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July 10, 2007 | General

Moody’s affirms Edmonton Airports’ solid financial footing

Edmonton — Responding to Edmonton International Airport’s soaring passenger and cargo growth prompted by Alberta’s booming economy and expanding services, Edmonton Airports is undertaking a review of its facilities. The review will identify opportunities to better utilize existing infrastructure with new technologies, and expand areas that are now at full capacity.

Opportunities for facility expansion and optimization include:

• Parkade and surface lot parking
• Infrastructure to support expanding cargo facilities
• U.S. holdroom area
• Aircraft gates
• Airline check-in counters

“The scope of the original Air Terminal Redevelopment Project anticipated supporting 5.5 million passengers by 2015,” says Reg Milley, President and CEO of Edmonton Airports. “But with 10.5 per cent passenger growth in 2005 and 12 per cent in the first quarter of 2006, passenger numbers are far ahead of that forecast and on-track to reach 5 million this year and 5.5 million in 2007.”

Depending on the scope and timing of approved projects, Edmonton Airports anticipates that it may seek future additional expansionary capital in the range of $100M to $150M.

Affirmed Strong Financial Rating:

Today, Moody’s Investors Service revised the rating outlook of Edmonton Airports to stable from negative and affirmed its A1 senior secured rating. This financial affirmation also referenced Edmonton Airports’ ability to service additional capital.

“We are very pleased with Moody’s comments on our strong financial position,” says Milley. “This is important affirmation at a time when our customers are telling us that we need to have solid plans that envision the right airport facilities to support increasing numbers of travellers, more business and more cargo through our northern gateway airport.”

New investments will be considered on a project by project basis with each business case determining priority and timing. This staggered approach will afford maximum flexibility, enabling Edmonton Airports to control the pace and priority of the projects.

By the Numbers:

• 2005 passenger growth was 10.5%
 Canadian growth: 10.2%
 U.S. growth: 11.9%
 International growth: 13.1%
• 2005 cargo growth was 9.6%
• 2006 year-to-date passenger growth is 12%, which is the strongest passenger growth of the Country’s top eight airports
• Edmonton International Airport now offers service to over 40 non-stop destinations including nine U.S. destinations
• Edmonton International Airport offers 16 daily non-stop flights to the U.S.

EEDC’s Economic Outlook Forecasts Sustained Economic Growth:

Driven by rising energy prices, phenomenal investment in the oilsands, strong construction activity, growth in personal income, and strong consumer spending, Greater Edmonton has had a decade of strong economic growth — the greatest of any Canadian city in the past five years. With oil and gas prices expected to decline, but still remain at historically high levels, and with $85.7 billion in major projects planned for Northern Alberta, future growth prospects are very solid. GDP growth is expected to average about 3% over the next five years.

Air Terminal Redevelopment Project Background:

Edmonton Airports commenced a three-phase Air Terminal Redevelopment Project in 1997. The full cost of the redevelopment and expansion was estimated to be $300 million. Edmonton Airports’ Board approved the implementation of projects totaling $282 million. These projects were financed through the issue of a 30-year $250 million revenue bond.

Phase 1 (1998): Parkade and roadway improvements $42M
Phase 2 (2000): South Terminal and new aircraft apron $127M
Phase 3 (2003): Central Hall linking the north and south terminals $96M
Phase 3B (2005): Partial renovation and expansion of North Terminal $17M

Edmonton Airports’ vision is: To be the North’s preferred gateway to the World, and the World’s preferred gateway to the North.

Related documents:
• Moody’s News Release (pdf 49KB)
• Moody’s Credit Opinion (pdf 60KB)