7b report
ITEM NO.: 7b_Attach_1
DATE OF
MEETING: May 14, 2013
PORT OF SEATTLE
2013 FINANCIAL & PERFORMANCE REPORT
AS OF MARCH 31, 2013
TABLE OF CONTENTS
Page
I. Portwide Performance Report 3-5
II. Aviation Division Report 6-12
III. Seaport Division Report 13-18
IV. Real Estate Division Report 19-23
V. Capital Development Division Report 24-26
VI. Corporate Division Report 27-29
2
I. PORTWIDE FINANCIAL & PERFORMANCE REPORT 03/31/13
EXECUTIVE SUMMARY
Financial Summary
The Port's total operating revenues for the first quarter of 2013 were $111.8 million, $10.8 million below the
revised budget. Aeronautical revenues were $50.2 million, $7.9 million below budget. Other operating revenues
were $61.6 million, $3.0 million lower than the revised budget primarily due to lower revenues from Rental
Cars, Concessions, and Grain. Total operating expenses were $65.4 million, $11.8 million below the revised
budget mainly due to delayed hiring and vacant positions, delays in airline terminal realignment expense, and
delays and savings of outside contracted services. Operating income before depreciation was $46.3 million, $978
thousand above budget. Operating income after depreciation was $3.7 million, $1.4 million higher than budget.
The Port-wide capital spending is forecasted to be $207.1 million for the year, $5.8 million below the budgeted
$212.9 million.
Operating Summary
At the Airport, enplanements through the first quarter were 3.6% higher; excluding certain non-revenue
passengers that had previously been unreported, the growth would be 1.7%. International enplaned passengers
through the first quarter attained greater growth (9.5% vs. 2012) than domestic enplanements (3.0% vs. 2012).
For the Seaport division, TEU volume was down 19.4% from September year-to-date 2012. Full year forecasted
volume is for 1.66 million TEU's, in line with budget. Grain volume was at 258 thousand metric tons, 83.9%
below 2012 volumes and 68.0% below budget. For the Real Estate division, occupancy levels at Commercial
Properties were at 91%, slightly below the target of 92% but higher than Seattle market average of 88%.
Fishermen's Terminal and Maritime Industrial Center were at 79% occupancy, below target of 81%.
Recreational Marinas was at 94% occupancy, above target of 91%.
Key Business Events
We launched live music events at Sea-Tac Airport. The Radio Frequency Identification (RFID) program
was implemented for trucks calling Port container terminals. We completed the sale of all non-freight area
on the rail corridor to King County and reached settlement agreement with King County related to the
condemnation action to acquire an interest in the Terminal 91 West Yard site. We launched the 2013
Wellness Reward program with Cigna and work is underway for developing health care cost containment
strategy. We issued Limited Tax General Obligation Refunding Bonds in the amount of $102,795,000. On
the environmental front, 25% of frequent ship calls are meeting Northwest Ports Clean Airs Standards
target. We joined Green Marine, a marine industry environmental excellence program, becoming the first
U.S. Port outside of the Great Lakes to do so. Contract was awarded for early action Superfund project
clean-up at Terminal 117. We also received 10 year programmatic permit for harbor wide dock piling
maintenance and repair. Finally, the 85th Annual Blessing of the Fleet was held at Fishermen's Terminal in
March.
Major Capital Projects
We completed the relocation of American, Jet Blue and Frontier from Ticketing Zone 2 to Zone 5 as part of
the Airline Realignment Tenant Improvement. The escalator renewal project was near completion. Labor &
Industries approved use of sleep mode for new escalators (44 escalator project), first such approval in State.
We turned over Electrical Ground Support Equipment (eGSE) demonstration project for use by Alaska. We
also reached agreement with TSA on funding and consultant on scope and budget for 30% design of
optimization and recapitalization of baggage system screening devices. Finally, we completed the shell to
allow upcoming tenant construction of a new duty free retail space for South Satellite West End Project and
began construction of utility relocation for Sound Transit South Link extension.
3
I. PORTWIDE FINANCIAL & PERFORMANCE REPORT 03/31/13
INCOME STATEMENT
Report: Income Statement
As of Date: 2013-03-31
2012 YTD 2013 YTD 2013 YTD Rvsd Bud Var Change from 2012
Revised
$ in 000's Actual Actual Budget $ % $ %
Revenues:
Aviation 85,154 82,839 93,086 (10,247) -11.0% (2,315) -2.7%
Seaport 26,786 21,196 21,892 (696) -3.2% (5,590) -20.9%
Real Estate 7,591 7,650 7,581 68 0.9% 59 0.8%
Capital Development 7 5 - 5 0.0% (3) -35.5%
Corporate 98 68 39 29 75.8% (30) -30.6%
Total Revenues 119,637 111,757 122,598 (10,840) -8.8% (7,880) -6.6%
Operating & Maintenance:
Aviation 33,380 34,007 41,355 7,348 17.8% 626 1.9%
Seaport 4,072 3,738 4,091 353 8.6% (334) -8.2%
Real Estate 7,550 8,082 8,754 672 7.7% 532 7.0%
Capital Development 2,909 3,034 3,812 778 20.4% 124 4.3%
Corporate 17,118 16,583 19,251 2,667 13.9% (535) -3.1%
Total O&M Costs 65,030 65,444 77,262 11,818 15.3% 414 0.6%
Operating Income Before Depreciation 54,607 46,314 45,336 978 2.2% (8,293) -15.2%
Depreciation 40,414 42,654 43,045 391 0.9% 2,240 5.5%
Operating Income after Depreciation 14,193 3,659 2,291 1,368 59.7% (10,533) -74.2%
IMPORTANT NOTE:
All the numbers in the table above are on an Org basis while the actual numbers for the operating divisions are
on a Subclass basis.
