements (continued)

September 30, 2021 and 2020

Beneﬁ ts provided:

The ASRS provides re rement, health insurance premium supplement, long term disability, and survivor

beneﬁ ts. State statute establishes beneﬁ t terms. Re rement beneﬁ ts are calculated on the basis of age,

average monthly compensa on, and service credit as follows:

Initial membership date:

Before July 1, 2011 On or after July 1, 2011

Years of service and age Sum of years and age equals 80 30 years age 55

required to receive beneﬁ t 10 years age 62 25 years age 60

5 years age 50* 10 years age 62

any years age 65 5 years age 50*

any years age 65

Final average salary is based on Highest 36 consecutive months Highest 60 consecutive months

of last 120 months of last 120 months

Beneﬁ t percent per year of service 2.1% to 2.3% 2.1% to 2.3%

Re rement beneﬁ ts for members who joined the ASRS prior to September 13, 2013 are subject to

automa c cost of living adjustments based on excess investment earnings. Members with a membership

date on or a er September 13, 2013 are not eligible for cost of living adjustments. Survivor beneﬁ ts

are payable upon a member’s death. For re red members, the survivor beneﬁ t is determined by the

re rement beneﬁ t op on chosen. For all other members, the beneﬁ ciary is en tled to the member’s

account balance that includes the member’s contribu ons and employer’s contribu ons, plus interest

earned.

In accordance with State statutes, annual actuarial valua ons determine ac ve member and employer

contribu on requirements. The combined ac ve member and employer contribu on rates are expected

to ﬁ nance the costs of beneﬁ ts employees earn during the year, with an addi onal amount to ﬁ nance any

unfunded accrued liability. For the years ended September 30, 2021 and 2020, ac ve ASRS members and

2021 2020

Employee contribution rates:

Retirement

12.04% 11.94%

Long-term disability 0.18% 0.17%

12.22% 12.11%

Employer contribution rates:

Retirement 11.65% 11.45%

Health insurance premium beneﬁ t0.39%0.49%

Long-term disability 0.18% 0.17%

12.22% 12.11%

The TAA's contribu ons to the pension/OPEB plan for the years ended September 30, 2021 and 2020 were

$1,380,826 and $1,336,711.

FINANCIALS 55

Notes to Financial Statements (continued)

September 30, 2021 and 2020

NOTE 7 – PENSION AND OTHER POSTEMPLOYMENT BENEFITS (continued)

Pension liability At September 30, 2021 and 2020, the TAA reported a liability of $12,730,870 and

$17,506,107 for its propor onate share of the ASRS’ net pension/OPEB liability. The net pension/OPEB

liability was measured as of June 30, 2021 and 2020 (the total pension/OPEB liability used to calculate the

net pension/OPEB liability was determined using updated procedures to roll forward the total pension/

OPEB liability from an actuarial valua on as of June 30, 2020, to the measurement date of June 30, 2021.)

The TAA’s propor on of the net pension/OPEB liability was based on the TAA's actual contribu ons to the

plan rela ve to the total of all par cipa ng employers’ contribu ons for the years ended June 30, 2021 and

2020. The TAA’s propor ons, measured as of June 30, 2021 and 2020 were as follows:

2020 2019 Decrease

Pension

0.10053% 0.10101% (0.00048)%

Health beneﬁ t supplement 0.10249% 0.10295% (0.00046)%

Long term disability 0.10180% 0.10213% (0.00033)%

For the years ended September 30, 2021 and 2020, the TAA recognized pension/OPEB expense (income) for

ASRS of $1,045,978 and $1,512,597. At September 30, 2021 and 2020, the TAA reported deferred ou lows

of resources and deferred inﬂ ows of resources related to pension/OPEBs from the following sources:

September 30, 2021 September 30, 2020

Deferred Deferred Deferred Deferred

outﬂ ows of inﬂ ows of outﬂ ows of inﬂ ows of

resources resources resources resources

Diﬀ erences between expected and

actual experience $ 207,432 $ 174,884 $ 165,074 $ 145,617

Net diﬀ erence between projected

and actual earnings on pension

plan investments - 4,384,922 1,771,150 -

Changes in proportion and diﬀ erences

between employer contributions and

proportionate share of contributions 1,223 322,614 1,409 638,300

Changes in assumptions

1,750,759 46,667 48,757 -

Contributions subsequent to the

measurement date 327,803 - 314,268 -

$ 2,287,217 $ 4,929,087 $ 2,300,658 $ 783,917

The $327,803 reported as deferred ou lows of resources related to TAA contribu ons subsequent to

the measurement date will be recognized as a reduc on of the net pension/OPEB liability in the year

ending September 30, 2022. Amounts reported as deferred ou lows of resources and deferred inﬂ ows

of resources related to ASRS pension/OPEBs, including those for contribu ons subsequent to the

measurement date, will be recognized in pension/OPEB expense as follows:

56 TUCSON AIRPORT AUTHORITY 2021 ACFR

NOTE 7 – PENSION AND OTHER POSTEMPLOYMENT BENEFITS (continued)

Notes to Financial Statements (continued)

September 30, 2021 and 2020

The signiﬁ cant actuarial assump ons used to measure the total pension liability are as follows:

Actuarial valuation date June 30, 2020

Actuarial roll forward date June 30, 2021

Actuarial cost method Entry age normal

Asset valuation Fair value

Pension discount rate and OPEB investment rate of return 7.0%

Projected salary increases pension 2.9%-8.4%

Inﬂ ation 2.3%

Permanent beneﬁ t increase Included

Mortality rates pension and health 2017 SRA Scale U MP

Recovery rates long term disability 2012 GLDT

Actuarial assump ons used in the June 30, 2020 valua on were based on the results of an actuarial

experience study for the 5 year period ended June 30, 2016.

The long term expected rate of return on ASRS pension/OPEB plan investments was determined to be

7.0% using a building block method in which best es mate ranges of expected future real rates of return

(expected returns, net of pension/OPEB plan investment expense and inﬂ a on) are developed for each

major asset class. These ranges are combined to produce the long term expected rate of return by

weigh ng the expected future real rates of return by the target asset alloca on percentage and by adding

expected inﬂ a on.

The target alloca on and best es mates of arithme c real rates of return for each major asset class are

summarized in the following table:

Year ending September 30, 2022 $ (330,564)

2023 (59,604)

2024 (1,014,251)

2025 (1,545,299)

2026 (10,637)

Thereafter (9,318)

$(2,969,673)

Asset Class Target asset allocation

Long-term contribution to

expected return

Equity

50% 2.45%

Fixed Income - credit

20% 1.04%

Fixed income - interest rate sensitive 10% 0.07%

Real estate 20% 1.14%

Total 100% 4.70%

FINANCIALS 57

Notes to Financial Statements (continued)

September 30, 2021 and 2020

NOTE 7 – PENSION AND OTHER POSTEMPLOYMENT BENEFITS (continued)

Discount rate

The discount rate used to measure the ASRS total pension/OPEB liability was 7.0%, which is more than

the long term expected rate of return of 4.7%. The discount rate decreased by 0.5% form the prior

year. The projec on of cash ﬂ ows used to determine the discount rate assumed that contribu ons

from par cipa ng employers will be made based on the actuarially determined rates based on the ASRS

Board’s funding policy, which establishes the contractually required rate under Arizona statute. Based on

those assump ons, the Re rement Funds’ ﬁ duciary net posi on was projected to be available to make

all projected future beneﬁ t payments of current plan members. Therefore, the long term expected rate

of return on pension/OPEB plan investments was applied to all periods of projected beneﬁ t payments to

determine the total pension/OPEB liability.

Sensi vity of the TAA’s propor onate share of the ASRS net pension/OPEB liability to changes in the

discount rate The following table presents the TAA’s propor onate share of the net pension/OPEB

liability calculated using the discount rate of 7.0%, as well as what the TAA’s propor onate share of the net

pension/OPEB liability would be if it were calculated using a discount rate that is 1 percentage point lower

(6.0%) or 1 percentage point higher (8.0%) than the current rate:

Current

1% decrease

discount rate 1% increase

(6.0%) (7.0%) (8.0%)

TAA’s proportionate share of the

net pension/OPEB liability $ 20,473,706 $ 12,730,870 $ 6,271,834

Detailed informa on about the pension/OPEB plan’s ﬁ duciary net posi on is available in the separately

issued ASRS ﬁ nancial report.

Public Safety Personnel ReƟ rement System (PSPRS):

Plan descrip on Employees of the TAA who are employed in either police of ﬁ reﬁ gh ng capaci es and

work at least 40 hours a week for more than 6 months a year par cipate in the Arizona Public Safety

Personnel Re rement System (PSPRS). The PSPRS administers an agent mul ple employer deﬁ ned beneﬁ t

pension/OPEB plan, an agent mul ple employer deﬁ ned health insurance premium beneﬁ t (OPEB) plan

(agent plans) and a cost sharing mul ple employer plan ( er 3). The PSPRS acts as a common investment

and administra ve agent that is jointly administered by the Board of Trustees (“the Board”) and 237

local boards. The PSPRS issues a publicly available ﬁ nancial report that includes ﬁ nancial statements and

required supplementary informa on. The report may be obtained by wri ng Public Safety Personnel

Re rement System, 3010 E. Camelback Road, Suite 200, Phoenix, AZ 85016, calling (602) 255 5575, or by

visi ng: h p://www.psprs.com/sys_psprs/AnnualReports/cato_annual_rpts_psprs.htm.

Beneﬁ ts provided

The PSPRS provides re rement, health insurance premium supplement, disability, and survivor beneﬁ ts.

State statute establishes beneﬁ t terms as well as employee and employer contribu on rates according

to a member’s membership date. These membership dates fall within three separately iden ﬁ ed groups

referred to as Tiers. Those Tiers and the corresponding membership dates are outlined in the following

table:

58 TUCSON AIRPORT AUTHORITY 2021 ACFR

NOTE 7 – PENSION AND OTHER POSTEMPLOYMENT BENEFITS (continued)

Notes to Financial Statements (continued)

September 30, 2021 and 2020

Tier 1 Tier 2 Tier 3

Before

January 1, 2012

On or after

January 1, 2012 and

before July 1, 2017

On or after

July 1, 2017

Years of service

and age required to

receive beneﬁ t

20 years of service, any age

15 years of service, age 62

25 years of service or

15 years of credited

service, age 52.5

15 years of credited

service, age 52.5

15 or more years of

service, age 55

Final average salary

is based on

Highest 36 consecutive

months of last 20 years

Highest 60 consecu-

tive months of last 20

years

Highest 60 consec-

utive months of last

15 years

Beneﬁ t percent:

Normal retirement 50% less 2.0% for each year

of credited service less than

20 years OR plus 2.0% to

2.5% for each year of credited

service over 20 years, not to

exceed 80%

1.5% to 2.5% per year of credited service, not

to exceed 80%

Accidental disability

retirement

50% or normal retirement, whichever is greater

Catastrophic disability

retirement

90% for the ﬁ rst 60 months then reduced to either 62.5% or normal retire-

ment, whichever is greater

Ordinary disability

retirement

Normal retirement calculated with actual years of credited service or 20 years

of credited service, whichever is greater, multiplied by years of credited ser-

vice (not to exceed 20 years) divided by 20

Survivor beneﬁ t:

Retired members 80% to 100% of retired member’s pension beneﬁ t

Active member 80% to 100% of accidental disability retirement beneﬁ t or 100% of average

monthly compensation if death was the result of injuries received on the job

Re rement and survivor beneﬁ ts are subject to automa c cost of living adjustments based on inﬂ a on.

PSPRS also provides temporary disability beneﬁ ts of 50 percent of the member’s compensa on for up to

12 months.

Health insurance premium beneﬁ ts are available to re red or disabled members with 5 years of credited

service. The beneﬁ ts are payable only with respect to allowable health insurance premiums for which the

member is responsible. Beneﬁ ts range from $100 per month to $260 per month depending on the age of

the member and dependents.

FINANCIALS 59

Notes to Financial Statements (continued)

September 30, 2021 and 2020

NOTE 7 – PENSION AND OTHER POSTEMPLOYMENT BENEFITS (continued)

Fire Department Police Department

Retirees and beneﬁ ciaries 19

Inactive, non-retired members 2 5

Active members 15 19

36 51

At September 30, 2021, the number of employees covered by the PSPRS agent pension plan beneﬁ t terms

was as follows:

Contribu ons:

State statutes establish the pension/OPEB contribu on requirements for ac ve PSPRS employees. In

accordance with State statutes, employer contribu on requirements for PSPRS pension/OPEB and health

insurance premium beneﬁ ts are determined by the annual actuarial valua ons. The combined ac ve

member and employer contribu on rates are expected to ﬁ nance the costs of beneﬁ ts employees earn

during the year, with an addi onal amount to ﬁ nance any unfunded accrued liability. For the Plan years

ended June 30, 2021 and 2020, the TAA and ac ve PSPRS members were required to contribute at the

following rates, and the TAA's contribu ons to the pension/OPEB plan, which included the required

contribu ons for the health insurance premium beneﬁ t, were as follows:

Fire Police

2021 2020 2021 2020

Employer contribution

rates (Tier 1 & 2):

95.19% 99.85% 97.55% 95.30%

Employer health

contribution rates

0.00% 0.00% 0.02% 0.22%

Employer pension

contributions rates

95.19% 99.85% 95.53% 95.08%

Employer

contributions

$13,031,387 $1,227,825 $16,507,129 $1,554,910

Employer

contributions rates

Tier 3

89.39% 94.91% 92.43% 89.25%

Employer pension

legacy cost rates

79.45% 84.97% 82.49% 79.31%

Employer health

contributions rates

0.26% 0.26% 0.26% 0.26%

Employer pension

contributions rates

9.68% 9.68% 9.68% 9.68%

Employee contribution

rates:

Tier 1 7.65% 7.65% 7.65% 7.65%

Tier 2 11.65% 11.65% 11.65% 11.65%

Tier 3 9.94% 9.94% 9.94% 9.94%

60 TUCSON AIRPORT AUTHORITY 2021 ACFR

NOTE 7 – PENSION AND OTHER POSTEMPLOYMENT BENEFITS (continued)

Notes to Financial Statements (continued)

September 30, 2021 and 2020

Liability At September 30, 2021 and 2020, the TAA reported the following net pension/OPEB liabili es

(assets) for its PSPRS pension/OPEB plans:

The net pension/OPEB liabili es were measured as of June 30, 2021 and 2020, and the total pension/OPEB

liability used to calculate the net pension/OPEB liability (asset) was determined by an actuarial valua on as

of these dates.

