9b Q2 Financial Performance Presentation
Item No. 9b supp . Meeting Date: September 11, 2018 Port of Seattle Q2 2018 Financial Performance Report 1 Portwide Financial Highlights Q2 YTD Actual: o Operating Revenues $12.7M favorable to budget and $28.4M over 2017. o The Non-Aviation Revenues $4.3M favorable to budget and $2.5M over 2017. o Operating Expenses $17.3M favorable to budget and $17.5M above 2017 mainly due to more payroll and project-related expenses. o Net Operating Income before depreciation $30.1M favorable to budget and $10.9M over 2017. Year-End Forecast: o Revenues $14.6M favorable, Expenses $3.2M favorable, and NOI $17.8M favorable to budget. o Total capital spending forecast to be $652.6M or 74.5% of the budget for 2018. Expect strong financial performance results for 2018 2 Portwide Net Operating Income Performance Both operating revenues and expenses growing gradually since 2008 3 Non-Aviation Net Operating Income Performance NOI for 2018 is forecasted to be relatively flat compared to 2008 4 Aviation Division Highlights Activity: Passenger growth in Q2 tracking slightly higher than budgeted growth of 5% Customer Service: below target through Q2 - Airport Service Quality scores below 2017 in all 6 categories. Improved Security checkpoint times. Planning for future: Sustainable Airport Master Plan initiated environmental review in July 2018 Financial Forecast: Non-Aeronautical NOI $7.3 million above budget Total Operating and Maintenance Expenses $1.4 million under budget Passenger Airline Cost per Enplaned Passenger (CPE) $0.11 below revised budget (revised for change in revenue sharing under SLOA IV) Capital spending of $594 million, below budget of $796 million Passenger growth driving financial result, creating customer service challenges 5 Airport Activity Passengers (in 000s) Growth rate 60,000 14% Year-to-date Q2: 12.9% 49,308 49,308 Passengers +6.1% 50,000 46,935 12% 45,737 Operations +5.0% 42,341 Int'l Int'l Landed weight +7.7% 10% 40,000 37,498 Int'l Int'l Cargo metric tons Int'l +5.3% Int'l 8.0% 8% 7.7% 30,000 6% 5.1% 5.1% 20,000 4% 10,000 2.6% Domestic Domestic Domestic Domestic Domestic Domestic 2% 0 0% 2014 2015 2016 2017 2018 Budget 2018 Forecast Passenger growth ahead of plan YTD, still anticipate 5% growth for year 6 Airline Cost Management (CPE) CPE Revenue Sharing ($000s) 12.00 45000 42,310 2018 Budget: 11.63 11.48 11.52 40000 Adjusted for SLOA IV 40% 11.50 37,395 revenue sharing 35000 31,908 11.00 2018 CPE Forecast: 29,436 30000 28,639 Revenue Sharing (000s) Below budget due to 10.52 25000 increased non-airline CPE 10.50 revenues generating more 20000 10.12 10.10 revenue sharing 17,034 10.00 15000 10000 9.50 5000 9.00 0 2014 2015 2016 2017 2018 Budget 2018 Forecast 2018 revenue sharing $3.3 million higher than budget anticipated with SLOA IV provision 7 Non-Aeronautical Performance Non-Aero NOI ($000s) Non-Aero Revenue per Enplanement 180,000 12.00 YTD 2018 vs. 2017: 160,000 10.11 10.17 9.93 Revenues +5.4% 9.66 9.70 9.33 10.00 Expenses +7.8% 134,164 140,000 133,101 128,727 126,861 NOI +3.6% Revenue growth: 120,000 112,618 8.00 Rental car CFC 100,386 100,000 Forecast NOI (000s) Public parking 6.00 ADR 80,000 Rev Per Enplanement GT 60,000 4.00 40,000 2.00 YTD YTD 20,000 - - - 2014 2015 2016 2017 2018 Budget 2018 Forecast ADR, parking and TNCs driving positive revenue variance in 2018 forecast 8 Total Operating Expense Performance Total O&M Expense ($000s) O&M Expense per Enplanement 450,000 13.58 Q2 YTD: 13.52 14.00 $11.6M favorable 400,000 12.77 12.19 2018 Forecast: 11.28 11.46 334,856 350,000 333,374 12.00 $1.4M favorable (0.4%) 2018 unplanned costs 299,114 300,000 10.00 per Enplanement absorbed: (000s) 261,226 Planning studies 250,000 238,140 228,172 Forecast 8.00 Bag system testing O&M Expense Pest management 200,000 6.00 O&M Expense Peak staffing support Fire Dept. OT 150,000 4.00 100,000 YTD YTD 2.00 50,000 - - - - - - 2014 2015 2016 2017 2018 Budget 2018 Forecast 2018 savings/deferrals covering unplanned expenditures 9 Capital Spending 900,000 2018 Forecast: 796,200 800,000 IAF = $215M NSAT = $132 M 700,000 Other = $249 M 593,941 600,000 Major 2018 Variances: (000s) IAF = - $109M 500,000 Capital Spending Automated Security Forecast Lane = -$15.6M 400,000 NSAT = -$9.0M 294,497 300,000 200,000 155,970 164,931 153,887 100,000 YTD - 2014 2015 2016 2017 2018 Budget 2018 Forecast 2018 spending variances primarily due to delayed spending, not project savings 10 Maritime Business Highlights Cruise Commissioners, Executive, Cruise, and Public Affairs staff participated in the successful inaugural event and first turnaround call of the Norwegian Bliss, May 30-June 02. The event garnered significant media attention. Recreational Boating Successfully hosted the Clipper Around the World at Bell Harbor Marina in June. Fishing and Commercial Operations Transitioned management of Salmon Bay Marina in June. Maritime Portfolio Management Finalized a license with Ecco Wireless that will bring a new Wi-Fi network to Shilshole Bay Marina with faster speeds and better coverage over the whole site for all customers. Stormwater Utility Obtained permit from US Army Corp of Engineers to proceed with T18 Outfall Renewal and Replacement project. Tracking to exceed the 75% assessment target. Fine tuning the businesses and advancing the Century Agenda 11 Maritime Financial Highlights Maritime YTD Q2 2018 NOI is Fav (UnFav) Incr (Decr) $4,145K favorable to budget and Net Operating Income 2016 YTD 2017 YTD 2018 Year-to-Date Budget Variance Change from 2017 ($77K) lower than 2017 $ in 000's Actual Actual Actual Budget $ % $ % Fishing & Operations (1,563) (910) (1,139) (1,643) 504 31% (230) -25% YTD Q2 Revenue favorable to Recreational Boating 748 799 987 34 953 2840% 187 23% budget by $1,234K and Cruise 2,223 2,697 2,093 956 1,137 119% (604) -22% Bulk 1,442 2,388 2,249 1,672 577 35% (139) -6% $1,732K greater than 2017 Maritime Portfolio 450 121 391 (314) 705 224% 270 223% driven by Recreational All Other (15) (478) (39) (308) 269 87% 438 92% Boating and Fishing & Total Maritime 3,285 4,618 4,541 396 4,145 1046% (77) -2% Operations. YTD Q2 Expenses favorable to budget by $2,911K and $1,809K higher than 2017. 2018 Operating profit forecast to exceed budget by $1.3M. 2018 Capital forecast to 70% of budget driven by restroom and paving projects at Shilshole Bay moving spend to 2019. Stormwater Utility forecast is tracking to budget. Maritime NOI forecast to exceed budget in 2018 12 EDD Business Highlights Real Estate Development In April Trammell Crow started construction at Des Moines Creek North property in SeaTac. Salmon Bay Marina acquisition closed in June. Design work at FT suspended pending final CIP resolution. Workforce Development Airport Career Pathways Convening - Discussion co-facilitated with airport employers convened by Airport Director Lance Lyttle to identify potential opportunities for developing career pathways training to drive opportunities for low-wage workers to increase skills and wages. Small Business Presented the Diversity in Contracting implementation plan to Commission on June 12th to address port wide goal setting, outreach, contracting, tracking, evaluation, and accountability. Portfolio Management Elevator modernization project for two passenger elevators and the service elevator at Pier 66 completed May 3, which was 3.5 weeks ahead of schedule. Tourism Port Commissioners authorized the Executive Director to execute all related contract agreements for the 26 awardees of the 2018 Tourism Marketing Support Program. Additionally launched the Spotlight Advertising Program application process at Sea-Tac Int'l Airport in June. Moving ahead on initiatives and navigating changing real estate market 13 EDD Financial Highlights EDD YTD 2018 NOI $1,951K favorable to budget and $1,216K greater than 2017 Revenue favorable to budget by $524K and $2,039K greater than 2017 driven by favorable volumes at the Conference and Event Centers. Expenses favorable to budget by $1,428K, of which $1.3M is related to underspend on EDD initiatives such as Workforce Development and EDD Grants. Y/Y expenses up $823K primarily due to increased Conference and Event Center volumes and Maintenance, offset by timing of EDD Grants. Full year NOI forecast to exceed budget by $1.2M. EDD projects to spend 98% of capital budget. Growth in Conference and Event Center volumes 14 Central Services Business Highlights The Port Commission approved $200,000 in grants for 26 tourism-related projects across the state of Washington. The Port Commission has appointed a panel of four experts to independently review costs and schedules associated with the new International Arrivals Facility (IAF) now under construction. Received U.S. Army Corps of Engineers leadership approval of the Seattle Harbor Deepening Project. Issued Intermediate Lien Revenue Bonds of $555,564,000 to finance or refinance capital improvements to aviation facilities. Replaced the Port of Seattle website that is more focus on engaging our customers and provides infrastructure for organizational content updates. Achieved a number of accomplishments in Q2 2018 15 Central Services Financial Highlights Q2 Actual: o Operating expenses $9.9M