E N G I N E O F E C O N O M I C G R O W T H

2 01 0 A N N U A L R E V I E W

About the Airports Authority

The Metropolitan Washington Airports Authority operates major transportation facilities in the Washington, D.C., area, including Washington Dulles International and Ronald Reagan Washington National Airports. In addition, it operates the Dulles Toll Road and is the financial manager and builder of the Metrorail extension that is under construction.

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Chairman’s Letter

Management’s Message

Aviation Enterprise

Washington Dulles International Airport

Ronald Reagan Washington National Airport

Dulles Corridor Enterprise

Dulles Corridor Metrorail Project

Dulles Toll Road

Green Initiatives in Action

Financial Summary

Board of Directors

Management

Contents

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Engine of Economic Development

The Metropolitan Washington Airports Authority is an engine of economic development for the entire Washington Metropolitan Area.

For years, the Airports Authority has made massive contributions supporting the Metropolitan Area’s economy as manager of two of the region’s major airports and, now, major rail and highway transportation projects. Directly and indirectly, the Airports Authority’s activities are responsible for the employment of 40,000 people. Taking air, rail and highway activities into account, the Airports Authority pumps $2.6 billion in labor income each year into the regional economy.

The Dulles Corridor

The Airports Authority is more than just airports. The Airports Authority operates the Dulles Toll Road and, in 2009, launched the Dulles Corridor Metrorail extension to Washington Dulles International Airport and beyond as its financial manager and builder. The Dulles Toll Road, the Dulles Airport Access Highway and the Metrorail extension, now under construction, are all built within the Dulles Corridor, most of which consists of a broad right-of-way that is actually part of Dulles International Airport. The Corridor is becoming the transportation backbone of the region, connecting Washington and the growing commercial and residential areas of Northern Virginia.

The Corridor right-of-way was acquired, with remarkable foresight, by the Federal Aviation Administration 60 years ago. From the start, it was planned as a right-of-way to provide express transportation to Dulles International. The Commonwealth of Virginia used the right-of-way to build the Dulles Toll Road to ease traffic congestion in the developing areas along the Corridor and beyond. Recently, Virginia transferred operation of the Dulles Toll Road to the Airports Authority to help finance the rail transit project.

The core of the right-of-way was reserved for a rail transit line, which was made available to the Metrorail project at no cost. Today, the Metrorail project gives new meaning to the Corridor concept by extending rail service 23 miles to the fast-growing Northern Virginia region. The extension will serve 11 new stations, from the existing East Falls Church Station to Tysons Corner, Herndon, Dulles International and beyond.

The massive $6 billion Metrorail project is the largest transportation project under way on the East Coast. Economic benefits from the project come from construction spending, direct employment, earnings and economic development along the route. New Metrorail service in the region will not only facilitate transportation to and from Dulles International, but will also provide new access for residents to growing regional employment centers. Quality-of-life improvements from the Metrorail extension will include fewer personal vehicle-miles driven and easy access between Washington and key Northern Virginia communities. When the Metrorail project is complete in 2017, the Dulles Corridor will represent a high-return, public resource for decades to come.

Chairman’s Letter

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This Annual Review describes the mission and status of the Dulles Corridor project and the two major airports linked by modern transportation capability to the Nation’s Capital and Northern Virginia. It’s an exciting story; please look inside.

The Airports

Operation of Ronald Reagan Washington National and Dulles International Airports represents the Airports Authority’s core contribution to the regional economy. In 2010, the two Airports together ranked fourth in the nation by flight operations and seventh by passengers served. Last year, combined passengers at the Airports grew 2.6 percent. Cargo operations, both domestic and international, increased by 14.2 percent from the prior year. Both rates of increase were greater than average and reflect the Airports Authority’s importance in supporting the regional economy.

The Airports Authority develops and maintains Reagan National and Dulles International Airports pursuant to long-term strategic plans. Our Airports are well-equipped to sustain growing regional, national and international demand for air transportation.

Reagan National and Dulles International Airports provide grand gateways to the Washington region. The Airports served more than 12 million out-of-town visitors who alone contributed more than $10 billion to the local economy.

Acknowledgments

The Airports Authority is managed and staffed by experienced, dedicated employees representing all major disciplines from professional and skilled trades to seasoned executives. The average length of service among Airports Authority employees is more than 10 years.

In May 2010, Jim Bennett retired as President and Chief Executive Officer of the Airports Authority. Jim completed more than 16 years of service with the Airports Authority and was instrumental in delivering many capital projects important to our customers. We applaud his contributions to making the Airports Authority the successful institution it is today.

After Jim’s retirement, Lynn Hampton, formerly Vice President and Chief Financial Officer, postponed her retirement to serve as President and Chief Executive Officer.

She is doing a great job. A search is under way to hire a Chief Executive.