Actuarial assump ons The signiﬁ cant actuarial assump ons used to measure the total pension/OPEB

liability are as follows:

Asset valua on method Fair value of assets

Actuarial Cost Method Entry Age Normal

Asset Valua on Method Fair Value of Assets

Investment rate of return 7.3%, net of investment and administra ve expense

Payroll growth 3.50%

Inﬂ a on 2.22%

Salary increases 3.50%-7.50%, including inﬂ a on

Investment rate of return 7.40% (7.50% for 2016), net of investment and administra ve expenses

Mortality rates RP-2014 mortality table projected 1 year backwards to 2013 with MP-

2014 (adjusted by 110% of female healthy annuitant mortality table).

Future mortality improvements are assumed each year using 75% of scale

MP-2016.

Permanent Beneﬁ t Increases The cost-of-living adjustment will be based on the average annual

percentage change in the Metropolitan Phoenix-Mesa Consumer Price

Index published in the United States Department of Labor, Bureau of

Sta s cs. We have assumed that to be 1.75% for this valua on.

Healthcare cost trend rate N/A

Actuarial assump ons used in the June 30, 2021 valua on were based on the results of an actuarial

experience study for the 5 year period ended June 30, 2017.

The long term expected rate of return on pension/OPEB plan investments was determined using a building

block method in which expected future real rates of return (expected returns, net of pension/OPEB plan

investment expenses and inﬂ a on) are developed for each major asset class. These real rates of return are

combined to produce the long term expected rate of return by weighing the expected future real rates of

return by the target asset alloca on percentage and by adding expected inﬂ a on

Fire Police

2021 2020 2021 2020

Net pension liability

$ (426,421) $ 13,515,076 $ (1,285,142) $ 16,863,216

FINANCIALS 61

Notes to Financial Statements (continued)

September 30, 2021 and 2020

NOTE 7 – PENSION AND OTHER POSTEMPLOYMENT BENEFITS (continued)

For each major asset class that is included in the pension/OPEB plan's target asset alloca on as of June 30,

2021, es mates are summarized in the following table:

Long term expected

Asset Class

Target Allocation real rate of return

U.S. Public Equity

24% 4.08%

International public equity 16% 5.20%

Global private equity 20% 7.67%

Other assets (capital appreciation) 7% 5.43%

Core bonds 2% 0.42%

Private credit 20% 5.74%

Diversifying strategies 10% 3.99%

Cash - Mellon 1% (0.31)%

100%

Discount rate At June 30, 2020, the discount rate used to measure the total pension/OPEB liability was

7.30%. The projec on of cash ﬂ ows used to determine the discount rate assumed that plan member

contribu ons will be made at the current contribu on rate and that employer contribu ons will be made

at rates equal to the diﬀ erence between the actuarially determined contribu on rate and the member

rate. Based on those assump ons, the plans' ﬁ duciary net posi on was projected to be available to make

all projected future beneﬁ t payments of current plan members. Therefore, the long term expected rate

of return on plan investments was applied to all periods of projected beneﬁ t payments to determine the

total pension/OPEB liability (asset).

62 TUCSON AIRPORT AUTHORITY 2021 ACFR

NOTE 7 – PENSION AND OTHER POSTEMPLOYMENT BENEFITS (continued)

Notes to Financial Statements (continued)

September 30, 2021 and 2020

Changes in the net pension liability - Tucson Airport Authority Fire Department 2021

Measurement date June 30, 2021

Total Pension Plan Fiduciary Net Net Pension Liability

OPEB Liability (a) Position (b) (a)-(b)

Balances at beginning of year

$ 19,446,317 $ 5,931,241 $ 13,515,076

Adjustment to beginning of year

-(32,139) 32,139

Changes for the year:

Service cost

265,461 - 265,461

Interest on the total pension liability

1,397,401 - 1,397,401

Changes of beneﬁ t terms

- - -

Diﬀ erences between expected and actual

experience in the measurement of the total

pension liability

212,178 - 212,178

Contributions - employer

-13,262,977(13,262,977)

Contributions - employee

-91,288(91,288)

Net investment income

- 2,493,309 (2,493,309)

Beneﬁ t payments, including refunds of

employee contributions

(1,138,617) (1,138,617) -

Administrative expense

-(11,137) 11,137

Eﬀ ect of tier 3 plans

--(11,139)

Other changes

- 1,100 (1,100)

Net changes

736,423 14,698,920 (13,973,636)

Balances at June 30, 2021

20,182,740 $ 20,598,022 $ (426,421)

Changes in the net pension liability Tucson Airport Authority Fire Department 2020

Measurement date June 30, 2020

Total Pension Plan Fiduciary Net Net Pension Liability

OPEB Liability (a) Position (b) (a)-(b)

Balances at June 30, 2020

$ 18,713,814 $ 5,689,191 $ 13,024,623

Changes for the year:

Service cost

272,170 - 272,170

Interest on the total pension liability

1,362,911 - 1,362,911

Diﬀ erences between expected and actual

experience in the measurement of the total

pension liability

233,963 - 233,963

Contributions - employer

- 1,216,474 (1,216,474)

Contributions - employee

-94,483(94,483)

Net investment income

-73,638(73,638)

Beneﬁ t payments, including refunds of

employee contributions

(1,136,541) (1,136,541) -

Administrative expense

- (6,004) 6,004

Net changes

732,503 242,050 490,453

Balances at June 30, 2021

19,446,317 $ 5,931,241 $ 13,515,076

FINANCIALS 63

Notes to Financial Statements (continued)

September 30, 2021 and 2020

NOTE 7 – PENSION AND OTHER POSTEMPLOYMENT BENEFITS (continued)

Changes in the net pension liability Tucson Airport Authority Police Department 2021

Measurement date June 30, 2021

Total Pension Plan Fiduciary Net Net Pension Liability

OPEB Liability (a) Position (b) (a)-(b)

Balances at beginning of year

22,558,814 $ 5,695,600 $ 16,863,214

Adjustment to beginning of year

-(46,872) 46,872

Changes for the year:

Service cost

368,844 - 368,844

Interest on the total pension liability

1,626,662 - 1,626,662

Diﬀ erences between expected and actual

experience in the measurement of the total

pension liability

(357,523) - (357,523)

Contributions - employer

- 16,845,168 (16,845,168)

Contributions - employee

- 261,526 (261,526)

Net investment income

- 2,727,376 (2,727,376)

Beneﬁ t payments, including refunds of

employee contributions

(1,289,241) (1,289,241) -

Eﬀ ect of tier 3 plans

--(11,197)

Administrative expense

-(12,056) 12,056

Net changes

348,742 18,532,773 (18,195,228)

Balances at June 30, 2021

22,907,556 $ 24,181,501 $ (1,285,142)

Total Pension Plan Fiduciary Net Net Pension Liability

OPEB Liability (a) Position (b) (a)-(b)

Balances at June 30, 2020

21,440,143 $ 5,910,060 $ 15,530,083

Changes for the year:

Service cost

279,588 - 279,588

Interest on the total pension liability

1,538,437 - 1,538,437

Diﬀ erences between expected and actual

experience in the measurement of the total

pension liability

1,160,712 - 1,160,712

Contributions - employer

- 1,452,764 (1,452,764)

Contributions - employee

- 123,872 (123,872)

Net investment income

-75,091(75,091)

Beneﬁ t payments, including refunds of

employee contributions

(1,860,066) (1,860,066) -

Administrative expense

- (6,121) 6,121

Net changes

1,118,671 (214,460) 1,333,131

Balances at June 30, 2021

$ 22,558,814 $ 5,695,600 $ 16,863,214

Changes in the net pension liability Tucson Airport Authority Police Department 2020

Measurement date June 30, 2020

64 TUCSON AIRPORT AUTHORITY 2021 ACFR

Current

1% decrease

discount rate 1% increase

(6.5%) (7.5%) (8.5%)

TAA’s net pension/OPEB liability (asset)

Fire Department

$ 2,130,062 $ (426,421) $ (2,513,761)

TAA’s net pension/OPEB liability (asset)

Police Department

$ 1,557,641 $ (1,285,142) $ (3,617,412)

NOTE 7 – PENSION AND OTHER POSTEMPLOYMENT BENEFITS (continued)

Notes to Financial Statements (continued)

September 30, 2021 and 2020

Sensi vity of the Plan’s net pension liability (asset) to changes in the discount rate The following table

presents the Plan’s net pension/OPEB liability (asset) calculated using the single discount rate of 7.30%, as

well as what the Plan’s net pension/OPEB liability (asset) would be if it were calculated using a discount rate

that is 1 percentage point lower (6.30%) or 1 percentage point higher (8.30%) than the current rate:

Plan ﬁ duciary net posiƟ on

Detailed informa on about the plans' ﬁ duciary net posi on is available in the separately issued PSPRS

ﬁ nancial report.

Fire Department Pension/OPEB expense and deferred ou lows/inﬂ ows of resource For the years ended

September 30, 2021 and 2020, the TAA recognized pension expense for PSPRS Fire of $1,575,044 and

$1,681,898. At September 30, 2021 and 2020, the TAA reported deferred ou lows of resources and

deferred inﬂ ows of resources related to pensions and OPEB from the following sources:

2021 2020

Deferred Deferred Deferred Deferred

outﬂ ows of inﬂ ows of outﬂ ows of inﬂ ows of

resources resources resources resources

Diﬀ erences between expected and

actual experience

$ 502,061 $ 13,232 $ 480,717 $ 17,801

Changes in assumptions 142,723 318 326,892 1,898

Net diﬀ erence between projected and

actual earnings on plan investments - 1,046,783 308,846 -

Contributions subsequent to the

measurement date 63,259 - 305,542 -

Changes in proportion and diﬀ erences

between employer contributions and

proportionate share of contributions 1,004 1,748 - -

$ 709,047 $ 1,062,081 $ 1,421,997 $ 19,699

FINANCIALS 65

Notes to Financial Statements (continued)

September 30, 2021 and 2020

NOTE 7 – PENSION AND OTHER POSTEMPLOYMENT BENEFITS (continued)

The amounts reported as deferred ou lows of resources related to pensions and OPEB resul ng from TAA

contribu ons subsequent to the measurement date will be recognized as an increase in the net asset or a

reduc on of the net liability in the year ending September 30, 2022. Other amounts reported as deferred

ou lows of resources and deferred inﬂ ows of resources related to pensions and OPEB will be recognized as

expenses as follows:

Year ending September 30, Pension

2023 $ 43,863

2024 14,753

2025

(156,256)

2026 (318,653)

$(416,293)

Police Department Pension/OPEB expense and deferred ou lows/inﬂ ows of resource For the years

ended September 30, 2021 and 2020, the TAA recognized pension expense for PSPRS Police of $1,546,657

and $2,067,798. At September 30, 2021 and 2020, the TAA reported deferred ou lows of resources and

deferred inﬂ ows of resources related to pensions and OPEB from the following sources:

2021 2020

Deferred Deferred Deferred Deferred

outﬂ ows of inﬂ ows of outﬂ ows of inﬂ ows of

resources resources resources resources

Diﬀ erences between expected and

actual experience

$ 870,104 $ 315,071 $ 1,264,662 $ 65,083

Changes in assumptions 218,467 - 345,579 470

Net diﬀ erence between projected and

actual earnings on plan investments - 1,144,741 310,699 -

Contributions subsequent to the

measurement date 88,810 - - -

Changes in proportion and diﬀ erences

between employer contributions and

proportionate share of contributions 6,799 6,782 447,737 -

$ 1,18 4,18 0 $ 1,4 6 6,59 4 $ 2,368,677 $ 65,553

66 TUCSON AIRPORT AUTHORITY 2021 ACFR

NOTE 7 – PENSION AND OTHER POSTEMPLOYMENT BENEFITS (continued)

Notes to Financial Statements (continued)

September 30, 2021 and 2020

The amounts reported as deferred ou lows of resources related to pensions and OPEB resul ng from TAA

contribu ons subsequent to the measurement date will be recognized as an increase in the net asset or a

reduc on of the net liability in the year ending September 30, 2022. Other amounts reported as deferred

ou lows of resources and deferred inﬂ ows of resources related to pensions and OPEB will be recognized as

expenses as follows:

Year ending September 30, Pension

2023 $ 181,530

2024 175,103

2025 (372,676)

2026 (355,181)

$(371,224)

NOTE 8 – PASSENGER FACILITY CHARGES

Passenger Facility Charges (PFCs) are collected in accordance with the Avia on Safety and Capacity

Expansion Act of 1990, which allows allowing airports to impose a charge on enplaning passengers. As

described in the summary of signiﬁ cant accoun ng policies, the TAA was granted permission to begin

collec on of such charges in February 1998. The total amount of PFCs to be collected under this FAA

approved applica on was based on the es mated costs of approved PFC projects. The FAA approval le er

provided total aggregate collec on authority of $101,234,420.

In April 2006, the FAA approved an amendment to the approved PFC applica on. The amendment

approved an increase in the collec on level from $3.00 to $4.50 for the following projects of the TAA:

terminal expansion, land acquisi on for airport expansion and land acquisi on for noise mi ga on. The

increase in rate was eﬀ ec ve October 1, 2006. In June 2006, the FAA approved an addi onal applica on

to include the concourse renova on project. On December 15, 2017, the TAA received approval under

a new PFC applica on for the Terminal Op miza on Project. The total eﬀ ect of approved applica ons

and amendments results in total aggregate collec on authority of $179,290,015. During the years ended

September 30, 2021 and 2020, the TAA earned PFCs of $4,628,663 and $4,265,140.

NOTE 9 – RISK MANAGEMENT

The TAA is exposed to various risks of loss related to torts; the of, damage to and destruc on of assets;

errors and omissions; injuries to employees; and natural disasters. The TAA carries commercial insurance

for all such risks of loss, including workers’ compensa on and employees’ health and accident insurance.

Se led claims resul ng from these risks have not exceeded commercial insurance coverage in any of the

past three ﬁ scal years. Other than for certain environmental remedia on liabili es as discussed in Note 11,

the ﬁ nancial statements do not include any liability for uninsured claims at September 30, 2021 and 2020.

NOTE 10 – COMMITMENTS

Commitments for contractual services for federally funded and other construc on projects at September

30, 2021 totaled approximately $56,174,000. These commitments will be funded in whole or in part by

federal and state grants of $32,310,000 and the TAA’s previously issued revenue bonds and TAA funds, as

necessary, of $23,864,000.