favorable to budget mainly due to some vacant positions and lower Outside Services expenses. o Operating expenses $3.4M higher than 2017 mainly due to higher payroll and more project-related expenses. Year-End Forecast: o Operating expenses forecast to be $8.0M favorable to budget due primarily to savings from Payroll and Outside Services. o Operating expenses forecast to be $19.7M higher than 2017 due to higher payroll and more project-related expenses. Departments that have the most increase include: Police: $4.9M Capital Development: $3.7M Environment & Sustainability: $3.5M Vacancies & delayed expenses led to favorable budget variances 16 Appendix Q2 2018 Financial Performance Report Portwide Financial Summary Fav (UnFav) Incr (Decr) 2016 YTD 2017 YTD 2018 Year-to-Date Budget Variance Change from 2017 $ in 000's Actual Actual Actual Budget % $ % Aeronautical Revenues 117,765 127,780 147,570 144,761 2,809 1.9% 19,791 15.5% Airport Non-Aero Revenues 100,336 112,761 118,864 113,264 5,601 4.9% 6,104 5.4% Other Port Operating Revenues 61,322 61,548 64,054 59,748 4,306 7.2% 2,506 4.1% Total Operating Revenues 279,422 302,088 330,489 317,773 12,716 4.0% 28,400 9.4% Total Operating Expenses 147,874 174,104 191,577 208,920 17,343 8.3% 17,473 10.0% NOI before Depreciation 131,549 127,984 138,912 108,853 30,059 27.6% 10,927 8.5% Depreciation 82,277 81,860 81,949 81,614 (335) -0.4% 89 0.1% NOI after Depreciation 49,271 46,124 56,963 27,238 29,724 109.1% 10,838 23.5% Operating Revenues $12.7M favorable to budget and $28.4M higher than 2017. Operating Expenses $17.3M favorable to budget but $17.5M higher than 2017. NOI before Depreciation $30.1M favorable to budget and $10.9M higher than 2017. Strong financial performance for the Port 18 Non-Aviation Financial Summary Fav (UnFav) Incr (Decr) 2016 YTD 2017 YTD 2018 Year-to-Date Budget Variance Change from 2017 $ in 000's Actual Actual Actual Budget $ % $ % NWSA Distributable Revenue 28,990 27,283 25,844 23,323 2,521 10.8% (1,439) -5.3% Maritime Revenues 22,027 24,525 26,257 25,023 1,234 4.9% 1,732 7.1% EDD Revenues 8,338 7,727 9,765 9,242 524 5.7% 2,038 26.4% SWU & Other 1,968 2,012 2,187 2,160 27 1.3% 175 8.7% Total Operating Revenues 61,322 61,548 64,054 59,748 4,306 7.2% 2,506 4.1% Total Operating Expenses 29,057 33,783 38,141 43,868 5,727 13.1% 4,358 12.9% NOI before Depreciation 32,265 27,765 25,913 15,880 10,032 63.2% (1,852) -6.7% Depreciation 21,046 20,272 19,988 20,176 187 0.9% (283) -1.4% NOI after Depreciation 11,219 7,493 5,925 (4,295) 10,220 -237.9% (1,569) -20.9% Strong financial performance for the Port 19 Portwide Operating Revenues Summary Fav (UnFav) Incr (Decr) 2016 YTD 2017 YTD 2018 Year-to-Date Budget Variance Change from 2017 $ in 000's Actual Actual Actual Budget $ % $ % Aeronautical Revenues 117,765 127,780 147,570 144,761 2,809 1.9% 19,791 15.5% - - - Public Parking 34,166 36,958 39,402 38,080 1,322 3.5% 2,444 6.6% Rental Cars - Operations 15,271 14,514 14,922 14,579 343 2.4% 408 2.8% Rental Cars - Operating CFC 3,872 3,284 5,497 5,434 63 1.2% 2,213 67.4% ADR & Terminal Leased Space 26,617 28,420 30,179 28,017 2,162 7.7% 1,759 6.2% Ground Transportation 5,668 7,633 8,885 8,060 825 10.2% 1,252 16.4% Employee Parking 4,563 4,674 5,191 4,608 584 12.7% 517 11.1% Airport Commercial Properties 4,286 10,708 7,593 7,082 511 7.2% (3,115) -29.1% Airport Utilities 3,571 3,423 3,438 3,778 (340) -9.0% 14 0.4% Cruise 5,410 6,325 6,806 6,944 (139) -2.0% 481 7.6% Recreational Boating 5,083 5,438 6,125 5,839 286 4.9% 687 12.6% Fishing & Operations 4,419 4,440 4,565 4,201 364 8.7% 125 2.8% Grain 2,010 3,042 3,123 2,572 551 21.4% 81 2.7% Maritime Portfolio Management 5,100 5,267 5,628 5,459 169 3.1% 361 6.9% Central Harbor Management 3,393 4,161 4,557 4,448 109 2.4% 396 9.5% Conference & Event Centers 4,518 3,545 5,188 4,776 412 8.6% 1,644 46.4% NWSA Distributable Revenue 28,990 27,283 25,844 23,323 2,521 10.8% (1,439) -5.3% Other 4,721 5,194 5,974 13,871 (7,898) -56.9% 780 15.0% Total Operating Revenues (w/o Aero) 161,658 174,309 182,918 173,012 9,906 5.7% 8,610 4.9% TOTAL 279,422 302,088 330,489 317,773 12,716 4.0% 28,400 9.4% Operating revenues exceeded budget 20 Portwide Operating Expense Summary Fav (UnFav) Incr (Decr) Payroll expenses were 2016 YTD 2017 YTD 2018 Year-to-Date Budget Variance Change from 2017 $3.7M below budget due $ in 000's Actual Actual Actual Budget $ % $ % to vacant positions and Salaries & Benefits 51,795 56,338 62,772 66,506 3,734 5.6% 6,434 11.4% hiring delay. Wages & Benefits 48,261 52,948 60,075 60,199 124 0.2% 7,127 13.5% Outside Services were Payroll to Capital Projects 10,040 12,873 13,602 14,311 710 5.0% 728 5.7% $14.7M favorable to Equipment Expense 2,923 4,311 3,866 4,373 507 11.6% (445) -10.3% budget due to timing of Supplies & Stock 3,454 4,616 4,633 4,336 (297) -6.9% 17 0.4% spending, project delays, Outside Services 25,663 32,969 38,460 53,117 14,657 27.6% 5,491 16.7% and some actual savings. Utilities 10,510 11,911 13,453 12,844 (608) -4.7% 1,542 12.9% Utilities Expense was Travel & Other Employee Expenses 1,879 2,338 2,303 3,482 1,179 33.9% (35) -1.5% $608K over budget Promotional Expenses 362 460 964 1,198 234 19.5% 504 109.4% mainly due to higher Other Expenses 8,450 16,566 15,361 14,831 (530) -3.6% (1,205) -7.3% Surface Water Utility Charges to Capital Projects (15,463) (21,226) (23,911) (26,278) (2,366) 9.0% (2,685) 12.7% cost. TOTAL 147,874 174,104 191,577 208,920 17,343 8.3% 17,473 10.0% Operating expenses were $17.3M below budget 21 Portwide Financial Summary YE Forecast Fav (UnFav) Incr (Decr) 2016 2017 2018 2018 Budget Variance Change from 2017 $ in 000's Actual Actual Forecast Budget $ % $ % Aeronautical Revenues 244,235 264,114 305,005 301,082 3,923 1.3% 40,891 15.5% Airport Non-Aero Revenues 221,021 236,803 250,728 244,786 5,942 2.4% 13,925 5.9% Other Port Operating Revenues 133,211 131,114 129,376 124,612 4,764 3.8% (1,739) -1.3% Total Operating Revenues 598,467 632,031 685,109 670,479 14,630 2.2% 53,078 8.4% Total Operating Expenses 325,285 372,982 419,666 422,885 3,219 0.8% 46,684 12.5% NOI before Depreciation 273,182 259,049 265,443 247,594 17,849 7.2% 6,394 2.5% Depreciation 164,336 165,021 163,309 163,309 - 0.0% (1,712) -1.0% NOI after Depreciation 108,846 94,028 102,133 84,285 17,849 21.2% 8,106 8.6% Operating Revenues forecast to be $14.6M favorable to budget in 2018. Operating Expenses forecast to be $3.2M favorable to budget in 2018. NOI before Depreciation forecast to be $17.8M above budget in 2018. Expect strong financial performance results in 2018 22 Capital Spending by Division 2018 YTD 2018 2018 Budget Variance $ in 000's Actual Forecast Budget $ % Aviation 224,817 593,941 796,200 202,259 25.4% Maritime 21,702 32,800 46,749 13,949 29.8% Economic Development 1,363 6,028 6,149 121 2.0% Corporate & Other (note 1) 1,887 19,826 26,779 6,953 26.0% TOTAL 249,769 652,595 875,877 223,282 25.5% Note: (1) "Other" includes Street Vacation projects and Storm Water Utility Small Capital projects. 2018 capital spending forecast to be $652.6M 23 Aviation Division Appendix Airport Activity Passenger Activity Change 2018 Market % Change Airline 2017 v. 2018 Share YTD 2016 YTD 2017 YTD 2018 from 2017 Alaska 2.7% 50.4% Total Passengers (000's) Delta 13.2% 22.4% Domestic 19,249 19,666 20,897 6.3% United 12.1% 6.3% International 2,257 2,484 2,611 5.1% Southwest 4.8% 6.1% Total 21,506 22,150 23,508 6.1% American 0.4% 5.0% Operations 197,152 199,610 210,722 5.6% Q2 2018: Landed Weight (In Millions of lbs.) Cargo 843 1,025 1,147 12.0% Passengers - YTD passenger All other 12,044 12,416 13,328 7.3% growth of 6.1% tracking well Total 12,886 13,441 14,475 7.7% ahead of 2018 budget based on Cargo - Metric Tons 5.0% growth. Domestic freight 83,079 111,015 122,259 10.1% International freight 55,287 57,534 57,279 -0.4% Cargo - YOY strong growth in Mail 27,562 28,882 28,326 -1.9% cargo driven by domestic e- Total 165,928 197,431 207,864 5.3% commerce and express shipments. 2018 total passenger growth of 6.1% 25 Aviation Financial Summary Fav (UnFav) Incr (Decr) 2016 2017 2018 2018 Budget Variance Change from 2017 $ in 000's Actual Actual Forecast Budget $ % $ % Operating Revenues: Gross Aeronautical Revenues 247,811 267,690 305,005 301,082 3,923 1.3% 37,315 13.9% (1) SLOA III Incentive Straight Line Adj (3,576) (3,576) - - - 0.0% 3,576 -100.0% Aeronautical Revenues 244,235 264,114 305,005 301,082 3,923 1.3% 40,891 15.5% Non-Aeronautical Revenues 221,021 236,803 250,728 244,786 5,942 2.4% 13,925 5.9% Total Operating Revenues 465,256 500,916 555,733 545,867 9,865 1.8% 54,816 10.9% Total Operating Expense 261,226 299,114 333,374 334,856 1,482 0.4% 34,259 11.5% Net Operating Income 204,030 201,802 222,359 211,011 11,348 5.4% 20,557 10.2% Capital Expenditures 153,887 293,785 593,941 796,200 202,259 25.4% 300,156 102.2% (2) Debt Service 133,982 131,060 138,177 136,075 (2,102) -1.5% 7,117 5% (1) Annual non-cash amortization of $17.9M lease incentive related to the 5 year SLOA III agreement which ended in 2017. (2) 2018 Budget debt service amount inadvertently understated by the $2.1M debt service exclusion adjustment which impacts Aero Rate Based Revenues only. Total 2018 Aeronautical debt service obligation is reflected in the 2018 Forecast column. 