Conclusion

Personally, I am honored to work with the public, Board of Directors and employees in guiding the Airports Authority. We know the importance of the tasks we undertake. The Board is committed to managing effectively and applying carefully its collective experience to attain superior results. Great organizations such as the Airports Authority bring excitement and optimism to their constituents. The Airports Authority is an engine of economic development; I invite you to join us in making our growing region ever more prosperous and successful.

With best regards.

Sincerely,

Charles D. Snelling Chairman

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During 2010, the Airports Authority witnessed numerous signs of improving economic conditions in the Washington area.

Increased demand for business and leisure travel had a positive impact on the Airports Authority’s business. Passengers increased 2.6 percent from the previous year. During 2010, new airlines started serving the Airports, resulting in more flights and destinations offered to travelers. Similarly, the Airports experienced increased cargo volume. Construction on the new Metrorail extension moved into high gear along the Dulles Corridor. The Dulles Toll Road remains a popular choice of residents and workers traveling between Tysons Corner and the Dulles Greenway.

An upward trend of key operating indicators for passengers, cargo and concession revenue supported the Airports Authority’s commitment to maintain and grow transportation assets for the future.

In 2010, a redefined Customer Service Initiative was implemented to ensure each customer a successful and pleasant travel experience at our Airports. Our “Going the Extra Mile” customer service campaign, which encourages all Airport employees to help passengers who may need assistance, continues to receive praise from appreciative travelers. Employees have embraced the program. They strive to solve problems, answer questions and help travelers enjoy a pleasant journey.

Whether working on an airport tarmac, staffing a toll booth, driving a snowplow or assisting passengers in an airport terminal, our employees and our partners’ employees make customer service and satisfaction a top priority.

The safety of drivers and passengers using the Dulles Toll Road was the objective in launching the Toll Road Safety Service Patrol. Since its start-up in mid-2010, the new on-road program has helped thousands of motorists.

Management’s Message

E. Lynn Hampton Margaret E. McKeough

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The Airports Authority also extends its services beyond the needs of the traveling public. It takes a lead in helping local small, minority and women-owned businesses connect with contracting opportunities. In October, more than 800 people attended the 20th annual Business Opportunity Seminar held in the District of Columbia, where the Airports Authority provided information on contracting opportunities in construction, concessions, goods and services. The Seminar was one of 26 business and trade fair events in which the Airports Authority participated during 2010. These businesses play an important part in helping fuel our local economy and have long been a mainstay of the Airports Authority’s concessions and contracting programs. Of the $224 million in non-federally assisted procurement activities generated by the Airports Authority in 2010 for construction, goods and services, $108 million, or 48 percent, went to Local Disadvantaged Business Enterprises and $80 million, or 36 percent, to Minority and Women-Owned Business Enterprises.

With economic recovery continuing in the region and active construction underway for the Metrorail extension, the Airports Authority will provide even more support to the Washington area for years to come.

E. Lynn Hampton President and Chief Executive Officer

Margaret E. McKeough Executive Vice President and Chief Operating Officer

Top photo: Washington Dulles International Airport.

Bottom photo: Ronald Reagan Washington National Airport.

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The Airports Authority’s Aviation Enterprise, which operates Dulles International and Reagan National Airports, provides major support to the region’s economy. Indeed, by serving the nation’s capital, the Airports Authority’s impact is felt around the world.

More than $5 billion of goods produced in Virginia, the District of Columbia and Maryland each year are shipped through Dulles International and

Reagan National Airports. Having convenient access to the Airports Authority’s Airports facilitates growing exports and domestic shipments.

In 2010, Dulles International and Reagan National Airports served nearly 42 million passengers, up 2.6 percent from the prior year and the first time either Airport experienced growth since 2007.

Aviation EnterpriseWashington Dulles

International Airport

Ronald Reagan Washington National Airport

Above: Turkish Airlines now serves Dulles International with four weekly flights to Istanbul.

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According to an economic impact study released by the Airports Authority in October 2010, the Airports Authority’s Airports generate nearly $1.4 billion in tax receipts annually to Virginia, the District of Columbia and Maryland. Another $618 million of taxes benefit the federal government.

The combined operations of Dulles International and Reagan National generate approximately $1.5 billion in direct labor income each year. This payroll represents more than 25,000 jobs throughout the region that have a direct tie to one or both Airports. This payroll fuels regional spending, making the 22 counties that comprise the Washington Metropolitan Statistical Area among the country’s strongest in terms of growth, economic stability and quality of life.

Spending by visitors arriving and departing by air was strong during 2010. Spending at both Airports’ concessions increased 5.6 percent from the previous year. Excluding sales from parking and car rentals, gross receipts from Dulles International and Reagan National

vendors totaled $351 million in 2010, an increase of $18.5 million from 2009. Disadvantaged Business Enterprise vendors generated $97 million or 28 percent of the total sales.

Washington Dulles International Airport

The iconic roofline of the Eero Saarinen-designed terminal has welcomed travelers from around the world since 1962. With 418 weekly flights to 44 international locations and 338 daily flights to 81 U.S. cities, Dulles International is one of the busiest airports in the Mid-Atlantic region and the third most popular trans-Atlantic gateway to the U.S. from European departure cities.

