Item 6c Report

ITEM NO. 6c-Report
DATE OF
MEETING  March 5, 2009


Port of Seattle

QUARTERLY 
PERFORMANCE 
REPORT


AS OF DECEMBER 31, 2008

TABLE OF CONTENTS 

Page 
I.      Portwide Performance Report                                                    1-3

II.     Aviation Division Report                                                        4-11

III.     Seaport Division Report                                                       12-19

IV.   Real Estate Division Report                                   20-25

V.   Corporate Professional & Technical Services                   26-36

VI.   Definition of Terms                                            37

(More detailed information can be made available upon request of the Divisions or LOBs)








i

I.       PORTWIDE PERFORMANCE REPORT 12/31/08 

INCOME STATEMENT 

Report: Income Statement
As of Date: 2008-12-31
2007 YTD   2008 YTD  2008 YTD   2008 Var $  2008 Var %   2008 Annual  % of Annual  2008 Var %
Dollars in thousands                 Actual       Actual     Budget    Bud vs. Act  Bud vs. Act     Budget       Bud     Act vs. 2007
Revenues:
Seaport                      80,210     94,781    87,982      6,800     7.7%     87,982     107.7%     18.2%
Real Estate                    32,383     35,231    32,183      3,049     9.5%      32,183     109.5%      8.8%
Aviation                        346,330     357,600   355,055      2,545      0.7%     355,055      100.7%      3.3%
Corporate                      2,223      1,735     1,258       477     37.9%      1,258     137.9%    -22.0%
Total Revenues                  461,146    489,347   476,477     12,870     2.7%    476,477     102.7%     6.1%
Operating & Maintenance:
Seaport                      19,867     24,262    25,522      1,260     4.9%     25,522      95.1%     22.1%
Real Estate                    30,390     39,244    31,578     (7,666)    -24.3%      31,578     124.3%     29.1%
Aviation                        121,067     142,318   134,061      (8,257)     -6.2%     134,061      106.2%     17.6%
Chief Procurement Office               37      1,406       20     (1,387)  -7032.8%        20    7132.9%   3701.5%
Corporate                     70,257     72,425    74,210      1,785     2.4%      74,210      97.6%     3.1%

Total O&M before De preciation      241,618    279,656   265,391    (14,265)    -5.4%     265,391     105.4%    15.7%

Operating Income Before Depreciation     219,528    209,691   211,086     (1,395)    -0.7%    211,086     99.3%     -4.5%
De preciation                  141,588    145,849   147,070      1,221     0.8%     147,070      99.2%     3.0%
Total O&M and Depreciation    383,206    425,505   412,460    (13,044)    -3.2%    412,460     103.2%    11.0%
Operating Income after Depreciation       77,939     63,843    64,017      (174)    -0.3%     64,017      99.7%    -18.1%












1

I.       PORTWIDE PERFORMANCE REPORT 12/31/08 

EXECUTIVE SUMMARY
The 2008 Port of Seattle's overall operating revenues are $489.3 million, $12.9 million above the budget.
Overall operating expenses are $279.7 million, $14.3 million above budget. Operating income before
depreciation is $209.7 million, $1.4 million below the budget. Operating income after depreciation is $63.8
million, $174 thousands below the budget.
Port-wide capital spending is $327.6 million for the year, $250.5 million below the budgeted $578.1 million.
Within the Aviation Division, total non-airline revenues were over budget by $2.28 million as Public Parking
ultimately underperformed against the budget, tempering the favorable variances in Concessions, Commercial
Properties, Utilities and Ground Transportation. The total operating expenses were $6 million greater than the
budget mainly due to Other Post-Employment Benefits (OPEB) to Firefighters ($4.4 million), unbudgeted credit
card fees and other assorted items in Airport Operations ($2.64 million), deicing fluid purchases and worker's
comp claims in Maintenance ($1.28 million), expensing of capital-related write-offs ($2.8 million) and of
environmental-related projects ($2.5 million) as required by new accounting rules (GASB 49). To lessen the
impact of overspending, other aviation departments have saved $5.1 million over approved budget in addition
with over $2 million in savings from Corporate/Seaport/Real Estate allocations. Total capital spending for 2008
was $209.8 million, or 69% of the approved annual budget amount of $303.84 million.
Total Seaport revenues were $95.1 million, $7.1 million favorable to budget due to receipt of retroactive grant
money from the Department of Ecology for Terminal 5 and Harbor Island superfund sites partially offset by lower
than anticipated Security Grant Revenue. Security Grant projects are commencing later than assumed in
budget. Expenses were $45.4 million, $1.9 million unfavorable to budget due to higher than anticipated
Environmental Reserve expense related to 2008 implementation of GASB 49, partially offset by delayed
spending on Security Grant projects. NOI before Depreciation was $49.7 million, $5.2 million favorable to budget
and $5.8 million above 2007. Depreciation was $28.5 million, $0.5 million favorable to budget. NOI after
Depreciation was $21.2 million, $5.7 million favorable to budget and $8.5 million above 2007. Seaport capital
spending for 2008 was $88.5 million, or 70.0% of the approved annual budget amount of $126.9 million.
Total Real Estate revenues were $34.9 million, $2.7 million favorable to budget primarily due to more event
activity at Bell Harbor International Conference Center than budgeted. Expenses were $38.8 million, $6.1 million
unfavorable to budget primarily due to expensing of costs that had been capitalized in connection with a plan to
develop North Bay. NOI before Depreciation was ($3.9) million, $3.4 million unfavorable to budget. NOI after
Depreciation was ($14.0) million, $3.7 million unfavorable to budget. Real Estate capital spending for 2008 was
$21.2 million, or 17.0% of the approved annual budget amount of $125.3 million.
Corporate Professional and Technical Services revenues for 2008 were $477 thousand favorable compared to
the approved budget due to higher Police operating grants. Operating expenses for 2008 were $72.4 million,
$1.8 million or 2.4% favorable compared to the approved budget and $2.2 million or 3.1% higher than 2007.
This favorable variance was primarily due to several position vacancies during the year and other cost savings
realized in several departments.






2

I.       PORTWIDE PERFORMANCE REPORT 12/31/08 

CAPITAL SPENDING RESULTS
($ Millions)
Annual Results:
2008 Plan of Finance                     619.2
2008 Approved Budget                   578.1
2008 Actuals                          327.6
Variance (Budget vs Actuals)                 250.5

PORTWIDE INVESTMENT PORTIFOLIO 
The investment portfolio for 2008 earned 4.04% against our benchmark (The Merrill Lynch 3-year
Treasury/Agency Index) of 2.01%. Since the Port has become its own Treasurer in 2002, the Port's portfolio lifeto-date
has earned 3.90% against our benchmark of 3.13%.















3

II.      AVIATION DIVISION PERFORMANCE REPORT 12/31/08 

Summary of Results 
2006     2007    2008    2008    Actual/Budget
$ in 000s    Actual     Actual    Budget    Actual     Var $   Var %
Operating Revenues
Landing Fees                  46,730    53,158    58,878    65,633    6,756  11.5%
Terminal Rental                 128,957   129,145   126,224   125,548     (676)  -0.5%
Other Aero Revenues             10,685    11,569    12,465    11,651    (814)  -6.5%
Airline Revenues                186,372   193,872   197,567   202,833    5,266   2.7%
Non-Airline Revenues             141,501   143,975   149,036   151,321    2,284   1.5%
Other Revenues                9,627    9,640    9,238    4,526   (4,712) -51.0%
Total Operating Revenues         337,500   347,487   355,842   358,680    2,838   0.8%
Total Operating Expenses        160,811   171,624   187,982   194,042   (6,060)  -3.2%
Net Operating Income            176,689   175,864   167,860   164,639   (3,222)  -1.9%
Capital Expenditure               362,110   298,387   303,835   209,813   94,022   30.9%
Passenger Airline CPE              11.79     11.73     11.63     11.87    (0.24)  -2.1%
For 2008, we experienced a positive variance in non-airline revenues of $2.28 million as Public Parking
ultimately underperformed against the budget, tempering the favorable variances in Concessions,
Commercial Properties, Utilities and Ground Transportation.
Expenses were $6 million greater than the budgeted mainly due to OPEB benefits to Firefighters ($4.4
million), unbudgeted credit card fees and other assorted items in Airport Operations ($2.64 million),
deicing fluid purchases and worker's comp claims in Maintenance ($1.28 million), expensing of capitalrelated
write-offs ($2.8 million) and of environmental-related projects ($2.5 million) as required by new
accounting rules (GASB 49). To lessen the impact of overspending, other aviation departments have
saved $5.1 million over approved budget in addition with over $2 million in savings from
Corporate/Seaport/Real Estate allocations.
Total capital spending for 2008 was $209.8 million, or 69% of the Approved Annual Budget amount of
$303.84 million.
Traffic Volume 
Year End Results 
2007      2008    %        2007     2008    %
in 000s         Q4          Q4  Variance        YTD       YTD  Variance
Enplanements           3,824      3,640     -4.8%    15,662    16,085      2.7%
Landed Weight           5,246      5,061     -3.5%    21,014    21,516      2.4%
Enplanements vs. Prior Year                  Landed Weight vs. Prior Year
15%   12.39%
10%   7.39%
6.00% 5.73%
Growth Rate     9.14%   8.89%                                       4.58% 4.21%         4.28%
10%                                   3.70%       3.37%
5.40% 4.80%                               5%
5%       2.37%    2.62% 2.55% 1.94%                              0.21% 0.56%
0%
0%                   -2.28%                                -4.75%
-4.33%      Growth Rate                                                 -6.52%
-5%
-5%                          -7.94%
-10%                                    -10%
Jan Feb Mar Apr May Jun Jul AugSeptOct Nov Dec         Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

Both enplanements and landed weight for Q4 2008 were significantly lower than that of Q4 2007 (-4.8%
and -3.5% respectively).
Over the course of the entire year, enplanements grew 2.7% from 2007. Landed weight in 2008 saw an
increase of 2.4% over last year.
4

II.      AVIATION DIVISION PERFORMANCE REPORT 12/31/08 

A.   BUSINESS EVENTS 
th
Third Runway opened on November 20 .
Extreme snowfall disrupted normal airline operations in December. Airport activated multi-day
emergency center to manage situation while assisting airlines and travelers.
Alaska/Horizon is now entirely on the new C-1 baggage handling system.
Received Commission approval for Preconditioned Air project.
Installed six electric vehicle charging stations in parking garage.
Gate allocation process for 2009 completed. Alaska Airlines will now consolidate most of their gates at
N Satellite and Concourse C.
Commission voted to suspend Rental Car Facility construction due to lack of long-term funding.
Negotiations with Midway Sewer have reduced Biochemical Oxygen Demand surcharges.