FINANCIALS 67

Notes to Financial Statements (continued)

September 30, 2021 and 2020

NOTE 10 – COMMITMENTS (continued)

Opera ng leases:

The TAA is the lessor of various land, facili es and equipment within the Airport System. Lease contracts are

generally wri en with noncancelable terms of up to 30 years. Costs and related accumulated deprecia on

of property under leases are not prac cally determinable as the majority of the leases relate only to

por ons of buildings. A summary of minimum noncancelable rentals under opera ng leases at September

30, 2021 follows:

The future minimum lease payments under the opera ng leases are as follows:

Year ending

September 30,

2022

8,617,397

2023

7,0 47,178

2024

5,437,532

2025

5,052,670

2026

4,883,939

Thereafter

53,303,616

84,342,332

Several lease agreements have provisions for con ngent rentals calculated on the tenant's gross revenue

is greater than contractual minimum annual guarantees (MAGs). In response to travel restric ons related

to the COVID 19 pandemic, the TAA waived the MAGs for lessees beginning in April 2020. Because

con ngent rental revenue represents amounts in excess of guaranteed minimums, with no minimums

in eﬀ ect, all concessions revenue recognized a er the waiver was classiﬁ ed as con ngent revenue. The

amount of con ngent rental revenue under these leases totaled $1,343,485 and $407,189 for the years

ended September 30, 2021 and 2020, and is included in concession revenues.

NOTE 11 –ENVIRONMENTAL MATTERS, LITIGATION AND CONTINGENCIES

Groundwater Remedia on (“TARP Consent Decree”) and Soils/Vadose Zone Remedia on (“Soils Consent

Decree”):

In 1991, the TAA and other obligated par es entered into the Tucson Airport Remedia on Project (TARP)

Consent Decree with the Environmental Protec on Agency (EPA). The TARP Consent Decree requires

performance of and funding for certain groundwater remedia on ac vi es.

In 1999, the TAA and other obligated par es entered into another Consent Decree (the “Soils Consent

Decree”) with the EPA. The Soils Consent Decree requires performance of and funding for certain soil and

shallow groundwater remedia on ac vi es on TAA property.

In 1999, the TAA and several other par es entered into a se lement pursuant to which other par es

paid certain amounts to TAA, there was an alloca on of responsibility for obliga ons under both of the

above referenced Consent Decrees, and the TAA funded a trust for the purpose of providing primary

funding for the TAA’s ﬁ nancial responsibili es under the Consent Decrees. The Trust is referred to as the

“Environmental Remedia on Trust.”

68 TUCSON AIRPORT AUTHORITY 2021 ACFR

Notes to Financial Statements (continued)

September 30, 2021 and 2020

NOTE 11 –ENVIRONMENTAL MATTERS, LITIGATION AND CONTINGENCIES (continued)

As a result of the 1999 se lement, the TAA is obligated to pay 100% of the costs associated with the TARP

Consent Decree and 80% of the costs of the work required under the Soils Consent Decree. Two other

par es are each obligated to pay 10% of the costs of the work required under the Soils Consent Decree, for

a combined obliga on of 20%. It is assumed that in the future these two par es will con nue to meet their

payment obliga ons for purposes of calcula ng the TAA’s environmental liability.

The liability for remedia on obliga ons is calculated using the expected cash ﬂ ow technique, which

measures the liability as the sum of probability weighted amounts in a range of possible expected

amounts – the es mated mean or average. This technique uses all expecta ons about possible cash

ﬂ ows. Es mated future cash outlays are based on exis ng technologies currently in use to perform the

required remedia on, stated at current value. These outlays include all opera on and maintenance

costs, remedia on monitoring costs (including post remedia on monitoring), regulatory oversight costs,

and facility construc on costs. These costs are subject to poten ally signiﬁ cant future price increases or

decreases for materials, u li es and labor.

Changes in the es mated environmental remedia on liability for the years ended September 30, 2020 and

2019 follow:

2021 2020

Environmental remediation liability, beginning of year $ 23,696,686 $ 24,575,777

Current year expense 1,334,189 394,453

Investment earnings on Environmental

Remediation Trust assets

2,511 2,520

Current year payments (1,112,484) (1,276,064)

Environmental remediation liability, end of year

$ 23,920,902 $ 23,696,686

Environmental remediation liability: $

Current – payable from unrestricted assets $ 5,678,529 4,987,354

Current – payable from restricted assets 392,447 402,420

Long-term – payable from unrestricted assets 17,849,926 $ 18,306,912

$ 23,920,902 $ 23,696,686

1,4 Dioxane Remedial InvesƟ gaƟ on and Feasibility Study:

In a le er dated July 17, 2008, the U.S. EPA requested that the TAA, the City of Tucson, the U.S. Air

Force, Boeing Corpora on and Raytheon Corpora on conduct a Remedial Inves ga on and Feasibility

Study regarding 1,4 Dioxane in the regional groundwater aquifer near Tucson Interna onal Airport.

This contaminant is not addressed in or covered by the TARP Consent Decree. The TAA has taken the

posi on that it is not responsible for this contamina on and another party has agreed to perform a

substan al por on of the work demanded. The TAA is currently unable to determine the probability of

an unfavorable outcome, if any, related to this ma er.

FINANCIALS 69

Landﬁ ll InvesƟ gaƟ on:

On April 18, 2007, the Arizona Department of Environmental Quality (“ADEQ”) sent the TAA a request for

informa on in connec on with ADEQ’s inves ga on of groundwater contamina on near the Broadway

North Landﬁ ll (“BNL”) in Tucson, which is part of the Broadway Pantano Water Quality Assurance Fund

Registry Site (“Site”). Similar requests were also sent to many other en  es. The request related to waste

purportedly generated by the TAA and its tenants at Tucson Interna onal Airport and Ryan Airﬁ eld

between 1961 and 1972 and that ADEQ alleged may have been transported to BNL. On May 15, 2007,

ADEQ sent a le er to the TAA and many other en  es no fying each en ty that it may be a responsible

party for the Site and that a remedial inves ga on and feasibility study designed to iden fy a remedy were

being conducted. The TAA is unable to determine the probability of an unfavorable outcome, if any, related

to this ma er.

Federal and State Grants:

All federal and state grants are subject to audit by the gran ng agencies for compliance with applicable

grant requirements. The TAA an cipates that the amount, if any, of disallowed grant expenditures in the

event of gran ng agency audits would be immaterial.

Legal proceedings:

From  me to  me, the TAA may be party to certain pending or threatened lawsuits arising out of or

incident to the ordinary course of business for which it carries general liability and other insurance

coverages. In the opinion of management and based upon consulta on with legal counsel, resolu on

of any pending or threatened lawsuits will not have a material adverse eﬀ ect on the TAA’s ﬁ nancial

statements.

Other conƟ ngencies:

The TAA is involved in other claims in the ordinary course of business. In the opinion of management,

based on consulta ons with legal counsel, these ma ers are considered immaterial to the TAA or will be

covered by insurance.

The TAA has signiﬁ cant contracts and leases that include con ngent amounts due to the TAA based upon

revenues of the lessees and concessionaires. The TAA monitors such agreements and includes adjustments

in the revenues earned under the contracts when such amounts are collected or a nego ated se lement

has been reached with the respec ve lessee/concessionaire

Notes to Financial Statements (continued)

September 30, 2021 and 2020

NOTE 11 –ENVIRONMENTAL MATTERS, LITIGATION AND CONTINGENCIES (continued)

NOTE 12 –CONCENTRATIONS:

Concession fees from the airport rental car opera ons amounted to approximately 16% and 12% of total

opera ng revenues for the years ended September 30, 2021 and 2020. Net revenues from the airport

parking lot opera ons amounted to approximately 13% and 12% of total opera ng revenues in the years

ended September 30, 2021 and 2020.

70 TUCSON AIRPORT AUTHORITY 2021 ACFR

Notes to Financial Statements (continued)

September 30, 2021 and 2020

NOTE 13 –RESTRICTED NET POSITION

September 30, 2021

Environmental Debt Capital Total

Trust service projects restricted

Assets

Cash and cash equivalents $ 392,447 $ - $ 1,443,206 $ 1,833,184

Investments - - 20,923,339 20,923,339

Accounts receivable - - 876,384 876,384

Accrued interest receivable - - 43,342 43,342

Total restricted assets $ 392,447 $ - $ 23,286,271 $ 23,676,249

Liabilities

Environmental remediation payable - $ 392,447 $ - $ - $ 389,978

Total Restricted Net Position $ - $ - $ 23,286,271 $ 23,286,271

Restricted net posi on includes restricted assets required to be set aside to repay principal and interest

under debt covenants; and to comply with other legal or contractual requirements; less liabili es payable

from these assets. For ﬁ scal years September 30, 2021 and 2020, restricted net posi on is as follows:

September 30, 2020

Environmental Debt Capital Total

Trust service projects restricted

Assets

Cash and cash equivalents $ 402,420 $ - $ 9,730,416 $ 10,132,836

Investments - - 12,423,496 12,423,496

Accounts receivable - - 410,268 410,268

Accrued interest receivable - - 47,465 47,465

Total restricted assets $ 402,420 $ - $ 22,611,645 $ 23,014,065

Liabilities

Environmental remediation payable - $ 402,420 $ - $ - $ 402,420

Total Restricted Net Position $ - $ - $ 22,611,645 $ 22,611,645

FINANCIALS 71

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72 TUCSON AIRPORT AUTHORITY 2021 ACFR

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FINANCIALS 73

REQUIRED

SUPPLEMENTARY

INFORMATION

–Unaudited

74 TUCSON AIRPORT AUTHORITY 2021 ACFR

Required Supplementary Information - Unaudited

1. Budgetary basis of accoun ng:

The TAA prepares its annual budget on the modiﬁ ed accrual basis of accoun ng. A budgetary comparison

schedule for the general fund is included as required supplementary informa on to provide meaningful

comparison of actual results to budget on a budget basis.

2.Pension and OPEB plan schedules:

Actuarially determined contribu on rates:

Actuarial determined contribu on rates for PSPRS are calculated as of June 30 two years prior to the end of

the ﬁ scal year in which contribu ons are made. The actuarial methods and assump ons used to establish

the contribu on requirements are as follows:

Actuarial cost method Entry age normal

Remaining amortization period

as of the 2019 actuarial valuation 17 years

Asset valuation method 7 year smoothed market; 80%/120% corridor

Actuarial assumptions:

Investment rate of return

PSPRS members with initial membership date before July 1, 2017: In the 2017 actuarial valuation, the invest-

ment rate of return was decreased from 7.5% to 7.4%. In the 2016 actuarial valuation, the investment rate of

return was decreased from 7.85% to 7.5%. In the 2013 actuarial valuation, the investment rate of return was

decreased from 8% to 7.85%. PSPRS members with initial membership on or after July 1, 2017: 7%

Salary increase

In the 2017 actuarial valuation, projected salary increases were decreased from 4%-8% to 3.5%-7.5%. In the

2014 actuarial valuation, projected salary increases were decreased from 4.5% – 8.5% to 4% – 8%. In the 2013

actuarial valuation, projected salary increases were decreased from 5% – 9% to 4.5% – 8.5%.

Wage growth

In the 2017 actuarial valuation, wage growth was decreased from 4% to 3.5%. In the 2014 actuarial valuation,

wage growth was decreased from 4.5% to 4%. In the 2013 actuarial valuation, wage growth was decreased

from 5% to 4.5%.

Retirement age

Experience based table of rates that is speciﬁ c to the type of eligibility condition. Last updated for the 2012

valuation pursuant to an experience study of the period July 1, 2006-June 30, 2011.

Mortality

In the 2017 actuarial valuation, changed to RP 2014 tables, with 75% of MP 2016 fully generational projection

scales. RP 2000 mortality table (adjusted by 105% for both males and females).

Factors that aﬀ ect trends:

Arizona courts have ruled that provisions of a 2011 law that changed the mechanism for funding permanent

pension beneﬁ t increases and increased employee pension contribu on rates were uncons tu onal or a

breach of contract because those provisions apply to individuals who were members as of the law’s eﬀ ec ve

date. As a result, the PSPRS changed beneﬁ t terms to reﬂ ect the prior mechanism for funding permanent

beneﬁ t increases for those members and revised actuarial assump ons to explicitly value future permanent

beneﬁ t increases. PSPRS also reduced those members’ employee contribu on rates. These changes are

reﬂ ected in the plans’ pension liabili es for ﬁ scal year 2015 (measurement date 2014) for members who

were re red as of the law’s eﬀ ec ve date and ﬁ scal year 2018 (measurement date 2017) for members who

re red or will re re a er the law’s eﬀ ec ve date. These changes also increased the PSPRS required pension

contribu ons beginning in ﬁ scal year 2016 for members who were re red as of the law’s eﬀ ec ve date. These

changes increased the PSPRS required contribu ons beginning in ﬁ scal year 2019 for members who re red

or will re re a er the law’s eﬀ ec ve date. Also, the TAA refunded excess employee contribu ons to PSPRS

members. PSPRS allowed the TAA to reduce its actual employer contribu ons for the refund amounts. As a

result, the TAA’s pension contribu ons were less than the actuarially or statutorily determined contribu ons

for 2018 and 2019.