New airlines, new routes and new conveniences combined to make 2010 a banner year for international travel to and from Dulles International, where nearly 24 million total passengers were served. This total represented a 2.3 percent increase from 2009.

For the seventh consecutive year, international passenger departures

and arrivals at Dulles International increased, setting an all-time high of 6.3 million, up 2.1 percent from 2009. Domestic travelers accounted for more than 17 million of the Airport’s passengers, an increase of 2.3 percent from the prior year.

Dulles International welcomed three new airlines during 2010:

• AeroSur, with weekly non-stop service to Santa Cruz and Cochabamba, Bolivia

• OpenSkies, with non-stop, all-business-class service to Paris Orly Airport

• Turkish Airlines, with four flights each week to Istanbul

Due to increased demand for air travel, several airlines expanded service to and from Dulles International. During 2010, the following fights and routes were added:

• Ethiopian Airlines increased its service to Addis Ababa from four flights per week to daily service

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• United Airlines introduced daily service to Lagos, Nigeria; daily non-stop service to Accra, Ghana; added same-plane service to Bahrain on its existing daily non-stop to Kuwait; it also began new daily service to Pensacola

Total airport operations at Dulles International experienced a slight decline in 2010 due to trends in capacity reduction by all airlines. On a positive note, Dulles International’s air cargo operations carried nearly 323,000 metric tonnes in 2010, which was 40,309 more than the previous year. International air cargo represented 61 percent of the total.

With respect to passenger service, 2010 got off to a great start with the opening of the AeroTrain service. Running from the Main Terminal to the A, B and C Gates, it replaced former mobile lounge vehicles. The AeroTrain makes the trip between stations in less than two minutes. Since its opening, thousands of passengers have enjoyed this new, enhanced service.

The Airports Authority embarked on three major projects at Dulles International to improve in-line baggage inspection, runway rehabilitation and installation of a new video surveillance system. In addition to the immediate economic benefits created by the spending, there is a long-term impact: each of these projects will make air travel safer, more secure and more convenient for years to come.

At Dulles International, the concessions program generated $38.9 million in revenue, nearly $2.2 million more than the previous year. This increase benefited concessionaires, passengers and the Airports Authority. Seven new high-quality shopping and dining locations opened at Dulles International. In addition, all Duty Free locations at Dulles International began to offer duty-paid items to domestic passengers.

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Dulles International Operations

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Dulles International Passengers

Dulles International Cargo (metric tonnes)

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400,000

20,000,000

300,000

300,000

15,000,000

200,000

200,000

10,000,000

100,000

100,000

5,000,000

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Ronald Reagan Washington National Airport

Located across the Potomac River from the Nation’s Capital, Reagan National offers service primarily to domestic passengers through 477 daily flights to 72 cities. It is convenient to Washington, Capitol Hill, Arlington, the Pentagon, the new National Harbor complex and tourist attractions.

During 2010, more than 18 million travelers chose to fly in or out of Reagan National, a 3.1 percent increase from the previous year.

Nearly 1,400 new parking spaces were added to Reagan National’s daily parking garages. This increase brings total parking places to almost 9,000 and provides added convenience to travelers. During 2010, $21 million was expended for construction at Reagan National.

New flights, new routes and a new carrier were added at Reagan National in 2010. In November, JetBlue began serving Reagan National with flights to Boston, Ft. Lauderdale and Orlando. In October, Delta Airlines began offering

flights to Hartford, Columbus, St. Louis, Jacksonville, Orlando and Miami. Delta also expanded existing service to Boston and Indianapolis.

Reagan National’s wide selection of vendor concessions is popular among consumers. Healthy sales in 2010 resulted in a 4.5 percent increase, bringing in more than $100 million to the Airports Authority, compared to $96 million in 2009.

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Reagan National Cargo (metric tonnes)

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Reagan National Operations

201020092008

Reagan National Passengers

20,000,000

300,000

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15,000,000

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200,000

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The Dulles Corridor is an expanding business and residential area principally adjacent to Dulles International, the Dulles Toll Road and the Dulles Access Highway. A portion of the Dulles Metrorail extension is being constructed in the right-of-way of the Dulles Access Highway. The Dulles Toll Road and the Dulles Metrorail extension are managed by the Airports Authority’s Dulles Corridor

Enterprise. Together, the Toll Road operations and the Dulles Metrorail extension are fueling new economic growth, not just for businesses and residents in the Dulles Corridor and the Washington area, but also for companies and communities far beyond the Capital region.

Dulles Corridor EnterpriseDulles Corridor Metrorail Project

Dulles Toll Road

Above: Dulles Corridor Metrorail Project.

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In an Economic Impact Study released in 2010, the Dulles Metrorail and the Dulles Toll Road were credited with generating nearly 1,200 jobs and more than $106 million in labor payroll.

