7b supp
ITEM NO.: 7b_Supp____ DATE OF MEETING: May 14, 2013 Q1 2013 Performance Report Port of Seattle Commission Briefing May 14, 2013 2013 Revised Operating Budget 2012 2013 2013 Budget vs. Rvsd Bud ($ in thousands) Actual Budget Rvsd Bud $ % Aeronautical Revenues 233,112 249,799 245,623 (4,176) -1.7% Other Operating Revenues 288,540 300,780 290,010 (10,770) -3.7% Total Operating Revenues 521,652 550,579 535,633 (14,946) -2.8% Total Operating Expenses 297,970 328,912 323,943 (4,969) -1.5% NOI before Depreciation 223,682 221,668 211,690 (9,978) -4.7% Depreciation 167,279 171,510 171,510 0 0.0% NOI after Depreciation 56,403 50,158 40,180 (9,978) -24.8% Commission was briefed on the revised budget/forecast on April 2, 2013. Lower revised revenues due to new airline rates and charges, new container lease structure/rates, and $1.2M pass-through leasehold excise tax. Operating expenses are reduced by $4.9M budget reductions and pass-though lease hold tax. 2 Portwide Operating Summary 2012 YTD 2013 Year-to-Date YTD Bud Var Year-End Projections Revised Approved Revised Rvsd $ in 000's Actual Actual Budget $ % Budget Budget Forecast Bud Var Aeronautical Revenues 51,634 50,173 58,037 (7,864) -13.5% 249,799 245,623 245,623 0 Other Operating Revenues 68,003 61,584 64,561 (2,977) -4.6% 300,780 290,010 285,591 (4,419) Total Operating Revenues 119,637 111,757 122,598 (10,841) -8.8% 550,579 535,633 531,214 (4,419) Total Operating Expenses 65,030 65,444 77,262 11,818 15.3% 328,912 323,943 323,887 56 NOI before Depreciation 54,607 46,313 45,336 (977) -2.2% 221,667 211,690 207,327 (4,363) Depreciation 40,414 42,654 43,045 391 0.9% 171,510 171,510 171,510 0 NOI after Depreciation 14,193 3,659 2,291 (1,368) -59.7% 50,157 40,180 35,817 (4,363) Excluding Aeronautical Revenues, Other Operating Revenues for Q1 were $2.9M below the revised budget mainly due to lower revenues from Rental Cars, Concessions, and Grain. Operating Expenses for Q1 were $11.8M lower than the revised budget due to vacant positions and delay hiring, savings of outside contracted services, and timing of spending. Total Revenues are forecasting to be $4.4M below the revised budget mainly due to lower Grain revenue and T18 crane rent. Total Expenses are forecasting to be $56K below the revised budget mainly due to savings from Corporate. 3 Corporate Summary 2012 YTD 2013 Year-to-Date YTD Bud Var Year-End Projections 2012 YTD 2013 Year-to-Date YTD Bud Var Revised Approved Year-End ProjectionsRevised Rvsd Revised Approved Revised Rvsd $ in 000's Actual Actual Budget $ % Budget Budget Forecast Bud Var $ in 000's Actual Actual Budget $ % Budget Budget Forecast Bud Var Total Revenues Total Revenues 98 98 68 68 39 39 29 29 75.8% 75.8% 155 155 155 155 184 184 29 29 Executive Executive 382 382 442 442 495495 53 53 10.8% 10.8% 1,552 1,552 1,806 1,806 1,806 1,806 - - Commission 194 209 326 118 36.1% 1,483 1,445 1,427 18 Commission 194 209 326 118 36.1% 1,483 1,445 1,427 18 Legal 567 698 735 36 5.0% 3,012 3,012 3,012 - Legal Risk Services 567 637 698 672 775735 103 36 13.3% 5.0% 3,186 3,012 3,166 3,012 3,101 3,012 65 - Risk Services Health & Safety Services 637 256 672 259 278775 20103 7.0% 13.3% 1,138 3,186 1,118 3,166 1,112 3,101 5 65 Health & Safety Services Public Affairs 256 1,270 1,199 259 1,563 278 364 20 23.3% 7.0% 5,946 1,138 5,946 1,118 5,946 1,112 - 5 Public Affairs Human Resources & Development 1,270 1,188 1,199 1,173 1,2831,563 110 364 8.6% 23.3% 5,468 5,946 5,425 5,946 5,425 5,946 - - Labor Relations 247 311 293 (19) -6.3% 1,198 1,153 1,197 (44) Human Resources & Development 1,188 1,173 1,283 110 8.6% 5,468 5,425 5,425 - Information & Communications Technology 4,642 4,257 5,104 847 16.6% 20,805 20,505 20,505 - Labor Relations Finance & Budget 247 376 311 353 391293 37 (19) 9.6% -6.3% 1,877 1,198 1,777 1,153 1,777 1,197 (44) Information & Communications Technology Accounting & Financial Reporting Services 4,642 1,500 4,257 1,376 1,6255,104 249 847 15.3% 16.6% 7,055 20,805 6,835 20,505 6,80920,505 26 - Finance & Budget Internal Audit 376 278 353 291 324391 33 37 10.2% 9.6% 1,361 1,877 1,361 1,777 1,361 1,777 - Accounting & Financial Reporting Services Office of Social Responsibility 1,500 359 1,376 215 1,625 464 249 249 53.6% 15.3% 1,702 7,055 1,702 6,835 1,702 6,809 - 26 Police 5,219 5,069 5,595 526 9.4% 22,574 22,318 22,318 - Internal Audit 278 291 324 33 10.2% 1,361 1,361 1,361 - Contingency 3 60 - (60) 0.0% 450 450 450 - Office of Social Responsibility 359 215 464 249 53.6% 1,702 1,702 1,702 - Total Expenses 17,118 16,583 19,251 2,667 13.9% 78,807 78,019 77,949 70 Police 5,219 5,069 5,595 526 9.4% 22,574 22,318 22,318 - Contingency 3 60 - (60) 0.0% 450 450 450 - Total Expenses 17,118 16,583 19,251 2,667 13.9% 78,807 78,019 77,949 70 4 CDD Summary 2012 YTD 2013 Year-to-Date YTD Bud Var Year-End Projections Revised Approved Revised Rvsd $ in 000's Actual Actual Budget $ % Budget Budget Forecast Bud Var Total Revenues 7 5 - 5 0.0% - - - - Expenses Before Charges To Cap/Govt/Envrs Propects Capital Development Administration 89 90 96 6 6.7% 382 378 378 - Engineering 3,091 3,026 3,599 