FINANCIALS 75

76 TUCSON AIRPORT AUTHORITY 2021 ACFR

Reporting date (September 30)

2021 2020 2019 2018

Measurement date (June 30) (2021) (2020) (2019) (2018)

TAA’s proportion of the net

pension liability 0.10053% 0.101010% 0.106740% 0.108140%

TAA’s proportionate share of

the net pension liability 13,209,196 $ 17,501,518 $ 15,531,912 $ 15,081,724

TAA’s covered payroll 11,255,969 10,979,377 11,198,483 10,748,407

TAA’s proportionate share of the

net pension liability as a percentage

its covered payroll 117.00% 159.40% 138.70% 140.32%

Plan ﬁ duciary net position as a

percentage of total pension liability 78.58% 69.33% 73.24% 73.00%

Schedule of the TAA’s Proportionate Share of the

Net Pension Liability – Cost Sharing Plan (ASRS)

(2013 – 2012 information not available)

FINANCIALS 77

2017 2016 2015 2014 2013 2012

(2017) (2016) (2015) (2014) (2013) (2012)

0.105060% 0.110640% 0.116260% 0.120267% -% -%

$ 16,366,300 $ 17,858,407 $ 18,108,646 $ 17,795,379 - -

10,234,127 10,309,250 10,708,240 10,840,726 - -

159.92% 173.23% 169.11% 164.15% -% -%

69.92% 67.06% 68.08% 69.49% -% -%

78 TUCSON AIRPORT AUTHORITY 2021 ACFR

Schedule of the TAA’s Proportionate Share of the

Net OPEB Liability – Cost Sharing Plan (ASRS)

(2016 – 2012 information not available)

Long-term Disability (LTD)

Reporting date (September 30)

2021 2020 2019 2018

(Measurement date (June 30))

(2021) (2020) (2019) (2018)

TAA’s proportion of the net pension

liability

0.10180% 0.102130% 0.108170% 0.108620%

TAA’s proportionate share of the net

pension liability

$ 21,014 $ 77,477 $ 70,467 $ 56,754

TAA’s covered payroll

11,255,969 10,979,377 10,748,407 10,748,407

TAA’s proportionate share of the net

pension liability as a percentage of its

covered payroll

0.186692% 0.71% 0.66% 0.53%

Plan ﬁ duciary net position as a percentage

of total pension liability

90.38% 68.01% 72.85% 78.00%

Health Beneﬁ t Subsidy (HBS)

Reporting date (September 30)

2021 2020 2019 2018

(Measurement date (June 30)) (2021) (2020) (2019) (2018)

TAA’s proportion of the net pension

liability

0.10249% 0.102950% 0.108880% 0.109890%

TAA’s proportionate share of the net

pension liability

$ (499,340) $ (72,888) (30,089) (39,570)

TAA’s covered payroll

11,255,969 10,979,377 11,198,483 10,748,407

TAA’s proportionate share of the net

pension liability as a percentage of its

covered payroll

-4.436224% -0.66% -0.27% -0.37%

Plan ﬁ duciary net position as a percentage of

total pension liability

130.24% 104.33% 101.62% 102.00%

FINANCIALS 79

2017

(2017)

0.105590%

$ 38,274

10,234,127

0.37%

84.44%

2017

(2017)

0.106520%

$ (57,989)

10,234,127

-0.57%

103.57%

2016 2015 2014 2013 2012

(2016) (2015) (2014) (2013) (2012)

0.000000% 0.000000% 0.000000% 0.000000% 0.000000%

$ - $ - $ - $ - $ -

- - - - -

0.00% 0.00% 0.00% 0.00% 0.00%

2016 2015 2014 2013 2012

(2016) (2015) (2014) (2013) (2012)

0.000000% 0.000000% 0.000000% 0.000000% 0.000000%

$ - $ - $ - $ - $ -

- - - - -

0.00% 0.00% 0.00% 0.00% 0.00%

80 TUCSON AIRPORT AUTHORITY 2021 ACFR

Multiyear Schedule of Changes in Net Pension Liability (Asset) and

Related Ratios Agent Retirement Plan (PSPRS) – Fire Department

(2013 – 2012 information not available)

Reporting date (September 30)

2021 2020 2019 2018

Measurement date (June 30) (2021) (2020) (2019) (2018)

Total pension liability

Service cost $ 260,136 $ 266,691 $ 156,487 $ 237,359

Interest on total pension liability 1,378,221 1,345,422 1,263,139 1,221,934

Beneﬁ t changes - - - -

Diﬀ erence between expected and actual

experience 186,264 212,900 394,075 127,803

Assumption changes - - 354,435 -

Beneﬁ t payments, including refunds of

employee contributions (1,120,205) (1,119,994) (1,212,840) (923,319)

Net change in total pension liability 704,416 705,019 955,296 663,777

Total pension liability, beginning 19,179,700 18,474,681 17,519,385 16,855,608

Total pension liability, ending (a) $ 19,884,116 $ 19,179,700 $ 18,474,681 $ 17,519,385

Plan ﬁ duciary net position

Contributions employer $ 13,262,977 $ 1,216,474 $ 1,006,544 $ 862,196

Contributions employee 91,288 94,483 92,740 89,302

Pension plan net investment income 2,405,826 69,458 279,715 346,270

Beneﬁ t payments, including refunds of

employee contributions (1,120,205) (1,119,994) (1,212,840) (923,319)

Hall/Parker Settlement - - - (207,683)

Pension plan administrative expense (10,777) (5,664) (5,860) (5,970)

Other 1,100 - - 59

Net change in ﬁ duciary net position 14,630,209 254,757 160,299 160,855

Plan ﬁ duciary net position, beginning 5,575,724 5,353,106 5,192,807 5,031,952

Adjustment to Beginning of Year

- (32,139) -

Plan ﬁ duciary net position, ending (b) $ 20,205,933 $ 5,575,724 $ 5,353,106 $ 5,192,807

Net pension liability (asset), ending (a)–(b) $ (321,817) $ 13,603,976 $ 13,121,575 $ 12,326,578

Plan ﬁ duciary net position as a percentage

of total pension liability 101.62% 29.07% 28.98% 29.64%

Covered payroll $ $1,054,218 $ $1,120,421 $ $1,140,342 $ 1,051,655

Net pension liability as a percentage

of covered valuation payroll -30.53% 1214.18% 1150.67% 1172.11%

FINANCIALS 81

2017 2016 2015 2014 2013 2012

(2017) (2016) (2015) (2014) (2013) (2012)

$ 288,240 $ 226,588 $ 214,614 $ 217,088 $ - $ -

1,144,049 1,114,931 1,113,123 926,805 - -

189,346 237,906 - 362,124 - -

(1,002) (88,660) (347,529) (59,196) - -

608,287 563,682 - 1,746,767 - -

(96 6,355) (1,102,101) (824, 231) (813,515) - -

1,262,565 952,346 155,977 2,380,073 - -

15,593,043 14,640,697 14,484,720 12,104,647 - -

$ 16,855,608 $ 15,593,043 $ 14,640,697 $ 14,484,720 $ - $ -

$ 850,516 $ 839,895 $ 527,805 $ 497,883 $ - $ -

132,556 133,036 120,005 111,010 - -

529,903 26,592 164,399 570,917 - -

(96 6,355) (1,102,101) (824, 231) (813,515) - -

- - - - - -

(5,089) (4,227) (4,385) - - -

57,028 58,877 (115,462) (261,027) - -

598,559 (47,928) (131,869) 105,268 - -

4,433,393 4,481,321 4,613,190 4,507,922 - -

$ 5,031,952 $ 4,433,393 $ 4,481,321 $ 4,613,190 $ - $ -

$ 11,823,656 $ 11,159,650 $ 10,159,376 $ 9,871,530 $ - $ -

29.85% 28.43% 30.61% 31.85% 0.00% 0.00%

$ 1,229,168 $ 1,174,641 $ 1,098,649 $ 1,013,577 $ - $ -

961.92% 950.05% 924.72% 973.93% 0.00% 0.00%

82 TUCSON AIRPORT AUTHORITY 2021 ACFR

Multiyear Schedule of Changes in Net OPEB Liability (Asset) and Related

Ratios Agent Retirement Plan (PSPRS) – Fire Department

(2016 – 2012 information not available)

Reporting date (September 30)

2021 2020 2019 2018

Measurement date (June 30) (2021) (2020) (2019) (2018)

Total OPEB liability

Service cost $ 5,325 $ 5,479 $ 3,470 $ 3,365

Interest on total OPEB liability 19,180 17,489 18,965 18,546

Beneﬁ t changes - - - -

Diﬀ erence between expected and actual

experience 25,914 21,063 (26,260) (248)

Assumption changes - - 1,739 -

Beneﬁ t payments, including refunds of

employee contributions (18,412) (16,547) (23,179) (12,415)

Net change in total OPEB liability 32,007 27,484 (25,265) 9,248

Total OPEB liability, beginning 266,617 239,133 264,398 255,150

Total OPEB liability, ending (a) $ 298,624 $ 266,617 $ 239,133 $ 264,398

Plan ﬁ duciary net position

Contributions - employer $ - $ - $ - $ -

Contributions - employee - - - -

OPEB plan net investment income 87,483 4,180 17,948 22,786

Beneﬁ t payments, including refunds of

employee contributions (18,412) (16,547) (23,179) (12,415)

Hall/Parker Settlement - - - -

OPEB plan administrative expense (360) (340) (310) (347)

Other - - - -

Net change in ﬁ duciary net position 68,711 (12,707) (5,541) 10,024

Plan ﬁ duciary net position, beginning 323,378 336,085 341,626 331,602

Plan ﬁ duciary net position, ending (b) $ 392,089 $ 323,378 $ 336,085 $ 341,626

Net OPEB liability (asset),

ending (a) - (b) $ (93,465) $ (56,761) $ (96,952) $ (77,228)

Plan ﬁ duciary net position as a

percentage of total OPEB liability 131.30% 121.29% 140.54% 129.21%

Covered payroll $ $1,054,218 $ 1,120,421 $ 1,140,342 $ 1,051,655

Net OPEB liability as a percentage of

covered valuation payroll -8.87% -5.07% -8.50% -7.34%

FINANCIALS 83

2017 2016 2015 2014 2013 2012

(2017) (2016) (2015) (2014) (2013) (2012)

$ 4,302 $ - $ - $ - $ - $ -

16,689 - - - - -

- - - - - -

30,351 - - - - -

(8,218) - - - - -

(16,675) - - - - -

26,449 - - - - -

228,701 - - - - -

$ 255,150 $ - $ - $ - $ - $ -

$ - $ - $ - $ - $ - $ -

- - - - - -

35,872 - - - - -

(16,675) - - - - -

-- - - - -

(318) - - - - -

- - - - - -

18,879 - - - - -

312,723 - - - - -

$ 331,602 $ - $ - $ - $ - $ -

$ (76,452) $ - $ - $ - $ - $ -

129.96% 0.00% 0.00% 0.00% 0.00% 0.00%

$ 1,229,168 $- $ - $- $- $-

-6.22% 0.00% 0.00% 0.00% 0.00% 0.00%

84 TUCSON AIRPORT AUTHORITY 2021 ACFR

Multiyear Schedule of Changes in Net Pension Liability (Asset) and Related

Ratios Agent Retirement Plan (PSPRS) – Police Department

(2013 – 2012 information not available)

Reporting date (September 30)

2021 2020 2019 2018

Measurement date (June 30)

(2021) (2020) (2019) (2018)

Total pension liability

Service cost $

362,628 $ 273,444 $ 180,206 $ 281,283

Interest on total pension liability

1,608,573 1,518,631 1,412,577 1,369,937

Beneﬁ t changes

00 0 -

Diﬀ erence between expected and actual

experience

(322,419) 1,190,19 5 6 0 8,5 02 (2,801)

Assumption changes

00572,330 -

Beneﬁ t payments, including refunds of

employee contributions

(1,272,921) (1,843,580) (1,023,805) (1,199,709)

Net change in total pension liability

375,861 1,138,690 1,749,810 448,710

Total pension liability, beginning

22,309,081 21,170,391 19,420,581 18,971,871

Total pension liability, ending (a) $

22,684,942 $ 22,309,081 $ 21,170,391 $ 19,420,581

Contributions employer $

16,841,672 1,446,138 1,323,808 $ 1,032,770

Contributions employee

261,526 123,872 162,627 120,133

Pension plan net investment income

2,647,896 71,363 273,290 323,004

Beneﬁ t payments, including refunds of

employee contributions

(1,272,921) (1,843,580) (1,023,805) (1,199,709)

Hall/Parker Settlement

-- - (237,532)

Pension plan administrative expense

(11,729) (5,818) (5,745) (5,616)

Other

0034,779 81,265

Net change in ﬁ duciary net position

18,466,444 (208,025) 764,954 114,315

Plan ﬁ duciary net position, beginning

5,354,296 5,609,193 4,847,914 4,733,599

Adjustment to beginning of year

0(46,872) (3,675) -

Plan ﬁ duciary net position, ending (b) $

23,820,740 5,354,296 5,609,193 $ 4,847,914

Net pension liability (asset), ending (a)–(b) $

(1,135,798) 16,954,785 15,561,198 $ 14,572,667

Plan ﬁ duciary net position as a percentage

of total pension liability

105.01% 24.00% 26.50% 24.96%

Covered payroll $

1,527,913 1,481,859 1,351,250 $ 1,329,942

Net pension liability as a percentage

of covered valuation payroll

-74.34% 1144.16% 1151.62% 1095.74%

FINANCIALS 85

2017 2016 2015 2014 2013 2012

(2017) (2016) (2015) (2014) (2013) (2012)

$313,234$253,073$258,524$256,981$ - $ -

1,267,411 1,213,721 1,171,149 965,854 - -

230,905 212,521 - 342,709 - -

213,612 163,868 195,045 178,695 - -

672,391 607,920 - 1,778,168 - -

(935,761) (1,150,547) (1,008,807) (807,083) - -

1,761,792 1,300,556 615,911 2,715,324 - -

17,210,079 15,910,153 15,294,242 12,578,918 - -

$ 18,971,871 $ 17,210,709 $ 15,910,153 $ 15,294,242 $ - $ -

$ 871,881 $ 860,997 $ 614,539 $ 576,148 $ - $ -

164,792 172,693 280,628 150,551 - -

497,677 24,385 154,668 511,958 - -

(935,761) (1,150,547) (1,008,807) (807,083) - -

-- - - - -

(4,804) (3,909) (4,150) - - -

46 1,450 (3,035) (209,036) - -

593,831 (94,931) 33,843 222,538 - -

4,139,768 4,234,699 4,200,856 3,978,318 - -

-----

$ 4,733,599 $ 4,139,768 $ 4,234,699 $ 4,200,856 $ - $ -

$ 14,238,272 $ 13,070,311 $ 11,675,454 $ 11,093,386 $ - $ -

24.95% 24.05% 26.62% 27.47% 0.00% 0.00%

$ 1,395,872 $ 1,309,901 $ 1,364,568 $ 1,305,875 $ - $ -

1020.03% 997.81% 855.62% 849.50% 0.00% 0.00%

86 TUCSON AIRPORT AUTHORITY 2021 ACFR

Multiyear Schedule of Changes in Net OPEB Liability (Asset) and Related

Ratios Agent Retirement Plan (PSPRS) – Police Department

(2016 – 2012 information not available)

Reporting date (September 30)

2021 2020 2019 2018

Measurement date (June 30) (2021) (2020) (2019) (2018)

Total OPEB liability

Service cost $ 6,216 $ 6,144 $ 4,655 $ 4,389

Interest on total OPEB liability 18,089 19,806 23,538 21,564

Beneﬁ t changes 0 0 0 -

Diﬀ erence between expected and actual

experience -35,104 -29,483 -67,403 14,339

Assumption changes 0 0 3,635 -

Beneﬁ t payments, including refunds of

employee contributions -16,320 -16,486 -16,186 (15,983)

Net change in total OPEB liability -27,119 -20,019 -51,761 24,309

Total OPEB liability, beginning 249,733 269,752 321,513 297,204

Total OPEB liability, ending (a) $ 222,614 $ 249,733 $ 269,752 $ 321,513

Plan ﬁ duciary net position

Contributions - employer $ 3,496 $ 6,626 $ 4,763 $ 862

Contributions - employee 0 0 0 -

OPEB plan net investment income 79,480 3,728 15,633 19,711

Beneﬁ t payments, including refunds of

employee contributions -16,320 -16,486 -16,186 (15,983)

Hall/Parker Settlement 0 0 0 -

OPEB plan administrative expense -327 -303 -270 (300)