B.   GOALS AND STRATEGIC ISSUES PROGRESS 
OBJECTIVES                    STATUS (Q4)
AERONAUTICAL 
Complete a strategic master plan for terminal   Long-term FIS study will be completed in early 2009,
development by the end of 2008           including optimization of existing location.
Coordination with Delta/Northwest on Phase 1 merger
facility needs.
Implement a targeted marketing program and   North cargo redevelopment study to be completed in
cargo facility and infrastructure enhancement   early 2009. This will clarify cargo facility needs and
plans to meet the region's growing demand for  options.
air cargo service by the end of 2008
Identify and analyze cost drivers for         Briefing document on CPE target setting sent to
aeronautical operating costs              Commission in November. Aviation will work with
Commission to set 5-7 year CPE target in early 2009.
CUSTOMER SERVICE 
Relocate permitted smoking areas away from   Proposal completed to add bold new signage to
those areas regularly used by non-smokers.    curbside window area to delineate smoking areas.
Upgrade terminal facilities to create a more    Short term improvement to FIS completed.
welcoming and efficient arrivals experience for
arriving international travelers; including a
strong 'Seattle' sense of place.
Evaluate the marketability and customer      Further development of ESP concept to provide new
service enhancement possibilities of a        parking, lounge access and 'registered traveler'
"Registered Traveler" program at Sea-Tac;    products.
present recommendations to Commission.
Improve the quality and availability of one-on-   New volunteer coordinator's efforts have resulted in
one customer service assistance provided by   increased volunteer recruitment. The program has
Sea-Tac (paid and volunteer) customer service  now approximately 85 volunteers
staff.
Create a new consumer-oriented airport      Business case for website redesign complete,
website.                           preparations for Commission presentation

5

II.      AVIATION DIVISION PERFORMANCE REPORT 12/31/08 
OBJECTIVES                    STATUS (Q4)
EMERGENCY PREPAREDNESS 
Complete the Airport Emergency Plan       Completed and adopted by the FAA on schedule
rewrite/update by July 1
Conduct Homeland Security required       2008 classes were conducted and reported as
emergency training and exercise programs by  scheduled. 2009 classes are being scheduled now.
the end of 2008
Design and implement an outreach plan by the  Completed On schedule. Outreach activities will be
end of 2008                       ongoing
Train staff to the Airport Emergency Plan      A training plan is being developed modeled to each
workgroup.
ENVIRONMENTAL LEADERSHIP 
Engage all airport stakeholders to assist in     Work continues on the development of the five-year
defining the strategic environmental focus     strategy plan. The strategy plan is being functionally
areas for the airport.                     organized around environmental performance factors
(KPIs). Working groups have identified goals,
objectives and actions.

Launch a campaign that engages, educates   Environmental Leadership Strategy team is in process
and instills a sense of personal responsibility    of being reorganized so that it is more proficient in
for environmental performance within the      identifying, tracking and prioritizing environmental
Aviation Division.                       initiatives at Sea-Tac. Reorganization will result in the
creation of seven working groups, each group
corresponding to one of the KPIs.
Establish an environmental "footprint"        Commission directed staff in March to establish
measurement mechanism that provides a     targets for GHG emission reduction at the airport.
means of regularly evaluating the performance  Reduction goals for GHG emissions related to Seaand
impact of the airport's actions.           Tac operations have been identified. Moreover, POS
is a founding member of The Climate Registry (TCR),
and as such is committed to reporting our Scope 1
and Scope 2 (Port-specific emissions) every year
beginning June 2009.
Implement an alternative fuel and emission    A Phase I assessment determined that a hotel shuttle
reduction policy for the airport's ground       consolidation program would make sense at Sea-Tac
sources of emissions.                  for essentially all hotels servicing the airport; saving
both emissions and vehicle access to the airport.
Upon sharing the information with hoteliers,
discussion/concern about the process has been
stated. We are trying to convince the hoteliers that we
do not wish to manage or play an integral role in
operating a shuttle consolidation program. Because
of this concern, Phase II (a logistical look at how to
implement the program) is on hold until 2009.
Develop and implement a policy that complies  Design standards for architectural, signage,
with EX-15 and requires LEEDS experience for  casework, mechanical and electrical were all updated
design consultant selection processes at the    to include environmental and sustainability
airport.                                performance measures. Completed in December. 

6

II.      AVIATION DIVISION PERFORMANCE REPORT 12/31/08 

OBJECTIVES                    STATUS (Q4)
HIGH PERFORMANCE WORKPLACE 
Ensure that every full-time airport employee has Airport Director's Office initiated a top-down
an employee development plan in place and   requirement for all staff to update development plans.
that supervisors make available appropriate
employee development opportunities.
Foster a workplace that supports challenges to  Continued sponsorship of Critical and Strategic
the status quo, incorporates new ideas and    Thinking training. Implemented Continuity Of
knowledge, and continuously strives for       Operations Planning (COOP) pilot project.
improvement by establishing an effective
communication program that allows Aviation
Division staff to offer ideas and feedback on
how to make the airport a "best place to work."
Establish an Aviation Division-wide mentoring   20 mentor/mentee matches port-wide, 1/3 in the
program that matches employees with       Aviation Division.
mentors.
Achieve a workplace injury rate 10% below the  Aviation's Occupation Injury Rate (OIR) is 7.79 per
national average and provide all employees    100 workers as compared to the national average of
with the tools and resources necessary to gain  4.4 per 100 workers. Initiated SafeStart training.
and maintain a healthy lifestyle.
NON-AERONAUTICAL 
Initiate development of key Port properties in   Work on redevelopment plan with City of Burien for
SeaTac, Burien and Des Moines as soon as   NERA (Northeast Redevelopment Area) continues.
th
practicable.                          Purchase of 7 Day Adventist Church property in
Burien completed. Discussing next steps with City of
Des Moines regarding preparing Des Moines Creek
Business Park for redevelopment. Study of
opportunities for redevelopment of Tyee Golf Course
completed.
Create new concession opportunities that     Regus Business Center cleared for construction start
provide for a more complete array of products   in January 2009. Infrastructure for kiosk/RMU
and services for the traveling public.          program complete in April 2009. GML Arrivals Hall
restaurant delayed until investment climate for small
business improves. RFP planned for 2010.
Increase advertising revenues through value   Current work focuses on identifying potential new
added promotion programs that do not detract  inventory within display advertising categories where
from the ambience of airport facilities.         sales maintain strength in a very challenging climate
for advertising.
Accommodate the rental car industry in a long-  Construction of rental car facility suspended in
term consolidated facility by 2011.           December due to lack of long-term financing. Efforts
continue to find viable financing plan.
Continue to increase parking business net     Parking revenues dropped below budget beginning in
income through new pricing and innovative    August and September. Total 2008 gross parking
services.                           revenues were $2.3 million under budget for the year.
However, total gross parking revenues increased from
$52.5 million in 2007 to $53.2 million in 2008, or 1.4%.

7

II.      AVIATION DIVISION PERFORMANCE REPORT 12/31/08 

OBJECTIVES                    STATUS (Q4)
SMALL BUSINESS 
Finalize by April 1 an accurate and         Done
comprehensive record keeping process that
effectively tracks all Aviation Division small
business participation.
By July 1, 2008, identify the procedures and    Done
practices which dampen small business and
Aviation Division participation in the Port's
Small Business Initiative and initiate a strategy
for their restructuring or removal.
By end of 2008, achieve 10% target of all     8.43% of 2008 service and product contracts were
service and product contracts with the Aviation  with qualified small businesses.
Division will be with qualified small businesses.
Roll out in 2008 a community outreach       Final figures for 2008 still being compiled
program that publicizes the Port's small
business opportunities ultimately resulting in
ten new small businesses enrolling on the
Port's small business roster and five new small
businesses providing goods and services to
the airport.
Done
By end of 2008, complete the airport's Small
Business Initiative and roll it into the larger
effort led by the Port's Office of Social
Responsibility.
SUPPORTIVE COMMUNITY 
Partner with Airport Jobs and within the       Community Development acted as a liaison between
community to increase educational and career  Airport Jobs and Highline Community College to
advancement opportunities for airport        develop a partnership to offer Airport University
employees by obtaining new scholarship     classes. Three classes are now being offered at the
money for and expanding class offerings at    Airport.
Airport University.
Engage employees in each Aviation Division   Initiated a new internship program for local High
department to identify and implement how --    School students.
either through their expertise or their
relationships with tenants and customers 
they can directly support the airport
communities.
Environmental Programs implemented an
Enhance youth understanding and interest in   Environmental Challenge program at Aviation HS.
the aviation industry through the            Held Aviation Academy for 80 freshmen from Aviation
implementation of a local high school        HS. Awarded $14K in scholarships in concert with
internship program that regularly brings       Host Int'l and Highline Schools Foundation. Port HR
students to work at the airport.              implemented new internship program where 6 high
school interns were hired for summer. New job
shadowing program for Aviation HS students was
implemented.

8

Runway opening was held and involved community
Use the third runway opening milestone as a   leaders. Multiple tours were given to elected officials,
means of celebrating with the local          community leaders and area residents. Information
communities the efforts to mitigate the impacts  was provided to the community at a community Open
of the airport on the surrounding area and the   House and on-going communication and information
creation of positive working relationships going  was provided about runway construction, testing and
forward.                           flight activity once opened. The Airport Director
provided information about the commissioning of the
runway through speeches and his stakeholder
newsletter.
Burien and the Port agreed on a scope of work for
Achieve success in development projects     redevelopment planning of NERA and selected a
within the local jurisdictions.                developer. Hosted a meeting between Burien and
SeaTac to begin cooperative traffic planning related to
truck routes for both Burien and SeaTac development.