4
I. PORTWIDE FINANCIAL & PERFORMANCE REPORT 03/31/13
KEY PERFORMANCE METRICS
2012 YTD 2013 YTD 2012 2013 2013 2013 Forecast/Budget
Revised Approved
Actual Actual Actual Forecast Budget Budget Var. Var. %
Enplanements (in 000's) 3,604 3,734 16,597 17,017 17,017 17,017 - 0.0%
Landed Weight (lbs. in 000's) 4,422 4,453 19,897 20,444 20,444 20,444 - 0.0%
Passenger CPE (in $) n/a n/a 13.23 13.65 13.65 13.80 - 0.0%
Container Volume (TEU's in 000's) 476 384 1,871 1,660 1,660 1,660 - 0.0%
Grain Volume (metric tons in 000's) 1,599 258 3,161 1,500 3,400 3,400 (1,900) -55.9%
Cruise Passenger (in 000's) n/a 1 935 852 851 851 1 0.1%
Commercial Property Occupancy 90% 91% 91% 92% 92% 92% 0% 0.0%
Shilshole Bay Marina Occupancy 92.7% 94.9% 94.3% 95.2% 94.2% 94.2% 1.0% 1.0%
Fishermen's Terminal Occupancy 78.9% 79.9% 74.0% 76.7% 78.2% 78.2% -1.5% -1.9%
CAPITAL SPENDING RESULTS
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%
PORTWIDE INVESTMENT PORTFOLIO
The investment portfolio for first quarter of 2013 earned 0.79% against our benchmark (The Bank of America
Merrill Lynch 3-year Treasury/Agency Index) of 0.26%. For the past twelve months the portfolio has earned
0.86% against the benchmark of 0.28%. Since the Port became its own Treasurer in 2002, the Port's portfolio
life-to-date has earned 3.12% against our benchmark of 2.19%.
5
II. AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/13
FINANCIAL SUMMARY
2012 2013 2013 2013 Rvsd Bud Var Change from 2012
Revised Approved
$ in 000's Actual Forecast Budget Budget $ % $ %
Operating Revenues
Aeronautical 232,999 245,623 245,623 249,799 - - n/a 0.0% 12,624 5.4%
Non-Aeronautical 153,023 156,563 156,563 157,826 - - n/a 0.0% 3,540 2.3%
Total Operating Revenues 386,023 402,186 402,186 407,625 - 0.0% 16,163 4.2%
Expenses:
Operating Expenses 211,244 233,231 233,231 237,087 - 0.0% 21,987 10.4%
Environmental Remediation Liability 5,321 4,615 4,615 4,615 - 0.0% (706) -13.3%
Total Operating Expenses 216,565 237,846 237,846 241,702 - 0.0% 21,281 9.8%
Net Operating Income 169,458 164,340 164,340 165,923 - 0.0% (5,118) -3.0%
Capital Spending 100,305 173,275 174,651 174,651 1,376 0.8% 72,970 72.7%
A. BUSINESS EVENTS
Airlines realignment in progress
Escalator renewal project near completion
No new airline agreement continuing to charge 2012 rates
Revised budget assumes resolution methodology for airline rates and charges. This shifts a higher
percentage of terminal costs to non-aeronautical, thus reducing non-aeronautical NOI, and passenger
airline CPE.
B. KEY PERFORMANCE INDICATORS
Passenger Enplanements
2012 2013 %
Passenger Enplanements YTD YTD Variance 2012 2013 %
International 353,080 386,504 9.5% Figures in 000's Actual Budget Variance
Domestic 3,250,728 3,347,312 3.0%
Total Enplanements 16,597 17,017 2.5%
Total Enplanements 3,603,808 3,733,816 3.6%
For 2013, enplaned passenger counts include certain non-revenue passengers that had previously been
unreported. Excluding these, Q1 growth would be 1.7%, rather than 3.6%.
6
II. AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/13
Key Performance Measures
2012 2013 2013 2013 Rvsd Bud Var Change from 2012
Revised Approved
Actual Forecast Budget Budget $ % $ %
Key Measures:
Non-Aero NOI less CFC Surplus ($ in 000's) 79,787 71,760 71,760 74,810 - 0.0% (8,027) -10.1%
Passenger Airline CPE 13.23 13.65 13.65 13.80 - 0.0% 0.41 3.1%
Debt / Enplaned Passenger 152.7 143.8 143.8 143.8 - 0.0% (8.9) -5.8%
Debt Service Coverage 1.40 1.30 1.30 1.35 - 0.0% (0.10) -7.1%
C. OPERATING RESULTS
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 -
YTD Operating Results
Aeronautical revenues are lower than revised budget by $7.9 million due to landing fees and terminal space
rents based on 2012 carryover rates, which are less than 2013 recoverable costs.
Non-aeronautical revenues are lower than revised budget by $2.4 million:
o Rental car revenues are lower than revised budget by $1.8 million, or -26.2%.
Car rental revenues are lower than revised budget by $1.5 million, or -27.2% due to
concession billing credits for current rental car contract year based on seasonality not
anticipated in budget, even though YTD February transaction days are higher by 3.4% and
average ticket price is higher by 0.6%.
CFC operating revenue is lower than revised budget by $220k, or-26.4%.
o Concessions revenue is lower than revised budget by $837K, or -8.8% due to lower retails sales
because of an unanticipated "Hudson" store closure over Q1 and $500K of new duty free MAG
revenue misbudgeted entirely in Q1 rather than in Q3 and Q4.
7
II. AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/13
o Public parking revenue is higher than revised budget by $108K, or 0.9% due to higher public
parking revenue of $228K offset by lower "Doug Fox" space rental revenue of $119K.
YTD Non-Operating Results
PFCs are higher than revised budget by $3.6 million, or 25.2% as actual PFC collections are higher based on
airline ticket sales; whereas, budget was based on enplanement trends.
YTD Operating Expenses
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
Aeronautical Business Unit Summary
2012 2013 2013 2013 Rvsd Bud Var Change from 2012
Revised Approved
$ in 000's Actual Forecast Budget Budget $ % $ %
Net Passenger Airline Costs 219,598 232,197 232,197 234,830 - 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 13.80 - 0.0% 0.41 3.1%
YOY Changes
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.
8
II. AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/13
Non-Aero Business Unit Summary
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%
2012 2013 2013 2013 Rvsd Bud Var Change from 2012
Revised Approved
$ in 000's Actual Forecast Budget Budget $ % $ %
Operating CFC Revenues 9,745 11,013 11,013 11,013 - 0.0% 1,268 13.0%
Non-Operating CFC Revenues 20,577 20,553 20,553 20,553 - 0.0% (24) -0.1%
Total CFC Revenues 30,322 31,566 31,566 31,566 - 0.0% 1,244 4.1%
YOY Changes
Revenue increases are due to higher continued growth in concession and commercial property revenues,
parking garage price increases, higher CFC operating revenue due to more transaction days from a full year
of RCF operations, offset by prior year's temporary unbudgeted rental car space rents in the main garage.
Operating costs increases are due to a full year of operations for the RCF and the terminal non-aero
allocation percentage changed to 22.8% in 2013 from 19.6% in 2012 under the terms of the rates and charges
resolution.
9
II. AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/13
Net Cash Flow: NOI after Debt Service and 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%
2013 forecasted net cash flow is down $9.3 million from 2012.