Other 0 0 0 1

Net change in ﬁ duciary net position 66,329 -6,435 3,940 4,291

Plan ﬁ duciary net position, beginning 294,432 300,867 293,252 288,961

Adjustment to beginning of year --3,675-

Plan ﬁ duciary net position, ending (b) $360,761$ 294,432$ 300,867$ 293,252

Net OPEB liability (asset),

ending (a) - (b) $-138,147$ -44,699$ -31,115$ 28,261

Plan ﬁ duciary net position as a

percentage of total OPEB liability 162.06% 117.90% 111.53% 91. 21%

Covered payroll $ 1,527,913 $ 1,481,859 $ 1,351,250 $ 1,329,942

Net OPEB liability as a percentage of

covered valuation payroll -9.04% -3.02% -2.30% 2.12%

FINANCIALS 87

2017

(2017)

$ 4,886

19,898

847

26,034

(10,834)

(12,972)

27,859

269,345

$ 297,204

$ $5,655

30,966

(12,972)

(275)

23,374

265,587

$ 288,961

$ 8,243

97.23%

$ 1,395,872

0.59%

2016 2015 2014 2013 2012

(2016) (2015) (2014) (2013) (2012)

$ - $ - $ - $ - $ -

- - - - -

$ - $ - $ - $ - $ -

- - - - -

-----

- - - - -

-----

- - - - -

$ - $ - $ - $ - $ -

0.00% 0.00% 0.00% 0.00% 0.00%

$- $ - $- $- $-

88 TUCSON AIRPORT AUTHORITY 2021 ACFR

Schedule of the TAA’s Proportionate Share of the

Net Pension Liability – Cost Sharing Plan (PSPRS Fire - Tier 3)

(2018 – 2012 information not available)

Reporting date (September 30)

2021 2020 2019 2018

Measurement date (June 30) (2021) (2020) (2019) (2018)

TAA’s proportion of the net

pension liability

0.110241% 0.093337% 0.116867%

TAA’s proportionate share of

the net pension liability

(10,207) 280 (1,678)

TAA’s covered

employee payroll

113,754 67,859 47,036

TAA’s covered employee payroll

net pension liability/(asset) as a percentage

of its covered employee payroll

-8.97% 0.41% -3.57%

Plan ﬁ duciary net position as a

percentage of total pension liability

121.67% 98.82% 118.05%

FINANCIALS 89

2017 2016 2015 2014 2013 2012

(2017) (2016) (2015) (2014) (2013) (2012)

-% -% -% -% -% -%

------

-% -% -% -% -% -%

90 TUCSON AIRPORT AUTHORITY 2021 ACFR

Schedule of the TAA’s Proportionate Share of the

Net OPEB Liability – Cost Sharing Plan (PSPRS Fire - Tier 3)

(2018 – 2012 information not available)

Reporting date (September 30)

2021 2020 2019 2018

Measurement date (June 30) (2021) (2020) (2019) (2018)

TAA’s proportion of the net

the net OPEB liability/(asset)

0.095456% 0.081212% 0.102787%

TAA’s proportionate share of

the net

OPEB liability/(asset)

(926) (284) (151)

TAA’s covered

employee payroll

113,754 67,859 47,036

TAA’s covered employee payroll

net OPEB liability/(asset) as a percentage

of its covered employee payroll

-0.81% -0.42% -0.32%

Plan ﬁ duciary net position as a

percentage of total

OPEB liability

242.50% 198.90% 207.50%

FINANCIALS 91

2017 2016 2015 2014 2013 2012

(2017) (2016) (2015) (2014) (2013) (2012)

-% -% -% -% -% -%

------

-% -% -% -% -% -%

92 TUCSON AIRPORT AUTHORITY 2021 ACFR

Schedule of the TAA’s Proportionate Share of the

Net Pension Liability – Cost Sharing Plan (PSPRS Police - Tier 3)

(2018 – 2012 information not available)

Reporting date (September 30)

2021 2020 2019 2018

Measurement date (June 30) (2021) (2020) (2019) (2018)

TAA’s proportion of the net

pension liability

0.108661% 0.175550% 0.017544%

TAA’s proportionate share of

the net pension liability

(10,061) 526 (252)

TAA’s covered

employee payroll

112,124 121,59 5 7,0 61

TAA’s covered employee payroll

net pension liability/(asset) as a percentage

of its covered employee payroll

-8.97% 0.43% -3.57%

Plan ﬁ duciary net position as a

percentage of total pension liability

121.67% 98.82% 118.05%

FINANCIALS 93

2017 2016 2015 2014 2013 2012

(2017) (2016) (2015) (2014) (2013) (2012)

-% -% -% -% -% -%

------

-% -% -% -% -% -%

94 TUCSON AIRPORT AUTHORITY 2021 ACFR

Schedule of the TAA’s Proportionate Share of the

Net OPEB Liability – Cost Sharing Plan (PSPRS Police - Tier 3)

(2018 – 2012 information not available)

Reporting date (September 30)

2021 2020 2019 2018

Measurement date (June 30) (2021) (2020) (2019) (2018)

TAA’s proportion of the net

the net OPEB liability/(asset)

0.116441% 0.187635% 0.015431%

TAA’s proportionate share of

the net

OPEB liability/(asset)

(1,130) (656) (23)

TAA’s covered

employee payroll

112,124 121,595 7,061

TAA’s covered employee payroll

net OPEB liability/(asset) as a percentage

of its covered employee payroll

-1.01% -0.54% -0.33%

Plan ﬁ duciary net position as a

percentage of total

OPEB liability

242.50% 198.90% 207.50%

FINANCIALS 95

2017 2016 2015 2014 2013 2012

(2017) (2016) (2015) (2014) (2013) (2012)

-% -% -% -% -% -%

------

-% -% -% -% -% -%

96 TUCSON AIRPORT AUTHORITY 2021 ACFR

This page intentionally left blank.

STATISTICAL

SECTION

STATISTICAL 97

Statistical Section

TABLE OF CONTENTS Pages

Financial Trends

98-99

These schedules contain trend information to help the reader understand how the

TAA’s ﬁ nancial performance and well-being have changed over time.

Revenue Capacity

100-103

These schedules contain information to help the reader assess the factors aﬀ ecting

the TAA’s ability to generate its airline and non-airline revenues.

Debt Capacity

104-107

These schedules present information to help the reader assess the aﬀ ordability

of the TAA’s current levels of outstanding debt and its ability to issue additional

debt in the future.

Demographic and Economic Information

108-111

These schedules oﬀ er demographic and economic indicators to help the reader

understand the environment within which the TAA’s ﬁ nancial activities take

place and to help make comparisons over time with other airports.

Operating Information

112-124

These schedules contain information about the TAA’s operations and resources

to help the reader understand how its ﬁ nancial information relates to the services the

TAA provides and the activities it performs.

98 TUCSON AIRPORT AUTHORITY 2021 ACFR

Net Position and Changes in Net Position

Fiscal Years Ended September 30

2012 2013 2014 2015

Operating revenues

Landing fees $ 3,065,212 $ 2,727,682 $ 2,677,840 $ 2,638,511

Space rentals 14,404,808 14,541,598 14,712,712 15,516,879

Land rent 2,639,679 2,684,589 2,663,514 2,767,584

Concession revenue 16,717,118 14,234,828 14,442,602 14,458,462

Product sales 2,624,936 1,000,111 - -

Airport services 3,626,002 3,069,561 3,813,682 3,787,935

Other operating revenues 4,764,771 4,336,606 3,040,508 2,817,414

Total operating revenues 47,842,526 42,594,975 41,350,858 41,986,785

Nonoperating revenues

Interest income 757,378 733,777 1,003,767 1,383,045

Passenger facility charges 6,884,959 6,193,285 6,135,127 6,010,676

Other nonoperating revenues 7,813 (466,024) 655,988 576,808

Total nonoperating revenues 7,650,150 6,461,038 7,794,882 7,970,529

Total revenues 55,492,676 49,056,013 49,145,740 49,957,314

Operating expenses

Personnel expenses 18,813,878 18,855,823 21,271,873 19,945,414

Contractual services 5,759,286 6,321,777 5,843,202 6,064,007

Materials and supplies 1,405,494 1,348,952 1,764,994 1,465,876

Cost of product sales 2,063,364 851,930 - -

Other operating expenses 1,244,705 1,177,404 2,632,370 914,491

Depreciation and amortization 15,386,500 16,472,711 15,860,805 16,577,216

Total operating expenses 44,673,227 45,028,597 47,373,244 44,967,004

Nonoperating expenses

Interest expense and ﬁ scal charges 3,373,283 3,048,133 2,787,713 2,667,488

Environmental remediation expenses 1,420,602 1,469,875 1,120,109 421,500

Other nonoperating expenses 13,216 15,714 - 280

Total nonoperating expenses 4,807,101 4,533,722 3,907,822 3,089,268

Total expenses 49,480,328 49,562,319 51,281,066 48,056,272

Capital contributions 12,633,202 13,542,280 26,622,392 15,074,095

Special item - Loss on asset impairment - - - -

Increase in net position $ 18,645,550 $ 13,035,974 $ 24,487,065 $ 16,975,137

Net position at year-end

Net investment in capital assets $ 208,795,492 $ 220,212,684 $ 236,631,507 $ 247,391,638

Restricted 33,221,914 32,995,119 34,237,052 36,710,371

Unrestricted 82,711,507 84,557,084 54,786,190 58,527,877

Total net position $ 324,728,913 $ 337,764,887 $ 325,654,749 $ 342,629,886

Prior Period Adjustment - - - -

Total net position, as restated $ 324,728,913 $ 337,764,887 $ 325,654,749 $ 342,629,886

STATISTICAL 99

Source: TAA audited ﬁ nancial statements.

2016 2017 2018 2019 2020 2021

$ 2,793,333 $ 2,761,273 $ 2,242,036 $ 3,070,839 $ 2,037,041 $ 1,973,618

15,563,025 14,983,380 14,443,728 15,046,170 14,560,223 11,906,284

2,754,715 2,963,840 3,510,909 3,515,665 3,789,349 3,705,607

15,146,036 16,014,76 4 17,153,120 18,624,43 4 11,878,384 12,386,429

--- - -

3,239,181 3,451,629 3,799,364 3,278,715 3,611,852 3,354,818

2,624,624 2,733,868 2,876,372 3,725,228 2,992,525 3,001,271

42,120,914 42,908,754 44,025,529 47,261,051 38,869,374 36,328,027

1,533,109 1,757,178 2,252,824 3,079,095 2,330,044 485,673

6,071,068 6,477,205 6,754,513 7,229,199 4,265,140 4,628,663

(47,097) (866,15 5) (1,16 4,74 5) 1,79 9,527 19,799,150 15,285,757

7,557,0 80 7, 3 6 8, 2 28 7, 8 42,5 9 2 12,107, 8 21 26 , 39 4,3 3 4 20,40 0,0 93

49,677,994 50,276,982 51,868,121 59,368,872 65,263,708 56,728,120

19,887,460 20,124,552 20,323,973 22,646,456 23,272,979 20,489,377

6,165,827 6,120,706 6,089,002 7,710,016 6,726,582 7,516,420

1,311,559 1,422,945 1,544,793 1,595,222 1,859,050 1,533,550

--- -

884,209 853,019 1,047,945 955,652 1,455,350 945,036

14,534,836 17,404,890 18,255,710 18,393,628 19,514,629 20,148,835

42,783,891 45,926,112 47,261,423 51,300,974 52,828,590 50,633,218

2,542,271 2,408,925 2,249,588 1,077,162 960,095 871,573

440,980 1,405,893 2,964,165 1,587,039 394,453 1,334,189

17,250 752 8,928 - - -

3,000,501 3,815,570 5,222,681 2,664,201 1,354,548 2,205,762

45,78 4,392 49,741,6 82 52,48 4,104 5 3,9 65,175 54,183,138 52,838,9 80

7,812,027 12,881,611 19,822,884 3,686,455 16,763,540 11,614,274

---

$ 11,705,629 $ 13,416,911 $ 19,206,901 $ 9,045,827 $ 27,844,110 $ 15,503,414

$ 251,798,899 $ 269,064,332 $ 290,739,199 $ 288,319,668 $ 301,652,819 $ 309,147,343

38,342,080 37,881,459 19,754,254 21,497,013 22,611,645 23,286,272

64,194,536 60,818,153 76,477,392 86,200,991 99,597,319 106,931,583

$ 354,335,515 $ 367,763,944 $ 386,970,845 $ 396,017,672 $ 423,861,783 $ 439,365,198

11,518-- - - -

$ 354,347,033 $ 367,763,944 $ 386,970,845 $ 396,017,672 $ 423,861,783 $ 439,365,198

100 TUCSON AIRPORT AUTHORITY 2021 ACFR

Source: TAA audited ﬁ nancial statements and records.