C.   KEY INDICATORS 
2006     2007    2008    2008    Actual/Budget
$ in 000s    Actual     Actual    Budget    Actual     Var $   Var %
Non-Aero Financial Performance
Revenues                 141,501   143,975   149,036   151,321   2,284   1.5%
Operating Expense              48,563    56,261    67,330    63,534    3,796   5.6%
NOI                    92,938   87,714   81,706   87,787   6,081   7.4%
Aeronautical Operating Expense     112,465   114,764   120,652   129,648   (8,996)  -7.5%
Airport Vitality Measures
Operating Cost / Enpl               10.73     10.97     11.72     12.06    (0.34)  -2.9%
Non-Airline Revenues / Enpl            9.45      9.19      9.29      9.41     0.12   1.2%
Key Measures
Passenger Airline CPE              11.79     11.73     11.63     11.87    (0.24)  -2.1%
Non-Aeronautical NOI              92,938    87,714    81,706    87,787    6,081   7.4%
Other Key Measures
Non-Airline Revenue / Total Rev        41.9%    41.4%    41.9%    42.2%   0.31%   0.7%
Parking Revenue / Enpl              3.51     3.54     3.79     3.77    (0.02)  -0.5%
Concession Revenue / Enpl           1.89     1.98     1.99     2.09    0.10   5.0%
Primary Concession Sales / Enpl         9.00     10.02     10.15     10.29     0.14   1.4%
Traffic
Enplanements                14,982   15,662   16,040   16,085     45   0.3%
Landed Weight                20,362    21,014    21,320    21,516     196   0.9%
Airline Surplus/Deficit
Landing Fees                   2,016    1,585      (19)   (8,224)   (8,205)   n/a
Terminal Rents                  (7,669)    8,153       0     9,065    9,065    n/a
Net Surplus/(Deficit)                 (5,652)     9,738       (19)      841      860     n/a
Highlights 
Non-aeronautical NOI was $6.08 million over the budget due to higher revenues in Concessions, Commercial
Properties, Ground Transportation and Utilities. In addition to revenue drivers, there were significant expense
savings in Business Development and changes to tariffs and billing rates in Utilities which ultimately drove nonaeronautical
expenses down.
CPE for 2008 came in higher than both the budget and the 2007 actual, primarily due to increased costs allocated to
aeronautical cost centers and enplaned passengers regressing towards the originally budgeted levels.
Primary concession sales per enplanement were $10.29, slightly better than budgeted.
We now have an $841K year-end billing surplus to the airlines at the end of the year. Despite snow removal costs
and other expenses hitting the airfield cost centers, terminal billings were greater than expected, along with a $2.5
million environmental settlement reached with Northwest Airlines which lowered terminal rental revenue
requirements.

9

II.      AVIATION DIVISION PERFORMANCE REPORT 12/31/08 
D.   OPERATING RESULTS---- IN THOUSANDS$       [REPORTED BY SUBCLASS]
2008 Year-to-Date     2008 Variances
In $ Thousands        Actual   Budget    $ %
Airline Revenues
Landing Fees                65,633   58,878    6,756   11.5%
Terminal Rents               125,548  126,224     (676)   -0.5%
Other Airline Revenues           11,651   12,465     (814)    -6.5%
Subtotal                    202,833  197,567     5,266     2.7%
Non-Airline Revenues
Public Parking                 59,111   60,870    (1,759)    -2.9%
Rental Cars                  36,019   36,014       5    0.0%
Concessions                33,547   31,853    1,694    5.3%
Other                     22,644   20,300    2,344   11.5%
Subtotal                    151,321  149,036     2,284     1.5%
Security Grants                 1,087     787      300    38.1%
Fuel Hydrant                  3,440    8,451    (5,012)   -59.3%
Total Revenue              358,680  355,842    2,838    0.8%
Expenses
O&M Expenses            149,484  141,397   (8,087)   -5.7%
Corp Allocations                44,557   46,584     2,027     4.4%
Total Operating Expense       194,042  187,982    (6,060)   -3.2%
NOI Before Deprec.           164,639  167,860    (3,222)   -1.9%
Total Depr Expense            107,349  108,427    1,078    1.0%
NOI After Deprec.             57,290   59,433    (2,144)   -3.6%
Grants & Donations Revenue       37,783   75,709   (37,926)   -50.1%
PFC Revenues             60,708   59,941     767    1.3%
CFC Revenues             22,947   19,960    2,987   15.0%
Non-Operating Rev/Exp         (103,790)  (95,786)    8,004    -8.4%
Excess of Revenue Over Exp.     74,937  119,257   (44,320)  -37.2% 
Revenues 
Year End Results 
Public Parking revenues were down $1.75 million compared to budget. Though daily and weekly parking rates
increased in November 2007, parking revenue per enplanement fell to $3.77, two cents off of the budgeted $3.79.
Ground Transportation was $328K greater than budgeted levels on account of increased activity from taxis and
courtesy vehicles.
Commercial Properties revenues ended up $958K or 19% over budget from In-Flight Meals revenue and Sound
Transit and Radisson payments being greater than budgeted.
Concessions finished the year $1.69 million or 5.3% over budget due to performance in food & beverage
concessions and increased space rentals.
The total non-airline revenues were $2.06 million or 1.4% over budget for 2008.
Expenses 
Year End Results 
Total division operating costs were over budget by $8 million on an Org basis and $6 million on a subclass basis
mainly due to expenses related to OPEB benefits to Firefighters ($4.4 million), unbudgeted credit card fees and other
assorted items in Airport Operations ($2.64 million), deicing fluid purchases and worker's comp claims in Maintenance
($1.28 million), expensing of capital-related write-offs ($2.8 million) and of asbestos-related projects ($2.5 million) as
required by new accounting rules (GASB 49). To lessen the impact of overspending, other aviation departments have
saved $5.1 million versus budget in addition with over $2 million in savings from Corporate/Seaport/Real Estate
allocations.
Non-Ops 
Year End Results 
FAA grant revenue was $11.2 million less than budgeted and TSA grant revenue was $29.1 million less than
budgeted, leading to a shortfall for the year in Grants & Donations of $37.9 million after factoring in $2.48 million in
unbudgeted donations and grants.
st
CFC revenues were nearly $3 million greater than budgeted due to increase in rate to $5 effective July 1 .

10

II.      AVIATION DIVISION PERFORMANCE REPORT 12/31/08 

E.   CAPITAL SPENDING RESULTS (000's)
2008     2008        Variance       Plan of
Sponsor               Actual    Budget     $ % of Bud   Finance
Airfield
Airfield Pavement (1)               7,313      5,870      1,443     124.6%      4,571
Other                      1,779     2,267      (488)     78.5%     5,919
Subtotal                      9,092      8,137       955     111.7%     10,490
Business Development
Properties (2)                    5,310      2,184      3,126     243.1%      1,000
Other (3)                       3,450      7,587      (4,137)      45.5%      8,088
Subtotal                      8,760      9,771     (1,011)     89.7%     9,088
Division Wide
Facilities (4)                        3,068       7,132      (4,064)      43.0%      10,471
Miscellaneous (5)                1,266      3,818     (2,552)     33.2%      (928)
Other                     24,973     32,580     (7,607)     76.7%    23,456
Subtotal                     29,307     43,530     (14,223)     67.3%     32,999
Facilities & Infrastructure
Mechanical Systems (6)            4,633      7,346     (2,713)     63.1%     6,226
Other                      2,032     3,391     (1,359)     59.9%     9,658
Subtotal                      6,665     10,737     (4,072)     62.1%     15,884
Landside
Rental Cars (7)                 39,592     58,181     (18,589)      68.0%     79,469
Other (8)                        672      2,364      (1,692)      28.4%      6,017
Subtotal                     40,264     60,545     (20,281)     66.5%     85,486
Noise Program
Acquisition                     16,429     20,764      (4,335)      79.1%     19,598
Residential Insulation (9)                1      6,020      (6,019)       0.0%      4,657
School Insulation (10)              4,054     14,351     (10,297)      28.2%     11,852
Subtotal                     20,484     41,135     (20,651)     49.8%     36,107
Security Program (11)           35,954     48,467    (12,513)     74.2%    61,129
Stormwater Program           2,230     1,283      947    173.8%     5,902
Terminal & Tenants
STEP (12)                  14,167     24,233    (10,066)     58.5%    21,729
Ticketing Strategy (13)               188      7,099      (6,911)       2.6%      7,086
Other                     15,269     18,853     (3,584)     81.0%    18,972
Subtotal                     29,624     50,185     (20,561)     59.0%     47,787
Third Runway Projects          27,433     30,045     (2,612)     91.3%    49,366
Division Grand Total           209,813    303,835    (94,022)     69.1%    354,238
Footnotes 
1)  16L/34R Reconstruction project was added mid-year and therefore not part of the 2008 Plan of Finance.
2)  Street Vacations/DM Creek elevated from business plan prospective project during the year.
3)  Concessions Flooring project delayed to avoid summer peak travel season. Tenant Reimbursements difficult to project.
4)  Consolidated Warehouse project was delayed and a new site presented to Commission due to the need for value engineering cost reductions.
5)  ARFF Station Update project was re-scoped and redesigned due to bids exceeding the engineers estimate.
6)  Garage Escalator and "A" Elevator project delayed due to value engineering cost reduction and to minimize bid climate risk and ensure multiple
bidders.
7)  Rental Car Facility construction suspended pending improvement in the bond market.
8)  South Access project cancelled and expensed.
9)  Home Insulation Retrofit has slowed while research on remaining eligible parcels is being completed. Single Family Home Sound Insulation has
slowed because of the contract process.
10) Expenditures dependent on Highline School District schedule.
11) Main Terminal 100% Baggage Screening behind schedule.
12) The dispute resolution process involving the STEP Security Bag and Checkpoint project has delayed schedule.
13) Alaska 2-Step project has been delayed as a result of delays in the C-1 project.