The Dulles Corridor Metrorail Project and the Dulles Toll Road share economic and geographic ties. Revenues from the Dulles Toll Road are used to partially finance construction of the Metrorail extension as well as for all improvements to the Dulles Toll Road itself.

Today, one sees the power of construction spending throughout the region. Local and national companies and their employees benefit from project activity.

Dulles Corridor Metrorail Project

In 2009, the U.S. Department of Transportation committed $900 million to begin construction of the Dulles Corridor Metrorail Project, signaling the beginning of one of the most comprehensive transportation infrastructure improvements in the region and one of the largest construction projects on the East Coast. With 23 miles of track and

11 new stations to be built, the project will be completed in two phases. The Dulles Corridor Metrorail Project will transform the way residents and visitors go to work or access other destinations. Convenient rail transit will reduce congestion, gasoline consumption and air pollution. The project represents a valuable asset for the Washington region.

In December 2010, the U.S. Department of Transportation’s Federal Transit Administration announced that it would advance $19.8 million of its financial commitment to the Dulles Corridor Metrorail Project sooner than originally scheduled. This advance will save the Metrorail Project an estimated $3.9 million in financing costs. More than $77 million in federal stimulus funds from the 2009 American Recovery and Reinvestment Act are also pledged to support the project.

Top photo: Crews install the waterproofing liner for the tunnel arch. The inbound and outbound tunnels run underneath the Route 123 and Route 7 intersection in Tysons Corner.

Bottom photo: Crews work on of the Tysons East Guideway coming off of the Dulles Connector Road to the north side of Route 123 in Tysons Corner.

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The new line begins inside the Capital Beltway at the existing East Falls Church Station. En route to Dulles International, it will serve Tysons Corner and other Northern Virginia employment centers. Finally, it will go beyond Dulles International to two Loudoun County locations. For most of its route, the extension will reside within the Dulles Corridor. When finished, passengers will be able to travel between Loudoun County, Va., and downtown Washington without changing trains.

The Dulles Corridor Metrorail Project is a joint effort involving the Airports Authority and partners from the federal, state, regional and private sectors. Dulles Transit Partners, LLC (DTP) is the Airports Authority’s Phase 1 design-build contractor. DTP partners are two of the world’s leading engineering, project management and construction companies, Bechtel Corporation and URS Corporation.

Phase 1, with an estimated cost of $2.6 billion, will extend service 12 miles from the East Falls Church Station, through Tysons Corner,

to Wiehle Avenue in Reston. Once a rural crossroads, Tysons Corner now draws an estimated 120,000 people to work every day, making it the 12th largest employment center in the nation. Four new Metrorail stations in Tysons Corner will be a welcome addition for people who work, shop or live in the area. Public transit will also benefit hundreds of retail stores; two major shopping malls; a number of Fortune 500 companies; and countless restaurants, car dealerships, small businesses, hotels and midsize companies. Urban planners herald the Metrorail extension as a key transportation link that will transform Tysons Corner into an efficient metropolitan area. Scheduled completion of Phase 1 is in 2013.

Phase 2, slated for completion in 2017, will extend the line an additional 11 miles and add six stations, including a stop at Dulles International.

A number of major engineering milestones were achieved in 2010 as Phase 1 construction ended its first full calendar year. The project’s rapid pace

and scale are evident everywhere — at, above and below ground level — in the Dulles Corridor and inside the Capital Beltway along the Dulles Toll Road Connector toward East Falls Church.

In preparation for the Phase 1 opening, the Washington Metropolitan Area Transit Authority (WMATA), operator of the Washington region’s Metrorail system, awarded a contract to Kawasaki Heavy Industries, Ltd. for 64 new

Above: Tysons Corner on the Horizon. Crews continue to prepare the bridges from the Dulles Connector Road to Route 123 for rail tracks.

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rail cars. These cars will support the expanded service.

Preliminary engineering for Phase 2 continued during 2010. This work included developing biddable documents for the entire alignment and conducting studies to evaluate the technical feasibility of constructing foundations to support air rights development at the Reston Parkway Station.

Dulles Toll Road

Since 2008, the Airports Authority has operated the 13-mile Dulles Toll Road. Built in 1984 by the Virginia Department of Transportation (VDOT), the road is a critical artery for those living and working in the area that stretches from Tysons Corner to Dulles International. A 2008 agreement with VDOT gave the Airports Authority responsibility for the Dulles Toll Road’s operation, maintenance and control for 50 years.

The Airports Authority’s free Safety Service Patrol assists motorists traveling the Dulles Toll Road, the Dulles Airport

Access Highway and Route 28. By year-end, the service assisted nearly 6,000 motorists and provided traffic control at accident scenes.

Several additional improvements to the Dulles Toll Road were completed during the year. These included toll booth renovation; the repainting of the toll plazas; and the repair and renewal of light poles, lighting and 30 overhead signs along the route. Landscape beautification was completed at five locations.