Principal Revenue Sources

Fiscal Years Ended September 30

2012 2013 2014 2015

Passenger airline rates and charges

Landing fees $ 2,787,533 $ 2,442,338 $ 2,374,308 $ 2,276,000

Terminal rentals 8,604,629 8,718,422 8,526,226 9,031,797

Security fees 1,673,772 1,620,612 1,683,084 2,168,184

Terminal use fees - - - -

Custodial, equipment and parking 295,335 281,127 290,848 266,689

Total passenger airline rates and charges 13,361,269 13,062,499 12,874,466 13,742,670

Concession revenues

Parking lots 6,299,860 5,889,802 6,091,415 6,192,931

Rental cars 7,941,530 5,883,762 5,909,460 5,733,134

News and gift 677,861 675,724 711,183 708,067

Food and beverage 1,118,681 1,111,483 1,095,263 1,165,119

Other 679,186 674,057 635,281 659,211

Total concession revenues 16,717,118 14,234,828 14,442,602 14,458,462

Other operating revenues

Space rental 5,315,138 5,305,856 5,724,956 6,030,053

Land rent 2,639,679 2,684,589 2,663,514 2,767,584

Tenant ﬁ nishes 226,888 224,858 224,858 224,858

Cargo airline landing fees 203,776 208,659 207,482 206,601

Air cargo space rentals 258,153 292,462 236,672 230,171

Fuel ﬂ owage 1,949,201 2,042,185 897,339 405,135

TSA reimbursements 527,436 413,479 423,100 425,099

Rental car customer facility charges 1,168,421 1,106,892 1,105,439 1,173,263

General aviation product sales 2,624,936 1,000,111 475,582 223,161

Other 2,850,511 2,018,557 2,074,848 2,099,728

Total other operating revenues 17,764,139 15,297,648 14,033,790 13,785,653

Total operating revenues 47,842,526 42,594,975 41,350,858 41,986,785

Nonoperating revenues

Interest income 757,378 733,777 1,003,767 1,383,045

Passenger facility charges 6,884,959 6,193,285 6,135,127 6,010,676

Other nonoperating revenues 7,813 (466,024) 655,988 576,808

Total nonoperating revenues 7,650,150 6,461,038 7,794,882 7,970,529

Total revenues $ 55,492,676 $ 49,056,013 $ 49,145,740 $ 49,957,314

STATISTICAL 101

2016 2017 2018 2019 2020 2021

$ 2,377,507 $ 2,358,611 $ 1,932,402 $ 2,588,507 $ 1,699,498 $ 1,580,914

9,012,994 8,998,645 8,962,562 9,445,182 9,277,131 7,274,870

2,010,660 2,039,015 2,388,206 2,087,021 2,348,792 2,400,220

- - - - - -

268,989 168,086 30,870 178,869 191,321 162,175

13,670,150 13,564,357 13,314,040 14,299,579 13,516,742 11,418,180

6,392,766 6,900,338 7,342,654 7,829,129 4,676,532 4,708,206

6,114,720 6,417,509 6,193,649 6,832,969 4,673,326 5,662,859

679,767 492,237 1,308,953 1,400,778 841,794 665,940

1,242,012 1,241,351 1,137,726 1,247,586 792,004 677,545

716,771 963,329 1,170,139 1,313,972 894,728 671,878

15,146,036 16,014,764 17,153,120 18,624,43 4 11,878,3 84 12,386,429

6,059,773 5,818,658 5,343,938 5,287,792 4,910,259 4,287,459

2,754,715 2,963,840 3,483,678 3,488,464 3,761,964 3,678,279

224,858 92,715 95,850 95,850 95,850 (95,850)

216,621 203,237 160,329 203,104 313,543 330,064

265,400 267,005 273,105 296,329 300,983 310,744

422,306 438,212 454,743 480,470 444,718 548,390

390,311 388,385 348,645 423,015 360,770 413,520

1,197,810 1,209,425 1,239,323 1,327,100 863,955 784,247

195,554 203,969 218,176 226,769 145,445 164,881

1,577,380 1,744,187 1,940,583 2,508,145 2,276,759 2,101,685

13,304,728 13,329,633 13,558,369 14,337,038 13,474,247 12,523,419

42,120,914 42,908,754 44,025,529 47,261,051 38,869,374 36,328,027

1,533,109 1,757,178 2,252,824 3,079,094 2,330,044 485,673

6,071,068 6,477,205 6,754,513 7,229,199 4,265,140 4,628,663

(47,097) (86 6,155) (1,164,745) 2,0 5 6, 20 4 19,79 9,150 15, 285,757

7,557,0 80 7,3 68 ,2 28 7,8 42, 592 12,3 6 4, 497 26 , 39 4,33 4 20,40 0,0 93

$ 49,677,994 $ 50,276,981 $ 51,868,122 $ 59,625,547 $ 65,263,708 $ 56,728,120

102 TUCSON AIRPORT AUTHORITY 2021 ACFR

Rates and Charges

Fiscal Years Ended September 30

Principal Revenue Source Ratios

Fiscal Years Ended September 30

Source: Enplaned passengers as reported by airlines.

2012 2013 2014 2015

Passenger airline rates and charges as a

percentage of total operating revenues 27.9% 30.7% 31.1% 32.7%

Concession revenues as a percentage of

total operating revenues 34.9% 33.4% 34.9% 34.4%

Non-passenger airline revenues as a

percentage of total operating revenues 72.1% 69.3% 68.9% 67.3%

Enplaned passengers 1,826,046 1,655,617 1,621,231 1,590,321

Airline cost per enplaned passenger $ 7.32 $ 7.89 $ 7.94 $ 8.64

Concession revenues per enplaned passenger $ 9.15 $ 8.60 $ 8.91 $ 9.09

Operating revenues per enplaned passenger $ 26.20 $ 25.73 $ 25.51 $ 26.40

Total revenues per enplaned passenger $ 30.39 $ 29.63 $ 30.31 $ 31.41

2012 2013 2014 2015

Signatory airlines

Landing fee (per 1,000 lbs.) $ 1.32 $ 1.31 $ 1.41 $ 1.31

Ticketing space (per sq. ft. per year) $ 73.86 $ 76.30 $ 76.30 $ 78.81

Baggage claim (per sq. ft. per year) $ 70.04 $ 72.36 $ 72.36 $ 74.74

Baggage makeup (per sq. ft. per year) $ 24.61 $ 25.42 $ 25.42 $ 26.26

Baggage claim oﬃ ce (per sq. ft. per year) $ 73.86 $ 76.30 $ 76.30 $ 78.81

Operations space (per sq. ft. per year) $ 62.76 $ 64.84 $ 64.84 $ 66.97

Hold room (per gate per year) $ 107,700.75 $ 111,263.62 $ 111,265.62 $ 114,926.26

Aircraft parking position (per gate per year) $ 7,726.84 $ 7,982.45 $ 7,982.60 $ 8,245.20

Parking

Hourly lot (per hour) $ 2.00 $ 2.00 $ 2.00 $ 2.00

Daily lot (per day) $ 9.00 $ 9.00 $ 9.00 $ 9.00

Garage $ 9.00 $ 9.00 $ 9.00 $ 9.00

Economy uncovered (per day) $ 4.00 $ 4.00 $ 4.00 $ 4.00

Economy covered $ 5.00 $ 5.00 $ 5.00 $ 5.00

Rental car privilege fee (% of gross receipts)

On-airport operators 10.0% 10.0% 10.0% 10.0%

Oﬀ -airport operators 10.0% 10.0% 10.0% 10.0%

STATISTICAL 103

*Parking rates were increased in February 2017

N.A.: Not applicable.

Source: TAA records.

2016 2017 2018 2019 2020 2021

32.5% 31.6% 30.2% 30.3% 34.8% 31.4%

36.0% 37.3% 39.0% 39.4% 30.6% 34.1%

67.5% 68.4% 69.8% 69.7% 65.2% 68.6%

1,618,304 1,711,518 1,782,050 1,897,590 1,144,018 1,137,279

$ 8.45 $ 7. 93 $ 7.47 $ 7.5 4 $ 11. 82 $ 10.04

$ 9.36 $ 9.36 $ 9.63 $ 9.81 $ 10.38 $ 10.89

$ 26.03 $ 25.07 $ 24.70 $ 24.91 $ 33.98 $ 31.94

$ 30.70 $ 29.38 $ 29.11 $ 31.42 $ 57.05 $ 49.88

2016 2017 2018 2019 2020 2021

$ 1.30 $ 1.29 $ 1.04 $ 1.32 $ 1.15 $ 1.15

$ 78.81 $ 80.91 $ 80.91 $ 83.42 $ 83.42 $ 65.21

$ 74.74 $ 76.73 $ 76.73 $ 79.11 $ 79.11 $ 61.84

$ 26.26 $ 26.96 $ 26.96 $ 27.80 $ 27.80 $ 21.73

$ 78.81 $ 80.91 $ 80.91 $ 83.42 $ 83.42 $ 65.21

$ 66.97 $ 68.75 $ 68.75 $ 70.88 $ 70.88 $ 55.40

$ 114,926.26 $ 117,9 8 3.30 $ 117,983.30 $ 121,640.78 $ 121,6 40.78 $ 95,080.52

$ 8,245.23 $ 8,464.55 $ 8,464.55 $ 8,726.95 $ 8,726.95 $ 9,095.23

$ 2.00 $ 2.00 $ 2.00 $ 2.00 $ 2.00 $ 2.00

$ 9.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00

$ 4.00 $ 4.50 $ 4.50 $ 4.50 $ 4.50 $ 4.50

$ 5.00 $ 6.00 $ 6.00 $ 6.00 $ 6.00 $ 6.00

10.0% 10.0% 10.0% 10.0% 10.0% 10.0%

104 TUCSON AIRPORT AUTHORITY 2021 ACFR

(1) Excludes amounts paid for early retirement of debt.

(2) The TAA has no statutory debt limit. Senior lien revenue bond limits would be calculated through

an additional bonds test (ABT) established in the TAA’s senior lien bond resolution.

Source: TAA audited ﬁ nancial statements.

Ratios of Outstanding Debt, Debt Service and Debt Limits

Fiscal Years Ended September 30

2012 2013 2014 2015

Outstanding Debt Ratios

Outstanding debt by type

Senior lien revenue bonds $ 4,510,000 $ - $ - $ -

Subordinate lien revenue bonds 60,730,000 58,385,000 55,930,000 53,345,000

Junior subordinate lien revenue bonds - - - -

Notes payable - - - -

Total outstanding debt $ 65,240,000 $ 58,385,000 $ 55,930,000 $ 53,345,000

Enplaned passengers 1,826,046 1,655,617 1,621,231 1,590,321

Outstanding debt per enplaned passenger $35.73 35.26 34.50 33.54

Operating revenues $ 47,842,526 $ 42,594,975 $ 41,350,858 $ 41,986,785

Ratio of outstanding debt to operating revenues 1.36 1.37 1.35 1.27

Total revenues $ 55,492,676 $ 49,056,013 $ 49,145,740 $ 49,957,314

Ratio of outstanding debt to total revenues 1.18 1.19 1.14 1.07

Debt Service Ratios

Debt service

Principal (1) $ 6,530,000 $ 6,855,000 $ 2,455,000 $ 2,585,000

Interest 3,621,515 3,288,317 2,944,190 2,819,690

Total debt service $ 10,151,515 $ 10,143,317 $ 5,399,190 $ 5,404,690

Debt service per enplaned passenger $ 5.56 $ 6.13 $ 3.33 $ $3.40

Total expenses $ 49,480,328 $ 49,562,319 $ 51,281,066 $ 48,056,272

Ratio of debt service to total expenses 0.21 0.20 0.11 0.11

Debt Limit (2) N.A. N.A. N.A. N.A.

STATISTICAL 105

2016 2017 2018 2019 2020 2021

$ - $ - $ - $ - $ - $ -

50,635,000 47,785,000 37,330,000 32,520,000 29,540,000 26,475,000

- - -

$ 50,635,000 $ 47,785,000 $ 37,330,000 $ 32,520,000 $ 29,540,000 $ 26,475,000

1,618,304 1,711,518 1,782,050 1,897,590 1,144,018 1,137,279

31.29 27.92 20.95 17.14 25.82 23.28

$ 42,120,914 $ 42,908,754 $ 44,025,529 $ 47,261,051 $ 38,869,374 $ 36,328,027

1.20 1.11 0.85 0.69 0.76 0.73

$ 49,677,994 $ 50,276,981 $ 51,868,122 $ $59,368,872 $ 56,231,967 $ 56,728,120

1.02 0.95 0.72 0.55 0.53 0.47

$ 2,710,000 $ 2,850,000 $ 2,990,000 $ 4,810,000 $ 2,980,000 $ 3,065,000

2,688,815 2,551,315 3,089,878 1,216,903 1,030,869 933,498

$ 5,398,815 $ 5,401,315 $ 6,079,878 $ 6,026,903 $ 4,010,869 $ 3,998,498

$ 3.34 $ 3.16 $ $3.41 $ 3.18 $ 3.51 $ 3.52

$ 45,784,392 $ 49,756,927 $ $52,484,536 $ 53,581,703 $ 53,170,753 $ 52,838,980

0.12 0.11 0.12 0.11 0.08 0.08

N.A. N.A. N.A. N.A. N.A. N.A.

106 TUCSON AIRPORT AUTHORITY 2021 ACFR

(1) Net revenues per the TAA’s bond resolutions excludes interest income on restricted funds and certain

unrestricted insurance proceeds.

(2) This amount is calculated in accordance with the airport use agreement. See the introduction letter for a

description of the TAA’s airport use agreement.

Airport Revenue Bond Coverage Per Bond Resolutions

Fiscal Years Ended September 30

2012 2013 2014 2015

Senior Lien Revenue Bond Debt Service Coverage

Operating revenues

$ 47,842,526 $ 42,594,975 $ 41,350,858 $ 41,986,785

Interest income (1)

423,027 408,225 558,471 783,869

Transfer from airline reserve fund (2)

1,867,127 1,828,523 170,566 4,015,500

Total revenues

50,132,680 44,831,723 42,079,895 46,786,154

Operation and maintenance expenses

(29,286,727) (28,555,886) (31,512,439) (28,389,788)

Net revenues

20,845,953 16,275,837 10,567,456 18,396,366

Senior lien debt service requirement

Series 2001A,B,C

- - - -

Series 2003 refunding

4,738,833 3,157,000 - -

Total senior lien debt service

$ 4,738,833 $ 3,157,000 $ - $ -

Senior lien revenue bond debt service coverage

4.40 5.16 - -

Required minimum coverage

1.25 1.25 1.25 1.25

Subordinate Lien Revenue Bond Debt Service Coverage

Net revenues

$ 20,845,953 $ 16,275,837 $ 10,567,456 $ 18,396,366

PFC revenues transferred for

subordinate lien debt service

4,897,807 4,836,868 4,805,218 4,763,643

Subtotal

25,743,760 21,112,705 15,372,674 23,160,009

Senior lien debt service

(4,738,833) (3,157,000) - -

Net revenues available for

subordinate lien debt service

21,004,927 17,955,705 15,372,674 23,160,009

Subordinate lien debt service requirement

Series 2001

2,882,873 2,826,757 2,843,423 2,844,923

Series 2006

2,576,642 2,570,475 2,573,183 2,516,683

Series 2018

- - - -

Total subordinate lien debt service

$ 5,459,515 $ 5,397,232 $ 5,416,606 $ 5,361,606

Subordinate lien revenue bond debt service coverage

3.85 3.33 2.84 4.32

Required minimum coverage

1.10 1.10 1.10 1.10

Total Revenue Bond Debt Service Coverage

Net revenues

$ 20,845,953 $ 16,275,837 $ 10,567,456 $ 18,396,366

PFC revenues transferred for

subordinate lien debt service

4,897,807 4,836,868 4,805,218 4,763,643

Subtotal

25,743,760 21,112,705 15,372,674 23,160,009

Total revenue bond debt service requirement

Senior lien bonds

4,738,833 3,157,000 - -

Subordinate lien bonds

5,459,515 5,397,232 5,416,606 5,361,606

Junior subordinate lien bonds

- - - -

Total revenue bond debt service

$ 10,198,348 $ 8,554,232 $ 5,416,606 $ 5,361,606

Total revenue bond debt service coverage

2.52 2.47 2.84 4.32

Required minimum coverage

1.00 1.00 1.00 1.00

STATISTICAL 107

Source: TAA audited ﬁ nancial statements and bond resolutions.