Non-aeronautical gross debt service YOY increase of $2.6 million is due to change in allocation percentages
under the terms of the rates and charges resolution.
10
II. AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/13
D. CAPITAL RESULTS
Capital Variance
$ in 000's 2013 YTD 2013 2013 Budget Variance
Description Actual Forecast Budget $ %
Airfield Pavement Replacement 158 9,368 4,180 (5,188) -124.1%
Doug Fox Site Improvements 163 973 3,870 2,897 74.9%
Convert Ticket Zone 2 Pushback 0 2,750 5,500 2,750 50.0%
All Other 26,348 160,184 161,101 917 0.6%
Total Spending 26,669 173,275 174,651 1,376 0.8%
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.
2013-2017 Capital and Funding Plan
Future
2013-2017 Revenue
$ in 000's Total Bonds
Budget 1,454,153 875,308
Forecast 1,276,006 697,161
Decrease (178,147) (178,147)
2013 Annual Budget Changes
2013
$ in 000's Spending
Checked Bag Recap/Optimization 1,501
Pax Bridge and Walkway S16 Rep 775
USO Relocation 758
NSAT-STS CeilingLeak LT Repair 122
Total 3,156
These projects were not included in the 2013 2017 capital budget and plan of finance.
11
II. AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/13
Future 2013 Authorization Requests
Future 2013 Authorization Requests:
South Access Property Acq.
Parking Garage Light Retrofit
Replace PLBs at B7, B9 & S8
Purch/Repl PLBs at B6 ,B8, B14
International Arrivals Fac-IAF
Radio System Upgrade (800MHz)
Pax Bridge and Walkway S16 Rep
USO Relocation
Service Tunnel Renewal/Replace
Air Cargo Rd Safety Imp D/C
Utility ER Backup/Standby Pwr
NS Main Terminal Improvements
Security Checkpoint Wayfinding
Fiber Infr to Gate Backstands
Fire Dept Comm. Upgrades
So. 160th St. GT Lot Expansion
Fire Station Electric Upgrades
Grease Interceptor Augmnt 2013
Renew/Repl Emer Power Switches
Concourse D Roof Replacement
Plan of Finance Budget vs. Approved Annual Budget
2013 Plan of 2013 Annual
Finance Approved
Figures in $ 000's Budget Budget Change
NS NSAT Renov NSTS Lobbies 15,000 6,700 (8,300)
Rental Car Fac. Construction 245 8,038 7,793
Aircraft RON Parking USPS Site 6,000 800 (5,200)
All Other 162,995 159,113 (3,882)
Total 184,240 174,651 (9,589)
12
III. SEAPORT DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/13
FINANCIAL SUMMARY
2012 2013 2013 2013 Revised Bud Change from 2012
Revised Approved Variance
$ in 000's Actual Forecast Budget Budget $ % $ %
Revenues:
Operating Revenue 101,715 96,328 100,603 110,110 (4,275) -4% (5,387) -5%
Security Grants 2,226 0 173 173 (173) -100% (2,226) -100%
Total Revenues 103,941 96,328 100,777 110,283 (4,448) -4% (7,613) -7%
Total Operating Expenses 44,700 46,147 46,147 47,043 0 0% 1,447 3%
Net Operating Income 59,241 50,181 54,630 63,240 (4,448) -8% (9,060) -15%
Capital Expenditures 10,841 9,362 11,129 11,129 1,767 16% (1,479) -14%
Total Seaport revenues were ($663) thousand unfavorable through the first quarter primarily due to below
budget grain revenue as a result of volume being 68% below budget. For the full year Seaport is forecasting
revenue to be below budget by ($4.4 million) as a result of below budget grain revenue, crane rent, and
security grants.
Total Operating Expenses were $877 thousand favorable through the first quarter due to timing. Seaport is
forecasting full year operating expenses to match the budget.
Forecasted Net Operating Income for 2013 is estimated to be ($4.4 million) unfavorable to budget and ($9.1
million) below 2012 Actual. 2013 Forecast is unfavorable due to revenue variances described above.
Decrease from 2012 Actual is due to lower revenue from containers and grain and higher expenses primarily
due to the Terminal 5 maintenance dredge project and related operating environmental remediation liability,
utility expenses and corporate costs.
As of the end of the 1st Quarter, total capital spending for 2013 is projected to be $9.4 million or 84% of the
Approved Annual Budget.
A. BUSINESS EVENTS
TEU volumes for Seattle Harbor were down 19.4% Q1 2013, compared to Q1 2012 levels. Q1 13 volume is
383,910 TEUs. Q1 13 full inbound TEUs are down 18.9%, full outbound TEUs are down 16.2%, empty
inbound TEUs are down 29.2%, and empty outbound TEUs are down 17.4%.
Consolidated West Coast Port results through the 1st Quarter of 2013 show an overall increase in TEU
volume of 4% compared to volumes in 2012.
TEU Volume (in 000's) Q1 13 Q1 12 TEU Change % Change
Long Beach 1,554 1,307 247 18.9%
Los Angeles 1,787 1,875 (88) -4.7%
Oakland 567 560 7 1.2%
Portland 48 55 (6) -11.8%
Prince Rupert 135 128 7 5.6%
Seattle 384 476 (92) -19.4%
Tacoma 469 343 126 36.8%
Vancouver 643 628 15 2.5%
West Coast - Totals: 5,587 5,371 217 4.0%
13
III. SEAPORT DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/13
Terminal 46: Washington State Department of Transportation took possession of approximately 4.85 acres
formerly within Total Terminals International, LLC leasehold in support of the Alaskan Way Tunnel Project.
Additional 1.5 acres along north apron of Terminal 46 also leased by WSDOT. Both areas are directly
leased from the Port.
Implemented the new rent terms for the minimum annual guarantee (MAG) program in the TTI lease
extension, effective 1/1/2013.
Grain vessels shipped 258K metric tons of grain through Terminal 86 for year-to-date 2013. Amount is 84%
lower than 2012 volumes and 68% unfavorable to 2013 Budget volume.
Implemented new rent terms in the Cruise Terminals of America lease extension, effective date 1/1/2013.
The 2013 cruise season begins May 1st.
Environmental:
25% of frequent vessel calls meeting Northwest Ports Clean Air Standards target.
Joined Green Marine, a marine industry environmental excellence program, becoming the first U.S. Port
outside of the Great Lakes region 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.
General Construction and Manson Construction's use of T107 / Kellogg Island submerged lands was
incorporated into the available berthing for construction, deck, and derrick barges.
Closed out security grant administration contract with Moffatt & Nichol and transitioned to in-house grant
administration.