Top photo: Construction continues on the bridges through Tysons Corner approaching the future Tysons Central 123 station near Tysons Corner Center and Tysons Galleria.

Bottom photo: Airports Authority Safety Service Patrol comes to the aid of motorists on the Dulles Toll Road.

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The Airports Authority has a long-standing commitment to environmental stewardship and conservation projects. From business operations to construction projects, the Airports Authority is committed to conserving energy, recycling, using renewable resources, and adopting practices minimizing air and water pollution. The Airports Authority complies with all federal and state environmental regulations.

The Airports Authority works closely with local jurisdictions to reduce its environmental footprint.

During 2010, the Airports Authority’s recycling program welcomed the participation of additional tenants and airlines. The Airports Authority also completed an internal study of ways to reduce energy consumption.

Green Initiatives in Action

Above: Green Team members distribute seeds and planter boxes at Earth Day at Barrett Elementary School.

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Use of Solar Energy to Power Our Airports

Recently, two companies were selected to install and operate Solar Demonstration Projects at the Airports and the Dulles Toll Road. These projects will determine if solar energy can power certain facilities cost effectively.

Electric Vehicle Charging Stations in Parking Garages

The Washington Metropolitan region is a designated center to facilitate the use of electric vehicles. The Airports Authority will introduce public vehicle recharging stations at both Airports. Charging stations at reserved spaces will be provided in daily garages at each Airport. These stations will be furnished and maintained under a federal program until the end of 2013. After that, the equipment will become the property of the Airports Authority. The installations are expected to take place in mid-2011.

Identifying Energy Conservation Opportunities

In conjunction with the Commonwealth of Virginia’s master contract for energy performance-based services (ESCO), the Airports Authority will conduct an audit of Reagan National’s Baggage Conveyance System, Terminal B/C and its Boiler/Chiller Plant. The audit, expected to be completed in 2011, has three primary goals:

• identify energy conservation measures that have the potential to reduce energy demand and consumption

• identify functional improvements that meet building operational goals

• identify needed capital to address aging infrastructure

ESCO will provide recommendations for necessary operational and infrastructural needs.

Top photo: The geese that live in a pond on the construction site of the future Tysons Central 123 Station are part of the varied wildlife that call Northern Virginia home.

Bottom photo: Airports Authority, U.S. Department of Agriculture and airline employees clean up Horse Pen Run at Dulles International.

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Operating RevenuesConcessions $ 230,752,253 $ 217,413,676 $ 223,710,732 $ 217,486,823 $ 199,011,305 Tolls 88,038,168 64,893,554 10,416,498 — —Rents 226,375,685 193,736,080 171,331,285 167,301,027 156,164,079 Design fees — — 20,363,189 — —Landing fees 101,637,867 96,934,558 82,289,545 78,682,496 73,375,458Utility sales 12,464,920 13,227,161 13,348,545 11,778,736 11,248,988 Passenger fees 25,913,522 30,665,358 28,354,142 28,684,113 25,474,908 Other 6,730,469 6,476,626 11,547,405 6,542,935 5,893,899

Total Operating Revenues $ 691,912,884 $ 623,347,013 $ 561,361,341 $ 510,476,130 $ 471,168,637

Total Non-Operating Revenues $ 30,870,361 $ 121,756,165 $ 39,307,183 $ 55,557,746 $ 45,035,158 Total Revenues $ 722,783,245 $ 745,103,178 $ 600,668,524 $ 566,033,876 $ 516,203,795 Total Capital Contributions $ 447,571,207 $ 428,191,274 $ 438,884,975 $ 118,674,180 $ 136,960,753

Operating ExpensesMaterials, equipment, supplies, contract services and other $ 203,460,878 $ 173,550,066 $ 176,288,727 $ 182,096,091 $ 151,009,792 Impairment loss/design costs — — 80,027,390 — —Salaries and related benefits 156,534,497 144,210,330 136,720,661 128,465,267 113,870,907 Utilities 24,565,137 28,209,669 25,402,257 21,134,317 20,359,248 Lease from U.S. Government 5,101,119 5,066,069 4,958,280 4,830,121 4,689,858 Depreciation and amortization 219,144,166 185,946,715 164,863,585 142,030,354 133,106,378

Total Operating Expenses $ 608,805,797 $ 536,982,849 $ 588,260,900 $ 478,556,150 $ 423,036,183

Total Non-Operating Expenses $ 278,932,176 $ 158,222,947 $ 304,492,245 $ 140,080,587 $ 113,598,483

Total Expenses $ 887,737,973 $ 695,205,796 $ 892,753,145 $ 618,636,737 $ 536,634,666

Increase in Net Assets $ 282,616,479 $ 478,088,656 $ 146,800,354 $ 66,071,319 $ 116,529,882

Decrease in Net Assets Due to 2010 Restatement — — — 31,877,378 —Total Net Assets $ 1,878,596,925 $ 1,595,980,446 $ 1,117,891,800 $ 971,091,446 $ 936,897,505