2016 2017 2018 2019 2020 2021

$ 42,120,914 $ 42,908,754 $ 44,025,529 $ 47,261,051 $ 38,869,374 $ 36,328,027

897,339 1,022,053 1,517,699 2,067,717 1,534,472 322,437

- - 1,100,000 - - -

43,018,253 43,930,807 46,643,228 49,328,768 40,403,846 36,650,464

(28,249,055) (28,521,222) (29,005,713) (32,576,858) (33,308,319) (30,484,383)

14,769,198 15,409,585 17,637,515 16,751,910 7,095,527 6,166,081

- - - - - -

$ - $ - $ - $ - $ - $ -

- - - - - -

1.25 1.25 1.25 1.25 1.25 1.25

$ 14,769,198 $ 15,409,585 $ 17,637,515 $ 16,751,910 $ 7,095,527 $ 6,166,081

4,656,554 4,823,054 5,096,988 7,229,199 4,265,140 4,628,663

19,425,752 20,232,639 22,734,503 23,981,109 11,360,667 10,794,744

- - -

19,425,752 20,232,639 22,734,503 23,981,109 11,360,667 10,794,744

2,792,315 2,862,257 2,814,230 - - -

2,445,225 2,573,225 2,540,043 - - -

- - 347,245 6,026,903 4,010,869 3,998,498

$ 5,237,540 $ 5,435,482 $ 5,701,518 $ 6,026,903 $ 4,010,869 $ 3,998,498

3.71 3.72 3.99 3.98 2.83 2.70

1.10 1.10 1.10 1.10 1.10 1.10

$ 14,769,198 $ 15,409,585 $ 17,637,515 $ 16,751,910 $ 7,095,527 $ 6,166,081

4,656,554 4,823,054 5,096,988 7,229,199 4,265,140 4,628,663

19,425,752 20,217,394 22,734,071 23,981,109 11,360,667 10,794,744

- - - - -

5,237,540 5,435,482 5,701,518 6,026,903 4,010,869 3,998,498

- - - - - -

$ 5,237,540 $ 5,435,482 $ 5,701,518 $ 6,026,903 $ 4,010,869 $ 3,998,498

3.71 3.72 3.99 3.98 2.83 2.70

1.00 1.00 1.00 1.00 1.00 1.00

108 TUCSON AIRPORT AUTHORITY 2021 ACFR

Population in the Air Service Area

As of July 1 (April 1 for U.S. Census Data)

Unemployment Rates in the Air Service Area

Annual Average

Source: Arizona Department of Administration, Oﬃ ce of Employment and Population Statistics, The State Demographer’s Oﬃ ce;

except for 2010, which is based on census data from the U.S. Census Bureau.

Source: Arizona Department of Administration, Oﬃ ce of Employment and Population Statistics,

in cooperation with the U.S. Dept of Labor, Bureau of Labor Statistics. Local Area Unemployment Statistics (LAUS) data.

2012 2013 2014 2015 2016

Primary service area

Pima County, Arizona 990,380 996,046 1,007,162 1,009,371 1,013,103

Annual % change 0.4% 0.6% 1.1% 0.2% 0.4%

Secondary service area

Cochise County, Arizona 130,752 130,906 129,628 129,112 128,343

Graham County, Arizona 37,314 37,872 38,315 38,475 38,303

Greenlee County, Arizona 8,599 10,913 10,476 10,555 10,433

Pinal County, Arizona 389,192 393,813 396,237 406,468 413,312

Santa Cruz County, Arizona 48,724 49,218 49,554 50,270 50,581

Total secondary service area 614,581 622,722 624,210 634,880 640,972

Annual % change 0.9% 1.3% 0.2% 1.7% 1.0%

Total primary and secondary

service areas 1,604,961 1,618,768 1,631,372 1,644,251 1,654,075

Annual % change 0.6% 0.9% 0.8% 0.8% 0.6%

State of Arizona 6,498,569 6,581,054 6,667,241 6,758,251 6,835,518

Annual % change 0.9% 1.3% 1.3% 1.4% 1.1%

United States 313,873,685 316,128,839 317,297,938 321,422,019 323,127,513

Annual % change 0.7% 0.7% 0.4% 1.3% 0.5%

2012 2013 2014 2015 2016

Primary Service Area

Pima County, Arizona 7.3% 6.9% 6.3% 5.7% 5.0%

Secondary service area

Cochise County, Arizona 8.2% 8.5% 8.3% 7.6% 6.3%

Graham County, Arizona 8.9% 8.1% 6.9% 7.7% 6.7%

Greenlee County, Arizona 6.0% 6.7% 6.5% 8.5% 7.7%

Pinal County, Arizona 8.9% 8.4% 7.4% 6.6% 5.6%

Santa Cruz County, Arizona 17.2% 18.0% 16.2% 14.6% 10.1%

Total secondary service area 9.3% 9.1% 8.2% 7.6% 6.2%

Total primary and secondary

service areas 7.9% 7.7% 6.9% 6.4% 5.4%

State of Arizona 8.3% 8.0% 8.0% 6.0% 5.4%

United States 8.1% 7.4% 6.2% 5.1% 4.9%

STATISTICAL 109

2017 2018 2019 2020 2021

1,026,099 1,034,201 1,044,675 1,052,375 1,058,318

1.3% 0.8% 1.0% 0.7% 0.6%

128,383 130,319 129,778 131,694 126,463

38,275 38,126 38,476 38,666 39,025

10,961 10,506 10,375 10,558 9,593

427,603 440,591 455,210 467,932 439,128

51,507 52,390 53,161 53,731 48,468

656,729 671,932 687,000 702,581 662,677

2.5% 2.3% 2.2% 2.3% -5.7%

1,682,828 1,706,133 1,731,675 1,754,956 1,720,995

1.7% 1.4% 1.5% 1.3% -1.9%

6,9 65, 897 7, 076,19 9 7,187,9 9 0 7,2 94, 5 87 7, 285, 370

1.9% 1.6% 1.6% 1.5% -0.1%

325,507,602 327,167,434 328,239,523 331,449,281 331,893,745

0.7% 0.5% 0.3% 1.0% 0.1%

2017 2018 2019 2020 2021

4.5% 4.4% 4.6% 7.7% 5.0%

5.4% 5.6% 5.8% 7.0% 4.8%

5.7% 5.1% 4.9% 6.3% 4.1%

5.5% 4.6% 4.2% 5.5% 4.0%

4.9% 4.9% 5.0% 7.5% 4.7%

9.6% 9.3% 8.7% 11.4% 8.7%

5.4% 5.4% 5.4% 7.6% 5.0%

4.8% 4.7% 4.9% 7.7% 5.0%

4.8% 4.8% 4.6% 7.9% 4.9%

4.4% 4.0% 3.5% 8.1% 3.9%

110 TUCSON AIRPORT AUTHORITY 2021 ACFR

Major Employers in the Air Service Area

Full-time Equivalent Employees

Source: Arizona Daily Star, Star 200 survey. Participation in the survey is voluntary. Includes employers in the TAA’s primary and secondary

service areas.

(1) Data not provided and/or not a major employer.

(2) University Physicians merged with the University Medical Center in 2011 and was purchased by Banner Health in 2015.

(3) The Star 200 survey was discontinued after 2016. No comparable data was available.

Employer Industry Sector 2012 2013 2014

University of Arizona Education 10,681 10,846 11,047

Raytheon Missiles & Defense Manufacturing 10,500 10,300 9,933

State of Arizona State Government 9,061 8,807 9,439

Davis-Monthan Air Force Base Military 8,566 9,100 8,933

Pima County Local Government 6,170 6,076 7,328

Tucson Uniﬁ ed School District No. 1 Education 6,674 6,790 6,525

Banner - University Medicine (2) Health Services 5,594 6,099 6,329

U.S. Customs and Border Protection Federal Government 6,000 6,500 4,135

Freeport-McMoRan nc. Mining 5,068 5,463 5,600

Wal-Mart Stores, Inc. Retail 7,300 7,450 5,200

U.S. Army Intelligence Center, Fort Huachuca Military 6,198 5,096 5,717

City of Tucson Local Government 4,541 4,585 4,845

Tohono O'odham Nation Local Government 4,350 4,350 4,350

Carondelet Health Network Health Services 4,635 3,668 3,476

TMC HealthCare Health Services 2,904 2,977 2,954

Southern Arizona V.A. Health Care System Health Services 2,151 2,182 2,450

Corrections Corporation of America Government Services 2,482 2,314 2,146

Fry's Food Stores Retail 3,100 2,700 2,024

Pima Community College Education 2,386 2,384 2,177

Asarco Mining 2,348 2,297 2,366

Sunnyside Uniﬁ ed School District Education 2,125 2,083 2,000

Afni, Inc. Call Center 2,198 2,199 1,950

APAC Customer Services Inc. Call Center 1,650 1,777 1,904

Pinal County Local Government 1,952 1,993 1,931

Amphitheater Uniﬁ ed School District Education 1,920 1,833 1,814

Vail Uniﬁ ed School District Education 1,442 1,469 1,578

Target Corp. Retail 1,639 1,640 1,640

Citi Call Center 2,000 2,000 1,900

Circle K Stores Inc. Retail (1) (1) (1)

Casino Del Sol Resort Spa and Casino Entertainment (1) 1,300 1,500

Northwest Medical Center Health Services 1,532 1,757 1,722

U.S. Postal Service Federal Government 1,562 1,558 1,226

Walgreen Co. Retail 1,399 1,420 1,420

GEICO Insurance (1) (1) (1)

Marana Uniﬁ ed School District Education 1,600 1,657 1,706

University Physicians Healthcare (2) Health Services (2) (2) (2)

STATISTICAL 111

Percentage

of Total

2015 2016 Employment 2017 (3)

2018 (3) 2019 (3) 2020 (3) 2021 (3)

11,235 11, 251 1.8%

9,600 9,600 1.5%

8,524 8,580 1.4%

8,335 8,406 1.3%

7,0 2 3 7,0 6 0 1.1%

7,134 6,770 1.1%

6,542 6,272 1.0%

6,470 5,739 0.9%

5,800 5,530 0.9%

5,400 5,500 0.9%

5,314 5,477 0.9%

4,882 4,595 0.7%

4,350 4,350 0.7%

3,943 3,860 0.6%

2,976 3,162 0.5%

2,255 2,464 0.4%

2,300 2,413 0.4%

2,136 2,346 0.4%

2,207 2,235 0.4%

2,427 2,200 0.4%

2,200 2,100 0.3%

2,220 1,900 0.3%

1,904 1,889 0.3%

1,917 1,852 0.3%

1,789 1,739 0.3%

1,625 1,705 0.3%

1,640 1,640 0.3%

1,800 1,600 0.3%

(1) 1,600 0.3%

1,600 1,592 0.3%

1,651 1,585 0.3%

1,496 1,531 0.2%

1,459 1,419 0.2%

(1) 1,411 0.2%

1,754 1,404 0.2%

(2) (2) 0.0%

112 TUCSON AIRPORT AUTHORITY 2021 ACFR

TAA Employees

Authorized Full-Time Equivalent Positions as of September 30

Source: TAA records.

2012 2013 2014 2015

Management 4.00 4.00 4.00 3.00

Legal 3.00 3.00 3.00 3.00

Administration/Properties 7.00 7.00 8.00 7.00

Information Technology and Telecommunications 9.00 9.00 9.00 9.00

Human Resources 5.00 5.00 5.00 4.00

Procurement 9.00 8.00 7.00 6.00

Air Service Development and Marketing 5.00 4.00 4.00 4.00

Oﬃ ce, Records, and Warehouse Management - - - 9.00

Finance 9.00 9.00 8.00 7.00

Projects 22.00 21.00 29.00 24.50

Operations Management 7.00 9.00 3.00 2.00

Airside Operations - - 7.25 8.00

Police 48.50 47.50 46.00 44.00

Fire 16.50 17.00 17.00 17.00

Communications/Dispatch 12.00 12.00 12.00 13.00

Custodial 44.00 43.00 42.00 42.00

Flight Line Services 23.00 16.00 2.00 -

Maintenance 40.00 40.00 38.50 37.00

Total 264.00 254.50 244.75 239.50

STATISTICAL 113

2016 2017 2018 2019 2020 2021

3.00 3.00 3.00 3.00 3.00 2.00

3.00 4.00 3.00 3.00 3.00 4.00

7.00 8.00 8.00 8.00 8.00 5.00

9.00 9.00 9.00 9.00 9.00 11.00

4.00 4.00 5.00 5.00 5.00 6.00

6.00 6.00 5.00 5.00 5.00 4.00

4.00 4.00 4.00 4.00 5.00 7.00

10.00 8.00 10.00 9.00 9.00 3.00

7.00 7.00 7.00 7.00 8.00 11.00

24.50 24.50 23.50 21.50 20.00 21.00

2.00 2.00 4.00 4.00 4.00 2.00

8.00 8.00 8.00 11.00 11.00 11.00

44.00 44.00 43.50 43.50 44.00 43.00

17.00 17.00 17.00 17.00 17.00 17.00

12.00 12.00 12.00 11.00 11.00 12.00

42.00 42.00 42.00 42.00 43.00 38.00

- - -

37.00 38.00 39.00 39.00 42.00 41.00

239.50 240.50 243.00 242.00 247.00 238.00

114 TUCSON AIRPORT AUTHORITY 2021 ACFR

Airport Information

Tucson International Airport

As of September 30

(1) Includes a limited service FBO (fueling, tie-downs and pilot facilities) owned and operated by the TAA. Fueling services ended 1/31/2014.

(2) Eﬀ ective 10/01/2012 TAA’s FAA category changed to, commercial services, small hub.

Source: TAA records.

2012 2013 2014 2015

Land area (acres): 8,343 8,343 8,343 8,282

Runways: 11L-29R 10,996 x 150 ft. 10,996 x 150 ft. 10,996 x 150 ft. 10,996 x 150 ft.

3-21 7,000 x 150 ft. 7,000 x 150 ft. 7,000 x 150 ft. 7,000 x 150 ft.

11R-29L 8,408 x 75 ft. 8,408 x 75 ft. 8,408 x 75 ft. 8,408 x 75 ft.

