Friday, October 9, 2009

Hartsfield-Jackson Atlanta International Airport Identifies Classification Errors of Certain Expenses

As part of the due diligence with pending sales of bonds for Hartsfield Jackson Atlanta International Airport, the Department of Aviation undertook a review of the airport’s construction in progress account. This account is a holding account of capital projects which are under construction and not yet placed in service.

During that review, the Department of Aviation found certain errors regarding items which should have been classified as expenses over the years dating back to 2003 and certain items which should have been placed in service in 2007 and 2008. The impact of these changes for the period 2003-2008 would have reduced the airport’s surplus by an amount ranging from $10.4 million in 2003 to $19.7 million in 2008. The range of the impact of these errors changes the key debt service coverage ratio to 1.33 in 2003, a reduction of .09, to 1.86 in 2008, a reduction of .12.

All of the revised debt service coverage ratios remain well above the minimum required of 1.2. These changes will be reflected in a restatement of 2008 financial results as part of the fiscal year 2009 audited financial statements. The Department of Aviation has implemented the necessary controls to insure that such errors do not recur.
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