Guidebook for Evaluating Terminal Renewal Versus Replacement Options (2012)

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A-1 A.1 Glossary The definitions of terms given below are only applicable to this Guidebook. The terms and concepts may have different meanings in different contexts. Airline Leased Space—Terminal spaces, typically gates and holdrooms, rented to individual airlines for their exclusive or preferential use. Airplane Design Group (ADG)—A grouping of airplanes based on wingspan specified by the Federal Aviation Administration (FAA) and documented in FAA Advisory Circular 150/5300-13.1 Benefit-Cost Analyses (BCA)—An analytical process used to calculate and compare project benefits and project costs. Both benefits and costs can be quantitative (dollar value, or delay levels) and qualitative (terminal appearance or congestion). A BCA is conducted using defined procedures when required by the FAA for project approvals and funding. Bond Rating—Grade assigned to bonds by rating agencies, according to the agencies’ defini- tions and procedures, to inform investors on the security of the bonds. Brainstorming—A method of bringing stakeholders together to develop a solution to a specific problem by gathering a list of ideas, issues, and strategies. Building Information Modeling—Refers to systems, models, and commuter programs used to monitor and analyze (typically on a real-time basis) building systems and operations. Capital Improvement Program (CIP)—The planned airport capital projects budgeted by the spe- cific airport operator. This program is typically prepared annually for the succeeding 5 to 10 years and can be funded from multiple sources, including airport revenues, federal funds, passenger facil- ity charges (PFCs), and other sources. City Airport—Specific to this Guidebook, a typical midsized airport and terminal facility with defined characteristics. The characteristics of the City Airport example are used to illustrate the typical issues, analyses, and evaluations associated with the decision to renew or replace an airport terminal. Common Use—Related to the shared use of terminal elements by the airport operator, airlines, and other airport tenants. Comparative Performance Evaluation—A comparison of options that qualitatively measures the relative differences in performance (connect times, baggage travel distances, maintainability), A p p e n d i x A Glossary and Acronyms 1Federal Aviation Administration, Airport Design, Advisory Circular 150/5300-13 (and Change 11), United States Department of Transportation, Washington, D.C., August 9, 2001.

A-2 Guidebook for evaluating Terminal Renewal Versus Replacement Options integration with airfield configuration and landside facilities, experiential, and adaptability to sustainability initiatives and other design qualities inherent in an option. Compensatory Agreement—One of two commonly used airline/airport rate-setting method- ologies whereby the airlines pay agreed-upon rates and charges based on the recovery of costs allocated to the facilities and services that they occupy or use. Cost per Enplaned Passenger (CPE)—A standard financial evaluation metric, CPE is the calcu- lated cost to the airlines for each enplaned passenger at the airport. Depending on airline/airport agreements, net costs include both terminal rents and landing fees, and are offset by various airport revenues, such as concession revenue. Customer Facility Charge (CFC)—A charge imposed by an airport operator on customers of rental car companies at the airport based on terms and conditions of the airport operator set through state or municipal authorization. Debt Service Coverage Ratios—The ratio of funds available to pay debt service each year to the required annual debt service payments. Required debt service coverage ratios are typically contained in the airport operator’s bond enabling legislation. Facility Condition Assessment (FCA)—Assessment technique that provides an inventory of the terminal spaces and utilities, as well as architectural, engineering, and special systems infra- structure with the expressed purpose of identifying deficiencies, projecting priority of repairs or replacements, and estimating the cost to correct deficiencies. Facility Condition Index (FCI)—Stated as a percentage, this index measures the estimated cost of the current year deficiencies and compares it to the projected replacement cost of the termi- nal. The higher the FCI, the poorer the relative condition of the facility. Gap Analysis—A framework used to collect and analyze data to compare existing conditions to required or desired conditions. Letter of Intent (LOI)—A letter from the FAA reflecting its intent to fund an approved capital project as funding is available. Typically used in multiyear funding commitments, the FAA issues an LOI and awards the airport annual grants based on a defined schedule. An LOI is not a legal obligation to award funds; it reflects the FAA’s intent only. Life Cycle—The typical or expected life of a piece of equipment, system, or facility beyond which productivity, efficiency, or cost of repair becomes impractical. Life-Cycle Cost—The total cost of purchasing, operating, and maintaining a system through its expected useful life. Majority-in-Interest (MII)—The voting and approval processes defined in airport/airline agreements. Million Annual Passengers (MAP)—Total annual passengers (in millions) who arrive or depart from the airport, including passengers who connect between flights. The count typically includes only passengers on commercial flights. Origin and Destination (O&D)—Airline passengers who begin or end their trips at this airport as opposed to those passengers who are connecting from (or to) another flight. Pay as You Go (PAYGO)—The use of PFC revenues to cover direct project expenses on a pay- as-you-go basis rather than using existing and expected PFC revenues to pay debt service on bonds issued for PFC-eligible projects. Program Compliance Evaluation—An evaluation or analysis of results that compares facility requirements to functional and size elements of the options under consideration.

