INSTRUCTIONS FOR APPENDICES B, C, AND D

In order to comply with the verification requirements of the Act, and to permit the Department to critically evaluate submitted claims, the Department proposes to require that claimants submit revenues and expenditures, and profitability data for the years 1999 and 2000, and for that portion of 2001 prior to the terrorist attacks on September 11, 2001. Furthermore, claimants would be required to submit actual and forecast revenue, expense and profitability estimates, on a monthly basis, for the period between and including September 11, 2001 through the month their airport was permitted to reopen for general aviation operations. (As noted above, DOT has tentatively determined that the relevant “last months” would be October, 2005 for GA entities operating at Ronald Reagan Washington National Airport; February, 2005 for College Park Airport, Potomac Airfield, and Washington Executive/Hyde Field; and November, 2005 for Washington South Capitol Street Heliport.).

By precedent, claimants who are seeking compensation under Federal statutes for losses sustained arising from the terrorist attacks, have been obligated to mitigate their losses to the extent possible. In this regard revenues and expenses arising from the employment of aviation oriented assets in alternative business uses in order to mitigate losses should be entered along with aviation oriented revenues and expenses.

Data are to be submitted in the prescribed Excel spreadsheet format, which is structured as an elementary income statement with revenues, expenses, operating profits, special expenditures and total expenses. Appendix B covers actual financial results, Appendix C forecast data that was actually prepared prior to September 11, 2001, and Appendix D reconstructed, “good faith” forecast data that will address any periods unaddressed by actual forecasts. These data may be submitted in hard copy form or, preferably on electronic media in the form of a Microsoft Excel spreadsheet file on three inch floppy disk or CDROM (no DVD). Electronic forms can be downloaded from the Department’s website, http://ostpxweb.dot.gov/aviation/index.html “programs”. Regardless of the means employed to submit these data, the claimant will be required to certify that, by applying for reimbursement under this Act, the data has been prepared under their supervision and is true and accurate to the best of their knowledge. The submission of false or deceptive data is punishable under law by fine and/or imprisonment.

Should questions arise with regard to preparing these documents assistance is available from Tim Carmody, Department of Transportation, Office of the Secretary, Office of Aviation Analysis at 202 -366-2348.

Revenues by Type

An explanation of the primary items and sub-classifications on the data forms are described herein. The first account subcategory, Revenues by Type, pertains to revenues from the sale of goods and services which grow from and are incidental to the provision of services to the operation, maintenance and safe conduct of general aviation. Revenues related to services of a magnitude or scope beyond an incidental adjunct to the direct operation of general aviation of equipment and facilities shall not be included in this classification of Revenues by Type other than mitigating revenues. A footnote shall be added indicating the source of mitigating revenues reported on this line.

Revenues shall be entered in only one revenue sub-classification to prevent duplication.

Aircraft Fuel and Oil Sales.

This sub classification shall include fuels and oils issued from stocks for delivery directly to the aircraft for use in flight operations.

Aircraft Maintenance and Overhaul.

This sub-classification shall include all revenues received for the maintenance, inspection, checking, upgrading of aircraft and aircraft related equipment and for polishing and cleaning property and equipment that is incidental and in support of operations that permit the routine conduct of general aviation procedures.

Aircraft and Hangar Parking.

These sub-classifications shall include all revenues that are derived directly from the transient and long-term storing, parking and sheltering of aircraft.

Flight Instruction.

Record here revenues derived from the provision of flight instruction services, training flight operations, instructional materials and rental of flight training facilities and equipment.

Space and Equipment Rental.

This sub-classification shall include revenues, fees received for the use of property and equipment provided for the direct support of general aviation flight equipment and operations.

Other.

This miscellaneous sub-classification shall include revenues received for goods and services incidental to maintenance and operation of general aviation. Examples of these items might include retail sales of maps, books, flight clothing, sectional charts, devices and parts for aircraft, food services, hospitality services, auto rentals, aircraft custodial and sanitation services and revenues from air charter and air taxi operations.