2010 2009 2008 2007 2006

Financial Summary

Combined Aviation Enterprise Fund and Dulles Corridor Enterprise Fund

Fiscal Years Ended December 31,

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This report presents selected financial information of the Airports Authority only. This report is not intended to be a Comprehensive Annual Financial Report (CAFR) presented in accordance with Generally Accepted Accounting Principles (GAAP). The financial data presented is derived from the 2010 CAFR and is consistent with GAAP. The Airports Authority has issued separately the 2010 CAFR, which is prepared in conformance with GAAP and includes more detailed financial information. A copy of the 2010 CAFR is available on the Airports Authority’s website at www.mwaa.com/file/2010-CAFR.pdf or may be obtained by contacting the Office of Finance at the Metropolitan Washington Airports Authority, 1 Aviation Circle, Washington, D.C. 20001-6000, 703.417.8700.

This report is being submitted to the Government Finance Officers Association (GFOA) for consideration of the Award for Outstanding Achievement in Popular Annual Financial Reporting (PAFR). The goal of the GFOA program is not to replace reports prepared in conformity with GAAP, but rather to supplement such reports to make the information they contain more readily accessible to a broader audience than that served by traditional financial reporting.

Total Net Assets (in millions)

500

1,000

0

1,500

$2,000

2010 2009 2008 2007 2006

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Financial Highlights for the Fiscal Year Ended December 31, 2010

The financial statements presentation includes two enterprise funds. The Aviation Enterprise Fund encompasses the activity of Reagan National Airport and Dulles International Airport, collectively, the Airports. The Dulles Corridor Enterprise Fund encompasses the Airports Authority’s activity within the Dulles Corridor, which includes, but is not limited to, the Dulles Toll Road and the Dulles Corridor Metrorail Project (Dulles Metrorail Project). The Dulles Corridor is the transportation corridor with an eastern terminus of the East Falls Church Metrorail station at Interstate 66 and a western terminus of VA Route 772 in Loudoun County, Va.

Aviation Enterprise Fund — Operating Revenues

The overall activity results of 2010 reflect the gradual reversal of negative trends experienced across the aviation industry as a result of the recession that started in December 2007. The Airports Authority recorded $603.9 million in operating revenues for 2010. This was a total increase from 2009 of $45.4 million. The Airports Authority’s revenues are primarily derived from rents and charges for the use of the Airports Authority’s facilities, including landing fees received from airlines using the Airports and concession contracts at the Airports, including parking and off-airport rental car operations. Concessions historically have accounted for a substantial portion of the Airports Authority’s revenues and accounted for 38.2 percent of total operating revenues in 2010. Signatory airlines, those that have signed the Airport Use Agreement and Premises Lease Agreement, are required to pay actual costs plus debt service coverage, while the majority of concessionaires pay a percentage of revenue or a minimum annual guarantee (MAG).

2010 Aviation Operating Revenues

37.5%, Rents

1.1%, Other

4.3%, Passenger fees

2.1%, Utility sales

16.8%, Landing fees

38.2%, Concessions

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Airline Revenues

In 2010, airline revenue, which consists of landing fees, terminal rents and passenger fees, increased $32.6 million from 2009, principally related to an increase in debt service at Dulles International for the Automated People Mover (the AeroTrain) that was placed into service in January and debt service for Concourse A renovations at Reagan National. Prior-year transfers, which are used as an offset to revenue paid by the airlines, decreased $4.2 million. Total landing fees increased $4.7 million, or 4.9 percent, to $101.6 million. Rent revenue increased $32.6 million, a 16.8 percent increase from 2009. Passenger fees, including passenger conveyance, International Arrivals fees and fees paid by the Transportation Security Administration, decreased $4.8 million, or 15.5 percent. The decline in passenger fees was driven by a decrease in passenger conveyance fees for mobile lounge use, which declined significantly as a result of the AeroTrain becoming operational in 2010. Revenues associated with the AeroTrain are included in terminal rents as opposed to being charged as a separate passenger conveyance fee.

Concession Revenues

In 2010, the Airports Authority’s concession revenue increased $13.3 million, or 6.1 percent, from 2009. Concession revenue accounted for 38.2 percent of total operating revenue, down from 2009 by 0.7 percent. Car parking revenue ranked as the Airports Authority’s largest concession, providing $110.2 million in total revenue for the year. This was an increase of $2.4 million from 2009 and reflects the general increase in passenger traffic. Rental car revenue of $44.3 million increased $5.4 million from 2009 and was the result of higher MAG amounts, as negotiated in new contracts for both Reagan National and Dulles International in recent years. Ground transportation revenue of $8.0 million increased by 16.0 percent, or $1.1 million, reflecting the new taxi contract in place at Dulles International and new taxi fees at Reagan National. In 2010, display advertising generated $11.7 million in concession revenue, up $3.4 million, or 41.4 percent, from 2009. All other areas of concession revenue accounted for a combined net increase of $953,000 from 2009. This increase

was largely attributable to an $848,000 increase in food and beverage revenue and a $319,000 increase in duty free revenue, which offset moderate declines in retail, services and other concession revenue.