573 15.9% 14,904 14,853 14,858 (5) Port Construction Services 1,218 1,498 1,697 199 11.8% 6,618 6,591 6,591 - Central Procurement Office 1,190 1,177 1,107 (70) -6.3% 4,532 4,510 4,510 - Aviation Project Management 1,848 1,846 2,161 315 14.6% 8,710 8,679 8,679 - Seaport Project Management 432 573 964 390 40.5% 3,841 3,813 3,777 36 Total Before Charges to Capital Projects 7,868 8,210 9,625 1,415 14.7% 38,988 38,823 38,792 31 5 Aviation Division Summary 2012 YTD 2013 Year-to-Date YTD Rvsd Year-end Projections Revised Bud Var Approved Revised Rvsd $ in 000's Actual Actual Budget $ % Budget Budget Forecast Bud Var Aeronatical Revenues 51,634 50,173 58,037 (7,863) -13.5% 249,799 245,623 245,623 - Non-Aeronautical Revenues 33,520 32,666 35,049 (2,384) -6.8% 157,826 156,563 156,563 - Total Operating Revenues 85,154 82,839 93,086 (10,247) -11.0% 407,625 402,186 402,186 - Operating Expenses: Salaries & Benefits 21,715 22,105 23,439 1,334 5.7% 97,842 96,953 96,953 - Outside Services 4,688 5,965 10,840 4,875 45.0% 45,453 44,976 44,976 - Utilities 3,595 3,495 3,363 (132) -3.9% 12,425 12,425 12,425 - Other Airport Expenses 3,382 2,442 3,713 1,271 34.2% 15,956 14,534 14,534 - Baseline Airport Expenses 33,380 34,007 41,355 7,348 17.8% 171,676 168,888 168,888 - Environmental Remediation Liability - - - - n/a 4,615 4,615 4,615 - Total Airport Expenses 33,380 34,007 41,355 7,348 17.8% 176,291 173,503 173,503 - Corporate 7,935 7,680 8,982 1,302 14.5% 37,314 36,965 36,965 - Police Costs 3,858 3,751 4,186 435 10.4% 16,891 16,699 16,699 - Capital Development/Other Expenses 2,353 2,372 2,799 426- 15.2%n/a 11,206 10,679 10,679 -- Total Operating Expenses 47,526 47,809 57,321 9,511 16.6% 241,702 237,846 237,846 - - NOI Before Depreciation 37,628 35,030 35,765 (735) -2.1% 165,923 164,340 164,340 - Depreciation Expense 29,284 31,433 31,850 418 1.3% 126,977 126,977 126,977 - NOI After Depreciation 8,344 3,597 3,915 (318) -8.1% 38,946 37,363 37,363 - Selected Non-Operating Rev/(Exp): Capital Grants & Donations 423 - 1,839 (1,839) -100.0% 16,230 16,230 16,230 - Non-Capital Grants & Donations 0 - 317 (317) -100.0% 1,269 1,269 1,269 - Passenger Facility Charges (PFCs) 16,894 17,708 14,142 3,566 25.2% 64,844 64,844 64,844 - Customer Facility Charges (CFCs) 4,722 4,850 5,138 (289) -5.6% 20,553 20,553 20,553 - 6 Seaport Division Summary 2012 YTD 2013 Year-to-Date YTD Rvsd Bud Var Year-End Projections Revised Approved Revised Rvsd $ in 000's Actual Actual Budget $ % Budget Budget Forecast Bud Var Operating Revenue 26,115 21,331 21,907 (577) -3% 110,110 100,603 96,328 (4,275) Security Grants 816 0 87 (87) -100% 173 173 0 (173) Total Revenues 26,931 21,331 21,994 (663) -3% 110,283 100,777 96,329 (4,448) Seaport Expenses (excl env srvs) 2,710 3,174 3,482 308 9% 15,385 14,971 14,971 0 Environmental Services 302 332 373 41 11% 2,675 2,675 2,675 0 Maintenance Expenses 1,185 1,562 1,397 (165) -12% 6,360 6,076 6,076 0 P69 Facilities Expenses 130 115 132 18 13% 526 526 526 0 Other RE Expenses 86 66 89 23 26% 353 353 353 0 CDD Expenses 651 824 894 70 8% 3,530 3,475 3,475 0 Police Expenses 948 947 1,059 112 11% 4,271 4,223 4,223 0 Corporate Expenses 2,718 2,604 3,077 474 15% 12,773 12,678 12,678 0 Security Grant Expense 821 4 0 (4) NA 0 0 0 0 Envir Remed Liability 0 0 0 0 NA 1,170 1,170 1,170 0 Total Expenses 9,550 9,628 10,504 877 8% 47,043 46,147 46,147 0 Net Operating Income 17,381 11,703 11,490 213 2% 63,240 54,630 50,182 (4,448) Forecasted Revenue Variance: Grain Revenue: ($2.5 million) volume is currently forecasted to come in 52% below budget. T-18 Crane Rent: ($1.8 million) due to no minimum payment required for MHI cranes if full year volume falls below 250K lifts. Tenant has indicated lifts will be below that level. 7 Real Estate Division Summary 2012 YTD 2013 Year-to-Date YTD Bud Var Year-End Projections Revised Approved Revised Rvsd $ in 000's Actual Actual Budget $ % Budget Budget Forecast Bud Var Revenue 5,407 5,415 5,422 (6) 0% 22,776 22,776 22,776 0 Conf & Event Ctr Revenue 2,043 2,109 2,058 51 2% 9,740 9,740 9,740 0 Total Revenue 7,450 7,524 7,479 45 1% 32,516 32,516 32,516 0 Real Estate Exp(excl Conf, Maint,P69) 2,445 2,374 2,743 369 13% 11,300 11,300 11,300 0 Conf & Event Ctr Expense 1,646 1,751 1,702 (49) -3% 7,642 7,642 7,642 0 Eastside Rail Corridor 24 20 38 18 48% 177 177 177 0 Maintenance Expenses 1,585 1,735 2,147 412 19% 9,630 9,535 9,535 0 P69 Facilities Expenses 48 39 45 6 13% 178 178 178 0 Seaport Expenses 239 222 235 13 6% 1,268 1,268 1,268 0 CDD Expenses 241 210 537 326 61% 2,148 2,131 2,131 0 Police Expenses 328 313 350 37 11% 1,412 1,396 1,396 0 Corporate Expenses 1,082 1,091 1,246 155 12% 5,166 5,117 5,117 0 Envir Remed Liability 0 0 0 0 NA 80 80 80 0 Total Expense 7,638 7,756 9,042 1,287 14% 39,002 38,824 38,824 0 Net Operating Income (188) (232) (1,563) 1,332 85% (6,486) (6,308) (6,308) 0 8 Q1 2013 Financial Performance Portwide Results Commission Briefing May 14, 2013 9 Q1 Financial Highlights Total Port Operating Revenues were $111.8 million, $7.9 million, or 6.6%, lower than Q1 2012 Operating Revenues were $10.8 million, or 8.8%, below the revised