Grants

This sub-classification includes all grants, subsidies, and incentives provided by local, state, and Federal government entities in support of the security, maintenance and provision of general aviation service and facilities. For example, monies reported here should include those grants issued under the Aviation Transportation Security Act (ATSA) Public Law 107-71 November 19, 2001, Airport Improvement Program (AIP) to airport owners to reimburse the cost of operations and capital improvements to implement a security program for the Maryland three airports.

Mitigating Revenues

This sub-classification shall include non–aviation oriented revenues derived from the utilization of property, the provision of services and the sale of goods that were undertaken to mitigate losses arising from the closure of airports attendant to the September 11, 2001 attack. These could include revenues realized from the provision of services and sale of goods moved from restricted airports to unrestricted airports or compensation for non-aviation oriented goods and services provided at restricted airports. It could also include compensation for aviation-related fixed assets or capital utilized outside of the restricted airport.

Expenses by Type

The second account subcategory, Expenses by Type, described are expenses for goods and services which grow from and are incidental to the provision of services to the operation, maintenance and safe conduct of general aviation. Expenses related to services of a magnitude or scope beyond an incidental adjunct to the direct operation of general aviation equipment and facilities shall not be included in this classification of Expenses by Type other than mitigating expenses. A footnote shall be added indicating the source of mitigating expenses reported on this line.

Expenses shall be entered in only one expense sub-classification to prevent duplication.

Labor Costs (compensation and benefits).

Aircraft Operating Costs

Direct aircraft operating expenses shall be reported as follows, pilot and copilot salaries, and related employee benefits, pensions, payroll taxes and personnel expenses, the cost of fuel and oil used in flight operations and nonrefundable aircraft fuel and oil taxes, insurance, and all other expenses incurred in the in-flight operation of aircraft and holding of aircraft and aircraft operational personnel in readiness for assignment to an in-flight status, the cost of labor, material and related overhead expended by an operator to

maintain flight equipment, general services purchased for flight equipment maintenance from associated or other outside companies, and provisions for flight equipment overhauls, depreciation of flight equipment, amortization of capitalized leases for flight equipment, provision for obsolescence and deterioration of spare parts, and rental expense of flight equipment. Included in this sub-classification are indirect expenses including flight attendants' salaries, and related employee benefits, pensions, payroll taxes and personnel expenses, traffic solicitor salaries, traffic commissions, passenger food expense, traffic liability insurance, advertising and other promotion and publicity expenses, and the fringe benefit expenses related to all salaries in this classification, aircraft and traffic handling salaries, landing fees, clearance, customs and duties, related fringe benefit expenses and maintenance and depreciation on ground property and equipment.

Space and Equipment Rental

This sub-classification shall include rentals, fees, or charges incurred in the use of

property and equipment provided by others. When a lease arrangement provides that the amounts paid include charges for maintenance, insurance, or taxes, the amounts related thereto shall not be recorded in this account but in the appropriate expense account to which related.

Concession Fees

This sub-classification shall include fees incurred for services provided by associated companies and other than associated companies to the fixed based operator or service provider incidental to the support and provision of general aviation services.

Fuel Expenses

The cost data reported on each line shall represent the gallon weighted average cost of fuel including shrinkage but excluding (1) 'through-put' and 'in to plane' fees, i.e., service charges or gallonage levies assessed by or against the fuel vendor or concessionaire and passed on to the operator in a separately identifiable form and (2) nonrefundable Federal and State excise taxes. However, 'through-put' and 'in to plane' charges that cannot be identified or segregated from the cost of fuel shall remain a part of the cost of fuel as reported on this schedule. The operator shall submit data on this line showing the computation of fuel inventories and consumption for each fuel type. The periodic average weighted cost method shall be used in computing fuel inventories and consumption. Under this method, an average unit cost for each fuel type shall be computed by summing the cost of each type of fuel multiplied by the appropriate number of gallons divided by fuel available (Beginning Inventory plus Purchases) by the total gallons available. The resulting unit cost shall then be used to determine the ending inventory and the total consumption costs to be reported on this line. Where amounts reported are for other than aviation gasoline, such as Jet A fuel, a footnote shall be added indicating the number of gallons and applicable costs of such other fuel included in amounts reported on this line.