11

III.     SEAPORT DIVISION PERFORMANCE REPORT 12/31/08

FINANCIAL SUMMARY 
Total Seaport revenues were $95.1 million, $7.1 million favorable to budget due to receipt of retroactive
grant money from the Department of Ecology for Terminal 5 and Harbor Island superfund sites partially
offset by lower than anticipated Security Grant Revenue. Security Grant projects are commencing later than
assumed in budget.
Expenses were $45.4 million, ($1.9) million unfavorable to budget due to higher than anticipated
Environmental Reserve expense related to 2008 implementation of GASB49, partially offset by delayed
spending on Security Grant projects. Security Grant projects are commencing later than assumed in budget.
NOI before Depreciation was $49.7 million, $5.2 million favorable to budget and $5.8 million above 2007.
Containers and Support Properties Services $34.5 million, ($2.2) million unfavorable to budget.
Cruise and Industrial Properties $13.5 million, $3.6 million favorable to budget.
Environmental Grants/Reserve $2.8 million, $3.6 million favorable to budget.
Security ($1.2 million), $0.2 million favorable to budget.
Depreciation was $28.5 million, $0.5 million favorable to budget
NOI after Depreciation was $21.2 million, $5.7 million favorable to budget and $8.5 million above 2007.

A.   BUSINESS EVENTS 
TEU volumes for Seattle Harbor are down 13.6% in 2008 compared to 2007 levels. Total 2008 volume is
1,704K TEU's. 2008 full inbound TEU's are down 17.2%, full outbound TEU's are down 11.9. Key service
changes impacting the results were the loss of MOL's PSX service to Tacoma (65K TEU's) and the
implementation of COSCO's new service through Prince Rupert (53K TEU's).
2008 Cruise season ended with record passenger volumes of 886,039 passengers and 210 sailings, which
reflected a 13.5% increase in passengers over 2007 volumes. Seattle cruise passenger volume exceeded
Vancouver cruise passenger volume for the Alaska cruise market, for the first time in 2008.
Grain vessels shipped an all time record volume of 6,401K metric tons of grain through Terminal 86 in 2008,
which represents an increase of 20.0% over 2007 volume and an 8.5% increase over the prior record
volume of 5,902K metric tons in 2006.
Reactivation of Terminal 30 to a container facility is on schedule for completion in May 2009. 
Received $8.8 million in retroactive grant money from the Department of Ecology for Terminal 5 Puget
Sound Resources and Harbor Island sediment superfund sites.
As part of the Northwest Ports Clean Air Strategy, developed and implemented plan for ship and cargo
handling equipment emissions reduction.
SR-519 Phase II Memorandum of Agreement was finalized and Commission Approved Port of Seattle
funding.

B.   KEY INDICATORS 
Total 2008 TEU volume was 1,704K down (13.6%) from 2007. Full inbound TEU's were down (17.2%) and
full outbound down (11.9%).
Grain record volume at 6.4 million metric tons is up 20% from 2007.
Cruise record passenger volumes of 886,000 an increase of 13.5% over 2007.



12

III.     SEAPORT DIVISION PERFORMANCE REPORT 12/31/08

C.   INITIATIVES, GOALS AND MEASURES
OBJECTIVES                    2008
ENSURE SEAPORT VITALITY.
Achieve financial objectives$45 Million NOI
(excluding Environmental Reserves and Grants)
for full year 2008: In 2008, each business unit   YTD is $46.9 million, $1.6 million favorable to Budget.
will contribute to the goal as follows:
Container & Support Properties  $36.8    YTD is $34.5 million, ($2.2) million unfavorable to budget.
Million
Cruise and Industrial Properties  $9.9     YTD is $13.5 million, $3.6 million favorable to budget.
Million
Security $(1.5) Million              YTD is ($1.2) million, $0.2 million favorable to budget.
Environmental  no target            YTD is $2.8 million, $3.6 million favorable to budget.
Provide compelling value that will attract and
retain customers, and which will further the
Port's financial objectives: 
Meet key milestones in our capital plan      Seaport spent 70% of the 2008 Approved Capital Budget.

Terminal 18 North Apron Project            Project completed on schedule and within budget.
Completion (Mach)
T30/T91 project progress (Zahn)            Project is on schedule. Authorization for additional
funding to cover higher T91 building foundation costs and
T30 upland disposal costs approved by Commission.
Implementing long term agreements with    Agreement in progressing of being finalized, Commission
cruise lines that currently utilize Seattle as a   approval granted in December of this year.
homeport. (McLaughlin)
Preserve our assets and increase their
utilization:
Bringing all in-use Port-owned cranes to    Contingency plan to expedite repairs with back up gear
fully operational status (Burke)           boxes in place for Terminal 46 ZPMC cranes.
Establishing crane audit procedures      Reviewing maintenance records for Terminal 46 and
(Burke)                        establishing ongoing record requirements.
Identifying and acquiring off-dock support   Search for properties will be performed by Real Estate
land (Burke)                      Division with support by Container & Support Properties.
Reviewed key elements of requirements with Real Estate
Division.
Increasing container business marketing   Target achieved, 394 contacts made.
efforts both directly and in conjunction with
our terminal tenants (Styrk)
Developing formal terminal condition      Held condition meetings with terminal operator tenants.
reports with our tenants (Burke)          Regular quarterly meetings are held with tenants on an
ongoing basis.
Developing asset management plans for   Focus on major container terminals initially, other facilities
other facilities (Burke/McLaughlin)        to follow.

13

OBJECTIVES                    2008
DEVELOP NEW BUSINESS AND ECONOMIC
OPPORTUNITIES FOR THE REGION AND THE
PORT.
Lease Terminal 106 (Burke)           Preparation under way to issue a Request for Proposal
(RFP) to identify future use of this facility.
ENHANCE PUBLIC UNDERSTANDING AND
SUPPORT OF THE PORT'S ROLE IN THE
REGION.
Conduct monthly speaking engagements in   9 speaking engagements in fourth quarter and 35 YTD.
the community (Morris)
Providing internships for students (Buchholz)  10 Interns (5 Seaport Marketing, 3 Environmental
Services, 2 Planning).
Strive to purchase at least 15% of all goods   Full Year 2008: 5.57% of expense and 9.29% of capital.
and services from qualified small, minority-    Combined 6.87%.
owned, women-owned and emerging
business enterprises. (Buchholz)
BE A CATALYST FOR REGIONAL
TRANSPORTATION SOLUTIONS.
Complete the Spokane Street/Terminal 18   Put on hold due to more pressing traffic issues impacting
congestion mitigation study              Terminal 46.
Ensure that construction and design of the   Construction and traffic mitigation plans reviewed and
Alaskan Way Viaduct replacement do not    comments submitted. Design and construction
adversely affect operations              management changes made.
BE A LEADER IN TRANSPORTATION
SECURITY.
Meet the milestones of the Port's security    The 2008 milestones established for the Seaport Security
program                      Program are:
Emergency Preparedness  Business Continuity
Planning continuing.
Terminal 91 MTSA Revised Facility Security Plan
submitted to Coast Guard for approval.
Domestic Nuclear Detection Office - Small vessel
Radioactive Material Detection Program completed
and equipment delivered.
Emergency Management Resources  Initial
Emergency Coordination Center/Situation Room
equipment received with supplemental items deferred.
Increase the Port's security score by       Port Security Grants 6 & 7 enhancing improvements to
continuing to reduce our vulnerability for     Marine Domain Awareness and Security Monitoring.
security incidents in Port facilities           Rounds 7B/8 have developed a Port Resiliency/Recovery
Plan for the Area Maritime Security Committee to be
submitted to DHS for approval next quarter.
Ensure successful implementation of the      Focusing outreach materials to specific industry
Transportation Worker Identification           segments.
Credential(TWIC) requirements            Meeting Facilitation  Outreach Meetings held at Port
of Seattle and Tacoma. Trucker information
distributed to key locations.
Enrollment of Staff  All critical personnel have
nd
enrolled with 2  phase staff enrolling as needed.
TWIC Implementation to start February 28, 2009.


14

OBJECTIVES                    2008
EXHIBIT ENVIRONMENTAL STEWARDSHIP
THROUGH OUR ACTIONS. 
Achieve/maintain zero regulatory violations   Violations regarding over dredging at Terminals 30 and 91
st
were discovered and self reported in the 1 half of the
year. These issues were resolved with the Army Corps of
Engineers regulators by year end.
Implementing Northwest Ports Clean Air     Further developed implementation plans for Trucking and
Strategy                         completed implementation plan for Ocean Going Vessels.
Developed reporting and verification framework with Port
of Tacoma and Port of Metro Vancouver.
Develop stormwater best management     Stormwater pollution prevention plan is on schedule to be
practice program                   completed by March 2009 and the operations and
maintenance program has been developed. Both of these
include Best Management Practices.
Develop Duwamish River plan integrating    Public meetings targeting both industrial users and
maritime industrial uses, public shoreline     community members were held. Separate outreach
access, treaty fishing, and habitat          strategies implemented for community and water
restoration.                          dependent businesses.
BE A HIGH PERFORMANCE WORKPLACE.
Provide our staff with regular feedback and   18% 1 week prior to anniversary date
support by completing 100% of staff        26% by anniversary date
performance reviews one week before the    56% late
anniversary date
Complete PREP plans with training,       100% of PREPs that were completed during 2008 had
development, and diversity components     completed PREP plans with training, development and
diversity components.
Achieve a perfect safety score and zero     OIR (Occupational Injury Rate) for the Seaport for 2008
accidents by providing our staff with the      was 0.0.
necessary tools and training (Moses)