budget Port wide Operating Expenses were $65.4 million, $11.8 million, or 15.3%, below the revised budget Net Income Before Depreciation was $978K, or 2.2%, above the revised budget and 15.3% lower than Q1 2012 Net Income After Depreciation was $1.4 million, or 59.7%, above the revised budget and 41.6% lower than Q1 2012 10 Q1 Major Revenue Variances 2012 YTD 2013 YTD 2013 YTD Rvsd Bud Change Major Revenues ($ in 000's) Actual Actual Rvsd Bud Variance from 2012 Aero Revenues 51,634 50,173 58,037 (7,863) (1,460) Seaport Security Grants 816 - 87 (87) (816) Public Parking 12,368 12,407 12,299 108 39 Rental Cars 6,593 5,044 6,832 (1,789) (1,549) Concessions 8,185 8,672 9,509 (837) 487 Utilities 1,879 1,606 1,745 (139) (273) Container 19,491 15,935 15,754 181 (3,556) Seaport Industrial Properties 3,881 3,993 4,068 (75) 112 Grain 1,746 251 874 (622) (1,494) Dock 955 1,071 1,136 (65) 116 Conference & Event Centers 2,043 2,109 2,058 51 66 Other 8,117 8,462 8,371 91 345 Subtotal 67,187 61,584 64,474 (2,890) (5,603) TOTAL 119,637 111,757 122,598 (10,840) (7,880) Excluding Aeronautical Revenues and Seaport Security Grants, Other Operating Revenues were $2.9M lower than the revised budget and $5.6M lower than Q1 2012. 11 Q1 Major Expense Variances 2012 YTD 2013 YTD 2013 YTD Rvsd Bud Change Major Expenses (In $ '000) Actual Actual Rvsd Bud Variance from 2012 Salaries & Benefits 22,784 23,401 24,877 1,477 617 Wages & Benefits 21,322 21,334 22,190 856 12 Payroll to Capital Projects 4,641 4,981 5,541 560 340 Equipment Expense 1,223 1,055 1,647 592 (167) Supplies & Stock 1,899 1,398 1,629 232 (501) Outside Services 8,305 9,266 16,905 7,638 961 Utilities 5,148 4,992 4,934 (58) (155) Travel & Other Employee Exps 957 913 1,662 750 (44) Promotional Expenses 89 198 420 222 109 Other Expenses 5,431 5,017 5,450 433 (414) Charges to Capital Projects (6,768) (7,111) (7,995) (884) (343) TOTAL 65,030 65,444 77,262 11,818 414 Operating Expenses were $11.8M lower than the revised budget mainly due to vacant positions and timing of spending. Operating Expenses were $414K higher than Q1 2012 mainly due to higher payroll costs and outside services expense. 12 Q1 Operating Income Summary 2012 YTD 2013 YTD 2013 YTD Rvsd Bud Var ($ in 000's) Actual Actual Rvsd Bud $ % Aeronautical Revenues 51,634 50,173 58,037 (7,864) -13.5% Other Operating Revenues 68,003 61,584 64,561 (2,977) -4.6% Total Operating Revenues 119,637 111,757 122,598 (10,841) -8.8% Total Operating Expenses 65,030 65,444 77,262 11,818 15.3% NOI before Depreciation 54,607 46,313 45,336 977 2.2% Depreciation 40,414 42,654 43,045 391 0.9% NOI after Depreciation 14,193 3,659 2,291 1,368 59.7% Total Operating Revenues were $10.8M below the revised budget. Total Operating Expenses were $11.8M lower than the revised budget. NOI before Depreciation was $46.3M, $977K higher than the revised budget. 13 2013 Year-End Forecast 2012 2013 Approved Revised Rvsd Bud Var ($ in 000's) Actual Forecast Budget Budget $ % Aeronautical Revenues 233,112 245,623 249,799 245,623 0 0.0% Other Operating Revenues 288,540 285,591 300,780 290,010 (4,419) -1.5% Total Operating Revenues 521,652 531,214 550,579 535,633 (4,419) -0.8% Total Operating Expenses 297,970 323,925 328,912 323,981 56 0.0% NOI before Depreciation 223,682 207,289 221,667 211,652 (4,363) -2.0% Depreciation 167,279 171,510 171,510 171,510 0 0.0% NOI after Depreciation 56,403 35,779 50,157 40,142 (4,363) -8.7% Total Revenues are forecasting to be $4.4M below the revised budget mainly due to lower Grain revenue and T18 crane rent. Total Expenses are forecasting to be $56K below the revised budget mainly due to savings from Corporate. 14 Capital Spending by Division 2013 YTD 2013 2013 Budget Variance $ in 000's Actual Forecast Budget $ % Aviation 26,669 173,275 174,651 1,376 0.8% Seaport 895 9,362 11,129 1,767 15.9% Real Estate 644 9,904 12,165 2,261 18.6% Corporate & CDD 1,915 14,564 14,976 412 2.8% TOTAL 30,123 207,105 212,921 5,816 2.7% 15 Aviation Division Q1 2013 Financial Performance Commission Briefing May 14, 2013 16 Aviation Business Highlights Business events: Airlines Realignment in progress Escalator renewal project near completion No new airline agreement continuing to charge 2012 carryover rates Airline activity: 2013 YTD enplanements up 3.6% from 2012 If non-revenue passengers excluded, Q1 growth is 1.7% Non-Airline NOI before debt service and amortization: 2013 YTD revenues are 6.8% below revised budget Operating expenses: 2013 YTD expenses are 16.8% below revised budget Airline costs: 2013 CPE at revised budget of $13.65 Capital program: 2013 forecasted spending at $173.3 million 17 Activity 2012 2013 % Passenger Enplanements YTD YTD Variance 2012 2013 % International 353,080 386,504 9.5% Domestic 3,250,728 3,347,312 3.0% Figures in 000's Actual Budget Variance Total Enplanements 3,603,808 3,733,816 3.6% Total Enplanements 16,597 17,017 2.5% International enplaned passengers saw greater 2013 YOY growth of 9.5% than domestic enplanements of 3.0%. Q1 2013 total enplanements experienced YOY positive growth of 3.6%, however, if non-revenue passengers are excluded, Q1 growth would be 1.7%. 