Purchased Materials.

This sub-classification shall contain the cost of materials and supplies consumed directly

in maintenance of airframes and spare parts related to airframes. Other flight equipment (including instruments), including aircraft engines and spare parts related to aircraft engines, shall also be recorded here. Instruments shall include all gauges, meters, measuring devices, and indicators, together with appurtenances thereto for installation in aircraft and aircraft engines, which are maintained separately from airframes and aircraft engines.

Security, Personnel, Materials and Equipment

This sub-classification shall include compensation, vacation and sick leave pay, medical benefits, workmen’s compensation contributions, accruals or annuity payments to pension funds, training reimbursements, professional fees, licensing fees, educational or recreational activates for the benefit of the employee associated with providing security services by either employees or contract personnel that are in direct support related to a general aviation facility, its equipment and aircraft. This sub-classification further includes the expense of acquiring and maintaining security equipment and material as required to operate a safe and secure general aviation airport facility.

Utilities

Record here charges related to the provision of light, heat, power and water including related taxes.

Other

Record here the cost of supplies and expendable small tools and equipment used in maintaining, servicing and cleaning property or equipment the cost of which cannot be directly assigned to a specific job or type of work. Losses incurred on the sale of assets arising as a direct result of the restrictions imposed between September 11, 2001 and November 30, 2005 or until the month that restrictions on general aviation flights was lifted at your airport shall be included in this sub-classification.

Outside Service

These expenses shall include outside bookkeeping, accounting, recordkeeping, legal services, general insurance and other contracted services, but do not include lobbying expenses, which shall be separately identified as indicated below.

Mitigating Expenses

This sub-classification shall include non–aviation oriented expenses associated with the utilization of property, the provision of services and the sale of goods that were undertaken to mitigate losses arising from the closure of airports attendant to the September 11, 2001 attack. These could include expenses incurred for the provision of services and sale of goods moved from restricted airports to unrestricted airports or compensation for non-aviation oriented goods and services provided at restricted airports.

It could also include expenses for aviation-related fixed assets or capital utilized outside of the restricted airport. A footnote shall be added indicating the source of mitigating expenses reported on this line.

Lobbying Expenses

Lobbying expenses are not reimbursable, and must be separately identified and excluded from Total Revenues on Appendices B, C and D. Lobbying expenses include any amount paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress. Lobbying expenses and the expense for legal services whose purpose is lobbying should be entered on the line entitled Lobbying expenses on Appendices B, C and D.

Gross Income

Gross Income or operating income is the result of subtracting Total Operating Expenses from Total Revenues

Taxes

Record here monthly provisions for accruals of Federal, State, local, and foreign taxes based upon net income, computed at the normal tax and surtax rates in effect during the current accounting year. In general, this account shall reflect provisions within each period for currently accruing tax liabilities as actually or constructively computed on tax returns, and any subsequent adjustments. This account shall include credits for refund claims arising from the carryback of losses in the year in which the loss occurs, credits for the carry-forward of losses in the year to which the loss is carried, and investment tax credits in the year in which each credit is utilized to reduce the liability for income taxes. This account shall also include amounts for previously deferred investment tax credits amortized during the current period.

Extraordinary Items

Record here material items characterized by their unusual nature and infrequent occurrence. Events or transactions which are material and either unusual or nonrecurring, but not both, shall be recorded in the profit and loss accounts to which they relate. Explanations of extraordinary items should be noted in footnotes. Record here income taxes allocable to items of income included in Extraordinary Items and income tax assessments that do not constitute ordinary adjustments of a recurrent nature. Records supporting entries to this account shall be maintained with sufficient particularity to identify the nature and gross amount of each extraordinary credit and each extraordinary debit.