2018 Forecasted NOI $11.3M favorable to budget 26 Key Performance Measures 2018 Forecast vs. 2018 Budget Fav (UnFav) Incr (Decr) Key Performance Metrics 2016 2017 2018 2018 Budget Vairance Change from 2017 Actual Actual Forecast Budget $ % $ % CPE: Key Performance Metrics CPE Impacted by SLOA IV Cost per Enplanement (CPE) 10.10 10.52 11.52 11.35 (0.17) -1.5% 0.99 9.4% reduction in Revenue Sharing to 40%. 2018 Budget assumed 50% Non-Aeronautical NOI (in 000's) 128,727 133,101 134,164 126,861 7,303 5.8% 1,063 0.8% Revenue Sharing Other Performance Metrics 2018 Forecast CPE is favorable to O&M Cost per Enplanement 11.46 12.77 13.52 13.58 0.06 0.4% 0.75 5.9% Adjusted Budget CPE of $11.63 Non-Aero Revenue per Enplanement 9.70 10.11 10.17 9.93 0.24 2.4% 0.06 0.6% Non-Aero NOI: Debt per Enplanement (in $) 104 114 126 116 (10) -8.9% 12 10.4% Non-Aero NOI growth due to both Debt Service Coverage 1.53 1.57 1.60 1.51 0.09 5.8% 0.02 1.5% higher Non-Aero Revenue and lower Days cash on hand (10 months = 304 days) 416 379 307 304 3 1.0% (72) -19.0% Operating Expenses primarily due to Aeronautical Revenue Sharing ($ in 000's) (37,395) (42,311) (31,908) (35,799) 3,891 10.9% 10,403 24.6% schedule delays Activity (in 000's) Other Performance Metrics: Enplanements 22,796 23,416 24,654 24,654 - 0.0% 1,238 5.3% Aero Revenue Sharing Forecast reflects 40% Revenue Sharing per SLOA IV, Budget assumed 50% Revenue Sharing Positive: Non-aero NOI above budget. CPE below adjusted budget. 27 Aviation Expense YTD Summary Fav (UnFav) Incr (Decr) 2018 YTD Actuals to YTD 2018 Budget 2016 YTD 2017 YTD 2018 Year-to-Date Budget Variance Change from 2017 $ in 000's Actual Actual Actual Budget $ % $ % Cost Savings (Favorable): Operating Expenses: Payroll Vacancies and hiring delays Payroll 49,708 55,798 63,139 64,511 1,372 2.1% 7,341 13.2% Outside Services planning project Outside Services 15,736 17,203 21,015 24,978 3,963 15.9% 3,812 22.2% and program delays Utilities 7,358 8,389 9,589 9,072 (516) -5.7% 1,200 14.3% Charges from other divisions Other Airport Expenses 9,132 13,680 9,788 9,920 132 1.3% (3,892) -28.5% Total Airport Direct Charges 81,934 95,070 103,530 108,481 4,951 4.6% 8,460 8.9% CDD savings - delays in AVPMG projects for terminal and ADR Environmental Remediation Liability 33 2,714 4,484 2,980 (1,504) -50.5% 1,770 65.2% Capital to Expense - 24 8 - (8) N/A (16) -66.8% Total Exceptions 33 2,738 4,492 2,980 (1,512) -50.7% 1,753 64.0% Unplanned Expenses (Unfavorable): Total Airport Expenses 81,968 97,809 108,021 111,461 3,439 3.1% 10,212 10.4% Utilities Higher Surface water costs, including IWTP Overflow Police Costs 8,943 9,146 10,659 11,070 411 3.7% 1,513 16.5% Event Capital Development 3,358 6,486 6,072 11,422 5,351 46.8% (415) -6.4% Other Central Services 22,723 25,000 26,714 28,414 1,700 6.0% 6.9% ERL IAF soil contamination & NSAT 1,714 Maritime/Economic Development 1,826 1,879 1,970 2,685 715 26.6% 91 4.8% Asbestos Total Charges from Other Divisions 36,849 42,512 45,414 53,591 8,177 15.3% 2,902 6.8% Total Operating Expense 118,817 140,321 153,436 165,052 11,617 7.0% 13,115 9.3% Net Operating Income 99,283 100,219 112,999 92,972 20,026 21.5% 12,780 12.8% Unplanned expenses absorbed by cost savings 28 Aviation Expense YE Summary Fav (UnFav) Incr (Decr) 2018 Forecast to 2018 2016 2017 2018 2018 Budget Variance Change from 2017 Budget $ in 000's Actual Actual Forecast Budget $ % $ % Operating Expenses: Unfavorable in Outside Payroll 94,559 114,463 130,809 132,156 1,347 1.0% 16,346 14.3% Services and other Airport Outside Services 31,636 41,055 55,002 52,532 (2,469) -4.7% 13,947 34.0% Expenses offset by cost Utilities 14,667 16,374 17,927 17,320 (607) -3.5% 1,553 9.5% savings from other Other Airport Expenses 21,934 28,292 21,940 19,776 (2,165) -10.9% (6,352) -22.5% divisions - Capital Total Airport Direct Charges 162,797 200,184 225,677 221,784 (3,893) -1.8% 25,493 12.7% Development and other Environmental Remediation Liability - 8,812 4,851 4,030 (821) -20.4% (3,961) -44.9% Central Services Capital to Expense - 2,856 367 - (367) 0.0% (2,489) -87.1% Total Exceptions - 11,668 5,218 4,030 (1,188) -29.5% (6,450) -55.3% Total Airport Expenses 162,797 211,852 230,896 225,814 (5,082) -2.3% 19,044 9.0% Police Costs 18,183 17,652 22,174 22,174 - 0.0% 4,522 25.6% Capital Development 9,319 14,701 17,936 23,092 5,156 22.3% 3,235 22.0% Other Central Services 58,617 51,004 57,032 58,265 1,233 2.1% 6,028 11.8% Maritime/Economic Development 12,310 3,904 5,336 5,511 175 3.2% 1,431 36.7% Total Charges from Other Divisions 98,429 87,262 102,478 109,042 6,564 6.0% 15,216 17.4% Total Operating Expense 261,226 299,114 333,374 334,856 1,482 0.4% 34,259 11.5% Net Operating Income 204,030 201,802 222,359 211,011 11,348 5.4% 20,557 10.2% Unplanned expenses absorbed by cost savings 29 Aeronautical Business YTD Fav (UnFav) Incr (Decr) 2018 YTD Actuals to YTD 2018 Budget 2016 YTD 2017 YTD 2018 Year-to-Date Budget Variance Change from 2017 Revenue - $2.8Mfavorable Rate based revenue $0.8M higher Due $ in 000's Actual Actual Actual Budget $ % $ % to unplanned costs of customer service Revenues: peak staffing initiative , partially offset by lower than budgeted AVPMG terminal Movement Area 45,551 50,849 59,656 59,421 235 0.4% 8,806 17.3% projects costs (flight corridor delays & Apron Area 6,088 7,636 8,209 7,654 555 7.2% 573 7.5% SSAT scope change) Commercial Area revenue $0.1 higher Terminal Rents 75,640 78,051 83,956 84,140 (183) -0.2% 5,906 7.6% Due to higher RON parking activity. Federal Inspection Services (FIS) 5,174 6,708 6,641 6,470 171 2.6% (67) -1.0% Revenue sharing $1.9M lower - Due to reduction of revenue sharing percentage Total Rate Base Revenues 132,453 143,243 158,462 157,684 778 0.5% 15,219 10.6% from 50% to 40%, based on SLOA IV provisions Commercial Area 4,479 4,959 5,072 4,976 97 1.9% 114 2.3% Subtotal before Revenue Sharing 136,932 148,202 163,534 162,660 874 0.5% 15,332 10.3% Expenses $5.9M favorable Payroll savings Primarily due to Revenue Sharing (17,379) (18,635) (15,964) (17,899) 1,935 10.8% 2,671 14.3% vacancies and hiring delays Total Aeronautical Revenues 119,553 129,567 147,570 144,761 2,809 1.9% 18,003 13.9% AVPMG savings due to Terminal project delays partially offset by lower charges to capital Total Aeronautical Expenses 76,280 91,209 100,511 106,450 5,939 5.6% 9,302 10.2% Net Operating Income 43,272 38,358 47,059 38,311 8,749 22.8% 8,701 22.7% Higher Aeronautical revenues due to lower revenue sharing percentage 30 Aeronautical Business YE Fav (UnFav) Incr (Decr) 2018 Forecast to Budget 2016 2017 2018 2018 Budget Variance Change from 2017 Revenue - $3.9M favorable $ in 000's Actual Actual Forecast Budget $ % $ % Rate based revenue $33K higher Revenues: Due to unplanned cost of customer Movement Area 94,725 108,638 125,275 125,422 (147) -0.1% 16,637 15.3% service peak staffing initiative , Apron Area 14,028 16,771 16,023 15,979 44 0.3% (748) -4.5% partially offset by lower than budgeted AVPMG terminal Terminal Rents 155,852 155,431 171,260 171,854 (594) -0.3% 15,830 10.2% projects costs (flight corridor Federal Inspection Services (FIS) 11,227 18,612 14,143 13,413 730 5.4% (4,469) -24.0% delays & SSAT scope change) Total Rate Base Revenues 275,832 299,452 326,701 326,668 33 0.0% 27,249 9.1% Revenue sharing $3.9M - Lower due to reduction of revenue Commercial Area 9,379 10,574 10,212 10,212 - 0.0% (362) -3.4% sharing percentage from 50% to Subtotal before Revenue Sharing 285,211 310,026 336,913 336,880 33 0.0% 26,887 8.7% 40%, based on SLOA IV provisions Revenue Sharing (37,395) (42,311) (31,908) (35,799) 3,891 10.9% 10,403 24.6% Other Prior Year Revenues (5) (26) - - - 0.0% 26 100.0% Expenses $0.1M favorable Total Aeronautical Revenues 247,811 267,690 305,005 301,082 3,923 1.3% 37,315 13.9% Unplanned costs of customer service peak staffing initiative, are Total Aeronautical Expenses largely offset by lower than 168,932 195,414 216,810 216,931 121 0.1% 21,397 10.9% budgeted AVPMG terminal Net Operating Income 78,879 72,276 88,195 84,151 4,044 4.8% 15,919 22.0% projects costs (flight corridor delays & SSAT scope change) and Debt Service (1) (89,130) (86,564) (92,425) (90,323) (2,102) -2.3% (5,861) -6.8% payroll savings due to vacancies Net Cash Flow (10,251) (14,288) (4,230) (6,173) 1,943 31.5% 10,058 70.4% and hiring delays (1) Debt service is forecasted/budgeted on an annual basis only. Thus, quarterly data is not available. Higher Aeronautical revenues due to lower revenue sharing percentage 31 Aero Cost Drivers Fav (UnFav) Incr (Decr) 2018 Forecast to 2018 2016 2017 2018 2018 Budget Variance Change from 2017 Budget $ in 000's Actual Actual Forecast Budget $ % $ % O&M Unplanned cost of customer service O&M 165,427 192,188 210,685 210,433 252 0.1% 18,498 9.6% peak staffing initiative, Debt Service Gross 118,641 113,832 120,555 120,555 - 0.0% 6,723 5.9% partially offset by lower Debt Service PFC Offset (32,831) (33,057) (33,015) (33,015) - 0.0% 42 -0.1% than budgeted AVPMG Amortization 28,215 29,654 32,373 32,373 - 0.0% 2,719 9.2% terminal projects costs Space Vacancy (2,638) (2,264) (2,638) (2,650) 12 -0.4% (374) 16.5% (flight corridor delays & TSA Operating Grant and Other (982) (901) (1,259) (1,028) (231) 22.4% (358) 39.8% SSAT scope change) and payroll savings due to Rate Base Revenues 275,832 299,452 326,701 326,668 33 0.0% 27,249 9.1% vacancies & hiring Commercial area 9,379 10,574 10,212 10,212 - 0.0% (362) -3.4% delays Total Aero Revenues 285,211 310,026 336,913 336,880 33 0.0% 26,887 8.7% Aero rate base revenues based on cost recovery formulas 32 Aero Revenue Sharing Fav (UnFav) Incr (Decr) 2016 2017 2018 2018 Budget Variance Change from 2017 $ in 000's Actual Actual Forecast Budget $ % $ % Aero Revenues (incl' commercial) 285,211 310,026 336,913 336,880 33 0.0% 26,887 8.7% Non-Aeronautical Revenues 221,021 236,803 250,728 244,786 5,942 2.4% 13,925 5.9% Total O&M Expenses (261,226) (299,114) (333,374) (334,612) 1,238 -0.4% (34,259) 11.5% Net Operating Income 245,006 247,714 254,267 247,054 7,213 2.9% 6,553 2.6% ADF Interest Income 3,725 4,242 4,127 4,127 - 0.0% (115) -2.7% Security Checkpoint TSA Grant 916 1,039 1,028 1,028 - 0.0% (10) -1.0% Misc. Non-Operating Expenses (2,481) (1,799) (750) (750) - 0.0% 1,050 -58.3% CFC Excess (4,899) (2,750) (6,182) (7,142) 960 -13.4% (3,432) 124.8% Available for Debt Service [a] 242,267 248,446 252,491 244,318 8,173 3.3% 4,046 1.6% Debt Service 133,982 131,060 138,177 138,177 - 0.0% 7,117 5.4% Debt Service x 1.25 [b] 167,477 163,825 172,721 172,721 - 0.0% 8,896 5.4% Available for revenue sharing [c]=[a]-[b] 74,790 84,621 79,770 71,597 8,173 11.4% (4,851) -5.7% Revenue Sharing [d]=[c]*0.5 (1) 37,395 42,310 31,908 35,799 (3,891) -10.9% (10,402) -24.6% Lower revenue sharing % drives increase in CPE 33 Non-Aeronautical Business YTD 2018 YTD Actuals to YTD 2018 Fav (UnFav) Incr (Decr) Budget 2016 YTD 2017 YTD 2018 Year-to-Date Budget Variance Change from 2017 $ in 000's Actual Actual Actual Budget $ % $ % Revenue - Non-Aero Revenues Airport Dining & Retail Rental Cars - Operations 15,271 14,514 14,922 14,579 343 2.4% 408 2.8% Convenience retail capturing Rental Cars - Operating CFC 3,872 3,284 5,497 5,434 63 1.2% 2,213 67.4% sales during Central Terminal Public Parking 34,166 36,958 39,402 38,080 1,322 3.5% 2,444 6.6% closure Ground Transportation 5,668 7,633 8,885 8,060 825 10.2% 1,252 16.4% Public Parking driven by Airport Dining & Retail & Leased Space 27,118 28,420 30,179 28,017 2,162 7.7% 1,759 6.2% higher transactions Commercial Properties 4,286 10,708 7,593 7,082 511 7.2% (3,115) -29.1% Utilities 3,571 3,423 3,438 3,778 (340) -9.0% 14 0.4% Employee Parking demand Employee Parking 4,563 4,674 5,191 4,608 584 12.7% 517 11.1% driven growth Clubs and Lounges 1,378 2,173 2,773 2,694 79 2.9% 599 27.6% Expenses - Other 443 973 983 932 51 5.5% 10 1.1% Savings from other Divisions - Total Non-Aero Revenues 100,336 112,761 118,864 113,264 5,601 4.9% 6,104 5.4% delays for ADR tenant build- Total Non-Aero Expenses 42,537 49,111 52,925 58,602 5,677 9.7% 3,813 7.8% outs and other Terminal Net Operating Income 57,799 63,649 65,940 54,662 11,278 20.6% 2,290 3.6% projects. Payroll savings vacancies and hiring delays YTD NOI growth due to both higher revenues and deferred expenses 34 Non-Aeronautical Business YE Fav (UnFav) Incr (Decr) 2018 Forecast to 2018 Budget 2016 2017 2018 2018 Budget Variance Change from 2017 Revenue $ in 000's Actual Actual Forecast Budget $ % $ % Airport Dining & Retail Strong Non-Aero Revenues performance in both food & Rental Cars - Operations 37,082 35,051 35,084 35,294 (210) -0.6% 33 0.1% beverage and retail sales despite Rental Cars - Operating CFC 12,122 10,641 14,653 15,563 (910) -5.8% 4,012 37.7% transitions to new leases, and Public Parking 69,540 75,106 80,046 78,572 1,474 1.9% 4,940 6.6% increased revenue from Advertising Ground Transportation 12,803 15,684 18,401 16,884 1,517 9.0% 2,717 17.3% Ground Transportation Increased Airport Dining & Retail & Leased Space 58,405 58,980 61,980 59,087 2,893 4.9% 3,000 5.1% TNC activity Commercial Properties 9,992 18,042 15,236 14,706 529 3.6% (2,807) -15.6% Public Parking Driven by higher Utilities 7,233 7,018 7,317 7,556 (239) -3.2% 300 4.3% transactions Employee Parking 9,329 9,617 10,214 9,457 757 8.0% 597 6.2% Expenses - Clubs and Lounges 3,028 5,041 5,830 5,630 200 3.6% 790 15.7% Savings from other Divisions - Other 1,487 1,624 1,966 2,036 (70) -3.4% 343 21.1% Delays for ADR tenant buildouts Total Non-Aero Revenues 221,021 236,803 250,728 244,786 5,942 2.4% 13,925 5.9% and other Terminal projects Total Non-Aero Expenses 92,294 103,702 116,564 117,925 1,362 1.2% 12,861 12.4% Payroll savings Vacancies and hiring delays Net Operating Income 128,727 133,101 134,164 126,861 7,303 5.8% 1,063 0.8% Unplanned expenses absorbed by Less: CFC (Surplus) / Deficit (1) (4,899) (2,750) (6,182) (7,142) 960 13.4% (3,432) -124.8% above savings include peak staffing Adjusted Non-Aero NOI 123,828 130,351 127,982 119,719 8,263 6.9% (2,369) -1.8% support, Landside honey bucket Debt Service (1) service, and lower payroll charges (43,984) (44,495) (45,752) (45,752) - 0.0% (1,257) -2.8% to capital Net Cash Flow 79,844 85,856 82,230 73,967 8,263 11.2% (3,625) -4.2% (1) CFC excess and Debt service are forecasted/budgeted on an annual basis only. Thus, quarterly data is not available. $7.3M NOI growth due to both higher revenues and deferred expenses 35 Public Parking Performance YTD Public Parking - Revenue Detail Fav / (UnFav) Incr / (Decr) Key message: 2016 YTD 2017 YTD 2018 YTD Budget Variance Change from 2017 Parking revenue growth $ in 000's Actual Actual Actual Budget $ % $ % primarily driven by rate Parking Garage Revenue to Port increase. Overall growth in Gross Sales - Parking Garage 36,497 40,214 43,276 40,931 2,345 6% 3,062 7.6% parking transactions is slower less - WA Sales Tax (2,991) (3,317) (3,624) (3,476) (148) 4% (307) 9.3% than growth in O&D less - SeaTac Parking Tax (2,018) (2,927) (3,411) (2,691) (720) 27% (484) 16.5% enplanements. Revenue to Port - General Parking 31,487 33,970 36,241 34,764 1,477 4% 2,271 6.7% Other Garage Revenue Passport Parking Program 1,349 1,459 1,532 1,654 (122) -7% 73 5.0% Total Parking Garage Revenue 32,836 35,429 37,773 36,418 1,354 4% 2,344 6.6% Other Parking Revenue Concession Rent - Doug Fox off-site parking 1,315 1,518 1,613 1,652 (39) -2% 95 6.3% All Other Parking Revenue 16 11 16 9 6 67% 5 44.2% Total Parking Revenue 34,166 36,958 39,402 38,080 1,322 3.5% 2,444 6.6% Parking Transactions by duration Fav / (UnFav) Incr / (Decr) 2016 YTD 2017 YTD 2018 YTD Budget Variance Change from 2017 in 000's Actual Actual Actual Budget # % # % Parking < 1 day 746 747 736 768 (32) -4.1% (11) -1.4% Parking 1-4 days 252 257 268 236 32 13.4% 11 4.1% Parking 4+ days 90 93 99 87 12 14.2% 6 6.9% Total Parking Transactions 1,087 1,098 1,104 871 233 26.8% 6 0.6% Slower growth in parking transactions reflects increasing transportation alternatives 36 Public Parking Performance YE Public Parking - Revenue Detail Fav / (UnFav) Incr / (Decr) Key message: 2016 2017 2018 2018 Budget Variance Change from 2017 Parking revenue growth $ in 000's Actual Actual Forecast Budget $ % $ % primarily driven by rate Parking Garage Revenue to Port increase. Overall growth in Gross Sales - Parking Garage 74,301 82,362 88,226 87,112 1,114 1% 5,864 7.1% parking transactions is slower than growth in O&D less - WA Sales Tax (6,081) (6,818) (7,359) (7,200) (160) 2% (541) 7.9% enplanements. less - SeaTac Parking Tax (4,212) (6,563) (7,274) (7,196) (78) 1% (711) 10.8% Revenue to Port - General Parking 64,008 68,981 73,593 71,997 1,596 2% 4,612 6.7% 2018 Forecast vs. 2017 Actuals Other Garage Revenue Revenue - Forecasted Passport Parking Program 2,749 2,990 3,233 3,356 (122) -4% 244 8.1% increase compared to prior Total Parking Garage Revenue 66,758 71,971 76,827 75,353 1,474 2% 4,855 6.7% year, primarily due to tariff rate increase in effect full Other Parking Revenue year 2018 (rate increase Concession Rent - Doug Fox off-site parking 2,751 3,109 3,200 3,200 - 0% 91 2.9% effective April 2017). All Other Parking Revenue 32 25 19 19 - 0% (6) -25.1% Transactions - Increase in expected total parking Total Parking Revenue 69,540 75,106 80,046 78,572 1,474 1.9% 4,940 6.6% transactions reflects slower growth than the growth in Parking Transactions by duration Fav / (UnFav) Incr / (Decr) O&D enplanements, and 2016 2017 2018 2018 Budget Variance Change from 2017 reflects impact of in 000's Actual Actual Forecast Budget # % # % increasing number of transportation alternatives Parking < 1 day 1,646 1,623 1,625 1,639 (14) -0.8% 2 0.1% available to passengers. Parking 1-4 days 496 499 528 504 24 4.7% 29 5.7% Parking 4+ days 181 184 201 186 15 8.2% 17 9.3% Total Parking Transactions 2,323 2,307 2,354 2,329 25 1.1% 47 2.0% Slower growth in parking transactions reflects increasing transportation alternatives 37 Rental Car Performance YTD Rental Car - Revenue Detail Fav / (UnFav) Incr / (Decr) Key message: 2014 YTD 2015 YTD 2016 YTD 2017 YTD 2018 YTD 2018 YTD Budget Variance Change from 2017 $ in 000's Actual Actual Actual Actual Actual Budget $ % $ % Rental Car revenue continues to be impacted RCF Concession Revenue to Port 11,441 11,985 13,474 12,673 13,025 12,681 344 - 2.7% 352 2.8% by availability of other transportation Total Enplanements 8,589 9,731 10,668 11,008 11,688 11,564 123 1.1% 680 