18 Division Summary 2012 YTD 2013 Year-to-Date YTD Rvsd Year-end Projections Revised Bud Var Approved Revised Rvsd $ in 000's Actual Actual Budget $ % Budget Budget Forecast Bud Var Aeronatical Revenues 51,634 50,173 58,037 (7,863) -13.5% 249,799 245,623 245,623 - Non-Aeronautical Revenues 33,520 32,666 35,049 (2,384) -6.8% 157,826 156,563 156,563 - Total Operating Revenues 85,154 82,839 93,086 (10,247) -11.0% 407,625 402,186 402,186 - Operating Expenses: Salaries & Benefits 21,715 22,105 23,439 1,334 5.7% 97,842 96,953 96,953 - Outside Services 4,688 5,965 10,840 4,875 45.0% 45,453 44,976 44,976 - Utilities 3,595 3,495 3,363 (132) -3.9% 12,425 12,425 12,425 - Other Airport Expenses 3,382 2,442 3,713 1,271 34.2% 15,956 14,534 14,534 - Baseline Airport Expenses 33,380 34,007 41,355 7,348 17.8% 171,676 168,888 168,888 - Environmental Remediation Liability - - - - n/a 4,615 4,615 4,615 - Total Airport Expenses 33,380 34,007 41,355 7,348 17.8% 176,291 173,503 173,503 - Corporate 7,935 7,680 8,982 1,302 14.5% 37,314 36,965 36,965 - Police Costs 3,858 3,751 4,186 435 10.4% 16,891 16,699 16,699 - Capital Development/Other Expenses 2,353 2,372 2,799 426- 15.2%n/a 11,206 10,679 10,679 -- Total Operating Expenses 47,526 47,809 57,321 9,511 16.6% 241,702 237,846 237,846 - - NOI Before Depreciation 37,628 35,030 35,765 (735) -2.1% 165,923 164,340 164,340 - Depreciation Expense 29,284 31,433 31,850 418 1.3% 126,977 126,977 126,977 - NOI After Depreciation 8,344 3,597 3,915 (318) -8.1% 38,946 37,363 37,363 - Selected Non-Operating Rev/(Exp): Capital Grants & Donations 423 - 1,839 (1,839) -100.0% 16,230 16,230 16,230 - Non-Capital Grants & Donations 0 - 317 (317) -100.0% 1,269 1,269 1,269 - Passenger Facility Charges (PFCs) 16,894 17,708 14,142 3,566 25.2% 64,844 64,844 64,844 - Customer Facility Charges (CFCs) 4,722 4,850 5,138 (289) -5.6% 20,553 20,553 20,553 - 19 YTD Operating Expenses 2013 YTD operating expenses are lower than revised budget by $9.5 million due to the net of the following: Positive Variance of $9.6 million: Negative Variance of $100K: Delays in airline realignment expenses $3.0M RCF water utility usuage higher than anticipated $132K Delays in expenditure of contracted services $1.7M: - KONE escalator/elevator svs $244k - Sustainability aviation master plan $207k - Concession master plan $133k - Landscaping maintenance $136k - Tenant marketing $75k Vacancies and payroll savings $978K Corporate/CDD/Police allocated expenses $2.2M Employee training and development expenses $344K Delay in airline trade and promotional events $207K Litigated claims reserve adjustment $189K Delay in Fire Department furniture purchase $165K Other Aviation Division savings $800K 20 Aeronautical Business 2012 2013 2013 2013 Rvsd Bud Var Change from 2012 Revised Approved $ in 000's Actual Forecast Budget Budget $ % $ % Net Passenger Airline Costs 219,598 232,197 232,197 236,373 - 0.0% 12,600 5.7% Enplanements 16,597 17,017 17,017 17,017 - 0.0% 419 2.5% Passenger Airline CPE 13.23 13.65 13.65 13.89 - 0.0% 0.41 3.1% Net passenger airline costs increases are due to airlines realignment and capital costs increases. 2013 approved budget assumed continuation of SLOA II. Revised budget assumes airline rates and charges based on a resolution. 21 Non-Aeronautical Business 2012 2013 2013 2013 Rvsd Bud Var Change from 2012 Revised Approved $ in 000's Actual Forecast Budget Budget $ % $ % Non-Aero Revenues Rental Cars 28,288 26,737 26,737 26,737 - 0.0% (1,551) -5.5% CFC Operating Revenues (RCF) 9,745 11,013 11,013 11,013 - 0.0% 1,268 13.0% RCF Reimbursable Revenue 38 222 222 1,486 - 0.0% 184 484.5% RCF Subtotal 38,072 37,972 37,972 39,236 - 0.0% (100) -0.3% Public Parking 49,781 50,948 50,948 50,948 - 0.0% 1,167 2.3% Ground Transportation 7,900 7,267 7,267 7,267 - 0.0% (633) -8.0% Concessions 37,998 41,263 41,263 41,263 - 0.0% 3,265 8.6% Other 19,273 19,113 19,113 19,113 - 0.0% (160) -0.8% Total Non-Aero Revenues 153,022 156,563 156,563 157,826 - 0.0% 3,541 2.3% RCF Operating Expense 6,196 7,858 7,858 9,121 - 0.0% 1,662 26.8% Operating Expense 64,855 67,985 67,985 68,911 - 0.0% 3,130 4.8% Share of terminal O&M 18,366 21,436 21,436 18,615 - 0.0% 3,070 16.7% Less utility internal billing (19,883) (17,095) (17,095) (17,095) - 0.0% 2,788 -14.0% Net Operating & Maint 69,533 80,184 80,184 79,552 - 0.0% 10,651 15.3% Net Operating Income 83,489 76,379 76,379 78,274 - 0.0% (7,110) -8.5% Adjusted Net Operating Income: Non-Aeronautical NOI 83,489 76,379 76,379 78,274 - 0.0% (7,110) -8.5% Less: CFC Surplus (3,702) (4,619) (4,619) (3,464) - 0.0% (917) 24.8% Adjusted Non-Aero NOI 79,787 71,760 71,760 74,810 - 0.0% (8,027) -10.1% 2012 2013 2013 2013 Rvsd Bud Var Change from 2012 Revised Approved Actual Forecast Budget Budget $ % $ % Revenues Per Enplanement Parking 3.00 2.99 2.99 2.99 - 0.0% (0.01) -0.2% Rental Cars (excludes CFCs) 1.70 1.57 1.57 1.57 - 0.0% (0.13) -7.6% Ground Transportation 0.48 0.43 0.43 0.43 - 0.0% (0.05) -11.0% Concessions 2.29 2.42 2.42 2.42 - 0.0% 0.13 5.9% Other 1.75 1.78 1.78 1.86 - 0.0% 0.03 1.9% Total Revenues 9.22 9.20 