14
III. SEAPORT DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/13
B. KEY INDICATORS
Container Volume TEU's in 000's
2,000
1,500
2012 Actuals
1,000
2013 Budget
2013 Actuals
500
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Grain Volume Metric Tons in 000's
4,000
3,000
2012 Actuals
2,000
2013 Budget
1,000 2013 Actuals
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cruise Passengers in 000's
1,000
800
2012 Actuals
600
2013 Budget
400
2013 Actuals
200
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Net Operating Income Before Depreciation By Business
$ in 000's 2012 YTD 2013 YTD 2013 YTD 2013 Rev Bud Var Change from 2012
Revised
Actual Actual Budget $ % $ %
Containers 15,545 11,191 10,436 755 7% (4,354) -28%
Grain 1,464 (0) 548 (548) -100% (1,464) -100%
Seaport Industrial Props 2,067 2,210 2,117 93 4% 143 7%
Cruise (1,334) (1,255) (1,381) 126 9% 80 6%
Docks (143) (220) (121) (99) -81% (77) -54%
Security (217) (217) (109) (108) -99% 0 0%
Env Grants/Remed Liab/Oth 0 (6) 0 (6) NA (6) NA
Total Seaport 17,381 11,703 11,490 213 2% (5,678) -33%
15
III. SEAPORT DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/13
C. OPERATING RESULTS
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 96,328 (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
NOI Before Depreciation 17,381 11,703 11,490 213 2% 63,240 54,630 50,181 (4,448)
Depreciation 8,633 8,764 8,781 17 0% 35,022 35,022 35,022 0
NOI After Depreciation 8,748 2,939 2,709 230 9% 28,218 19,608 15,160 (4,448)
Seaport revenues were ($663K) unfavorable to budget. Key variances are as follows:
Seaport Lease & Asset Management - unfavorable ($516K)
Containers were $181K favorable. Crane Rent Revenue $78K favorable due to above budget tariff crane
usage at Terminal 5 $205K, partially offset by unfavorable variance at Terminal 18 ($127K) due to no usage
of Port owned MHI cranes through the first quarter. Concession Rent favorable $114K due to Terminal 5
intermodal usage higher than anticipated in the Budget.
Grain ($622K) unfavorable due to volume coming in 68% unfavorable to budget.
Seaport Industrial Properties were ($75K) unfavorable. These were primarily due to the unfavorable Space
and Land Rental variance at Terminal 115 ($84K) because of arbitration with SeaFreeze over a market rate
adjustment that will be retroactive to Jan1, 2013.
Cruise and Maritime Operations - unfavorable ($148K)
Cruise was $4K favorable variance is not material.
Maritime Operations Docks were ($65K) unfavorable. These were primarily due to Sale of Utilities revenue
unfavorable ($95K) because of less electricity use than budgeted. This was partially offset by favorable
Wharfage variance $49K due to higher than normal unloading of fish, primarily the Pollack fleet.
Security Grants were ($87K) unfavorable due to budgeted Operating & Maintenance reimbursement grant,
but it was later determined that the grant requirements would exclude the planned activity.
Total Seaport Division Expenses were $877K favorable to budget. Key variances:
Seaport Expenses (excluding Environmental Services) were $308K favorable to budget. Major variances
were as follows:
Salaries & Benefits were $100K favorable due to current or earlier in the year open positions in
Terminal 91 Maritime Operations, Commercial Strategies, and Seaport Finance.
Utilities were $133K favorable primarily due to lower usage than budgeted of water, sewer, and
electrical utilities at Terminal 91 industrial properties.
Outside Services were $18K favorable due to offsetting variances. Costs for the Terminal 5 Phase II
Maintenance Dredge project $65K favorable to budget due to timing and costs budgeted for
transportation related studies $46K have not yet been spent. Amount were largely offset by unbudgeted
payment to Burke Museum to prepare tribal artifacts for transfer to tribes ($69K) and due to earlier
16
III. SEAPORT DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/13
than planned payment for advertising campaign development costs ($16K).
Travel & Other Employee Expenses were $79K favorable due to timing as there was less travel during
the first quarter than budgeted.
General Expenses were ($51K) unfavorable due to bad debt expense ($96K) in Maritime Operations.
Amount is expected to be reversed in the current year as involved companies are negotiating payment
plans. Unfavorable variance is partially offset by favorable Agency Permits & Fees $44K due to later
receipt of annual invoices than assumed in the budget.
Maintenance costs, direct and allocated, were unfavorable ($165K) due to crane rail repairs at Terminal 46
that were planned for 2012, but were delayed until early 2013 and due to unplanned preventative
maintenance on the Smith Cove Cruise Terminal gangways and steel camels. Unfavorable amounts were
partially offset by favorable variances in other areas related to delays in other projects.
CDD costs were favorable $70K due to below budget direct charged Outside Service costs $85K from
Seaport Project Management related to prior year invoice for Pier 66 underdock inspections not paid or
reaccrued in 2013 and below budget usage of outside services for the Terminal 5 phase II maintenance
dredge. In addition, direct charges and allocations from all CDD groups were below budget for planned
projects $131K. Favorable amounts were partially offset by unplanned direct charges and overhead related
to the unanticipated Terminal 115 broken waterline ($150K).
Police costs, direct and allocated were favorable $112K due to below budget spending by the Police for the
year-to-date.
Corporate costs, direct and allocated, were favorable $474K due to lower than anticipated direct charges
and allocations from virtually all Corporate groups including Information & Communication Technology
$170K, Accounting and Financial Reporting $75K, Office of Social Responsibility $55K, and Public Affairs
$47K.
Security Grant Expenses were unfavorable ($4K) due to grant management fees.
All other variances netted to favorable $82K or less than 1% of total expenses budgeted.
NOI Before Depreciation was $213K favorable to budget.
Depreciation was $17K favorable or essentially on budget for the year-to-date.
NOI After Depreciation was $230K favorable to budget.
Forecast
As of the end of the 2nd Quarter 2012, Seaport anticipates ending the year ($4.4 million) unfavorable to budget
for NOI Before Depreciation. The variance reflects below budget revenue of ($4.4 million).
The unfavorable revenue variance is primarily the result of below budget grain revenue ($2.5 million) due to
volume that is currently forecasted to come in 52% below budget and Terminal 18 crane rent ($1.8 million) due
to no minimum payment required for MHI cranes if full year volume falls below 250 thousand lifts. Tenant has
indicated that lifts will be below that level. In addition, security grant revenue ($173 thousand) due to amount
budgeted for operating and maintenance reimbursement grants. It has been determined that costs do not meet
grant requirements.