15

III.     SEAPORT DIVISION PERFORMANCE REPORT 12/31/08

D.   OPERATING RESULTS  IN THOUSANDS $ 
In $ Thousands            2007     2008     2008      2008 Bud Var
Actual     Actual    Budget     $ %
Operating Revenue              77,630     85,423     82,771    2,653     3%
Environmental Grants               973     8,833       207    8,626   4174%
Security Grants                  1,292       850      5,004    (4,154)    -83%
Total Revenue                79,895    95,106    87,982    7,125     8%
Direct Expenses                17,359     21,877     21,993     116     1%
Security Expense                2,256     1,715     6,180    4,466    72%
Environmental Reserve            4,983     5,996       950   (5,046)   -531%
Allocations                      11,423     15,829     14,357    (1,472)    -10%
Total Expense                36,020    45,417    43,480   (1,936)    -4%
NOI Before Depreciation          43,875     49,689     44,501    5,188    12%
Depreciation                   31,198     28,465     28,951     486     2%
NOI After Depreciation            12,676     21,225     15,550    5,675    36%
NOI Excl Envir Grants/Reserve*      47,884     46,853     45,245    1,608     4%
NOTE:* NOI Excl Envir Grants/Reserve is Before Depreciation
Total Seaport revenues were $7,125K favorable to budget. Key variances
Containers and Support Properties unfavorable ($492K).
Containers unfavorable ($836K). Space Rent unfavorable ($1,785K). Terminal 5 is unfavorable due to
termination of month to month lease on 23.2 acres of Option Area ($1,337K) and due to understatement of
the Terminal 5 straight-line rent adjustment in the Budget ($553K). Terminal 18 unfavorable ($71K) due to
set up of reserve for Q1 2009 principal payment due on Special Facility Revenue Bonds. Amounts were not
factored into Budget. Terminal 25/28 favorable $178K due to expected rent abatement, not needed, during
T30 Phase II construction. Crane Rent Revenue $156K favorable. Terminal 46 favorable $140K due to
rate differential for box moves in excess of 2008 annual guaranteed minimum applied toward 2006 shortfall
balance. Terminal 5 is favorable $32K due to higher usage of Tariff cranes than factored into budget,
partially offset by unfavorable rate variance. Terminal 18 unfavorable ($16K) due to unfavorable rate
variance. Terminal 5 Intermodal Revenue ($123K) unfavorable due to lower than expected intermodal
moves. Contract Revenue $439K favorable due to King County reimbursement for 50% share of T-30
dredging upland disposal costs. Utility Revenue $277K favorable due to acreage correction for drainage
billing to containers terminals in 2008.
Support Properties $331K favorable due to recognition of revenue from Shippers Transport lease
termination ($228K), as well as from CPI increases and lease renewals ($85K).
Cruise and Industrial Properties favorable $3,145K.
Cruise $1,405K favorable - due to higher than anticipated passenger volumes ($440K), 'Savings Rent'
generated by lower than anticipated CTA operating expenses ($408K), and other income higher than
expected ($557K).
Bulk Terminals $1,412K favorable. Terminal 86 grain volume exceeded budget by 16%.
Docks $547K favorable due to favorable barge activity from both preferential and non-preferential use
customers and due to favorable fishing activity from preferential use customers.
Industrial Properties unfavorable ($234K) primarily due to lower than anticipated Utility Income, partially
offset by lower than anticipated Utility Expenses. Other factors include an overstatement of Carnitech
percentage rent ($127K) in the Budget and an unfavorable variance related to two tenants budgeted in
Seaport Division, but belonging in Real Estate Division ($204K), partially offset by revenue recognition from
the SCS lease termination at Terminal 25 South ($75K) and by CPI increases not anticipated in the 2008
budget ($341K).

16

III.     SEAPORT DIVISION PERFORMANCE REPORT 12/31/08

Environmental Grants favorable $8,626K due to receipt of retroactive grant money from the Department of
Ecology for Terminal 5 and Harbor Island superfund sites.
Security Grants unfavorable ($4,154K) due to Rounds 6 and 7 grant activities commencing later than planned,
more than offset by a corresponding favorable expense variance. The remaining project grant activities are
expected to occur in 2009 or early 2010.
Expenses were unfavorable ($1,936K) to budget. Key variances:
Security favorable $4,466K primarily due to Round 6 and 7 grant activities commencing later than planned.
Amount is partially offset by corresponding unfavorable revenue variance above.
Environmental Reserve unfavorable ($5,046K) due to implementation of GASB 49 in July.
Litigated Injuries & Damages - favorable $758K primarily due to adjustment to prior year accrual to
recognize the Port's anticipated share of legal expenses for Wyckoff/Puget Sound Resources litigation
matter.
Maintenance unfavorable ($1,270K) due to work on Terminal 46 Cranes, costs to repair a break in a water
main at Terminal 104, costs to monitor the unoccupied warehouse building at Terminal 106, costs to prepare
Terminal 91 building C-173 for a new tenant, and work at Terminal 5 which is to be reimbursed by the
tenant. Amount partially offset by $357K in Reimbursement Revenue for work done directly for tenants.
Allocated Overhead to Capital Projects favorable $507K due to higher percentage of overhead expenses
charged to capital projects than assumed in Budget for Project Management.
Corporate costs, direct and allocated, unfavorable ($1,670K) due to Engineering and Port Constructions
Services (unbudgeted expense projects completed for the Seaport), Corporate Contingency (audit related
costs) and Economic & Trade Development. Amounts were partially offset by favorable variances from
Human Resources, Procurement Services, Risk Management, Social Responsibility and Police.
All other variances netted to a favorable $319K or less than 1% of Total Expenses Budgeted.
NOI Before Depreciation was $5,188K favorable to budget.
Depreciation was favorable $486K due to timing difference between actual and budgeted new asset inservice
dates and due to budgeted depreciation for projects that were cancelled after completion of the
budget.
NOI After Depreciation was $5,675K favorable to budget.

CHANGE FROM 2007 ACTUAL 
NOI Before Depreciation increased by $5,814K from 2007 - primarily due to the $8,833K in Environmental Grant
revenue received in 2008 and the increase in the Eagle Rate on container terminal leases that went into effect
on January 1, 2008. The 2008 revenue increase was partially offset by increased Environmental Reserve costs
related to implementation of GASB 49 in 2008, higher than anticipated expenses due to FTE transfers related to
the January 1, 2008 reorganization, the cost of T30 dredge upland disposal, relocation of cruise assets and T-30
shorepower, increased repair costs on T46 cranes, street use/permit fees, and costs associated with the
performance audit response/compliance. Litigated Injuries & Damages expense was lower in 2008 due to an
adjustment in the Port's anticipated share of legal expenses for Wyckoff/Puget Sound Resources litigation.





17

III.     SEAPORT DIVISION PERFORMANCE REPORT 12/31/08

E.   CAPITAL SPENDING RESULTS---IN THOUSANDS $
2008
2008   Approved  Variance to Actual as a % 2008 Plan
SEAPORT DIVISION                Actual   Budget   Budget   of Budget  of Finance
Terminal 30/91 Program                  62,887    71,695      8,808       88%    67,253
Terminal 18                           6,310     8,521      2,211       74%    14,042
Terminal 91                           6,304     8,221      1,917       77%     9,931
Terminal 115                          4,199    14,524     10,325       29%    7,496
Terminal 25                           2,904     1,461     (1,443)      199%     2,475
Cruise                               3,250     2,294       (956)      142%     2,379
Security                               1,295     7,000      5,705        19%     5,947
Green Port Initiative                             0      5,000       5,000         0%     5,000
Terminal 5                              392     1,630      1,238        24%     1,760
Terminal 46 - Dock Operations                 487        0       (487)        NA       0
Pier 24                                  58       646       588         9%      491
Terminal 10                             93     2,913      2,820        3%     6,554
Small Projects                             20       940       920         2%      940
Public Access at T30                        57      528       471        11%     4,948
All Other                                  267      1,563      1,296        17%     2,740
Total Seaport                           88,523    126,936     38,413        70%   131,956

Comments on Key Projects: 
Seaport spent 70% of the 2008 approved capital budget for the Division.
New projects approved that were not included in the 2008 Capital Plan: 
Terminal 25 South Container Yard  $4,400K approved for initial design, permitting, and Phase 1
construction.
Terminal 91 City Ice Bldg W40  $450 approved for initial design, permitting and in-house demolition work.
T10 Redevelopment  This project replaced the former T10 Uplands project with a new scope of work.
Terminal 91 Mobile Gangways  $6,460K approved for gangway procurement and installation at the new
cruise terminal at T91. 
Terminal 46 North Slip Fender Improvement (Dock Operations)  $825K approved to replace the failed
timber fender pile system along 400 lineal feet of the north face of T46.
Projects with significant changes in spending were: 
Terminal 30/91 Program  A schedule slippage due to unforeseen field conditions at T91 resulted in
delayed work performance and overall delay in contractor billings for T30 & T91. Project is scheduled to be
completed in time for the 2009 cruise season.
Terminal 115 Dock Reconstruction  Construction of Berths 2,3,4 & 5 is complete and the costs were less
than expected. Berth 1 project has a late start date because additional sediment sample analysis was
required by the agencies and the dredge work required revisions. Construction pushed back to 2009 and
2010.
Green Port Initiative  Capital projects have moved out to 2009.
Terminal 30 Public Access  Street vacation delayed by the City. Spending moved to future years.
Terminal 18 North Apron  Project was completed in 2008 and is in process of being closed out.
Cruise Tenant Improvement Allowance  2008 spending has been moved to 2009 to accommodate the
start-up of the new cruise terminal.
P66 Baggage Corridor and Passenger Screening  Project was put on hold pending final definition and
design of scope change. Spending was moved to 2009. 
Pier 91 Development (Carnitech)  Construction is complete. Project in final close-out phase.
Terminal 91 Berth M  Construction is complete. Wrapping up claims with contractor. Project is expected
to come in under budget due to limited need for use of contingency amounts.

18

III.     SEAPORT DIVISION PERFORMANCE REPORT 12/31/08

Seaport Security Round 6 Project  Federal Government has a hold on the grant funding, but working with
the federal grant administrator to release the funding. Spending will occur later than anticipated in 2008
Capital Plan.
Seaport Security Round 7 Project - Projects are still under design, and must be defined for presentation
and approval by Commission. Memorandum of Agreements with sub recipients are being drafted and
prepared for signature.
Note*: Changes between the 2008 Plan of Finance and the 2008 Approved Budget represent modifications in
2008 spending estimates made after determination of 2007 actual spending.



