9.20 9.27 - 0.0% (0.02) -0.2% Primary Concessions Sales / Enpl 10.91 11.25 11.25 11.25 - 0.0% 0.34 3.1% 22 Net Cash Flow: NOI After Debt Service & Interest Income 2012 2013 2013 2013 Rvsd Bud Var Change from 2012 Revised Approved $ in 000's Actual Forecast Budget Budget $ % $ % Aeronautical Operations: Total Revenues 233,000 245,623 245,623 249,799 - 0.0% 12,622 5.4% Baseline Operating Costs 137,189 138,165 138,165 142,652 - 0.0% 976 0.7% Airlines Realignment 5,802 16,069 16,069 16,069 - 0.0% 10,267 177.0% Regulated Materials 4,040 3,428 3,428 3,428 - 0.0% (612) -15.1% Total Operating Costs 147,031 157,662 157,662 162,150 - 0.0% 10,631 7.2% Net Operating Income 85,969 87,960 87,960 87,649 - 0.0% 1,991 2.3% Debt Service: Gross Debt Service 124,200 127,278 127,278 127,685 - 0.0% 3,077 2.5% Passenger Facility Charge (PFC) (33,717) (33,800) (33,800) (33,800) - 0.0% (83) 0.2% Terminal Non-aero Allocation (12,562) (15,409) (15,409) (13,763) - 0.0% (2,847) 22.7% Net Debt Service 77,922 78,069 78,069 80,122 - 0.0% 148 0.2% Aero NOI after Debt Service 8,048 9,891 9,891 7,527 - 0.0% 1,844 22.9% Non-Aeronautical Operations: Revenues 153,022 156,563 156,563 157,826 - 0.0% 3,541 2.3% Operating Expenses 69,533 80,184 80,184 79,552 - 0.0% 10,651 15.3% Net Operating Income 83,489 76,379 76,379 78,274 - 0.0% (7,110) -8.5% Debt Service: Gross Debt Service 50,652 53,288 53,288 50,282 - 0.0% 2,636 5.2% Customer Facility Charge (CFC) (20,048) (19,873) (19,873) (19,873) - 0.0% 175 -0.9% Terminal Non-aero Allocation 12,562 15,409 15,409 13,763 - 0.0% 2,847 22.7% Net Debt Service 43,166 48,824 48,824 44,173 - 0.0% 5,658 13.1% Non-Aero NOI after Debt Service 40,323 27,555 27,555 34,101 - 0.0% (12,768) -31.7% Total Aviation Net Operating Income 169,458 164,340 164,340 165,923 - 0.0% (5,119) -3.0% Net Debt Service 121,088 126,894 126,894 124,295 - 0.0% 5,806 4.8% NOI After Debt Service 48,371 37,446 37,446 41,628 - 0.0% (10,925) -22.6% Add ADF Interest Income 3,215 4,526 4,526 4,526 - 0.0% 1,311 40.8% Add Non-Operating TSA Grant 919 1,269 1,269 1,269 - 0.0% 350 38.1% Net Cash Flow after D/S & Interest 52,505 43,241 43,241 47,423 - 0.0% (9,264) -17.6% 23 Capital Variance Airfield pavement replacement variance reflects an increase in scope due to the extent of deteriorating panels. Doug Fox site improvements project was delayed due to a signage issue with the City of SeaTac, an asphalt re-surfacing issue with the tenant, and a maintenance provision in the lease agreement. Most construction work will now begin in 2014. Convert Ticket Zone 2 Pushback costs have been reallocated between expense and capital 24 2013 Capital Authorization Requests 25 Seaport Division Q1 2013 Performance Report Commission Briefing May 14, 2013 Seaport Business Goals TEU volume was 384K, down 19% from Q1 YTD 2012. Full inbound TEU's were down 19% and full outbound were down 16%. Grain volume was at 258K metric tons, down 84% from 2012 YTD and 68% under 2013 YTD budget. Cruise season will commence on May 1st. Radio frequency identification (RFID) program implemented for trucks calling Port container terminals. Seaport Division staff completed CPI Training. 27 Seaport Organizational Goals Environmental Stewardship 25% of frequent ship calls are meeting Northwest Ports Clean Airs Standards target. Joined Green Marine, a marine industry environmental excellence program, becoming the first U.S. Port outside of the Great Lakes to do so. Contract awarded for early action Superfund project clean-up at Terminal 117. Received 10 year programmatic permit for harbor wide dock piling maintenance and repair. Regional Transportation Closely engaged in freight mobility management for south harbor road construction projects and detour routes. 28 Seaport Q1 YTD Operating Results 2012 YTD 2013 YTD 2013 YTD 2013 Revised Bud Var Revised $ in 000's Actual Actual Budget $ % Operating Revenue 26,115 21,331 21,907 (577) -3% Security Grants 816 0 87 (87) -100% Total Revenues 26,931 21,331 21,994 (663) -3% Seaport Expenses (excl env srvs) 2,710 3,174 3,482 308 9% Environmental Services 302 332 373 41 11% Maintenance Expenses 1,185 1,562 1,397 (165) -12% P69 Facilities Expenses 130 115 132 18 13% Other RE Expenses 86 66 89 23 26% CDD Expenses 651 824 894 70 8% Police Expenses 948 947 1,059 112 11% Corporate Expenses 2,718 2,604 3,077 474 15% Security Grant Expense 821 4 0 (4) NA Envir Remed Liability 0 0 0 0 NA Total Expenses 9,550 9,628 10,504 877 8% Net Operating Income 17,381 11,703 11,490 213 2% 29 Seaport Division Key Variances Revenue Detail ($'s in Thousands) Q1 YTD Business Unit Variance to Budget Better (Worse) Containers $181 Grain ($622) Industrial Properties ($75) Cruise $4 Docks ($65) Security Grants ($87) Total ($663) 30 Seaport Division Key Variances Expense Detail ($'s in Thousands) Q1 YTD Expenses Variance to Budget Better (Worse) Seaport Expenses $349 Corporate $586 CDD $70 Maintenance ($165) All Other $37 Total Expense $877 31 Seaport Business Groups NOI Before Depreciation ($'s in Millions) Q1 YTD Variance to Budget Actual NOI Better (Worse) Containers $11.2 $0.8 Grain $0.0 ($0.5) Sea Industrial