Expenses are forecasted to match budget.
Change from 2012 Actual
NOI Before Depreciation for YTD 2013 decreased by ($5,678K) from 2012 due to lower revenue and slightly
higher expenses.
Revenue is down ($5,601K) from the prior year due to decreased Container revenue ($3,556K) resulting from
lower crane rent ($2,011K) due to sale of Terminal 46 cranes to terminal operator ($679K) and due to lower
17
III. SEAPORT DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/13
volume at Terminal 18 ($1,372K). Due to lower volume, SSA is not using MHI cranes and expects to qualify for
a waiver of minimum crane rent in 2013. Container Terminal Space and Land rental decreased ($1,621K) due to
change in lease rate structure following 13th Lease Amendment with TTI at Terminal 46. Grain revenue
decreased ($1,494K) due to significantly lower volumes in 2013. Security revenue decreased ($816K) due to
completion/expiration of grants in 2012. Reductions in revenue were partially offset by increase in Maritime
Operations revenue $116K due to commencement of the Washington State Department of Transportation lease at
the north-end of Terminal 46.
Expenses, both direct and allocated, increased by a net of $77K due to Seaport originated expenses increasing by
$464K due to outside services costs associated with the Terminal 5 Phase II Maintenance Dredge program and
due to payment to Burke Museum to prepare tribal artifacts for transfer to tribes. These increases were partially
offset by lower utility expenses at Terminal 91 Industrial Properties and due to Furniture & Equipment purchases
incurred in 2012 related to the cruise terminal lease. Maintenance expenses increased $376K due to increased
work at Terminal 46 Container Terminal, Smith Cove Cruise Terminal and Terminal 91 Docks. CDD expenses
increased $173K due to understatement of expenses in Q1 2012 because approximately $200K in 2011 year-end
accruals were reversed with no corresponding offsetting payment of amounts due until later in 2012. Security
Grant expenses decreased due to completion/expiration of grants in 2012.
D. CAPITAL SPENDING RESULTS
Budget Variance
2013 YTD 2013 2013
Actual Forecast Budget $ %
$ in 000's
Cruise 236 2,974 3,402 428 13%
Terminal 46 133 1,589 2,600 1,011 39%
Security 105 1,265 1,175 (90) -8%
N Argo Express - Private Road 91 791 797 6 1%
Small Projects 100 510 615 105 17%
Green Port Initiative 3 543 555 12 2%
P34 Dolphins & Catwalk 0 225 500 275 55%
T106 & T108 Drainage & Pavement 0 300 300 0 0%
Street Vacations 25 145 160 15 9%
All Other 202 1,020 1,025 5 0%
Total Seaport 895 9,362 11,129 1,767 16%
Comments on Key Projects:
Through the first quarter, the Seaport Division spent 8% of the 2013 Approved Capital Budget. Full
year spending is estimated to be 84% of the Approved Capital Budget.
Projects with significant changes in spending were:
Cruise Smith Cove Cruise Terminal shore power reliability solution will be further evaluated in 2014.
Terminal 46 Dock Rehabilitation $1.2M moved out one year due to prioritization of other projects at
Terminal 46.
P34 Dolphins & Catwalk Current schedule for project forecasts spending out through 2015.
18
IV. REAL ESTATE DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/13
FINANCIAL SUMMARY
2012 2013 2013 2013 Rvsd Bud Var Change from 2012
Revised Approved
$ in 000's Actual Forecast Budget Budget $ % $ %
Revenues:
Operating Revenue 31,308 32,516 32,516 32,516 0 0% 1,208 4%
Total Revenues 31,308 32,516 32,516 32,516 0 0% 1,208 4%
Total Operating Expenses 35,525 38,824 38,824 39,002 0 0% 3,299 9%
Net Operating Income (4,217) (6,308) (6,308) (6,486) 0 0% (2,091) -50%
Capital Expenditures 2,433 9,904 12,165 12,165 2,261 19% 7,471 307%
Total Real Estate Division Revenues were $45K or about 1% favorable to budget for the year-to-date. For
the full year, Real Estate is forecasting Revenue to be on budget.
Total Operating Expenses were $1,287K, or 14%, favorable to budget due timing. For the full year, Real
Estate is forecasting Operating Expenses to come in on budget.
Net Operating Income for 2013 was $1,332K favorable to budget and ($44K) below 2012 Actual. For the
full year, Real Estate is forecasting Net Operating Income to come in on budget.
At the end of the first quarter, capital spending for 2013 is currently estimated to be $9.9 million or 81% of
the Approved Annual Budget amount of $12.2 million.
A. BUSINESS EVENTS
Occupancy levels at Commercial Properties were at 91% at the end of the first quarter, which is below the
92% target for the 2013 Budget, but above comparable statistics for the local market of 88%.
Recreational marinas averaged 94% moorage occupancy through the second quarter which was above the
target of 91%.
Fishermen's Terminal and Maritime Industrial Center averaged 79% moorage occupancy which was below
the target of 81%.
Real Estate Development & Planning
Issued a request for proposals for the Des Moines Creek Business Park site in January.
Reached settlement agreement with King County in March related to the condemnation action to
acquire an interest in the Terminal 91 West Yard site for its proposed combined sewer overflow
project.
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 ("ERC"). ECR is developing plans for expanded freight and excursion service.
19
IV. REAL ESTATE DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/13
B. KEY INDICATORS
Shilshole Bay Marina Moorage Occupancy
120.0%
100.0% 2012 Actual
Footage 80.0% 2013 Budget
2013 Actual
Percent Linear 60.0%
40.0%
20.0%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Fishermen's Terminal Moorage Occupancy
120.0%
100.0%
2012 Actual
80.0% 2013 Budget
Footage Occupied 60.0% 2013 Actual
Percent Linear 40.0%
20.0%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Commercial Buildings
100%
90%
90% 92% 91% 91% 92% 91% 92% 91% 92%
2012 Actual
80%
Percent 2013 Target
70%
2013 Actual
60%
Qtr 1 Qtr 2 Qtr 3 Qtr 4
Net Operating Income Before Depreciation By Business
2012 2013 2013 Rvsd 2013 Bud Var Change from 2012
$ in 000's Actual Actual Budget $ % $ %
Recreational Boating 488 418 101 317 314% (71) -14%
Fishing & Commercial (523) (536) (901) 365 41% (13) -3%
Commercial Properties (403) (252) (741) 489 66% 151 38%
Conference & Event Centers 385 267 250 18 7% (118) -31%
Eastside Rail (68) (64) (89) 26 29% 4 6%
RE Development & Plan (67) (65) (182) 117 64% 2 3%
Envir Grants/Remed Liab/Oth (0) 0 (0) 0 -100% 0 NA
Total Real Estate (188) (232) (1,563) 1,332 85% (44) -23%
20
IV. REAL ESTATE DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/13
C. OPERATING RESULTS
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
NOI Before Depreciation (188) (232) (1,563) 1,332 85% (6,486) (6,308) (6,308) 0
Depreciation 2,498 2,457 2,413 (44) -2% 9,509 9,509 9,509 0
NOI After Depreciation (2,685) (2,688) (3,976) 1,288 32% (15,995) (15,816) (15,816) 0
Total Real Estate revenues were $45K favorable to budget. Key variances are as follows:
Harbor Services: Unfavorable ($1K)
Recreational Boating favorable $53K primarily due to above budget occupancy of 95% versus budget of
93% at Shilshole Bay Marina or an average of approximately 32 boats per month more than planned.