6.2% alternatives (TNCs, car-sharing, light rail, O&D % 73.8% 69.8% 69.4% 70.3% 70.3% 69.2% 0.01 1.6% 0.00 0.0% etc.) O&D Enplanements 6,339 6,792 7,404 7,739 8,217 8,003 214 2.7% 478 6.2% Gross Sales by Operators 114,211 124,690 129,324 127,258 134,430 126,808 7,622 6.0% 7,172 5.6% Total Transactions 587 631 655 648 657 629 28 4.5% 9 1.4% Average Ticket $194.64 $197.45 $197.52 $196.27 $204.47 $201.53 $2.94 1.5% $8.21 4.2% Average Length of Stay 4.08 4.10 4.10 4.13 4.16 4.37 (0.22) -4.9% 0.03 0.01 Transactions/O&D Enplanements 9.26% 9.30% 8.84% 8.38% 8.00% 7.86% 0.14% 1.8% -0.38% -4.5% CFC Revenue Summary Total Transaction Days 2,395 2,589 2,683 2,677 2,734 2,752 (18) -0.7% 57 2.1% CFC Rate per Transaction Day $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $0.00 0.0% $0.00 0.0% Total CFC Revenue Earned 14,228 15,373 16,276 16,436 16,499 16,514 (16) -0.1% 63 0.4% Reserve for debt service and CP interest: (9,058) (10,547) (11,154) (11,902) (11,001) (11,080) 79 -0.7% 900 -7.6% Reserve for CP principal payment: (1,250) (1,250) (1,250) (1,250) - - - 0.0% 1,250 -100.0% Debt Service Reserve Requirement (10,308) (11,797) (12,404) (13,152) (11,001) (11,080) 79 -0.7% 2,150 -16.4% Residual - CFC Operating Revenue: 3,921 3,576 3,872 3,284 5,497 5,434 63 1.2% 2,213 67.4% Rental Car - Revenue Summary Fav / (UnFav) Incr / (Decr) 2014 YTD 2015 YTD 2016 YTD 2017 YTD 2018 YTD 2018 YTD Budget Variance Change from 2017 $ in 000's Actual Actual Actual Actual Actual Budget $ % $ % RCF Concession Revenue to Port 11,441 11,985 13,474 12,673 13,025 12,681 344 2.7% 352 2.8% Residual - CFC Operating Revenue: 3,921 3,576 3,872 3,284 5,497 5,434 63 1.2% 2,213 67.4% Land Rent/Space Rent/Other 1,749 1,771 1,797 1,841 1,898 1,898 (1) 0.0% 57 3.1% Total Rental Cars Operating Revenue 17,111 17,332 19,143 17,798 20,420 20,013 407 2.0% 2,622 14.7% Rental Car activity impacted by increasing transportation alternatives 38 Rental Car Performance YE Rental Car - Revenue Detail Fav / (UnFav) Incr / (Decr) Key message: 2014 2015 2016 2017 2018 2018 Budget Variance Change from 2017 # and $ in 000's Actual Actual Actual Actual Forecast Budget $ % $ % Rental Car revenue continues to be impacted by availability of other transportation alternatives (TNCs, RCF Concession Revenue to Port 30,662 33,465 33,465 31,352 31,299 31,508 (210) -0.7% (53) -0.2% car-sharing, light rail, etc.) Total Enplanements 18,717 21,109 22,796 23,416 24,654 24,654 - 0.0% 1,238 5.3% 2018 Forecast vs. 2017 Actuals O&D % 73.8% 69.8% 69.4% 70.3% 70.3% 69.2% 1.1% 1.6% - 0.0% O&D Enplanements 13,813 14,734 15,821 16,461 17,332 17,061 271 1.6% 871 5.3% Rental Car Concession revenue - Forecast relatively Gross Sales by Operators 281,884 302,372 310,987 313,654 312,987 315,083 (2,097) -0.7% (667) -0.2% flat to prior year. Concession Revenue is impacted by Total Transactions 1,289 1,390 1,411 1,388 1,395 1,437 (42) -2.9% 8 0.5% (3) key indicators: Average Ticket $218.64 $217.51 $220.42 $226.03 $224.33 $219.22 0 2.3% ($1.70) -0.8% Expected decline in Transactions per O&D Average Length of Stay 4.31 4.34 4.34 4.37 4.38 4.37 0 0.1% 0.01 0.1% Enplanement reflects trend in passenger Transactions/O&D Enplanements 8.15% 9.44% 8.92% 8.43% 8.05% 8.42% (0) -4.4% -0.38% -4.5% preference shifting to other transportation options CFC Revenue Summary Total Transactions expected to grow at a slower Total Transaction Days 5,554 6,039 6,129 6,067 6,109 6,287 (178) -2.8% 42 0.7% rate than the growth in enplanements CFC Rate per Transaction Day $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 - 0.0% $0.00 0.0% Total CFC Revenue Earned 33,554 36,206 36,830 36,261 36,655 37,723 (1,068) -2.8% 394 1.1% Average ticket price is a function of rental car pricing and customer demand, and can vary Reserve for debt service and CP interest: (19,946) (20,543) (21,708) (22,621) (22,003) (22,161) (158) -0.7% (618) -2.7% significantly. The 2018 Budget and the 2018 Reserve for CP principal payment: - (3,000) (3,000) (3,000) - - - 0.0% (3,000) -100.0% Debt Service Reserve Requirement (19,946) (23,543) (24,708) (25,621) (22,003) (22,161) 158 -0.7% (3,618) -14.1% Forecast assumes an average ticket price slightly below 2017 actuals. This metric will be monitored Residual - CFC Operating Revenue: 13,608 12,663 12,122 10,641 14,653 15,563 (910) -5.8% 4,012 37.7% and adjusted in the 2018 forecast, as needed Rental Car - Revenue Summary Fav / (UnFav) Incr / (Decr) CFC Operating Revenue - Forecasted to increase 2016 2016 2016 2017 2018 2018 Budget Variance Change from 2017 due to increase in Transaction Days forecasted for # and $ in 000's Actual Actual Actual Actual Forecast Budget $ % $ % 2018 and lower debt service in 2018, primarily RCF Concession Revenue to Port 30,662 33,465 33,465 31,352 31,299 31,508 (210) -0.7% (53) -0.2% driven by final payment on outstanding Residual - CFC Operating Revenue: 13,608 12,663 12,122 10,641 14,653 15,563 (910) -5.8% 4,012 37.7% Commercial Paper balance ($3.0M) paid last year Land Rent/Space Rent/Other 3,541 3,189 3,617 3,699 3,786 3,786 - 0.0% 86 2.3% Total Rental Cars Oper Revenue 47,812 49,317 49,203 45,691 49,737 50,857 (1,120) -2.2% 4,046 8.9% Rental Car activity impacted by increasing transportation alternatives 39 Ground Transportation YTD Revenue to Port Fav / (UnFav) Incr / (Decr) Key message: 2016 YTD 2017 YTD 2018 YTD Budget Variance Change from 2017 Significant changes in customer preferred $ in 000's Actual Actual Actual Budget $ % $ % ground transportation alternatives are Ground Transportation Revenues reflected in both revenue and trip activity Transportation Network Companies 907 3,181 4,749 3,676 1,073 29.2% 1,568 49.3% between GT operator categories. On Demand Taxis 2,449 2,631 2,160 2,294 (134) -5.8% (471) -17.9% On Demand Limos 414 405 403 438 (35) -8.0% (2) -0.5% Belled In Taxis (Annual Permit) 159 43 33 69 (36) -52.0% (10) -23.0% Pre-Arranged Limos (Annual Permit) 276 360 361 300 61 20.4% 1 0.3% Courtesy Cars (cost recovery) 995 687 798 945 (146) -15.5% 111 16.1% All other Operators (cost recovery) 323 203 172 232 (60) -25.9% (32) -15.5% Other Misc Revenues 145 123 210 107 103 96.4% 87 70.5% Total GT Revenue 5,668 7,633 8,885 8,060 825 10.2% 1,252 16.4% Trip Activity Fav / (UnFav) Incr / (Decr) 2016 YTD 2017 YTD 2018 YTD Budget Variance Change from 2017 in 000's Actual Actual Actual Budget # % # % Ground Transportation Trips Transportation Network Companies 149 573 784 613 171 27.9% 210 36.6% On Demand Taxis 438 379 363 382 (19) -5.0% (16) -4.3% On Demand Limos 39 36 35 36 (1) -2.9% (1) -2.9% Belled In Taxis (Annual Permit) 120 37 9 33 (24) -72.3% (28) -75.0% Pre-Arranged Limos (Annual Permit) 186 165 168 161 7 4.1% 3 2.1% Courtesy Cars (cost recovery) 590 587 580 597 (17) -2.8% (7) -1.2% All other Operators (cost recovery) 47 40 30 31 (1) -4.3% (10) -25.1% Total GT Trip Activity 1,569 1,818 1,969 1,854 115 6.2% 151 8.3% TNC growth expected to continue to outpace enplanement growth 40 Ground Transportation YE Revenue to Port Fav / (UnFav) Incr / (Decr) Key message: 2016 2017 2018 2018 Budget Variance Change from 2017 Significant changes in customer preferred ground $ in 000's Actual Actual Forecast Budget $ % $ % transportation alternatives are reflected in both Ground Transportation Revenues revenue and trip activity between GT operator Transportation Network Companies 3,222 6,940 10,080 8,122 1,958 24.1% 3,140 45.3% categories. On Demand Taxis 5,045 5,199 4,307 4,591 (283) -6.2% (892) -17.2% 2018 Forecast vs. 2017 Actuals On Demand Limos 869 858 849 855 (5) -0.6% (8) -1.0% GT Revenue forecast compared to prior year: Belled In Taxis (Annual Permit) 159 45 35 108 (73) -67.9% (10) -23.0% TNC revenue forecast in 2018 reflects Pre-Arranged Limos (Annual Permit) 496 626 628 603 25 4.1% 2 0.3% continued shift in customer preference and the Courtesy Cars (cost recovery) 2,039 1,319 1,763 1,909 (146) -7.6% 444 33.6% impact of the rate increase (to $6/trip) effective All other Operators (cost recovery) 696 394 411 483 (72) -14.9% 17 4.4% for the full year Other Misc Revenues 278 303 328 214 114 53.3% 25 8.1% Taxi revenue forecasted to decline partially due Total GT Revenue 12,803 15,684 18,401 16,884 1,517 9.0% 2,717 17.3% to rate decrease (to $6/trip) effective all year in 2018, compared to $7/trip in effect for the first Trip Activity Fav / (UnFav) Incr / (Decr) 9 months of 2017 2016 2017 2018 Budget Variance Change from 2017 Courtesy car revenue increase reflects rate in 000's Actual Actual Forecast Budget # % # % correction in 2018 Budget Ground Transportation Trips Transportation Network Companies 602 1,277 1,680 1,354 326 24.1% 403 31.5% GT Trip Activity forecast compared to prior year: On Demand Taxis 827 750 718 765 (47) -6.2% (33) -4.3% TNC trip volume expected to continue to grow On Demand Limos 74 72 69 71 (1) -1.9% (2) -2.9% at a rate faster than the growth in enplaned Belled In Taxis (Annual Permit) 195 56 14 52 (38) -73.1% (42) -75.0% passengers, driven by strong customer demand Pre-Arranged Limos (Annual Permit) 369 337 344 325 19 5.9% 7 2.1% Taxi trips expected to grow at a slower rate Courtesy Cars (cost recovery) 1,197 1,175 1,118 1,211 (93) -7.6% (57) -4.8% than the growth in enplaned passengers All other Operators (cost recovery) 95 79 59 