Properties $2.2 $0.1 Cruise ($1.3) $0.1 Docks ($.2) ($0.1) Security ($.2) ($0.1) Total Seaport $11.7 $0.2 32 Seaport Full Year Operating Forecast 2012 2013 Approved Revised 2013 Revised Bud Var $ in 000's Actual Forecast Budget Budget $ % Operating Revenue 101,715 96,328 110,110 100,603 (4,275) -4% Security Grants 2,226 0 173 173 (173) -100% Total Revenues 103,941 96,328 110,283 100,777 (4,448) -4% Seaport Expenses (excl env srvs) 13,684 14,971 15,385 14,971 0 0% Environmental Services 2,207 2,675 2,675 2,675 0 0% Maintenance Expenses 6,040 6,076 6,360 6,076 0 0% P69 Facilities Expenses 532 526 526 526 0 0% Other RE Expenses 233 353 353 353 0 0% CDD Expenses 4,244 3,475 3,530 3,475 0 0% Police Expenses 3,969 4,223 4,271 4,223 0 0% Corporate Expenses 11,538 12,678 12,773 12,678 0 0% Security Grant Expense 2,227 0 0 0 0 NA Envir Remed Liability 26 1,170 1,170 1,170 0 0% Total Expenses 44,700 46,147 47,043 46,147 0 0% Net Operating Income 59,241 50,181 63,240 54,630 (4,448) -8% Forecasted Revenue Variance: Grain Revenue: ($2.5 million) volume is currently forecasted to come in 52% below budget. T-18 Crane Rent: ($1.8 million) due to no minimum payment required for MHI cranes if full year volume falls below 250K lifts. Tenant has indicated lifts will be below that level. 33 Seaport Capital 2013 $ in 000's 2013 YTD 2013 2013 Budget Variance Actual Forecast Budget $ % Seaport $895 $9,362 $11,129 $1,767 16% 34 Real Estate Division Q1 2013 Performance Report Commission Briefing May 14, 2013 Real Estate 1st Quarter Key Events Full Year Net Operating Income forecasted to meet budget. The 85th Annual Blessing of the Fleet was held at Fishermen's Terminal in March. Real Estate Development & Planning: Issued a request for proposals for the Des Moines Creek Business Park site Reached settlement agreement with King County related to the condemnation action to acquire an interest in the Terminal 91 West Yard site for its CSO project 36 Real Estate 1st Quarter Key Events Eastside Rail Corridor Completed the sale of all non-freight area on the rail corridor to King County Bankruptcy court approved the sale of GNP Rly Inc. (freight operator) assets to Eastside Community Rail LLC. 37 Real Estate Business Goals Provide Compelling Value and Asset Utilization Occupancy Rates: Commercial property at 91% occupancy, slightly below target of 92% but above 2013 Q1 Seattle market average of 88%. Moorage Occupancy Rates: Fishermen's Terminal and Maritime Industrial Center at 79% YTD average occupancy, below target of 81%. Recreational Marinas at 94%, above target of 91%. 38 Real Estate Division Qtr 1 Operating Results 2012 YTD 2013 YTD 2013 YTD 2013 Rvsd Bud Var Revised $ in 000's Actual Actual Budget $ % Revenue 5,407 5,415 5,422 (6) 0% Conf & Event Ctr Revenue 2,043 2,109 2,058 51 2% Total Revenue 7,450 7,524 7,479 45 1% Real Estate Exp(excl Conf, Maint,P69) 2,445 2,374 2,743 369 13% Conf & Event Ctr Expense 1,646 1,751 1,702 (49) -3% Eastside Rail Corridor 24 20 38 18 48% Maintenance Expenses 1,585 1,735 2,147 412 19% P69 Facilities Expenses 48 39 45 6 13% Seaport Expenses 239 222 235 13 6% CDD Expenses 241 210 537 326 61% Police Expenses 328 313 350 37 11% Corporate Expenses 1,082 1,091 1,246 155 12% Envir Remed Liability 0 0 0 0 NA Total Expense 7,638 7,756 9,042 1,287 14% Net Operating Income (188) (232) (1,563) 1,332 85% 39 Real Estate Division Q1 Key Variances Revenue Detail ($'s in Thousands) 2013 Year to Date Variance to Budget Business Unit Better (Worse) Recreational Boating $53 Fishing & Commercial ($54) Commercial Properties ($70) Conference & Event Centers $51 Eastside Rail $2 RE Development & Planning $28 Maintenance $35 Total $45 40 Real Estate Division Q1 Key Variances Expense Detail ($'s in Thousands) 2013 Year to Date Variance to Budget Expense Better (Worse) Maintenance $412 RE Expense (excl Conference & Event, Maint, P69) $369 CDD $326 Corporate $192 Conference & Event Centers ($49) All Other $38 Total Expense $1,287 41 Real Estate Business Groups NOI Before Depreciation ($'s in Thousands) Q1 YTD Variance to Budget Actual NOI Better (Worse) Recreational Boating $418 $317 Fishing & Commercial ($536) $365 Commercial Properties ($252) $489 Conference & Event Centers $267 $18 Eastside Rail ($64) $26 RE Development & Planning ($65) $117 Total Real Estate ($232) $1,332 42 Real Estate Division Full Year Forecast 2012 2013 Approved Revised 2013 Rvsd Bud Var $ in 000's Actual Forecast Budget Budget $ % Revenue 22,445 22,776 22,776 22,776 0 0% Conf & Event Ctr Revenue 8,863 9,740 9,740 9,740 0 0% Total Revenue 31,308 32,516 32,516 32,516 0 0% Real Estate Exp (excl Conf, Maint,P69) 10,564 11,300 11,300 11,300 0 0% Conf & Event Ctr Expense 6,816 7,642 7,642 7,642 0 0% Eastside Rail Corridor 293 177 177 177 0 0% Maintenance Expenses 9,110 9,535 9,630 9,535 0 0% P69 Facilities Expenses 198 178 178 178 0 0% Seaport Expenses 1,244 1,268 1,268 1,268 0 0% CDD Expenses 1,084 2,131 2,148 2,131 0 0% Police Expenses 1,374 1,396 1,412 1,396 0 0% Corporate Expenses 4,836 5,117 5,166 5,117 0 0% Envir Remed Liability 6 80 80 80 0 0% Total Expense 35,525 38,824 39,002 