Aviation Enterprise Fund — Operating Expenses

Operating expenses for the Aviation Enterprise Fund for the fiscal year ended December 31, 2010, totaled $574.0 million, an increase of $67.1 million, or 13.2 percent, from 2009. The largest driver of the increase in operating expenses was a 21.5 percent increase in materials, equipment, supplies, contract services and other, which increased $31.9 million in 2010. Record snow events at both Airports in February drove a $5.2 million increase in contractual snow removal costs and a $2.1 million increase in snow removal supplies. In addition, contracted operations of the AeroTrain resulted in a $7.3 million increase in 2010, while changes in contracted custodial and armed guard services at both Airports resulted in increases of $2.0 million and $1.6 million, respectively.

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The Airports Authority continued its process of implementing a new Enterprise Resource Planning (ERP) system. In March 2009, the Airports Authority selected Oracle E-Business Solutions as the ERP software. According to accounting principles as promulgated in GASB Statement No. 51, Accounting and Financial Reporting for Intangible Assets (GASB 51), the Airports Authority was in the developmental stage of the implementation program in early 2009 and expensed the costs through the Statements of Revenues, Expenses and Changes in Net Assets. In March 2009, the Airports Authority began capitalizing costs associated with the ERP, including implementation costs. As of December 31, 2010, $38.2 million was included in work in progress for the project.

Salaries and related benefits expenses increased $8.1 million from 2009, to $148.3 million in 2010. When compared to 2009, health insurance expenses of $14.1 million increased $592,000, and salary compensation, including full-time, part-time, holiday and overtime pay, increased $4.2 million. Overtime expenses rose by $2.7 million, with the increase

primarily related to record snowstorms experienced in February 2010. The Airports Authority continued funding its Other Post-Employment Benefits program and recorded $8.3 million in expenses for 2010 and $6.6 million in expenses for 2009. The contribution percentages to the Airports Authority’s retirement plans increased to 7.5 percent in 2010 from 6.4 percent of eligible earnings in 2009 for the general plan, and increased to 16.0 percent in 2010 from 13.0 percent of eligible earnings in 2009 for the police and firefighter plan. The funded ratio as of the actuarial valuation date of December 31, 2009, was 105.4 percent for the general plan and 98.2 percent for the police and firefighter plan.

The Airports Authority’s utility expenditures for 2010 were $24.4 million, a decrease of $3.8 million from 2009. In 2009, fuel prices began to moderate around the world, resulting in a leveling of the cost of utilities purchased by the Airports Authority, and in 2010, the Airports Authority joined an energy consortium, which further reduced utility expenses.

2010 Aviation Operating Expenses

25.8%, Salaries and related benefits

4.2%, Utilities

0.9%, Lease from U.S. government

37.6%, Depreciation and amortization

31.5%, Materials, supplies, equipment, contract services and other

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Depreciation and amortization expense in 2010 was $215.6 million. This was an increase of $30.8 million from 2009. In 2009, the Airports Authority completed and put into service at Dulles International the passenger security mezzanine, which was the first element of the AeroTrain and the first phase of the expanded International Arrivals Building (IAB). In January 2010, the AeroTrain became operational at Dulles International, and in November 2010, the Airports Authority completed the second phase of the IAB expansion.

A cost allocation plan is used to identify and quantify all overhead and other indirect costs appropriately allocable to the Dulles Toll Road or to the Dulles Corridor Metrorail Project within the Dulles Corridor Enterprise Fund. As a result of this allocation plan, $7.3 million and $5.7 million of Aviation Enterprise Fund operating expenses were allocated to the Dulles Corridor Enterprise Fund in 2010 and 2009, respectively.

DCE Operating RevenuesCash revenues $ 23,715,733 $ 19,199,661Automated vehicle identification revenues 63,606,906 45,146,685Violation revenues 715,529 547,208

Total $ 88,038,168 $ 64,893,554

2010 2009Fiscal Years Ended December 31,

DCE Operating Revenues (in millions)

2010 2009

20

40

0

60

$80

Cash revenues

Violation revenues

Automated vehicle identification revenues

Dulles Corridor Enterprise Fund — Operating Revenues

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For the year ended December 31, 2010, the Airports Authority recorded toll revenue of $88.0 million, which consisted of Automated Vehicle Identification (AVI) or electronic toll collections of $63.6 million, cash collections of $23.7 million and violations revenue of $716,000. AVI collection as a percentage of total operating revenue was 72.2 percent. In 2009, the first full year the Airports Authority operated the Dulles Toll Road, toll revenue totaled $64.9 million, which consisted of

AVI collections of $45.1 million, cash collections of $19.2 million and violations revenue of $547,000. AVI collection as a percent of total operating revenue was 69.6 percent. Overall increases in total operating revenue in 2010 were primarily driven by toll rate increases that went into effect on January 1, 2010.