Fishing and Commercial unfavorable ($54K) primarily due less demand than budgeted for small fishing
boats impacting monthly moorage, utility sales and vessel hookup fees.
Portfolio Management: Unfavorable ($19K)
Commercial Properties unfavorable ($70K) primarily due to lower occupancy at Terminal 102 Marina
Corporate Center and Pier 2 and later start of rent for tenant at Fishermen's Terminal Office & Retail than
assumed in the Budget.
Conference & Event Centers favorable $51K or within 2% of budget.
Bell Street International Conference Center favorable $99K.
World Trade Center Club unfavorable ($48K) due to lower activity than budgeted, but Membership
Revenue on budget.
Eastside Rail Corridor: Favorable $2K
Eastside Rail Corridor favorable $2K due to land rental.
RE Development and Planning: Favorable $28K
Terminal 91 General Industrial favorable $28K due primarily to higher revenue from Pacific Maritime
Association and University Volkswagon resulting from tenants taking more yard space than budgeted.
Facilities Management: On Budget
Maintenance: Favorable $35K
Maintenance favorable $35K.
21
IV. REAL ESTATE DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/13
Total Real Estate expenses were $1,287K favorable to budget. Key variances:
Real Estate Expenses (excluding Maintenance, P69 Facilities, and Conference & Event Activity Expense)
were favorable $369K. Major account variances were as follows:
Outside Services favorable $394K primarily due to timing in use of broker fees and tenant
improvement costs.
Utilities unfavorable ($64K) due to higher use of electricity at Shilshole Bay Marina and Bell
Harbor Marina.
Real Estate Conference & Event Centers unfavorable ($49K) due to activity at Bell Harbor International
Conference Center.
Eastside Rail Corridor expenses were $18K favorable due to underutilized consulting service costs.
Maintenance expenses were favorable $412K primarily due to timing differences with the budget.
Seaport originated expenses were favorable $13K due to below budget direct charges and allocations from
Environmental Services & Planning and Seaport Finance.
CDD costs, direct and allocated were favorable $326K primarily due to slower start on Net Shed compliance
work.
Police costs, direct and allocated were favorable $37K due to below budget spending by the Police for the
year-to-date.
Corporate costs, direct and allocated, were favorable $155K primarily due to ICT $69K, Accounting $25K,
and Public Affairs $13K.
All other variances netted to a favorable $6K.
NOI Before Depreciation was $1,332K favorable to budget.
Depreciation was ($44K) or (2%) unfavorable to budget.
NOI After Depreciation was $1,288K favorable to budget.
Full Year Forecast
Real Estate anticipates ending the year on Budget.
Change from 2012 Actual
Net Operating Income Before Depreciation decreased by ($44K) between Q1 year-to-date 2013 and 2012 as a
result of higher revenue more than offset by higher expenses.
Revenues increased by $74K primarily due to more activity at Bell Harbor International Conference Center and
World Trade Center Seattle.
Expenses increased by $118K primarily due to higher costs associated with more activity at Bell Harbor
International Conference Center and increased Marine Maintenance costs partially offset by lower Real Estate
expense due to less use of outside consultants in 2013.
22
IV. REAL ESTATE DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/13
D. CAPITAL SPENDING RESULTS
Budget Variance
2013 YTD 2013 2013
Actual Forecast Budget $ %
$ in 000's
P69 N Apron Corrosion Control 48 1,965 2,507 542 22%
FT C15 HVAC Improvements 37 1,500 2,400 900 38%
Small Projects 35 1,495 1,781 286 16%
MIC A1 Roof Replacement 43 1,441 1,448 7 0%
Fleet Replacement 2 722 724 2 0%
SBM Central Seawall Replacement 0 280 715 435 61%
All Other 479 2,501 2,590 89 3%
Total Real Estate 644 9,904 12,165 2,261 19%
Comments on Key Projects:
Through first quarter, the Real Estate Division spent 5% of the Approved Capital Budget. Full year spending is
estimated to be 81% of the Approved Capital Budget.
Projects with significant changes in spending were:
P69 N Apron Corrosion Control Contractor bid lower than estimate.
FT C15 HVAC Improvements Construction funding postponed to align with FT 25 year plan.
SBM Central Seawall Replacement Spending moved to 2014.
23
V. CAPITAL DEVELOPMENT DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/13
A. BUSINESS EVENTS
ENGINEERING:
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.
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.
PORT CONSTRUCTIION SERVICES:
Key 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.
CENTRAL PROCUREMENT OFFICE:
Added list of future procurements to external website.
AVIATION PROJECT MANAGEMENT GROUP:
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.
SEAPORT PORJECT MANAGEMENT GROUP:
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.
24
V. CAPITAL DEVELOPMENT DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/13
B. KEY PERFORMANCE METRICS
Key Performance 2013 YTD Notes
Metrics
Construction Soft ($ in 000's) Limit construction soft costs (design,
Costs construction management, project
Total Costs $ 3,237 (100%) management, environmental
36 month rolling documentation, allocated overhead) to
average from Total Construction: $ 2,486 ( 77%) no more than 25% of total capital
improvement costs.
Q2 2010 thru Q1 2013 Total Soft: $ 751 ( 23%)
Cost Growth During Total Completed Projects YTD: 8 Limit average mandatory change cost
Construction growth to 5% of construction contract
Discretionary Change: 0.6% award.
Mandatory Change: 2.5% Limit average discretionary change
cost growth to 5% of construction
contract award.
Design Schedule ($ in 000's) Limit design growth from initial
Growth Total Completed Projects YTD: 8 Commission project authorization to
Avg Design Growth Completed Proj's: 28.1% construction contract award to no more
Cumulative Value YTD: $ 9,358 than 10% of originally allotted
duration.