38,824 0 0% Net Operating Income (4,217) (6,308) (6,486) (6,308) 0 0% 43 Real Estate Capital 2013 $ in 000's 2013 YTD 2013 2013 Budget Variance Actual Forecast Budget $ % Real Estate 644 9,904 12,165 2,261 19% 44 Capital Development Division Q1 2013 Performance Report Commission Briefing May 14, 2013 Capital Development Division Q1 2013 Business Events Began construction of utility relocation for Sound Transit South Link extension. Significantly narrowed list of items requiring resolution for new parking garage revenue control system. Reached agreement with TSA on funding and consultant on scope and budget for 30% design of optimization and recapitalization of baggage system screening devices. Turned over Electrical Ground Support Equipment (eGSE) demonstration project for use by Alaska. Labor & Industries approved use of sleep mode for new escalators (44 escalator project), first such approval in State. Added list of future procurements to external website. Participated with reauthorization committee for RCW 39.10 legislation. Hosted Gonzaga University Entrepreneurial Leadership Program undergraduate students interested in engineering and communication careers. Participated in photography documentation classes by Damage Assessment Team members and others. 46 Capital Development Division Q1 2013 Business Events Achieved beneficial Occupancy and Substantial Completion status in March 2013 for Baggage Claim Device 14 project. Completed Airline Realignment Tenant Improvement: relocation of American, Jet Blue and Frontier from Ticketing Zone 2 to Zone 5. Completed the shell in March 2013 to allow upcoming tenant construction of a new duty free retail space for South Satellite West End Project. Key PCS projects for the first quarter are 911 call center, Central Terminal Expansion (CTE) elevator access upgrade, B exit security breach control, airline relocation signage, stage 2 mechanical energy conversation, noise remedy upgrades, Gate A6 ramp installation, Terminal 91 lift station, Terminal 115 pavement repair, and 1st floor south exit lane. Resident Engineer issued Substantial Completion Certification to the contractor for the Terminal 5 Phase 1 Dredging project. Radio Frequency Identification Device (RFID) - Terminals are seeing increased compliance as the April 1, 2013 deadline approaches. Terminal 115 Waterline break and Pavement repairs - An emergency declaration executed on January 25, 2013. The project was completed and made available to the tenant for use on scheduled date of March 22, 2013. 47 Project Hard/Soft Costs 48 Capital Development Division Key Indicators Cost Growth During Construction 49 Capital Development Division Key Indicators continued Design Schedule Growth Initial Commission Planned Actual Construction Project Authorized Start Construction Contract Award of Design Contract Award (Execution) (Execution) 1st Quarter 2013 S Satellite Common Use Exp 6-Dec-11 23-Mar-12 26-May-12 T-18 Fender Damages Repl. 6-Apr-10 1-Feb-11 2-Nov-10 TWIC Round 7 Power & Comm 19-May-09 12-Apr-11 29-Nov-11 Infrast. P 66 Bell St Brdg Prep & Paint 10-Apr-12 1-Aug-12 17-Sep-12 NER Ph 1 Final Paving (C#7) 11-Apr-06 21-Apr-10 17-May-10 Fire Station Reroof - Ph1 26-Jul-11 20-Jun-12 7-May-12 T5 Maint Dregding 2012 14-Aug-12 29-Oct-12 6-Nov-12 Pond M Mod/SDS Mod #3 28-Jul-09 15-May-10 5-May-11 50 Capital Development Division Key Indicators continued Construction Schedule Growth Planned Actual Construction Planned Actual Substantial Construction Project Construction Contract Award Substantial Completion of Schedule Contract Award (Execution) Completion of Construction Growth (Execution) Construction 1st Quarter 2013 S Satellite Common Use Exp 23-Mar-12 26-May-12 22-Sep-12 21-Sep-12 -0.8% T-18 Fender Damages Repl. 1-Feb-11 2-Nov-10 30-Apr-12 16-Mar-12 -8.3% TWIC Round 7 Power & Comm Infrast. 12-Apr-11 29-Nov-11 7-May-12 21-May-12 8.7% P 66 Bell St Brdg Prep & Paint 1-Aug-12 17-Sep-12 9-Nov-12 31-Dec-12 98.1% NER Ph 1 Final Paving (C#7) 21-Apr-10 17-May-10 12-Jan-11 18-Nov-11 129.2% Fire Station Reroof - Ph1 20-Jun-12 7-May-12 31-Oct-12 31-Oct-12 0.0% T5 Maint Dregding 2012 29-Oct-12 6-Nov-12 1-Mar-13 8-Feb-13 -18.3% Pond M Mod/SDS Mod #3 15-May-10 5-May-11 22-Sep-11 16-Dec-11 60.7% 51 CPO Procurement Time Procurement Schedule Total Time Receipt of Scope to Execution (Avg # Days) 2012 2013 Goods & Services 183 days 105 days Major Public Works 60 days 71 days Small Works 47 days 42 days Service Agreements 202 days 175 days 52 CDD Gross Operating Results 2013 2012 YTD Year-to- Date YTD Bud Var Year-End Projections Revised Approved Revised Rvsd $ in 000's Notes Actual Actual Budget $ % Budget Budget Forecast Bud Var Total Revenues 7 5 - 5 0.0% - - - - Expenses Before Charges To Cap/Govt/Envrs Propects Capital Development Administration 89 90 96 6 6.7% 382 378 378 - Engineering 3,091 3,026 3,599 573 15.9% 14,904 14,853 14,858 (5) Port Construction Services 1,218 1,498 1,697 199 11.8% 6,618 6,591 6,591 - Central Procurement Office 1,190 1,177 1,107 (70) -6.3% 4,532 4,510 4,510 - Aviation Project Management 1,848 1,846 2,161 315 14.6% 8,710 8,679 8,679 - Seaport Project Management 432 573 964 390 40.5% 3,841 3,813 3,777 36 Total Before Charges to Capital Projects 7,868 8,210 9,625 1,415 14.7% 38,988 38,823 38,793 31 53 CDD Key Variances to Net Budget Variance to Q1 2013 Expenses Budget Budget YTD Var. F/(UNF) $ in 000's YTD Better (Worse) % Salaries and Benefits 7,530 535 7.1 Outside Services 1,523 1134 74.5 Travel and Other 168 111 66.0 Telecommunications 31 16 51.8 Property Rentals 17 17 100.0 General Expenses 20 (102) (500.5) All Other 335 (296) (88.4) Charges to Capital Projects (5,813) (637) 11.0 Total 3,812 778 (20.4) 54 Corporate Q1 2013 Performance Report Commission Briefing May 14, 2013 Corporate Key Events Launched of live music events at Sea-Tac Airport. Launched the 2013 Wellness Reward program with Cigna and work is underway for developing health care cost containment strategy. Finalized a flow process for incident intake for reporting to the State Auditor's Office for lost/stolen Port's assets. Completed the audit for ICT Performance and Risk Assessment. Issued Limited Tax General Obligation Refunding Bonds in the amount of $102,795,000. Launched internal outreach for new Email Communications Strategy and Communications Toolbox. 56 Corporate Key Metrics Airport Jobs helped placed people into 101 jobs with airport employers 31 Apprenticeship Opportunity Project Placements Conducted 14 small business outreach 74 small businesses were approved on the new Procurement Roster Management System (PRMS) Responded to 245 public disclosure requests Provided orientation to 23 new employees Provided 37 employee development classes 19 employees participated in the Tuition Reimbursement Program Negotiated 6 labor contracts 57 Q1 Corporate Operating Results 2012 YTD 2013 YTD Rvsd Bud Var Change from 2012 $ in 000's Actual Actual Rvsd Bud $ % $ % Total Revenues 98 68 39 29 75.8% (30) -30.6% Executive 382 442 495 53 10.8% 60 15.6% Commission 194 209 326 118 36.1% 14 7.4% Legal 567 698 735 36 5.0% 131 23.2% Risk Services 637 672 775 103 13.3% 35 5.5% Health & Safety Services 256 259 278 20 7.0% 2 1.0% Public Affairs 1,270 1,199 1,563 364 23.3% (70) -5.5% Human Resources & Development 1,188 1,173 1,283 110 8.6% (15) -1.3% Labor Relations 247 311 293 (19) -6.3% 64 26.1% Information & Communications Technology 4,642 4,257 5,104 847 16.6% (385) -8.3% Finance & Budget 376 353 391 37 9.6% (22) -5.9% Accounting & Financial Reporting Services 1,500 1,376 1,625 249 15.3% (124) -8.3% Internal Audit 278 291 324 33 10.2% 13 4.6% Office of Social Responsibility 359 215 464 249 53.6% (144) -40.1% Police 5,219 5,069 5,595 526 9.4% (150) -2.9% Contingency 3 60 - (60) 0.0% 57 2001.8% Total Expenses 17,118 16,583 19,251 2,667 13.9% (535) -3.1% All Corporate departments were under budget, except Labor Relations due to HR10 for one employee. 58 Q1 Corporate Expense by Category 2012 YTD 2013 YTD Rvsd Bud Var Change from 2012 Operating Expenses ($ in '000) Actual Actual Rvsd Bud $ % $ % Salaries & Benefits 8,744 8,698 9,398 700 7.4% (45) -0.5% Wages & Benefits 4,566 4,646 4,942 296 6.0% 80 1.8% Payroll to Capital Projects 535 797 627 (170) -27.1% 262 49.0% Equipment Expense 170 141 456 315 69.0% (28) -16.6% Supplies & Stock 108 68 146 78 53.3% (40) -36.7% Outside Services 2,016 1,675 2,668 992 37.2% (340) -16.9% Travel & Other Employee Exps 495 499 683 184 26.9% 5 0.9% Insurance Expense 510 534 575 41 7.1% 24 4.7% Litigated Injuries & Damages 152 (8) - 8 n/a (161) n/a Other 358 328 382 54 14.1% (29) -8.2% Charge to Capital (535) (797) (627) 170 -27.1% (262) 49.0% Total 17,118 16,583 19,251 2,667 13.9% (535) -3.1% Total Expenses were $2.7M or 13.9% below the revised budget mainly due to some vacant positions and timing of spending. Total Expenses were $535K lower than Q1 2012 actual mainly due to lower Outside Services and Litigated Injuries & Damages. 59 Corporate Year End Forecast 2012 2013 2013 2013 Rvsd $ in 000's Actual Forecast Budget Rvsd Bud Bud Var Explanations Total Revenues 444 184 155 155 29 Unbudgeted Police grants Executive 1,585 1,806 1,552 1,806 - Commission 799 1,427 1,483 1,445 18 Delays hiring Legal 3,083 3,012 3,012 3,012 - Risk Services 2,648 3,101 3,186 3,166 65 Lower insurance cost Health & Safety Services 1,009 1,112 1,138 1,118 5 Miscellaneous savings Public Affairs 5,860 5,946 5,946 5,946 - Human Resources & Development 5,227 5,425 5,468 5,425 - Labor Relations 1,094 1,197 1,198 1,153 (44) Due to one HR10 employee Information & Communications Technology 19,486 20,505 20,805 20,505 - Finance & Budget 1,467 1,777 1,877 1,777 Accounting & Financial Reporting Services 6,056 6,809 7,055 6,835 26 Rebate and Charges to Capital Internal Audit 1,334 1,361 1,361 1,361 - Office of Social Responsibility 1,448 1,702 1,702 1,702 - Police 21,793 22,318 22,574 22,318 - Contingency 367 450 450 450 - Total Expenses 73,263 77,949 78,807 78,019 70 Total Revenues are forecasting to be $29K above the revised budget due to unbudgeted Police grants. Total Expenses are forecasting to be $70K below the revised budget mainly due to lower insurance cost. 60
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