DCE Operating Expenses

Materials, equipment, supplies, contract services and other $ 22,827,232 $ 24,836,947Salaries and related benefits 8,260,815 4,071,427Utilities 189,956 67,989Depreciation and amortization 3,523,732 1,118,482

Total $ 34,801,735 $ 30,094,845

2010 2009Fiscal Years Ended December 31,

DCE Operating Expenses (in millions)

2010 2009

10

0

20

$30

Dulles Corridor Enterprise Fund — Operating Expenses

Salaries and related benefits

Utilities

Depreciation and amortization

Materials, equipment, supplies, contract services and other

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For the years ended December 31, 2010, and 2009, the Dulles Corridor Enterprise Fund recorded $34.8 million and $30.1 million in operating expenses, respectively. In 2010, operating expenses were primarily comprised of materials, supplies, equipment, contract services and other, which totaled $22.8 million and included $6.2 million in electronic toll collection fees paid to the third-party processor of AVI transactions, $3.7 million in maintenance and repair costs, and $1.4 million in contractual snow removal costs. In 2009, materials, supplies, equipment, contract service and other totaled $24.8 million, which included $9.5 million paid to VDOT for operations of the Dulles Toll Road through September 30, 2009, and $5.3 million in electronic toll collection fees paid to the third-party processor of AVI transactions.

The majority of costs related to the Dulles Corridor Enterprise Fund are directly charged to the Fund. In certain instances, overhead costs for the Airports Authority are initially paid from the Aviation Enterprise Fund but are appropriately allocable to the Dulles Corridor Enterprise Fund as costs associated with operation of the Dulles Toll Road or as costs of the Dulles Corridor Metrorail Project. The Airports Authority completed its first cost allocation plan in 2009. In 2010, $7.3 million was allocated from the Aviation Enterprise Fund to the Dulles Corridor Enterprise Fund, with $4.6 million allocated to the Dulles Toll Road and $2.7 million allocated to the Dulles Corridor Metrorail Project. In 2009, $5.7 million was allocated from the Aviation Enterprise Fund to the Dulles Corridor Enterprise Fund, with

$3.0 million allocated to the Dulles Toll Road and $2.7 million to the Dulles Corridor Metrorail Project.

Salaries and related benefits expenses increased $4.2 million from $4.1 million in 2009, to $8.3 million in 2010. The increase was due to a $2.0 million increase in salaries and benefits for Dulles Toll Road and Metrorail Project employees and a $2.2 million increase in allocated salaries and benefits expenses.

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Board of Directors

Dennis L. Martire

Michael A. Curto3

Vice ChairmanThe Honorable Thomas M. Davis III1

Leonard Manning8

The Honorable H.R. Crawford

ChairmanCharles D. Snelling

Frank M. Conner III

Shirley Robinson Hall7

The Honorable David G. Speck10

Jack Andrew Garson6

The Honorable William W. Cobey Jr.

Warner H. Session9

Richard S. “Dickie” Carter2

Mame Reiley

The Honorable Michael David Epstein5

Robert Clarke Brown

Mamadi Diané4

Michael L. O’Reilly

1 Appointed November 24, 2010; elected Vice Chairman April 20, 2011

2Appointed March 15, 20113Appointed January 10, 2011

4 Term expired January 5, 2009; served until March 15, 2011

5 Term expired November 30, 2010; served until January 10, 2011

6Resigned March 8, 20117Appointed March 15, 2011

8 Term expired January 5, 2011; served until March 15, 2011; served as Vice Chairman from January 1, 2011 to March 15, 2011

9Appointed March 15, 201110Term expired November 23, 2010

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Management

E. Lynn HamptonPresident and Chief Executive Officer 1

Margaret E. McKeough Executive Vice President and Chief Operating Officer

Quince T. Brinkley, Jr. Vice President and Secretary

Steven C. Baker Vice President for Business Administration

Christopher U. Browne Vice President and Airport Manager Washington Dulles International

George R. EllisVice President for Information and Telecommunications Systems

Frank D. Holly, Jr.Vice President for Engineering

Valerie HoltVice President for Audit

J. Paul Malandrino, Jr.Vice President and Airport Manager Ronald Reagan Washington National

Andrew T. Rountree Vice President for Finance and Chief Financial Officer 2

Philip SunderlandVice President and General Counsel

Elmer H. Tippett, Jr.Vice President for Public Safety

Mark Treadaway Vice President for Air Service Planning and Development, and Acting Vice President for Communications

Arl B. WilliamsVice President for Human Resources

1 Effective May 9, 2010 James E. Bennett retired on May 8, 2010

2Effective December 2, 2010

1 Aviation Circle, Washington, D.C. 20001-6000703.417.8745 www.mwaa.com