19

IV.   REAL ESTATE DIVISION PERFORMANCE REPORT 12/31/08

FINANCIAL SUMMARY 
Total Real Estate revenues were $34.9 million, $2.7 million favorable to budget primarily due to more event
activity at Bell Harbor International Conference Center than budgeted.
Expenses were $38.8 million, ($6.1) million unfavorable to budget primarily due to expensing of costs that
had been capitalized in connection with a plan to develop North Bay.
NOI before Depreciation was ($3.9) million, ($3.4) million unfavorable to budget. 
Harbor Services was $.4 million, $.2 million favorable to budget.
Property Management and Leasing was $3.2 million, $3.4 million favorable to budget.
Development and Planning was ($6.9) million, ($6.5) million unfavorable to budget.
Environmental Grants and Reserve was ($.6), ($.5) million unfavorable to budget.
Depreciation was $10.0 million, ($.3) million unfavorable to budget
NOI after Depreciation was ($14.0) million, ($3.7) million unfavorable to budget.

A.   BUSINESS EVENTS 
The sale of Pier 48 to the Washington Department of Transportation closed in August. The Port received
$10.9 million and is indemnified for any potential environmental cleanup costs. Sales price was $10.9 million
and resulted in a gain on sale of $9.6 million which is recorded as non-operating revenue on the Real Estate
Division's income statement.
Fishermen's Terminal - Replacement of inner harbor docks (5-10) and utilities completed. Project close-out
in progress and indicators are that the project will be approximately $2.5 million under the originally
authorized budget of $22 million. Full use of moorage spaces effective end of June.
Shilshole Bay Marina - Replacement of 22 docks and various landside improvements, including a new
Marina Building and north end sailing center restroom/shower building completed. Project close-out in
progress and indicators are that the project will come in slightly under the $80 million budget. Full use of
docks end of June. Anthony's Restaurant terminated lease negotiations. Site improvements in the area will
be completed in 2009 pending Commission briefing; this work will be done within the approved budget.
rd
On June 3 , the lease with Odyssey Maritime Discovery Center (ODMC) was terminated. The Port
amended the Bell Harbor International Conference Center Management Agreement to include the former
ODMC space through December 31, 2008.
In August a Request for Proposal for a new lease, commencing in 2009, of the former Odyssey Maritime
Discovery Center (ODMC) space was submitted. In September, a bid was received from Columbia
Hospitality to utilize the space as an event center. After review, the bid was accepted and lease negotiations
are currently in process with execution anticipated in the first quarter of 2009.
Occupancy levels at Commercial Properties are at 97% which is above comparable statistics for the local
market.
Northbay T91 - Korry Electronics withdrew from ground lease negotiations in March. The development of
the property as originally planned pursuant to the Harbor Development Strategy 21 was deemed no longer
probable. A final decision was made to write-off all capital costs associated with the project in August 2008.

B.   KEY INDICATORS 
Occupancy Rates: Commercial property at 97% occupancy, above target of 95% and above market
average of 89%.
FT/Marina Occupancy: Two of five exceed full year occupancy targets. Bell Harbor, Fishermen's Terminal
and Shilshole Bay Marina below targets.
Environmental Stewardship: No environmental/regulatory violations.
High Performance Workplace: Occupational Injury Rate at 11.12 down from 12.25 in 2007.

20

IV.   REAL ESTATE DIVISION PERFORMANCE REPORT 12/31/08

C.   KEY INITIATIVES GOALS AND MEASURES
OBJECTIVES                    2008
ENSURE SEAPORT VITALITY
MAXIMUM FINANCIAL PERFORMANCE:
Achieve 2008 year-end NOI Before Depreciation and       NOI Before Depreciation and Environmental
Environmental Grants and Reserve of $(526,943)        Grants and Reserve is ($3,338K)  unfavorable
variance of ($2,811K). Variance reflects the
expensing of North Bay capitalized costs.
Development & Planning - $(409,905)               NOI before depreciation is ($6,954K) 
unfavorable variance of ($6,544K). Variance
reflects the expensing of North Bay capitalized
costs.
Harbor Services - $127,183                      NOI before depreciation is $381K  favorable
variance of $254K and in excess of 100%
favorable to budget.
Property Management and Leasing - $(244,221)    NOI before depreciation is $3,235K  favorable
variance of $3,479K.
SERVICE GROUPS (ORG EXPENSES)
Maintenance - $(10,334,800)                       Net Org Expenses $(11,353K)  unfavorable
variance of ($1,018K) and 9.9% unfavorable to
budget.
Facilities Management  $(1,844,854)               Net Org Expenses $(1,720K)  favorable
variance of $125K and 6.8% favorable to budget.
INCREASE ASSET UTILITIZATION:
Commercial: Maintain 95% occupancy rate          Exceeds  Q4 occupancy is 97%
Moorage Occupancy - Annual Averages:            Moorage Occupancy  2008 Averages: 
SBM-93%                              SBM  below (91%; goal 93% )
HIM-90%                              HIM  above (91%; goal 90%)
BHM-84%                              BHM  below (79%; goal 84%)
FT-90%                               FT -  below (89%; goal 90%)
MIC-75%                              MIC - above (77%, goal 75%)
Develop and Implement Asset Management Plans    Maritime Industrial Center (MIC) asset condition
assessment completed in Q2. Fishermen's
Terminal (FT) asset condition assessment is
rescheduled for 2009.




21

OBJECTIVES                    2008
DEVELOP NEW BUSINESS AND ECONOMIC
OPPORTUNITIES FOR THE REGION AND PORT BY:
Reducing vacancies in properties and maximizing    8 new leases and 25 renewals executed in 2008.
land value.
ENHANCE PUBLIC UNDERSTANDING AND
SUPPORT OF THE PORT'S ROLE IN THE REGION 
Conducting monthly speaking engagements in the     48 speaking engagements in 2008.
community.
Providing 25 students with internships,             28 for the year (24 Maintenance, 4 Harbor
apprenticeships and training                   Services).
Purchase at least 15% of all goods and services
from qualified small or disadvantaged businesses.     21.4% of expense and 18.1% of capital.
Combined 20.6%.

WE WILL BE ON OUR WAY TO BEING THE
GREENEST/CLEANEST AND MOST ENERGY
EFFICIENT PORT IN THE US BY:
Incorporating sustainable asset management       Sustainability metrics consistently incorporated
protocols.                                into planning and development projects. 2008
Incorporating sustainability metrics into all          examples: FT Building C15 sewer line and T104
planning and development projects.              emergency water line repair projects.

Identifying opportunities for reduction in utility       2008 electrical consumption at Pier 69 was 1.6%
consumption across the Division.               lower than 2007 while average outside
temperature was 6% colder.
Reducing garbage tonnage by 10% and increase    Maintenance implemented a new recycling
recyclables by 10%.                       awareness program which has reduced garbage
tonnage by 58%

BE A HIGH PERFORMANCE ORGANIZATION
All PREP's completed one (1) week prior to        42% 1 week prior to anniversary date
anniversary date                          26% by anniversary date
32% late
Completing PREP plans with training,            100% of PREPs that were completed by the end
development, and diversity components           of 2008 had completed PREP plans with training,
development and diversity components.
Achieving a perfect safety score and zero          OIR (Occupational Injury Rate): Marine
accidents by providing our staff with necessary        Maintenance: 15.39; Harbor Services: 3.91;
tools and training.                             Property Management 0.0, Total Real Estate:
11.12. Comparable OIR in 2007 was 12.25


22

IV.   REAL ESTATE DIVISION PERFORMANCE REPORT 12/31/08

D.   OPERATING RESULTS -- IN THOUSANDS $
In $ Thousands             2007      2008     2008      2008 Bud Var
Actual     Actual    Budget      $ %
Operating Revenue               32,196     34,905     31,290     3,615    12%
Environmental Grants                531        1       893      (892)   -100%
Total Revenue                 32,727    34,906    32,183    2,723     8%
Direct Expenses                 28,991     36,402     30,310    (6,092)   -20%
Environmental Reserve                8       604       950      346    36%
Allocations                         860      1,841      1,506      (334)    -22%
Total Expense                 29,859    38,847    32,767    (6,081)   -19%
NOI Before Depreciation            2,868     (3,941)      (584)    (3,357)  -575%
Depreciation                     9,182     10,033      9,692      (342)    -4%
NOI After Depreciation             (6,314)    (13,974)    (10,275)    (3,699)   -36%
NOI Excl Envir Grants/Reserve*       2,345     (3,338)      (527)    (2,811)  -533%
NOTE:* NOI Excl Envir Grants/Reserve is Before Depreciation

REVENUES: FAVORABLE $2,723K 
Harbor Services: Unfavorable ($88K) 
Recreational Boating Unfavorable ($219K) primarily due to construction at SBM and longer lead
time to move a thousand customers from temporary slips to permanent slips than assumed in budget.
Fishing and Commercial Favorable $132K due to increased demand and boat size.
Property Management and Leasing Favorable $3,087K 
Commercial Properties Favorable $748K primarily due to higher occupancy at T-102 (tenants
assumed to vacate at end of lease terms did not) $404K and higher than anticipated concessions
rent, space rent, and Common Area Maintenance charges at Bell Street Pier 66 in the amount of
$236K.
Third Party Managed Properties Favorable $2,339K due favorable activity at Bell Harbor
International Conference Center and World Trade Center Club.
Development and Planning: Favorable $603K 
Terminal 91 General Industrial Favorable $566K due to tenants budgeted in Seaport Division, but
belonging in Real Estate Division $253K and several new or renewal leases not anticipated in the
budget in the amount of $287K.
Pier 48 Favorable $149K due to later than planned sale of facility which has resulted in additional
rent to the Port from tenants at the site. Property was sold in the third quarter.
Pier 2 Unfavorable ($112K) due to termination in late 2007 of a month to month lease at the site and
adjustment of past rent for former trucking tenant at the site.
Environmental Grants: Unfavorable ($892K) 
Environmental Grant revenue relating to Real Estate Division properties was lower than anticipated in
the 2008 Budget.