78 (20) -25.0% (20) -25.4% Declines in other operator categories reflects Total GT Trip Activity 3,360 3,746 4,002 3,856 147 3.8% 256 6.8% the changing GT operating environment TNC growth expected to continue to outpace enplanement growth 41 Airport Dining & Retail and Leased Space YTD Airport Dining & Retail andAirport Dining & Retail and 20142014 20152015 20162016 20172017 20182018 20182018 Fav / (Unfav) BudgetFav / (Unfav) Budget Incr / (Decr) fromIncr / (Decr) from Revenue Revenue Terminal Leased SpaceTerminal Leased Space YTDYTD YTDYTD YTDYTD YTDYTD YTDYTD YTDYTD VarianceVariance 20172017 Food & Beverage slightlyFood & Beverage slightly Org Basis (in 000's)Org Basis (in 000's) ActualActual ActualActual ActualActual ActualActual ActualActual BudgetBudget $$ %% $$ %% stronger than prior year despitestronger than prior year despite ADR RevenueADR Revenue significant unit closures for leasesignificant unit closures for lease Food & BeverageFood & Beverage 11 6,941 6,941 7,906 7,906 9,367 9,367 10,453 10,453 10,626 10,626 10,219 10,219 407 407 4.0%4.0% 172 172 1.6%1.6% transition.transition. Newly opened unitsNewly opened units RetailRetail11 4,874 4,874 5,605 5,605 6,050 6,050 6,213 6,213 7,819 7,819 6,520 6,520 1,300 1,300 19.9%19.9% 1,606 1,606 25.8%25.8% outperformingoutperforming Year 1 projections.Year 1 projections. Increased volume in most existingIncreased volume in most existing Duty Free 1Duty Free 1 3,412 3,412 3,651 3,651 3,382 3,382 3,518 3,518 3,742 3,742 3,702 3,702 39 39 1.1%1.1% 224 224 6.4%6.4% units to respond to passengerunits to respond to passenger Personal ServicesPersonal Services 11 1,470 1,470 1,619 1,619 1,919 1,919 1,869 1,869 1,830 1,830 1,813 1,813 17 17 0.9%0.9% (40) (40) -2.1%-2.1% demands. demands. AdvertisingAdvertising 2,735 2,735 2,788 2,788 3,296 3,296 3,412 3,412 2,920 2,920 2,782 2,782 138 138 5.0%5.0% (492) (492) -14.4%-14.4% Retail increase reflects strongRetail increase reflects strong Space Rental - TerminalSpace Rental - Terminal 1,646 1,646 2,021 2,021 2,254 2,254 2,735 2,735 3,046 3,046 2,832 2,832 214 214 7.6%7.6% 311 311 11.4%11.4% sales include increased grab'n'go sales include increased grab'n'go (food) offerings.(food) offerings. Retail units notRetail units not All other revenueAll other revenue 237 237 237 237 263 263 219 219 196 196 150 150 46 46 30.9%30.9% (22) (22) -10.2%-10.2% impacted by lease transitions inimpacted by lease transitions in Total ADR RevenueTotal ADR Revenue 21,31521,315 23,82723,827 26,52926,529 28,42028,420 30,17930,179 28,01728,017 2,1622,162 7.7%7.7% 1,7591,759 6.2%6.2% 2018. 2018. ExpensesExpenses Duty Free - steady growth fromDuty Free - steady growth from ADR & Terminal Leased SpaceADR & Terminal Leased Space 1,862 1,862 2,569 2,569 2,241 2,241 1,962 1,962 2,768 2,768 2,423 2,423 (345) (345) -14.2%-14.2% 806 806 41.1%41.1% growth in internationalgrowth in international Income from OperationsIncome from Operations 19,45319,453 21,25821,258 24,28824,288 26,45826,458 27,41127,411 25,59425,594 1,8171,817 7.1%7.1% 953953 3.6%3.6% enplanements. enplanements. Advertising strong demandAdvertising strong demand Sales per EnplanementSales per Enplanement continues, offset by lowercontinues, offset by lower SPE - Food & BeverageSPE - Food & Beverage $6.46$6.46 $6.53$6.53 $7.17$7.17 $7.36$7.36 $7.17$7.17 $6.96$6.96 $0.21$0.21 3.0%3.0% ($0.20)($0.20) -2.7%-2.7% percentage rent in newpercentage rent in new SPE - Retail SalesSPE - Retail Sales $4.03$4.03 $3.96$3.96 $3.70$3.70 $3.99$3.99 $4.36$4.36 $3.91$3.91 $0.45$0.45 11.4%11.4% $0.37$0.37 9.3%9.3% agreement. agreement. SPE - Duty FreeSPE - Duty Free $1.13$1.13 $1.04$1.04 $0.88$0.88 $0.92$0.92 $0.89$0.89 $0.98$0.98 ($0.09)($0.09) -8.9%-8.9% ($0.03)($0.03) -2.8%-2.8% Space Rent primarilySpace Rent primarily due todue to SPE - Personal ServicesSPE - Personal Services $1.20$1.20 $1.12$1.12 $1.01$1.01 $0.99$0.99 $0.95$0.95 $0.94$0.94 $0.01$0.01 1.0%1.0% ($0.04)($0.04) -3.8%-3.8% increased concession fees fromincreased concession fees from SPE - Total ADRSPE - Total ADR $12.82$12.82 $12.65$12.65 $12.76$12.76 $13.25$13.25 $13.37$13.37 $12.79$12.79 $0.58$0.58 4.5%4.5% $0.11$0.11 0.8%0.8% Alclear sales growth. Alclear sales growth. Concession RevenueConcession Revenue 1 1 per Enplanementper Enplanement $1.94$1.94 $1.93$1.93 $1.94$1.94 $2.00$2.00 $2.05$2.05 $1.92$1.92 $0.13$0.13 6.8%6.8% $0.05$0.05 2.6%2.6% (1) Concession Revenue is composed of revenue from concession agreements for the sales of Food & Beverage, Retail, Duty Free, and Personal Services only. (1) Concession Revenue is composed of revenue from concession agreements for the sales of Food & Beverage, Retail, Duty Free, and Personal Services only. Sales lost from Food & Beverage being picked up in convenience retail 42 Airport Dining & Retail and Leased Space YE Airport Dining & Retail and Fav / (Unfav) Budget Incr / (Decr) from 2018 Forecast vs. 2017 Actuals Terminal Leased Space 2014 2015 2016 2017 2018 2018 Variance 2017 Org Basis (in 000's) Actual Actual Actual Actual Forecast Budget $ % $ % Revenue ADR Revenue Food & Beverage holding steady to Food & Beverage 1 prior year despite significant unit 15,223 17,427 21,314 21,579 21,700 21,700 - 0.0% 120 0.6% closures for lease transition. Newly Retail 1 11,213 12,127 13,496 13,989 16,044 14,344 1,700 11.9% 2,055 14.7% opened units outperforming Year 1 Duty Free 1 6,664 6,769 6,265 6,912 7,251 7,251 - 0.0% 339 4.9% projections. Increased volume in most Personal Services 1 3,201 3,548 3,657 3,728 3,809 3,809 - 0.0% 81 2.2% existing units to respond to passenger Advertising 5,815 6,460 6,725 6,662 6,680 6,021 658 10.9% 17 0.3% demands. Retail increase reflects strong sales Space Rental - Terminal 3,483 4,629 5,190 5,641 6,121 5,664 457 8.1% 480 8.5% include increased grab'n'go (food) All other revenue 476 477 605 469 377 300 77 25.7% (92) -19.6% offerings. Retail units not impacted by Total ADR Revenue 46,076 51,437 57,252 58,980 61,980 59,087 2,893 4.9% 3,000 5.1% lease transitions in 2018. Expenses Duty Free - steady growth from ADR & Terminal Leased Space 1,862 2,569 2,241 1,962 2,768 2,423 (345) -14.2% 806 41.1% growth in international enplanements Income from Operations 44,214 48,868 55,010 57,018 59,212 56,664 2,548 4.5% 2,194 3.8% . Sales per Enplanement Advertising holding steady to prior SPE - Food & Beverage $6.46 $6.48 $7.23 $7.18 $6.93 $6.93 $0.00 0.0% ($0.25) -3.5% year, reflects strong demand offset by SPE - Retail Sales $4.10 $3.92 $3.86 $4.04 $4.16 $4.03 $0.13 3.2% $0.13 3.1% lower percentage rent in new SPE - Duty Free $1.12 $0.96 $0.89 $0.91 $0.90 $0.90 $0.00 0.0% ($0.01) -1.0% agreement. SPE - Personal Services $1.16 $1.08 $1.00 $0.95 $0.93 $0.93 $0.00 0.0% ($0.03) -3.0% Other Revenue decrease due to SPE - Total ADR $12.84 $12.45 $12.98 $13.08 $12.92 $12.79 $0.13 1.0% ($0.16) -1.3% temporary reduction in janitorial reimbursement revenue related to Concession Revenue 1 food & beverage unit closures for lease per Enplanement $1.94 $1.89 $1.96 $1.97 $1.98 $1.91 $0.07 3.6% $0.01 0.3% transition. (1) Concession Revenue is composed of revenue from concession agreements for the sales of Food & Beverage, Retail, Duty Free, and Personal Services only. Sales lost from Food & Beverage being picked up in convenience retail 43 2018 Capital Expenditures $ in 000's 2018 2018 2018 Budget Variance (1) Delays in design-build progress, consultant Description YTD Actual Forecast Budget $ % billings/purchases for construction and (1) International Arrivals Facility 75,176 215,298 324,221 108,923 33.6% project/construction management services. (2) ASL Conversion at Checkpoints 725 1,175 16,800 15,625 93.0% (2) $8.7M of capital budget deemed to be public expense as the equipment will be transferred to TSA. 1 of 3 (3) NS NSAT Renov NSTS Lobbies 58,656 131,716 140,738 9,022 6.4% lanes have been installed; remaining lanes pushed out (4) N. Terminals Utilities Upgrade 213 413 8,200 7,787 95.0% to Q4 2018 - Q2 2019. (5) Add'l Baggage Makeup Space IAF 1,234 10,520 15,998 5,478 34.2% (3) Actual projected billings as provided by contractor (6) Terminal Security Enhancements 189 2,189 5,925 3,736 63.1% have been less than anticipated. (7) SSAT Infrastructure HVAC 128 1,218 4,910 3,692 75.2% (4) Early works construction cancelled and combined with main construction phase due to better 2018 Taxiway Improvement Proj 8,988 37,378 36,250 (1,128) -3.1% coordination with adjacent projects. Concourse D Hardstand Holdroom 15,159 28,433 27,986 (447) -1.6% (5) Delays in construction due to changes in sequencing Alternate Utility Facility 17,169 18,263 18,350 87 0.5% of work by contractor. Checked Bag Recap/Optimization 16,009 38,009 38,000 (9) 0.0% (6) Favorable bids for Phase I (shatter proof windows) All Other 31,171 109,330 158,822 49,492 31.2% will result in less spending in 2018. Total Spending 224,817 593,941 796,200 202,259 25.4% (7) Bid bust has resulted in one year delay of project. Project was re-scoped and design is currently in progress. Forecasting to spend 74.6% of budget 44 SAMP Overview YTD SummaryYTD Summary Fav (Unfav)Fav (Unfav) Inc (Decr)Inc (Decr) 2016 YTD2016 YTD 2017 YTD2017 YTD 2018 Year-to-Date2018 Year-to-Date 2018 Budget Variance2018 Budget Variance Change from 2017Change