Glossary and Acronyms A-3 Public Space—Terminal spaces, such as corridors and restrooms, not rented to tenants and available to the public. Rates and Charges—The various payments made by airlines to the airport for facilities used and services provided, most commonly landing fees and terminal rental rates, in accordance with the airport use and lease agreements. Residual Agreement—One of two common airline/airport rate-setting methodologies, whereby the airlines pay the net costs of operating the airport after taking into account the commercial and other non-airline sources of revenue. The airlines (or signatory airlines) provide a guarantee that the level of rents and charges will be such that the airport enterprise can be operated in a break-even manner. In exchange for this guarantee, the signatory airlines typically have rights of approval over capital investment and other operating costs at the airport (see MII). Return on Investment (ROI)—The profits (or benefits) associated with an investment relative to the cost of the investment. Soft Costs—Costs related to a facility development that includes planning, design and engineer- ing, and program management, plus contingencies to cover unknown changes and conditions. Stakeholders—Individuals, groups, organizations, or other entities that have a significant inter- est in a common issue, event, or project. Strategic Plan—A document that states a community’s goals and objectives for its airport, including definitions of a mission and vision for its future (see ACRP Report 20).2 SWOT—A strategic framework applied to analyze the strengths, weaknesses, opportunities, and threats associated with a project or issue. Terminal Area Forecast (TAF)—Forecasts of aviation activity prepared annually by the FAA. Terminal Rentable Space—The total amount of rentable space in the terminal, including space leased and not leased to the airlines. Trigger—As defined in this Guidebook, an action, condition, or activity level that creates a need to modify a terminal building or elements within the building. Uniformat—A standard classification system for building elements and related sitework used in construction project management. Useful Life—Similar to Life Cycle, the typical or expected life of a piece of equipment, system, or facility beyond which productivity, efficiency, or the cost of repair becomes impractical. A.2 List of Acronyms AAAE American Association of Airport Executives ACI-NA Airports Council International-North America ACRP Airport Cooperative Research Program ADA Americans with Disabilities Act ADG Airplane Design Group A4A Airlines for America 2ACRP Report 20, Strategic Planning in the Airport Industry, Transportation Research Board, Washington, D.C., 2009.

A-4 Guidebook for evaluating Terminal Renewal Versus Replacement Options AIP Airport Improvement Program BCA Benefit/Cost Analysis CATS Compliance Activity Tracking System CBP U.S. Customs and Border Protection CFC Customer Facility Charge CIP Capital Improvement Program CPE Cost per Enplaned Passenger FAA Federal Aviation Administration FCA Facility Condition Assessment FCI Facility Condition Index GARBs General Airport Revenue Bonds HVAC Heating, ventilation, and air conditioning IATA International Air Transport Association ICAO International Civil Aviation Organization IT Information Technology LCCA Life-Cycle Cost Analysis LOI Letter of Intent MAP Million annual passengers MII Majority-in-Interest NPIAS National Plan of Integrated Airport Systems NPV Net present value O&D Origin and destination O&M Operation and Maintenance PFC Passenger facility charge PV Present value ROI Return on Investment SWOT Strengths, Weaknesses, Opportunities, and Threats TAF Terminal Area Forecast TSA Transportation Security Administration