23

IV.   REAL ESTATE DIVISION PERFORMANCE REPORT 12/31/08

EXPENSES: UNFAVORABLE ($6,081K). KEY VARIANCES:
Capital to Expense unfavorable ($7,274K) reflects the write-off of capital costs incurred to develop North
Bay site. The accounts significantly impacted by the write-off includes Outside Services ($6,085K) and
Department Expense Charged to Capital Projects ($1,187K).
Salaries and Benefits for Real Estate groups favorable $545K due to later than budgeted filling of open
positions.
Third Party Management Expense unfavorable ($1,000K) due to higher activity than budgeted at Bell Harbor
International Conference Center( $1,088K) (more than offset by favorable revenue variance). Amount is
partially offset by lower expenses at World Trade Center Club (even with higher revenue) and World Trade
Center West building.
Environmental Reserve favorable $346K due to smaller impact to Real Estate Division of implementing
GASB 49 than assumed in Budget.
Outside Services (excluding Capital to Expense, Maintenance and Corporate) favorable $461K due to
postponement of expense projects including the Fishermen's Terminal Condition Assessment, piling
replacement at Fishermen's Terminal and the Maritime Industrial Center, delay in processing new janitorial
contract, and unused tenant improvement funds due to tenants in holdover status. Favorable amounts were
partially offset by tenant improvements and broker fees related to new tenant at World Trade Center West.
Budget assumed these new tenant related expenses would be recognized in 2007. The use of temporary
personnel at Shilshole Bay Marina to cover vacant positions also partially offset the favorable variances in
the other areas.
Maintenance expenses direct and allocated unfavorable ($385K) primarily due to unplanned expense work
at Shilshole Bay Marina relating to managing warranty work and resolving electrical issues, cost overruns at
Fishermen's Terminal relating to L&I lighting and other electrical work, various repairs at T91 Uplands
including repair of a stairway on the Magnolia Bridge. In addition, Maintenance overhead was above budget
due to increased vehicle fuel costs and retroactive pay related to new contracts for represented workers.
Unfavorable variances were partially offset by the deferral of the Asset Condition Assessment at
Fishermen's Terminal and a portion of the West Wall Building Window Replacement until 2009.
Bad Debt expense favorable $1,158K primarily due to assets received in settlement for unpaid rent in
connection with Odyssey Maritime Discovery Center termination agreement.
Corporate costs direct and allocated unfavorable ($46K). Favorable variances in Engineering, Public
Affairs, Port Construction Services and Police were more than offset by unfavorable variance from
Corporate Contingency (audit related costs) and Information & Communication Technology.
All other variances netted to a favorable variance of $114K or less than 1% of Total Expenses Budgeted.
DEPRECIATION: UNFAVORABLE ($342K): 
Harbor Services Commercial: Unfavorable ($77K) less than 2% of budget. 
Property Management and Leasing: Unfavorable ($12K) less than 1% of budget. 
Development and Planning Unfavorable ($254K) due to delay in transferring Terminal 91 Seaport
related assets to Seaport Orgs from Real Estate Orgs and unbudgeted depreciation for Pier 48 which
was expected to be sold in first quarter 2008. Property was sold in August 2008.
CHANGE FROM 2007 ACTUAL 
NOI Before Depreciation decreased by ($6,809K) from 2007. Revenue increased by $2,179K due to more
revenue from Shilshole Bay Marina (construction ending) and increased activity at Bell Harbor International
Conference Center. Amounts are partially offset by decrease of ($530K) in Environmental Grant Revenue.
Expenses increased by $8,988K due to the expensing of capitalized development costs associated with the
North Bay site, higher expenses at Bell Harbor International Conference Center (more activity), increased
maintenance expenses and corporate allocations. Amounts are partially offset by Bad Debt expense recovered
as a result of the termination agreement with the Odyssey Maritime Museum $1,132K.


24

IV.   REAL ESTATE DIVISION PERFORMANCE REPORT 12/31/08

E.   CAPITAL SPENDING---IN THOUSANDS $
2008
Approved  Variance to Actual as a % 2008 Plan of
REAL ESTATE DIVISION      2008 Actual  Budget   Budget   of Budget  Finance
Eastside Rail Corridor                 10,655     106,955      96,300        10%    103,000
Fishermen's Terminal Docks            5,404      6,992      1,588       77%     5,961
Shilshole Bay Marina                 2,918      4,120      1,202       71%      3,794
Small Projects                       693      2,293      1,600        30%      1,470
Fleet Replacement                   373       592       219       63%      600
Central Watefront Utility Upgrade            449       585        136        77%       452
FT C15 Bldg Sewer Line Upgrade          349        0      (349)       NA        0
Tenant Improvement - Capital               0       660       660        0%       660
Marina Management System            202      305      103       66%      241
Terminal 91/North Bay                   0      1,500      1,500        0%      1,500
Terminal 102 HVAC Renewal/Replace        91      257       166       35%        0
Bell St. Garage Safety Improvements         46       569       523        8%       460
Others                           16       500       484        3%      500
Total Real Estate                    21,196    125,328     104,132        17%    118,138
Comments on Key Projects:
Real Estate spent 17% of the approved capital budget for the year.
Projects with significant changes in spending were: 
Eastside Rail Corridor  Credit market disruption has delayed closing to first quarter of 2009. 
Fishermen's Terminal Docks 5-10 Project  Dock construction complete. Project close out in progress.
Expected to be approximately $2.5 million under budget.
Shilshole Bay Marina  Construction is generally completed with the exception of the esplanade lighting
which will be completed in 2009. The contract is being closed out and is expected to come in within the
original $80 million budget. The build out of the restaurant is no longer planned and pending Commission
approval in 2009, temporary site improvements will be made in this area thus completing the capital
improvements at Shilshole by the end of 2009. This remaining work is also included in the $80 million
budget.
Small Projects  Several budgeted projects will move into 2009.
Fleet Replacement  Purchase of a sweeper truck expected in 2008 has been moved out to 2009.
Central Waterfront Utility Upgrade  Project was delayed due to change in contractors.
C15 Sewer Line Upgrade Project  Project was a Business Plan Prospective project in the 2008 Capital
Plan. Approved by Commission on 1/15/08 for $600K. Project is under construction. Some spending has
moved to 2009 due to change order negotiations with contractor.
Tenant Improvements Capital  No tenant improvements in 2009 qualified to be capitalized.
Terminal 91 North Bay - Project is cancelled, and all charges have been expensed.
Terminal 102 HVAC Renewal/Replace - Construction was delayed due to lease issues. Property Manager
is working out issues with the tenant. Spending was moved to 2009.
Bell St. Garage Safety Improvements  Project will start later than originally assumed due to delay in
negotiations with designer. Contract is now executed. Plan to go to Commission for spending
authorization in the first quarter of 2009.
Note*: Changes between the 2008 Plan of Finance and the 2008 Approved Budget represent modifications in
2008 spending estimates made after determination of 2007 actual spending.


25

V.   CORPORATE PROF. & TECHNICAL SERVICES PERFORMANCE REPORT 12/31/08

A.   BUSINESS EVENTS 
Risk Management:
o Continued to provide divisions with services in claims management, contractual risk analysis, risk
assessment, risk financing and insurance purchasing.
Health & Safety:
o A Wellness Incentive program was launched in February 2008. Employees with Port health care
insurance must achieve 1000 wellness points to offset any premium sharing in 2009. To date, 1162
employees have completed the health assessment and 1024 employees have achieved the 1000
point goal.
Public Affairs:
o Audit Response constituency communication and coordination of public hearings.
o Third Runway completed. Positive media coverage was garnered throughout the year
o Eastside Rail Corridor communications and coordination of public meetings held in Snohomish,
Woodinville, Bellevue, Kirkland and Renton.
o Welcome/media event for Nobel Peace Prize recipient and former South Korean President Kim Dae
Jung, who introduced Sunshine Policy with North Korea; managed Korean American media.
o Held two 2008 Annual Community Meetings: Harbor tour and Bus tour on the new Third Runway
Economic, Business & Trade Development (EBTD):
o EBTD was the lead organizer of activities surrounding the visit of a delegation from the Port of
Dalian led by Chairman Yuan Fuxiu on April 16-17. The visit coincided with the one year
anniversary of the signing of our friendship port agreement. Activities included a briefing on the Port
of Seattle, a terminal tour, and a dinner.
o Hosted an India Delegation from Gujarat, including the Gujarat city government, Maritime Board, the
Port of Gujarat, and representatives from other logistics/maritime related industries.
Human Resources and Development:
o The HR-18 Standards of Performance and Conduct, Corrective Action and Discipline procedure was
revised to incorporate reference to the new fraud policy (EX-18, Fraud Awareness and Prevention,
Loss of Public Funds and Assets) and to list fraud as a potential case of gross misconduct which
could result in severe discipline, up to termination of employment.
Information & Communication Technology (ICT):
o New Airport Parking Management System - ICT designed and deployed a complex system of
cameras, signs, and highly sophisticated software to direct customers to areas in the parking garage
with available parking. This new system has improved overall customer satisfaction dramatically.
Since its inception, this system has become nationally recognized because of the unique utilization
of video analytic technology. This accomplishment sustains airport vitality, public understanding, and
regional transportation.
o New Police and Fire Dispatch System - This new system provides vastly improved dispatch
capability for emergency responders. The new system improves interfaces to fire alarms,
surveillance systems, access control, map data, wireless devices, and records management. It also
provides Port police and firemen access to State, National, and Regional databases. This effort
sustains airport and seaport vitality, transportation security, and a high-performance organization.
Finance & Budget:
Budget 
o Finance & Budget was awarded the prestigious "Distinguished Budget Presentation Award" from the
Government Finance Officers Association of the United States and Canada (GFOA), for the 2008 Budget.
o Implemented the new budget system and provided budget user training.
o Completed all the budget reviews and documents as scheduled.
o Filed the 2009 statutory budget approved by the commission with King County Council and
Assessor in November as required by law.
o Monitored corporate operating performance and commitment control budgets.
o Identified cost savings and revised 2008 budget to offset unplanned Performance Audit response costs.
26

V.   CORPORATE PROF. & TECHNICAL SERVICES PERFORMANCE REPORT 12/31/08

Finance 
o Refunded 2003 auction rate bonds into variable rate demand bonds backed by a direct pay letter of
credit.
o Annual update with rating agencies.
o Completed annual disclosure report and submitted material event notices regarding bond insurer
downgrades.
Treasury 
o Replaced forward delivery investment agreement to T-18 reserve fund to improve the quality of
delivered investments.
o Investment Portfolio earned 4.04% compared to benchmark yield of 2.01%.
Strategic Planning 
o Continued developing the work plan for the Century Agenda long-range Port-wide strategic plan
update, to be completed in time for the 2011 Port of Seattle Centennial.
Office of Social Responsibility:
o Ship to Shelter donation program launched. Program developed and coordinated in partnership with
Holland America Line, Northwest Harvest, Customs, and terminal operator and Public Affairs
Department.
Regional Transportation:
o The Viaduct/Seawall Collaborative Process completed a year of study, and Port held two Working
Waterfront Forums to allow freight and waterfront interests an area to share their opinions; port staff
provided Building Block and Scenario analysis.
o The Joint Commissions of the Ports of Seattle and Tacoma met to review and discuss transportation
infrastructure issues.
Police Department:
o Police Department continued close cooperation with the U.S. Department of Homeland Security
(including the U.S. Coast Guard, the Transportation Security Administration, and other Federal
agencies), as well as regional, State, County, and municipal agencies. This cooperation is
exemplified by the department's participation in various task forces, regional teams, committee
memberships, and Mutual Aid relationships.