Construction Schedule ($ in 000's) Limit construction growth from
Growth Total Completed Projects YTD: 8 contract award to substantially
Avg Construction Growth Completed complete to no more than 10% of
Projects: 33.7% originally scheduled.
Cumulative Value YTD: $ 9,358
Performance Q1 2013 98% PREPs completed within 30 days
Evaluation Timeliness Total PREPs due: 44 44 of anniversary date.
Total PREPs on time:
0-30 days (CDD) 36 36
(82%) (82%)
0-60 days (HRD) 42 42
(95%) (95%)
2013 YTD Goods & Services 105 days Average number of days, improving
Procurement Schedule: Major Public Works 71 days from period to period.
Total Time Specs Small Works 42 days
Execution Service Agreements 175 days
25
V. CAPITAL DEVELOPMENT DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/13
C. OPERATING RESULTS
2012 YTD 2013 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
Charges To Capital/Govt/Envrs Projects
Capital Development Administration - - - - 0.0% - - - -
Engineering (2,160) (1,854) (2,488) (634) 25.5% (10,675) (10,675) (10,675) -
Port Construction Services (999) (934) (1,088) (154) 14.2% (4,353) (4,353) (4,353) -
Central Procurement Office (449) (468) (386) 82 -21.1% (1,531) (1,546) (1,546) -
Aviation Project Management (1,033) (1,589) (1,482) 106 -7.2% (6,178) (6,178) (6,178) -
Seaport Project Management (318) (331) (368) (37) 9.9% (1,472) (1,472) (1,427) (45)
Total Charges to Capital/Govt/Envrs Projects (4,959) (5,176) (5,813) (637) 11.0% (24,208) (24,223) (24,178) (45)
Operating & Maintenance Expense
Capital Development Administration 89 90 96 6 6.7% 382 378 378 -
Engineering 931 1,172 1,111 (60) -5.4% 4,229 4,178 4,183 (5)
Port Construction Services 220 564 609 45 7.5% 2,266 2,238 2,238 -
Central Procurement Office 741 709 721 12 1.6% 3,001 2,964 2,964 -
Aviation Project Management 815 258 678 421 62.0% 2,532 2,501 2,501 -
Seaport Project Management 115 242 596 354 59.4% 2,370 2,341 2,350 (9)
Total Expenses 2,909 3,034 3,812 778 20.4% 14,780 14,601 14,615 (14)
Variance Summary and Notes:
Vacancies: 34= $535K Salaries & Benefit savings from unfilled positions.
Over Absorption OH Clearing ($375K) represents costs allocated as overhead above the total actual
overhead costs. Actual capital, expensed and net operating costs will decrease to account for the over
absorption value. YTD budget variance will increase by the Absorption value.
CDD Admin $6K. Favorable variance in Salaries & Benefits and Travel (some travel and training at reduced
cost or delayed).
ENG ($60K). Favorable variances in Salaries & Benefits, Equipment, Supplies, Outside Services, and
Travel/Other were offset by reduced Charges to Capital (less than budgeted due to delayed projects).
PCS $45K. Favorable variances in Salary & Benefits, Equipment, Outside Services, Travel (more in-house
training), Property Rentals (port-owned properties no longer charging rent budgeted for 2013), Workers
Comp (less exposure than anticipated) offset unfavorable balances in Supplies & Stock (2012 accrual
adjustments) and Charges to Capital (less capital work than originally budgeted).
CPO $12K. Favorable variances in Salaries & Benefits, Supplies & Stock, Outside Services (timing of
expenses to Quarter 2), Total Travel (timing of training), Charges to Capital Projects (PeopleSoft upgrade
testing increased capital charges beyond amount budgeted) offset $100K unplanned legal costs.
AVPMG $421K. Favorable variances in Salaries & Benefits, Equipment, Outside Services, and more
Charges to Capital than budgeted. Expenses expected to match budget by year end as more staff is hired and
training/travel expenses are anticipated.
SPM $354K. Favorable variances in Salary & Benefits and Outside Services (timing of consultant
contracts), Travel (training not taken) offset unfavorable variance in Charges to Capital (less time to capital
than projected).
26
VI. CORPORATE FINANCIAL & PERFORMANCE REPORT 03/31/13
A. BUSINESS EVENTS
Commissioners and Executives provided overview of the port, Century Agenda, facilities, programs and
projects to commissioner applicants and the public. The meeting was streamed live on public TV.
Provided internal communication about Century Agenda implementation, business objectives and regional
objectives.
Fostered a better public understanding of the Port's competitive position, and what cargo and freight means
for a local economy, through increased media availability in local and industry publications.
Held US Navy Naming Ceremony of the USS Washington.
Met with Congressional staff regarding concerns about Harbor Maintenance Tax issues.
Developed content for Portfolio covering Century Agenda topic of Workforce Development, along with
arrival of Bertha tunnel drilling equipment via port docks and national Fit Friendly award.
Leveraged significant media interest in the commission vacancies into coverage of the port's broad mission
and impact on local economic development.
Launched of live music events at Sea-Tac Airport, which generated dozens of media interviews. The airport
had four rollouts of various components of the project, numerous press releases and two media availabilities.
Launched internal outreach for new Email Communications Strategy and Communications Toolbox.
Held Leadership Work Session, including presentation of new brand integration process and strategy.
Planning for Affordable Care Act compliance in 2014 and beyond. This includes monitoring continually
evolving and newly defined requirements as well as work on a long-term Healthcare Strategy.
Finalized a flow process for incident intake for reporting to the State Auditor's Office for lost/stolen
Port's assets.
Continued to focus on emergency preparedness and business continuity and working on a cyber-insurance
seminar.
Launched the 2013 Wellness Reward program with Cigna and work is underway for developing health care
cost containment strategy.
Completed 2012 Safety Evaluations and 2013 Safety Action Plans.
Implemented a Safety Training Day for Marine Maintenance.
Attended meetings of the Executive Committee and Design Oversight Committee addressing outstanding
issues of transit, bikes and streetcar on Central Waterfront.
Completed the audit for ICT Performance and Risk Assessment. The report was presented to the Audit
Committee and it delivered a 3-year internal audit work plan.
Completed extensive Fit/Gap analysis for all PeopleSoft Financials modules. T he upgrade is expected to
go-live in July.
Deployment of the Flight Information Display software has been completed, construction for the
replacement of monitors is underway, and the new Resource Management System is being configured. This
project will replace the aging monitors and the current FIMS with a flexible system that can provide flight
and other information such as visual paging and emergency notification.