Net Income

Record here the calculated value of Gross or Operating Income minus Taxes and Extraordinary items.

Special Expenditures

This sub-classification shall include special expenses, moving expenses, additional security equipment, and loss on sale of assets that arose from the direct imposition of restrictions during the period September 11, 2001 through November 25, 2005 or until general aviation flight restrictions were lifted, which ever occurred first. Any items entered in Special Expenditure shall not also be expensed in other sub-classifications that are reflected in the Net Income. Details regarding Special Expenditures should be noted in footnotes.

Total Special Expense

This item is the sum of the three lines contained in Special Expenditures.

APPENDIX B

Appendix B. The information on this form provides actual revenue and expense data for fixed-based general aviation operators and providers of general aviation ground support services for each month from 1999 through the last month of the reimbursement period for each airport. The submission of 1999-2001 data will enable the Department to establish baseline business trends for applicants prior to the September 11, 2001, disruption. This baseline information will be used, along with macroeconomic trends, as a part of a critical assessment of the reasonableness of applicant’s projected losses arising from forecast business trends. The post-September 11, 2001 data will identify the actual revenues and expenses that will be subtracted from forecasted revenues and expenses to derive tentative reimbursable loss figures for review.

For GA entities operating at Ronald Reagan Washington National Airport the Form should be completed through the month of October, 2005; at College Park Airport, Potomac Airfield, and Washington Executive/Hyde Field, through February, 2005; and at Washington South Capitol Street Heliport, through November 2005. Refer to the Instructions above for definitions of terms. Carry forward the result at Appendix B, page 7 the column entitled “Appendix B, Grand Totals Actual Results All Years” sum of Net Income and Total Special Expense rows to Appendix A, item 9 line 1.

APPENDIX C

Appendix C The information on this form reports the content of any forecast developed prior to September 11, 2001 that covers any period of the claim. If there are a number of such forecasts, the latest one prepared that had been approved by management should be reported. Applicants must retain any such forecasts they prepared, as DOT or other audit staff may require them to validate the claim. At the same time, the Department expects that a number of prospective applicants do not customarily prepare such forecasts and did not do so in a manner that would be relevant here. In that case, an applicant may simply certify as to that fact on the Form.

This forecast data is used to help determine the level of direct and incremental financial losses which are entitled to reimbursement; actual results will be subtracted from projected results to determine the tentative loss. In this regard this forecast is a projection as to the trends in revenues and expenses had the September 2001 attack not taken place.

For GA entities operating at Ronald Reagan Washington National Airport the Form should be completed through the month of October, 2005; at College Park Airport, Potomac Airfield, and Washington Executive/Hyde Field, through February, 2005; and at Washington South Capitol Street Heliport, through November 2005. Refer to the Instructions above for definitions of terms. Carry forward the result at Appendix C, page 5 the column entitled “Appendix C, Grand Total Prior Forecast Results All Years” sum of Net Income and Total Special Expense rows to Appendix A, item 9 line 2.

APPENDIX D.

The information on this Form would provide substitute information for periods not covered by the actual forecasts prepared and submitted under Appendix C. The Department recognizes that some applicants may not prepare business forecasts as part of their regular business, and that even if they do the forecasts may not have been extended out for the entire possible reimbursement period.

Applicants do not have a “choice” as to whether to submit actual or reconstructed forecasts: if actual forecasts had been prepared prior to September 11, 2001, the content of those forecasts must be submitted for the appropriate period. Reconstructed forecasts in Appendix D may only be submitted when actual forecasts were not prepared, and only for the time periods that actual forecasts do not cover.