from 2017 $ in 000's$ in 000's ActualActual ActualActual ActualActual BudgetBudget $$ %% $$ %% SAMP Completion & Transition to Env ReviewSAMP Completion & Transition to Env Review 105105 100100 161161 250250 8989 35.7%35.7% 6161 57.8%57.8% Adv Planning IDIQ - Master PlanAdv Planning IDIQ - Master Plan -- -- 1,2961,296 1,2501,250 (46)(46) -3.7%-3.7% 1,2961,296 N/AN/A Environmental Review - Master PlanEnvironmental Review - Master Plan -- 4747 -- -- -- N/AN/A (47)(47) N/AN/A SAMP Utilities Master PlanSAMP Utilities Master Plan -- -- -- 125125 125125 100.0%100.0% -- N/AN/A Total SAMP-Related SpendingTotal SAMP-Related Spending 105105 147147 1,4571,457 1,6251,625 168168 10.4%10.4% 1,3101,310 1247.4%1247.4% Annual ForecastAnnual Forecast Year-End Projection Year-End Projection Fav (Unfav)Fav (Unfav) Inc (Decr)Inc (Decr) 20162016 20172017 20182018 20182018 2018 Budget Variance2018 Budget Variance Change from 2017Change from 2017 $ in 000's$ in 000's ActualActual ActualActual ForecastForecast BudgetBudget $$ %% $$ %% SAMP Completion & Transition to Env ReviewSAMP Completion & Transition to Env Review 1,5911,591 1,3351,335 500500 500500 -- 0.0%0.0% (835)(835) -52.5%-52.5% Adv Planning IDIQ - Master PlanAdv Planning IDIQ - Master Plan -- 1,1411,141 3,2503,250 2,5002,500 (750)(750) -30.0%-30.0% 2,1092,109 N/AN/A Environmental Review - Master PlanEnvironmental Review - Master Plan 208208 169169 1,0001,000 1,7001,700 700700 41.2%41.2% 831831 399.5%399.5% SAMP Utilities Master PlanSAMP Utilities Master Plan -- 276276 500500 500500 -- 0.0%0.0% 224224 N/AN/A Total SAMP-Related SpendingTotal SAMP-Related Spending 1,7991,799 2,9212,921 5,2505,250 5,2005,200 (50) (50) -1.0%-1.0% 2,3292,329 129.5%129.5% Accelerated pace in advance planning offsets timing delay in Environmental Review 45 Maritime Division Appendix Maritime 2018 Financial Summary Fav (UnFav) Incr (Decr) 2016 YTD 2017 YTD 2018 Year-to-Date Budget Variance Change from 2017 $ in 000's Actual Actual Actual Budget $ % $ % Fishing & Operations 4,419 4,440 4,565 4,201 364 9% 125 3% Recreational Boating 5,083 5,438 6,125 5,839 286 5% 687 13% Cruise 5,410 6,325 6,806 6,944 (139) -2% 481 8% Bulk 2,010 3,042 3,123 2,572 551 21% 81 3% Maritime Portfolio Management 5,100 5,267 5,628 5,459 169 3% 361 7% Other 5 14 11 9 2 28% (3) -23% Total Revenue 22,027 24,525 26,257 25,023 1,234 5% 1,732 7% Expenses Fishing & Operations 2,206 2,305 2,461 2,399 (63) -3% 156 7% Rec Boating 1,524 1,852 1,989 2,285 297 13% 137 7% Cruise 954 558 1,135 1,987 851 43% 577 103% Other Maritime 373 585 266 655 388 59% (318) -54% Maintenance Expenses 4,716 4,740 5,576 5,642 66 1% 836 18% Portfolio Management 1,679 1,770 2,031 2,191 160 7% 261 15% Other ED Expenses 166 353 320 460 141 31% (33) -9% Total Maritime & EDD expenses 11,617 12,162 13,778 15,618 1,840 12% 1,616 13% Enviromental & Sustainability 303 598 519 998 479 48% (79) -13% CDD Expenses 522 419 437 630 193 31% 18 4% Police Expenses 1,925 1,889 2,169 2,101 (68) -3% 280 15% Other Central Services 4,309 4,401 4,842 5,219 377 7% 441 10% Aviation Division 66 67 70 61 (9) -15% 2 3% Total Central Services & Aviation 7,124 7,374 8,037 9,009 972 11% 662 9% Envir Remed Liability 48 371 (99) 0 99 NA (469) -127% Total Expense 18,789 19,907 21,716 24,627 2,911 12% 1,809 9% NOI Before Depreciation 3,237 4,618 4,541 396 4,145 1046% (77) -2% Depreciation 8,655 8,442 8,823 8,868 45 1% 381 5% NOI After Depreciation (5,418) (3,824) (4,281) (8,471) 4,190 -49% (458) 12% Focus on revenue growth and expense management. 47 Maritime 2018 Financial Forecast Fav (UnFav) Incr (Decr) 2016 2017 2018 2018 Budget Variance Change from 2017 $ in 000's Actual Actual Forecast Budget $ % $ % Fishing & Operations 9,108 9,297 8,748 8,388 360 4% (550) -6% Recreational Boating 10,255 11,086 12,446 12,166 280 2% 1,361 12% Cruise 15,422 17,596 18,150 18,150 0 0% 554 3% Bulk 5,382 5,427 5,163 5,163 0 0% (263) -5% Maritime Portfolio Management 10,255 10,787 10,769 11,169 (400) -4% (18) 0% Other 388 (9) 17 17 0 0% 26 -297% Total Revenue 50,810 54,183 55,293 55,053 240 0% 1,109 2% Expenses Fishing & Operations 4,308 4,599 4,641 4,641 0 0% 42 1% Rec Boating 3,164 3,813 4,595 4,595 0 0% 782 20% Cruise 2,600 2,674 4,448 4,748 300 6% 1,774 66% Other Maritime 666 462 1,399 1,399 0 0% 937 203% Maintenance Expenses 9,900 10,420 11,261 11,261 0 0% 840 8% Portfolio Management 3,367 3,507 3,550 3,750 200 5% 43 1% Other ED Expenses 420 665 833 833 0 0% 168 25% Total Maritime & EDD expenses 24,425 26,140 30,726 31,226 500 2% 4,586 18% Enviromental & Sustainability 1,358 1,125 1,994 2,168 173 8% 869 77% CDD Expenses 1,010 748 1,030 1,212 182 15% 282 38% Police Expenses 3,921 3,756 4,209 4,209 0 0% 453 12% Other Central Services 9,315 9,869 10,428 10,641 213 2% 559 6% Aviation Division 139 138 123 123 0 0% (15) -11% Total Central Services & Aviation 15,743 15,635 17,784 18,352 568 3% 2,149 14% Envir Remed Liability 115 389 0 0 0 NA (389) -100% Total Expense 40,283 42,164 48,510 49,578 1,068 2% 6,347 15% NOI Before Depreciation 10,526 12,020 6,783 5,475 1,308 24% (5,237) -44% Depreciation 17,351 17,410 17,868 17,868 0 0% 459 3% NOI After Depreciation (6,824) (5,390) (11,086) (12,394) 1,308 -11% (5,696) 106% Uncertainty in 2nd half grain volumes and WSDOT lease at Terminal 106 48 Maritime 2018 YTD by Business Part 1 YTD YTD YTD YTD Bud Var Chg fr Prior Year Total Year $ in 000's Actual Actual Actual Budget Fav(UnFav) Incr/(Decr) Budget 2016 2017 2018 2018 $ % $ % 2018 Cruise Revenue 5,410 6,325 6,806 6,944 (138) -2.0% 481 7.6% 18,150 Expense 3,187 3,628 4,712 5,988 1,276 21.3% 1,084 29.9% 12,817 NOI Before Depreciation 2,223 2,697 2,094 956 1,138 119.0% (603) -22.4% 5,333 Depreciation Expense 2,619 2,627 3,201 3,234 33 1.0% 574 21.9% 6,498 NOI After Depreciation (396) 70 (1,107) (2,278) 1,171 51.4% (1,177) -1681.4% (1,165) Rec Boating Revenue 5,083 5,438 6,125 5,839 286 4.9% 687 12.6% 12,166 Expense 4,335 4,639 5,139 5,805 666 11.5% 500 10.8% 11,661 NOI Before Depreciation 748 799 986 34 952 2800.0% 187 23.4% 505 Depreciation Expense 1,710 1,592 1,459 1,462 3 0.2% (133) -8.4% 2,957 NOI After Depreciation (962) (793) (473) (1,428) 955 66.9% 320 40.4% (2,452) Maritime Portfolio Revenue 5,100 5,267 5,628 5,459 169 3.1% 361 6.9% 11,169 Expense 4,650 5,146 5,237 5,773 536 9.3% 91 1.8% 10,891 NOI Before Depreciation 450 121 391 (314) 705 224.5% 270 223.1% 278 Depreciation Expense 1,316 1,335 1,361 1,306 (55) -4.2% 26 1.9% 2,610 NOI After Depreciation (866) (1,214) (970) (1,620) 650 40.1% 244 20.1% (2,332) Fishing & Operations Revenue 4,419 4,440 4,565 4,201 364 8.7% 125 2.8% 8,388 Expense 5,983 5,350 5,704 5,844 140 2.4% 354 6.6% 11,687 NOI Before Depreciation (1,564) (910) (1,139) (1,643) 504 30.7% (229) -25.2% (3,299) Depreciation Expense 2,743 2,606 2,497 2,562 65 2.5% (109) -4.2% 5,195 NOI After Depreciation (4,307) (3,516) (3,636) (4,205) 569 13.5% (120) -3.4% (8,494) Major Maritime Businesses tracking favorable to budget 49 Maritime 2018 YTD by Business Part 2 YTD YTD YTD YTD Bud Var Chg fr Prior Year Total Year $ in 000's Actual Actual Actual Budget Fav(UnFav) Incr/(Decr) Budget 2016 2017 2018 2018 $ % $ % 2018 Bulk/Grain Terminal Revenue 2,010 3,042 3,123 2,572 551 21% 81 2.7% 5,163 Expense 568 653 874 900 26 3% 221 33.8% 1,839 NOI Before Depreciation 1,442 2,389 2,249 1,672 577 35% (140) -5.9% 3,324 Depreciation Expense 269 279 298 304 6 2% 19 6.8% 608 NOI After Depreciation 1,173 2,110 1,951 1,368 583 43% (159) -7.5% 2,716 Other Revenue 5 14 11 9 2 22% (3) -21.4% 17 Expense 53 492 50 317 267 84% (442) -89.8% 683 NOI Before Depreciation (48) (478) (39) (308) 269 87% 439 91.8% (666) Depreciation Expense 0 3 7 0 (7) NA 4 133.3% 0 NOI After Depreciation (48) (481) (46) (308) 262 85% 435 90.4% (666) Total Maritime Revenue 22,027 24,525 26,257 25,023 1,234 5% 1,732 7.1% 55,053 Expense 18,775 19,907 21,716 24,627 2,911 12% 1,809 9.1% 49,578 NOI Before Depreciation 3,252 4,618 4,541 396 4,145 1047% (77) -1.7% 5,475 Depreciation Expense 8,655 8,442 8,823 8,868 45 1% 381 4.5% 17,868 NOI After Depreciation (5,403) (3,824) (4,282) (8,472) 4,190 49% (458) -12.0% (12,393) Grain Revenue ahead of budget and 2017 50 Stormwater Utility YTD Results Fav (UnFav) Incr (Decr) 2017 YTD 2018 YTD Budget Variance Change from 2016 $ in 000's Actual Actual Budget $ % $ % StormWater Utility NWSA 1,706 1,862 1,846 16 1% 156 9% Tenants Revenue 213 235 251 (16) -6% 22 11% Non-tenants Revenue 564 609 570 39 7% 45 8% Total Revenues 2,483 2,707 2,667 40 2% 223 9% SWU Direct 267 394 713 319 45% 128 48% Maintenance Expenses 1,129 1,672 1,711 39 2% 542 48% Other Maritime Expenses - - - - NA - NA EDD Expenses 10 4 9 5 55% (6) -58% Environmental & Sustainability 261 103 112 9 8% (158) -61% Police Expenses - - - - NA - NA Capital Development Expenses 31 16 27 11 40% (15) -47% Other Central Service Expenses 184 334 352 18 5% 149 81% Total Expenses 1,881 2,523 2,924 401 14% 641 34% NOI Before Depreciation 602 184 (257) 441 -172% (418) -69% Depreciation 498 548 603 55 9% 51 10% NOI After Depreciation 104 (364) (860) 496 -58% (468) -449% Stormwater Utility tracking to budget for 2018 51 Maritime Capital 2018 SBM restrooms and paving delayed due to bidding and permit schedule 52 Economic Development Division Appendix EDD 2018 