Main terminal: Airlines (sq. ft.) 202,451 202,451 202,451 202,451

Concessions 35,067 35,067 35,067 35,067

TSA & security checkpoints 10,401 10,401 10,401 10,401

Public /c ommon 115,300 115,300 115,300 115,300

TAA use 12,076 12,076 23,862 23,862

Mechanical 76,730 76,730 76,730 76,730

Total (sq. ft.) 452,025 452,025 463,811 463,811

Number of gate positions 19 19 19 19

Number of active gates 18 18 18 18

Apron (sq. ft.) 1,941,985 1,941,985 1,941,985 1,941,985

Consolidated Number of companies 7 7 7 7

rental car facility: Quick turnaround facilities 7 7 7 7

Customer service building (sq. ft.) 18,000 18,000 18,000 18,000

3-level parking structure (spaces)

Rental car use 697 697 697 697

Airport employee use 661 661 661 661

Public parking 605 605 605 605

Public parking lots Hourly 469 469 469 469

(surface spaces): Daily 908 908 908 908

Covered economy 308 308 308 308

Uncovered economy 5,337 5,337 5,337 5,337

Tot al 7,02 2 7,022 7,0 2 2 7,02 2

Air cargo: Number of buildings 3 3 3 3

Total sq. ft. 35,000 35,000 35,000 35,000

Apron (sq. ft.) 819,000 819,000 819,000 819,000

General aviation: Number of FBOs (1) 5 5 4 3

Apron (sq. ft.) 1,301,767 1,301,767 1,301,767 1,301,767

Airport code: TUS

FAA category: Commercial service,small hub (2)

Location: 8 miles south of downtown Tucson, Arizona

Elevation: 2,641 feet above sea level

International: 24/7 U.S. Customs Federal Inspection Station

Tower: FA A-staﬀ ed 24/7

STATISTICAL 115

2016 2017 2018 2019 2020 2021

8,282 8,282 8,282 8,282 7,985 7,985

10,996 x 150 ft. 10,996 x 150 ft. 10,996 x 150 ft. 10,996 x 150 ft. 10,996 x 150 ft. 10,996 x 150 ft.

7,000 x 150 ft. 7,000 x 150 ft. 7,000 x 150 ft. 7,000 x 150 ft. 7,000 x 150 ft. 7,000 x 150 ft.

8,408 x 75 ft. 8,408 x 75 ft. 8,408 x 75 ft. 8,408 x 75 ft. 8,408 x 75 ft. 8,408 x 75 ft.

202,451 202,451 197,268 197,268 197,268 197,268

35,067 35,067 30,309 30,309 30,309 30,309

10,401 10,401 22,531 22,531 22,531 22,531

115,300 115,300 132,070 132,070 132,070 132,070

23,862 23,862 28,904 28,904 28,904 28,904

76,730 76,730 56,333 56,333 56,333 56,333

463,811 463,811 467,415 467,415 467,415 467,415

19 19 19 19 19 19

18 19 19 19 19 19

1,941,985 1,941,985 1,941,985 1,941,985 1,941,985 1,941,985

7 7 7 7 7 7

18,000 18,000 18,000 18,000 18,000 18,000

697 697 697 697 697 697

661 661 661 661 661 661

605 605 605 605 605 605

469 469 469 469 469 469

908 908 908 908 908 908

308 308 308 308 308 308

5,337 5,337 5,337 5,337 5,337 5,337

7,022 7,0 2 2 7,02 2 7,0 22 7,02 2 7,02 2

3 3 3 3 3 3

35,000 35,000 35,000 69,156 69,156 69,156

819,000 819,000 819,000 819,000 819,000 819,000

333444

1,301,767 1,301,767 1,301,767 1,301,767 1,301,767 1,301,767

116 TUCSON AIRPORT AUTHORITY 2021 ACFR

Airport Information

Ryan Airﬁ eld

As of September 30

(1) Includes a limited service FBO (fueling, tie-downs and pilot facilities) owned and operated by the TAA.

Fueling services ended 12/31/2013.

Aircraft maintenance services are oﬀ ered by various private businesses on the airport.

Source: TAA records.

2012 2013 2014 2015

Land area (acres): 1,804 1,804 1,804 1,804

Runways: 6R-24L 5,500 x 75 ft. 5,500 x 75 ft. 5,500 x 75 ft. 5,500 x 75 ft.

6L-24R 4,900 x 75 ft. 4,900 x 75 ft. 4,900 x 75 ft. 4,900 x 75 ft.

15-33 4,000 x 75 ft. 4,000 x 75 ft. 4,000 x 75 ft. 4,000 x 75 ft.

Terminal: None None None None

FBO services: Number of FBOs (1) 1 1 1 1

Apron (sq. ft.) 465,000 465,000 436,000 436,000

Airport code: RYN

FAA category: General aviation

Location: 12 miles southwest of downtown Tucson, Arizona

Elevation: 2,417 feet above sea level

International: No international facilities

Tower: Contract - staﬀ ed 6:00 A.M. - 8:00 P.M. daily

STATISTICAL 117

2016 2017 2018 2019 2020 2021

17,999 17,999 17,999 1,876 1,876 1,876

5,500 x 75 ft. 5,500 x 75 ft. 5,500 x 75 ft. 5,500 x 75 ft. 5,500 x 75 ft. 5,500 x 75 ft.

4,900 x 75 ft. 4,900 x 75 ft. 4,900 x 75 ft. 4,900 x 75 ft. 4,900 x 75 ft. 4,900 x 75 ft.

4,000 x 75 ft. 4,000 x 75 ft. 4,000 x 75 ft. 4,000 x 75 ft. 4,010 x 75 ft. 4,010 x 75 ft.

None None None None None None

1 1 1 1 1 1

436,000 436,000 436,000 436,000 436,000 436,000

118 TUCSON AIRPORT AUTHORITY 2021 ACFR

Source: TAA records based on airline reporting.

Passenger, Cargo and Mail Summary

Tucson International Airport

Fiscal Years Ended September 30

2012 2013 2014 2015

Passengers

Enplaned 1,826,046 1,655,617 1,621,231 1,590,321

Deplaned 1,823,737 1,653,003 1,618,618 1,591,580

Total 3,649,783 3,308,620 3,239,849 3,181,901

Annual % change -0.7% -9.3% -2.1% -1.8%

Air Freight (pounds)

All-cargo carriers

Enplaned 26,487,591 29,923,629 29,713,492 27,929,293

Deplaned 42,433,770 36,390,827 33,480,907 36,302,965

Total 68,921,361 66,314,456 63,194,399 64,232,258

Annual % change 16.9% -3.8% -4.7% 1.6%

Passenger carriers

Enplaned 915,005 671,255 581,698 812,252

Deplaned 1,595,464 1,374,109 1,020,436 1,140,052

Total 2,510,469 2,045,364 1,602,134 1,952,304

Annual % change -4.9% -18.5% -21.7% 21.9%

Mail (pounds)

Enplaned 5,391 5,291 5,419 3,041

Deplaned 6,991 9,301 10,979 25,485

Total 12,382 14,592 16,398 28,526

Annual % change -4.7% 17.8% 12.4% 74.0%

STATISTICAL 119

2016 2017 2018 2019 2020 2021

1,618,304 1,711,518 1,782,050 1,897,590 1,144,018 1,137,279

1,610,085 1,701,933 1,769,109 1,885,945 1,139,759 1,120,302

3,228,389 3,413,451 3,551,159 3,783,535 2,283,777 2,257,581

1.5% 5.7% 4.0% 6.5% -39.6% -1.1%

25,854,899 26,062,422 29,920,833 32,183,334 30,490,801 31,104,323

34,188,437 30,312,564 33,436,313 33,732,819 32,756,102 36,539,145

60,043,336 56,374,986 63,357,146 65,916,153 63,246,903 67,643,468

-6.5% -6.1% 12.4% 4.0% -4.0% 7.0%

690,595 542,651 616,836 662,604 401,959 374,786

1,103,759 801,217 683,861 793,904 591,803 660,588

1,794,354 1,343,868 1,300,697 1,456,508 993,762 1,035,374

- 8.1% -25.1% -3. 2% 12.0% -31.8% 4. 2%

2,160 3,120 882 1,285 1,559 172

83,158 42,992 29,183 21,002 10,390 79,330

85,318 46,112 30,065 22,287 11,949 79,502

199.1% -46.0% -34.8% -25.9% -46.4% 565.3%

120 TUCSON AIRPORT AUTHORITY 2021 ACFR

(1) Data collected during Ryan UNICOM regular hours of operation (6:00 a.m. - 8:00 p.m.).

Source: FAA “Air Traﬃ c Activity” reports, Tucson International Airport air traﬃ c control tower records, and Ryan air traﬃ c control tower records.

Note: Where available, information for regional aﬃ liate carriers is included with the associated major carriers.

Predecessor airline information is included in the current carrier totals.

Source: TAA records based on airline reports.

Aircraft Operations Summary

Fiscal Years Ended September 30

Enplaned Passengers By Scheduled Carrier

Fiscal Years Ended September 30

2012 2013 2014 2015

Tucson International Airport

Air carrier 34,423 30,593 30,527 28,624

Air taxi 20,309 20,417 19,308 20,126

Military 24,887 25,133 24,693 28,050

General aviation 65,545 62,120 64,892 64,622

Total 145,164 138,263 139,420 141,422

Annual % change -8.3% -4.8% 0.8% 1.4%

Ryan Airﬁ eld (1)

Air carrier - - - 2

Air taxi - 2 - -

Military 9,744 14,914 14,675 20,464

General aviation 107,531 106,658 103,135 97,017

Total 117,275 121,574 117,810 117,483

Annual % change 4.7% 3.7% -3.1% -0.3%

Carrier 2012 2013 2014 2015 2016 2017

American Airlines 638,794 605,261 638,006 628,962 616,346 661,910

Southwest Airlines 623,484 592,375 530,680 506,260 497,687 493,566

Delta Air Lines 199,117 181,950 179,842 181,236 216,432 240,113

United Airlines 262,245 222,485 198,926 203,459 215,208 234,805

Alaska Airlines 57,391 53,546 73,777 70,404 72,631 77,694

Aeromar - - - - - 3,430

Frontier Airlines 45,015 - - - - -

Sun Country Airlines - - - - - -

Via Air - - - - - -

Allegiant - - - - - -

Total 1,826,046 1,655,617 1,621,231 1,590,321 1,618,304 1,711,518

STATISTICAL 121

2016 2017 2018 2019 2020 2021

32,888 35,625 36,059 38,681 28,680 27,686

17,541 13,767 13,753 14,557 14,553 17,337

26,974 27,734 21,181 18,658 16,844 20,401

62,152 55,741 60,176 59,520 62,554 74,758

139,555 132,867 131,169 131,416 122,631 140,182

-1.3% -4.8% -1.3% 0.2% -6.7% 14.3%

- - - - -

- - 4 5 27 -

16,483 13,602 13,862 12,913 9,036 9,729

94,376 90,808 80,759 92,178 103,242 97,131

110,859 104,410 94,625 105,096 112,305 106,860

-5.6% -5.8% -9.4% 11.1% 6.9% -4.8%

% of

2018 2019 2020 2021 Total

677,895 693,686 418,268 409,360 36.0%

482,524 508,820 295,328 269,352 23.7%

258,946 274,970 167,583 204,827 18.0%

257,997 267,808 162,945 158,903 14.0%

97,314 115,511 68,336 76,038 6.7%

- - - - 0.0%

- 15,280 9,252 5,987 0.5%

5,598 7,503 5,282 3,645 0.3%

1,776 695 - - 0.0%

- 13,317 17,024 9,167 0.8%

1,782,050 1,897,590 1,144,018 1,137,279 100.0%

122 TUCSON AIRPORT AUTHORITY 2021 ACFR

Note: Where available, information for regional aﬃ liate carriers is included with the associated major carriers.

Predecessor airline information is included in the current carrier totals.

Source: TAA records based on airline reports.

Scheduled Carrier Landed Weights (1,000 lbs. Units)

Fiscal Years Ended September 30

Carrier 2012 2013 2014 2015 2016

Passenger carriers

American Airlines 683,765 668,463 704,729 682,507 696,297

Southwest Airlines 810,352 708,544 600,950 582,838 575,400

Delta Air Lines 213,304 191,419 188,555 185,116 243,961

United Airlines 299,888 242,435 215,279 217,723 241,336

Alaska Airlines 58,787 53,504 76,872 71,231 71,857

Aeromar - - - -

Frontier Airlines 46,009 - - -

Sun Country Airlines - - - -

Via Air

Allegiant

Total 2,112,104 1,864,365 1,786,385 1,739,415 1,828,851

Cargo carriers

Federal Express 145,331 149,664 146,110 149,500 158,676

Ameriﬂ ight 9,044 9,617 9,323 8,211 7,955

Air Cargo Carriers

Total 154,374 159,281 155,433 157,711 166,631

Grand total 2,266,479 2,023,646 1,941,818 1,897,126 1,995,482

STATISTICAL 123

% of

2017 2018 2019 2020 2021 Total

706,789 717,591 741,559 508,479 498,697 33.9%

543,476 523,176 570,286 415,488 321,528 21.9%

264,562 276,239 296,347 231,215 318,569 21.7%

269,875 290,204 303,460 230,195 199,846 13.6%

76,197 100,332 127,475 85,560 100,472 6.8%

7,109 - - 0.0%

- 13,651 11,645 9,239 0.6%

- 6,948 9,701 7,022 5,267 0.4%

4,085 -

-- -

0.0%

19,198

25,471 17,102 1.2%

1,868,008 1,918,575 2,062,479 1,515,076 1,470,720 100.0%

138,292 152,203 152,225 153,727 153,599 94.6%

19,256 1,960 1,643 2,396 1,889 1.2%

6,708 6,864 6,760 6,838 4.2%

157,548 160,871 160,732 162,882 162,326 100.0%

2,025,556 2,079,446 2,223,211 1,677,958 1,633,045

124 TUCSON AIRPORT AUTHORITY 2021 ACFR

Scheduled Air Service Information

Tucson International Airport

Month of September

Source: Oﬃ cial Airline Guide.

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Number of daily nonstop

destinations

14 14 14 13 13 14 15 14 10 14

Number of nonstop ﬂ ights per

day

Albuquerque 2 - - - - - - - - -

Atlanta 2 2 2 2 2 2 2 2 1 2

Charlotte - - - - - - 1 - - -

Chicago Midway 2 2 1 1 1 1 1 1 - 1

Chicago O'Hare 2 1 1 1 1 3 3 2 - 3

Dallas/Fort Worth 7 7 7 6 6 6 6 7 5 6

Denver 4 4 5 5 5 6 6 5 4 6

Houston Hobby - - - - - - - - 1

Houston Bush 4 4 4 3 3 2 3 2 1 3

Las Vegas 4 4 4 3 3 3 4 4 2 2

Los Angeles International 9 9 8 8 10 9 8 8 1 7

Minneapolis - - - - - - - - - -

Portland - - 1 - - - - - - -

Phoenix 8 9 9 10 9 7 6 7 4 5

Salt Lake City 3 3 3 3 2 2 3 3 3 3

San Diego 3 3 3 3 3 2 2 2 - 1

San Francisco 1 1 1 1 2 2 2 3 2 2

San Jose - - - - - 1 1 2 - -

Seattle 1 1 1 1 1 1 1 1 1 2

Total 52 50 50 47 48 47 49 49 24 44

Average scheduled seats per day 5,518 4,990 5,041 4,634 4,892 4,934 5,145 5,267 2,544 4,788

7250 South Tucson Blvd

S u i t e 30 0

Tucson, AZ 85756

520.573.8100