Implementation and configuration of the Police Records Management System is in progress. This effort will
replace the aging police records management system to ensure availability, traceability, and increased
productivity.
Issued Limited Tax General Obligation Refunding Bonds, Series 2013 A and B in the amount of
$102,795,000 for the purpose of refunding the 2004 bonds and a portion of the 2011 bonds for total debt
service savings of $16 million.
Solicited bids for a replacement letter-of-credit for the 2008 Subordinate Lien Revenue Bonds.
Continued to reach out to the community to educate small businesses on contracting opportunities and the
Small Contractors and Suppliers Program (SCS).
Continued collaboration efforts with community and law enforcement partners to address theft issues.
27
VI. CORPORATE FINANCIAL & PERFORMANCE REPORT 03/31/13
B. KEY PERFORMANCE METRICS
Key Performance Metrics YTD 2013 YTD 2012/Notes
A. Be a High Performance Workplace
1. Employee Training
a) New Employee Orientation 23 attendees 24 , decreased by 1
b) Employee Develop. Classes 37 13, increased by 24
c) REALeadership Program 0 0, No change
d) MIS Training 0 MIS class 3 MIS classes, 11 users
e) Required Safety Training 87% 70%, increased 17%
2. Tuition Reimbursement 19 employees participated 21, decreased by 2
3. Occupational Injury Rate 4.77 5.96, decreased 1.19
4. Total Lost Work Days 185 57, increased 128 days
B. Foster a Strong Partnership with Surrounding Communities
1. Sustainability Communications 60,218 individuals reached 51,732, increased by 16%
2. Targeted Outreach Contacts 113 new contacts 110, increased by 3
3. Small Business Outreach 14 9, increased by 5
C. Continue to be a Strong Advocate of Social Responsibility
1. Small Businesses on PRMS 74 133, decreased by 59
2. Contracts Reviewed for SCS 40 12, increased by 28
3. Airport Job Placements 101 98, increased by 3
4. Apprenticeship Opportunity 31 57, decreased by 26
Project Placements
5. Numbers of Interns Hired 1 2, decreased by 1
D. Maintain a Strong Culture of Transparency and Accountability
1. Internal Audits Completed 2 5, decreased by 3
2. % of Audit Plan Completed 10% 19%, decreased by 9%
3. Public Disclosure Requests 245 519, decreased by 274
4. Vehicle Incidents 6 9, decreased by 3
5. Incurred Auto Liability Costs $25K $30K, decreased by $5K
E. Maintain the Port's Strong Financial Position
1. Corp. Cost as a % of Total Rev. 14.8% 14.3%
2. Corp. Cost as a % of Total Exp. 25.3% 26.3%
3. Commission Authorized Projects 100%/30% 100%/55%, decreased by 25%
On Budget/Schedule
4. Account Receivables Collection $2,550M $2,889M
(0 30 days)
5. Invoice Due Date vs. Date Paid 4 days Compared to 3 days (benchmark)
F. Provide Outstanding Support to Divisions
1. Contract Administration Issues 12 25, decreased by 13
2. Attorney Services 24 litigation and claims 31, decreased by 7
3. Labor Contracts Negotiated 6 2, increased by 4
4. Job Openings Created 69 70, decreased by 1
5. Job Applications Received 1,906 2,848, decreased by 942
6. Police Customer Service Survey 88% 98%, decreased by 10%
(% Above Average or Excellent)
28
VI. CORPORATE FINANCIAL & PERFORMANCE REPORT 03/31/13
C. OPERATING RESULTS
2012 YTD 2013 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 98 68 39 29 75.8% 155 155 184 29
Executive 382 442 495 53 10.8% 1,552 1,806 1,806 -
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 -
Risk Services 637 672 775 103 13.3% 3,186 3,166 3,101 65
Health & Safety Services 256 259 278 20 7.0% 1,138 1,118 1,112 5
Public Affairs 1,270 1,199 1,563 364 23.3% 5,946 5,946 5,946 -
Human Resources & Development 1,188 1,173 1,283 110 8.6% 5,468 5,425 5,425 -
Labor Relations 247 311 293 (19) -6.3% 1,198 1,153 1,197 (44)
Information & Communications Technology 4,642 4,257 5,104 847 16.6% 20,805 20,505 20,505 -
Finance & Budget 376 353 391 37 9.6% 1,877 1,777 1,777
Accounting & Financial Reporting Services 1,500 1,376 1,625 249 15.3% 7,055 6,835 6,809 26
Internal Audit 278 291 324 33 10.2% 1,361 1,361 1,361 -
Office of Social Responsibility 359 215 464 249 53.6% 1,702 1,702 1,702 -
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
Corporate revenues were $29 thousand favorable compared to budget due to higher operating grants.
Corporate expenses for the first three months of 2013 were $16.6 million, $2.7 million or 13.9% favorable
compared to the revised budget and $535 thousand or 3.1% lower than the same period a year ago. The $2.7
million favorable variance is due primarily to timing differences between when the items are paid and when
budgeted and not necessarily cost savings.
All corporate departments have a favorable variance except for:
Labor Relations - unfavorable variance of $19 thousand is due to Severance pay for a HR10 employee.
Contingency - unfavorable variance of $60 thousand is primarily due to the Port's contribution to
Washington Tourism Alliance.
Year-end spending is projected to be $70 thousand under budget due primarily to:
Commission delays hiring of vacant position.
Risk Management lower insurance costs.
Health & Safety Services miscellaneous savings.
Accounting and Financial Reporting Services rebate received for the credit card/p card and e-payables
program and unbudgeted charges to capital for work performed on the People Soft Financial Systems
Upgrade Project.
D. CAPITAL SPENDING RESULTS
2013 YTD 2013 2013 Budget Variance
$ in 000's Actual Forecast Budget $ %
PeopleSoft Financials Upgrade 875 4,635 4,635 0 0.0%
ID Badge System Replacement 61 1,711 1,900 189 9.9%
IT Infrastructure Small Cap 263 1,568 1,568 0 0.0%
Service Technology Small Cap 73 1,382 1,382 0 0.0%
LiveLink Upgrade 0 300 500 200 40.0%
All Other 679 4,968 4,991 23 0.5%
TOTAL 1,951 14,564 14,976 412 2.8%
29
Limitations of Translatable Documents
PDF files are created with text and images are placed at an exact position on a page of a fixed size.
Web pages are fluid in nature, and the exact positioning of PDF text creates presentation problems.
PDFs that are full page graphics, or scanned pages are generally unable to be made accessible, In these cases, viewing whatever plain text could be extracted is the only alternative.