Financial Summary Fav (UnFav) Incr (Decr) 2016 YTD 2017 YTD 2018 Year-to-Date Budget Variance Change from 2017 $ in 000's Actual Actual Actual Budget $ % $ % Revenue 1,777 2,020 2,167 2,147 20 1% 147 7% Conf & Event Centers 1,895 1,107 2,330 2,177 153 7% 1,223 110% Total Revenue 3,672 3,127 4,497 4,324 173 4% 1,370 44% Expenses Portfolio Management 636 899 1,016 1,030 14 1% 117 13% Conf & Event Centers 1,721 1,653 2,033 2,109 76 4% 380 23% P69 Facilities Expenses 41 50 53 60 7 12% 3 6% RE Dev & Planning 173 57 38 48 10 20% (18) -32% EconDev Expenses Other 148 208 163 289 126 43% (45) -21% Maintenance Expenses 573 666 850 765 (85) -11% 185 28% Maritime Expenses (Excl Maint) 8 9 34 70 36 52% 25 260% Total EDD & Maritime Expenses 3,300 3,542 4,188 4,372 183 4% 647 18% Small Business 4 12 20 38 18 48% 8 67% Workforce Development (9) 95 86 403 317 79% (10) -10% Tourism 193 232 239 315 76 24% 8 3% EDD Grants 0 12 6 0 (6) NA (6) -51% Total EDD Initiatives 188 351 351 756 406 54% (0) 0% Environmental & Sustainability 11 53 46 83 37 45% (7) -14% CDD Expenses 88 91 57 84 28 33% (34) -37% Police Expenses 39 39 41 39 (2) -6% 2 4% Other Central Services 922 1,244 1,273 1,419 146 10% 29 2% Aviation Division 24 27 28 31 4 11% 1 2% Total Central Services & Aviation 1,084 1,455 1,445 1,657 212 13% (10) -1% Envir Remed Liability 0 0 0 0 0 NA 0 NA Total Expense 4,572 5,347 5,984 6,785 801 12% 637 12% NOI Before Depreciation (900) (2,220) (1,487) (2,461) 974 -40% 733 -33% Depreciation 934 927 998 1,038 40 4% 71 8% NOI After Depreciation (1,835) (3,147) (2,485) (3,499) 1,014 -29% 662 -21% Strong Occupancy and Management of Expenses 54 EDD 2018 Financial Summary Fav (UnFav) Incr (Decr) 2016 YTD 2017 YTD 2018 Year-to-Date Budget Variance Change from 2017 $ in 000's Actual Actual Actual Budget $ % $ % Revenue 3,818 4,182 4,577 4,465 112 3% 395 9% Conf & Event Centers 4,518 3,545 5,188 4,776 412 9% 1,644 46% Total Revenue 8,337 7,727 9,765 9,242 524 6% 2,039 26% Expenses Portfolio Management 1,536 2,050 1,952 1,901 (51) -3% (98) -5% Conf & Event Centers 3,665 3,660 4,306 4,258 (48) -1% 646 18% P69 Facilities Expenses 81 96 114 171 57 33% 18 19% RE Dev & Planning 211 120 74 107 32 30% (46) -38% EconDev Expenses Other 321 383 473 584 111 19% 90 23% Maintenance Expenses 1,248 1,483 1,996 1,528 (468) -31% 513 35% Maritime Expenses (Excl Maint) 14 25 76 161 85 53% 52 210% Total EDD & Maritime Expenses 7,076 7,817 8,992 8,710 (282) -3% 1,175 15% Small Business 9 26 37 74 37 50% 10 39% Workforce Development 150 228 228 941 713 76% (1) 0% Tourism 420 514 620 750 130 17% 106 21% EDD Grants 0 427 28 480 452 94% (399) -93% Total EDD Initiatives 579 1,195 912 2,244 1,332 59% (283) -24% Environmental & Sustainability 9 130 121 188 67 36% (8) -7% CDD Expenses 113 200 139 172 33 19% (61) -31% Police Expenses 81 85 81 79 (2) -3% (3) -4% Other Central Services 1,907 2,576 2,576 2,852 276 10% (0) 0% Aviation Division 51 56 59 63 4 7% 3 6% Total Central Services & Aviation 2,161 3,046 2,976 3,354 378 11% (70) -2% Envir Remed Liability 0 0 0 0 0 NA 0 NA Total Expense 9,816 12,058 12,880 14,308 1,428 10% 823 7% NOI Before Depreciation (1,479) (4,331) (3,115) (5,067) 1,951 -39% 1,216 -28% Depreciation 1,881 1,860 1,999 2,084 84 4% 139 7% NOI After Depreciation (3,360) (6,191) (5,114) (7,150) 2,036 -28% 1,077 -17% Strong Occupancy and Management of Expenses 55 EDD 2018 Financial Forecast Fav (UnFav) Incr (Decr) 2016 2017 2018 2018 Budget Variance Change from 2017 $ in 000's Actual Actual Forecast Budget $ % $ % Revenue 7,881 8,658 9,097 8,985 112 1% 439 5% Conf & Event Centers 8,022 9,133 9,949 9,537 412 4% 816 9% Total Revenue 15,903 17,791 19,046 18,522 524 3% 1,255 7% Expenses Portfolio Management 3,084 3,879 3,778 3,778 0 0% (101) -3% Conf & Event Centers 6,932 7,639 8,465 8,465 0 0% 827 11% P69 Facilities Expenses 180 206 289 289 0 0% 84 41% RE Dev & Planning 1,037 214 211 211 0 0% (3) -1% EconDev Expenses Other 628 773 1,227 1,227 0 0% 454 59% Maintenance Expenses 2,787 3,666 3,276 3,055 (221) -7% (390) -11% Maritime Expenses (Excl Maint) 31 52 344 344 0 0% 292 557% Total EDD & Maritime Expenses 14,679 16,429 17,591 17,370 (221) -1% 1,163 7% Small Business 21 64 140 140 0 0% 76 118% Workforce Development 522 850 1,292 1,992 700 35% 442 52% Tourism 1,093 1,234 1,460 1,460 0 0% 225 18% EDD Grants 20 751 960 960 0 0% 209 28% Total EDD Initiatives 1,656 2,900 3,852 4,552 700 15% 952 33% Environmental & Sustainability 62 260 363 398 35 9% 103 40% CDD Expenses 250 387 264 329 65 20% (123) -32% Police Expenses 157 51 156 158 2 1% 105 205% Other Central Services 4,223 5,257 5,700 5,816 116 2% 443 8% Aviation Division 107 113 127 127 0 0% 15 13% Total Central Services & Aviation 4,800 6,068 6,611 6,829 218 3% 542 9% Envir Remed Liability 0 0 0 0 0 NA 0 NA Total Expense 21,135 25,397 28,055 28,751 697 2% 2,657 10% NOI Before Depreciation (5,232) (7,606) (9,008) (10,229) 1,221 -12% (1,402) 18% Depreciation 3,682 3,863 4,156 4,156 0 0% 293 8% NOI After Depreciation (8,914) (11,469) (13,164) (14,385) 1,221 -8% (1,695) 15% Higher conference center volumes and tight expense management 56 EDD Capital 2018 Budget Variance 2018 YTD 2018 2018 Actual Forecast Budget $ % $ in 000's P66 Elevator 2,3,4 Upgrades 956 1,229 1,175 (54) -5% RE: Contingency Renew.&Replace 0 1,000 1,000 0 0% BHICC Interior Modernization 100 900 710 (190) -27% Small Projects 59 525 516 (9) -2% Tenant Improvements -Capital 23 897 532 (365) -69% P69 Solar Panel System 39 482 502 20 4% T-102 Outdoor Lighting 19 209 437 228 52% T91 Upland PreDevelopment 11 150 425 275 65% CW Elevator Modernization 0 100 325 225 69% All Other projects 156 536 527 (9)0 -2%NA Total Economic Development 1,363 6,028 6,149 121 2% Tenant improvement capital offset by project delays 57 Central Services Appendix Central Services Expense by Category Fav (UnFav) Incr (Decr) Payroll savings due to 2016 YTD 2017 YTD 2018 Year-to-Date Budget Variance Change from 2017 delay hiring and $ in 000's Actual Actual Actual Budget $ % $ % vacancies. Salaries & Benefits 32,923 34,654 38,558 40,526 1,968 4.9% 3,904 11.3% Outside Services Wages & Benefits 10,695 10,679 12,360 13,170 810 6.1% 1,682 15.7% favorable budget Payroll to Capital Projects 8,610 11,207 10,897 11,455 558 4.9% (311) -2.8% variance mainly came Equipment Expense 750 1,230 1,193 1,548 356 23.0% (38) -3.1% from lower spending Supplies & Stock 429 493 589 689 100 14.5% 97 19.6% and project delays. Outside Services 8,650 13,311 14,340 21,393 7,053 33.0% 1,029 7.7% Charge to Capital was Travel & Other Employee Exps 1,106 1,188 1,199 1,962 763 38.9% 11 1.0% lower than budget due Insurance Expense 1,192 1,167 1,079 1,160 81 7.0% (88) -7.5% to delay of some capital Litigated Injuries & Damages 223 838 (82) - 82 0.0% (920) -109.8% projects. Other 90 1,633 1,160 1,564 404 25.9% (473) -29.0% Charge to Capital (13,712) (19,219) (20,757) (23,027) (2,271) 9.9% 1,537 8.0% Total 50,956 57,181 60,536 70,441 9,904 14.1% 3,356 5.9% Most of the budget savings came from payroll and outside services 59 Financial Summary for Central Services Year-to-Date Actual Fav (UnFav) Incr (Decr) 2016 YTD 2017 YTD 2018 Year-to-Date Budget Variance Change from 2017 $ in 000's Actual Actual Actual Budget $ % $ % Total Operating Revenues 75 82 81 56 25 45.0% (1) -1.2% Core Central Support Services 31,594 34,692 36,661 39,178 2,517 6.4% 1,969 5.7% Police 11,312 11,378 13,188 13,511 323 2.4% 1,810 15.9% Capital Development 4,747 7,763 7,733 13,075 5,342 40.9% (30) -0.4% Environment & Sustainability 3,303 3,347 2,954 4,676 1,722 36.8% (393) -11.8% Total Operating Expenses 50,956 57,181 60,536 70,441 9,904 14.1% 3,356 5.9% Operating expenses $9.9M favorable to budget through Q2 60 Financial Summary for Central Services Year-End Forecast Fav (UnFav) Incr (Decr) 2016 2017 2018 2018 Budget Variance Change from 2017 $ in 000's Actual Actual Forecast Budget $ % $ % Total Operating Revenues 1,330 68 182 182 - 0.0% 113 166.0% Core Central Support Services 69,196 71,071 78,720 80,367 1,647 2.0% 7,648 10.8% Police 23,045 22,095 26,955 27,065 110 0.4% 4,860 22.0% Capital Development 12,218 17,370 21,058 26,289 5,231 19.9% 3,688 21.2% Environment & Sustainability 8,824 6,975 10,486 11,504 1,019 8.9% 3,511 50.3% Total Operating Expenses 113,284 117,511 137,218 145,225 8,008 5.5% 19,707 16.8% Operating expenses forecast to be $8.0M favorable to budget for the year 61 Central Services Capital Spending 2018 YTD 2018 2018 Budget Variance $ in 000's Actual Forecast Budget $ % Infrastructure - Small Cap 210 1,500 1,500 0 0.0% Services Tech - Small Cap 110 1,150 1,150 0 0.0% Project Cost Mgmt System 221 600 600 0 0.0% Supplier Database System 137 487 450 (37) -8.2% Corporate Firewall 26 922 922 0 0.0% PeopleSoft Financials Upgrade 566 1,866 3,100 1,234 39.8% Radio System Upgrade 7 7,800 12,000 4,200 35.0% Police Records Mgmt System 0 200 700 500 71.4% CDD Fleet Replacement 172 1,040 1,210 170 14.0% Corporate Fleet Replacement 45 1,180 1,180 0 0.0% Other (note 1) 129 929 1,526 597 39.1% TOTAL 1,623 17,674 24,338 6,664 27.4% Note: (1) "Other" includes remaining ICT projects and small capital projects/acquistions. 2018 capital spending forecast to be 72.6% of budget 62
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