For GA entities operating at Ronald Reagan Washington National Airport the Form should be completed through the month of October, 2005; at College Park Airport, Potomac Airfield, and Washington Executive/Hyde Field, through February, 2005; and at Washington South Capitol Street Heliport, through November 2005. Refer to the Instructions above for definitions of terms. Carry forward the result at Appendix D, page 5 the column entitled “Appendix D, Grand Totals Reconstructed Forecast Resultts All Years” sum of Net Income and Total Special Expense rows to Appendix A, item 9 line 3.

The purpose of this Form is to assist an applicant in reconstructing a reasonable forecast, projecting their revenues and expenses as if the federally mandated airport closures were not imposed. If there are unusual events or conditions that may skew their forecast, applicants should provide a detailed explanation along with the forecast. All forecasts will be carefully reviewed for accuracy and reasonableness by Departmental analysts and/or auditors.

In developing this forecast the applicant shall consider its actual past results and growth trends, and adjust those results as needed to consider the effects of seasonality, the trends in macroeconomic variables and general economic factors including Gross Domestic Product (GDP), local business indexes, interest rates, and general aviation and individual airport traffic trends. Data sources to assist applicants in making these adjustments are listed below. The Department can answer questions for claimants that might arise while claimants develop projections, but the Department is not in a position to propose or develop projections for claimants.

In the explanation item 10 on Appendix A, applicants must explain how and why they adjusted actual past results to achieve the reconstructed forecasts they submitted. The Department will use the applicant’s actual results and forecast results for the appropriate period, along with macroeconomic data and the applicant’s explanations, to critically test the reasonableness of the applicant’s revenue and expense projections. If claims are unreasonable on their face, they will be rejected outright, and no reimbursement paid.

Applicants seeking to familiarize themselves with an overall approach to preparing aviation forecasts may wish to access a July 2001 report, entitled Forecasting Aviation Activity by Airport. This report was prepared by GRA, Incorporated (GRA) for the FAA’s Office of Aviation Policy Plans Statistical and Forecast Branch (APO-110). While the Department recognizes that fixed based general aviation operators and providers of general aviation ground support services are different entities from airports, the Department believes that this document offers relevant guidance for applicants that did/do not prepare forecasts as part of regular business operations. This document may be accessed at: http://www.faa.gov/data_statistics/aviation_data_statistics/forecasting/media/AF1.doc.

The report explains the basic steps usually utilized in preparing forecasts, including: identifying parameters and measures to forecast; collecting forecast information of expected revenues or expenses, including budgets; gathering and evaluating data; selecting a forecast method (such as regression and trend analysis, share analysis, or exponential smoothing); applying methods and evaluating results; and summarizing and documenting the results.

As noted above, DOT expects applicants to make adjustments based on macroeconomic variables and general economic factors including Gross Domestic Product (GDP), local business indexes, interest rates, and general aviation and individual airport traffic trends. For this purpose, the following data sources may be utilized:

Aviation data. The FAA maintains historical data for activity at FAA and Contract Towered Airports as well as at non-towered Airports. Information for the former, including Ronald Reagan Washington National Airport, can be obtained from the FAA’s Air Traffic Activity Data System (ATADS). Applicants may access the ATADS at http://www.apo.data.faa.gov. Information for the latter can be obtained from FAA Form 5010. A number of commercial organizations have made FAA Form 5010 public (http://www.gcr1.com/5010WEB and http://www.airnav.com).

Each year, the FAA prepares a Terminal Area Forecast (TAF) which assumes an unconstrained demand for aviation services. Time series TAF data is contained in Appendix E, Economic Trend Data for Washington area airports, for the convenience of applicants. The TAF data can also be accessed at http://api.hq.faa.gov/apo_pubs.htm and http://www.apo.data.faa.gov. Two other FAA reports, FAA Aerospace Forecasts and FAA Long Range Aerospace Forecasts can be accessed from http://api.hq.faa.gov/apo_pubs.htm; this website also includes information about General Aviation activity.