B.   GOALS AND STRATEGIC ISSUES PROGRESS 
Executive:
o Audit Response Milestone Report submitted to the State Auditor's Office addressing his 51
recommendations for improvement and corrective actions.
o Organizational Changes  Completed implementation of organizational changes outlined in 2007.
o Strategic Planning  Conducted transparent strategic planning processes with input from key
stakeholders.
o Be a High Performance Organization.
o Implement "Green Initiative" at Seaport and Airport.
Commission:
o Environmental Leadership to front and center of entire organization.
Legal:
o To provide public record administration.
o To provide Port-wide classes regarding relevant legal issues.



27

V.   CORPORATE PROF. & TECHNICAL SERVICES PERFORMANCE REPORT 12/31/08

Risk Management:
o Maintain cost effective property and liability insurance for the Port.
o Continue to search for alternatives to traditional earthquake insurance for funding of property
damage following a major earthquake.
o Manage the Port's Driver Safety Program which includes managing drivers with commercial driver
licenses including and oversight of drug testing for these drivers.
Health & Safety:
o Collaborate on safe work practices and promote a healthy work force.
Public Affairs:
o Communicated the Port's Message:
Position and response on State Performance Audit to customers and community.
Port's priorities and importance of freight through Working Waterfront Forum aimed at
Viaduct issues and freight mobility.
o Enhance public access to Port information through a variety of communication vehicles:
E-news bulletins are reaching more than 9,000 subscribers, increased by 30% since March '08.
Produced our first electronic annual report and electronic holiday card.
Commission meetings are streamed live on our intranet and Internet, the audio is posted on
the Web site immediately after meetings, and video files are chaptered and archived. The
meeting tapes are also shown on King County TV each Sunday.
Worked to improve the Port's transparency with the Audit Task Group; helped develop
progress reports and summaries posted on an Accountability site for the public, linked from
Compass for employees.
External Affairs:
o Support efforts to acquire and plan for use of BNSF Eastside Rail Corridor: Numerous meetings in
community with citizens and elected leaders about development options for corridor; draft public
process program.
o Support Port transportation strategies including replacement of Alaskan Way Viaduct, East Marginal
Way grade separation and other transportation requirements.
Economic, Business & Trade Development:
o Assisted Aviation Division with their work to set up two new direct Seattle  China services: Hainan
Airlines and Great Wall All-Cargo Airlines.
o Partnered with the Pacific Market Center (PMC) in an effort to establish a Chinese pavilion at the
January 2009 Seattle Gift and Home Accessories show.
Engineering:
o Provide site information, design services, construction services, contract administration, survey, and
drafting for new developments
o Update and maintain Engineering Standards, Master Specification, QA/QC, and Life cycle analysis.
o Maintain leadership role in regards to environmental construction compliance, i.e. erosion control
and clean water management; Green Building and LEED certified buildings, Sustainable Asset
Management initiative and other similar programs
Port Construction Services:
o Continue to manage the Port's small works program in a manner that reflects the goals, values and
principles of the Port by providing a quick cost effective means to accomplish small projects.




28

V.   CORPORATE PROF. & TECHNICAL SERVICES PERFORMANCE REPORT 12/31/08

Human Resources & Development:
o Implement a new Learning Management System (LMS). The LMS launched in September was on time
and nearly trouble free and continued implementation of it has supported employee use and skill with it.
o Pilot a Military Veterans Fellow Program. Extensive outreach resulted in six fellows now on board
and successfully participating in the program.
o The Mayo Clinic's "Embody Health" Program (in partnership with Health & Safety). The Wellness
Rewards Program was launched February 14. Numerous information sessions were held around
the Port during January, and the points system was fine-tuned based on employee input. On-site
biometric testing was provided, along with numerous classes and brown-bag sessions.
At the end of the program on October 31, only 42 employees had not achieved their 1,000 points.
Forms authorizing payroll deduction on a pretax basis for 10% of their premiums were collected from
each of these employees.
Labor Relations:
o Worked with managers to negotiate contract changes directly related to the vitality of the Airport and
Seaport. Contract negotiations in 2008 are near completion.
o Instrumental in bringing to the table both the Port and Union Officials on economic issues affecting
the Port including the Rental Car Facilities, and the STIA Parking Garage.
o Continued with its training sessions to ensure that the Port overall understands the labor contract
process.
Information & Communication Technology (ICT):
o Services focused on managing the Port's enterprise Information and Communication Technology
systems, services, and resources in the most cost effective manner.
Finance & Budget:
Budget 
o Wrap up the economic impact study by February 2009.
o Continued to identify potential budget savings.
o Continued to refine the budget system.
o Applied for another Distinguished Budget Presentation Award from Government Finance Officers
Association.
Finance 
o Developed Draft Plan of Finance in conjunction with the 2009 Budget.
o Developed funding plan for replacement of XL capital surety and MBIA surety (if needed) in
Intermediate Lien reserve fund.
o Developed alternatives for rental car funding  on hold due to market conditions.
o Began process for G.O. bond issue  on hold due to market conditions.
Strategic Planning 
o Conducted research in key emerging issue areas, such as sustainability, climate change, asset
management, etc.
o Delivered presentations on strategic planning issues to outside groups, e.g. Municipal League.
o Supported internal strategy coordination teams such as regional transportation, security, ICT and
environmental.
Accounting and Financial Reporting:
o The Port and its 2007 Comprehensive Annual Financial Report (CAFR), prepared by the Accounting
& Financial Reporting (AFR) department, received the "Certificate of Achievement for Excellence in
Financial Reporting" from the Government Finance Officers Association (GFOA) of the United States
and Canada. Along with this prestigious certification, the GFOA "Award of Financial Reporting
Achievement" was also given to the AFR Department. This is the third consecutive year for
receiving the certification and award. The Port's 2008 CAFR will be completed and transmitted to
the GFOA for consideration of receiving another award.
o The Port received a clean, unqualified independent Certified Public Accountant (CPA) audit opinion
on its 2007 financial statements.
o The Port received clean 2007 Single Audit and PFC audits, resulting in no Federal grants/FAA
regulatory compliance or questioned cost findings.
29

V.   CORPORATE PROF. & TECHNICAL SERVICES PERFORMANCE REPORT 12/31/08

Office of Social Responsibility:
o Focus on the Small Business contracting area as a primary focus of its business plan.
o OSR's and Small Business work program is categorized as: Policy Development, Program
Development, Outreach, and Contracting Accomplishments.
Regional Transportation:
o Ensure access to existing facilities
o Ensure access to future facilities
o Enhance regional transportation and freight mobility
Police Department:
o The Department continues to participate in regional task forces, to include the FBI Joint Terrorism
Task Force, the DEA Task Force, Immigrations and Customs Enforcement (ICE) task force, and the
Valley Special Response Team. Participation in these cooperative working relationships provides
additional opportunities for our officers to enhance their investigative skill levels and forges stronger
working relationships with other local, State, and Federal agencies.
o The Department is constantly on the lookout for grant opportunities and other funding sources to
help finance its wide variety of missions. This includes our continued receipt of Homeland Security
grants in support of the Explosives Detection K-9 Program and Airport Security Program, as well as
Homeland Security grants for equipment. The new police boat was purchased through a marine
security grant, and has proven to be an effective asset for harbor security.

C.   KEY INDICATORS
Executive:
o State Auditor's Office (SAO) Audit
Changes have been made to Port practices so that they are reflective of legislative changes
and the auditor's recommendations.
Submitted a report to the SAO office of the actions we have taken to date addressing their
recommendations for improvement.
Implemented the new Ethics and Fraud Awareness & Prevention policies and established a
Fraud Hotline.
The Port's Internal Audit Manager now reports to the Commission and CEO.
o Organizational Changes
Hired a Chief Procurement Officer and established an independent Central Procurement Office.
Centralized the Port's development and construction activities within the new Capital
Development Division.
The Real Estate Division was launched in January and has reviewed and assessed all Port
properties.
The new Office of Social Responsibility continues the process of developing and
implementing new programs and initiatives.
o Strategic Planning
Key stakeholder advisory groups were formed and met at various times throughout the year.
o High Performance Organization
Police department implemented LEMAP recommendations to improve their work culture.
Veterans Fellowship program has been implemented.
o Green Initiative
Briefed Commissioners on Ports environmental programs in January.
Continue to progress on employee engagement and performance metrics.
o Eastside Rail Corridor
Acquisition is nearly finalized.


30

V.   CORPORATE PROF. & TECHNICAL SERVICES PERFORMANCE REPORT 12/31/08

Legal:
o Responses to requests for public records are within the statutory time limits and a reasonable
response time has been provided for production of documents. Feedback from the public is evidence
that this is done successfully.
o Port employees continue to attend classes and gain knowledge regarding a variety of legal issues
as well as record management issues.
Risk Management:
o Claims Management continues to achieve a high rate of recovery for claim costs for property
damage from liable parties when a liable party can be identified. Claims Management recovered
roughly $60,000 of property damage costs out of a total of $91,000.
o Property insurance renewal on July 1, 2008 resulted in a 4% decrease in premium even though
property values increased by 15%.
o Risk management procured a builder risk policy for the rental car facility project at a 20% savings
compared to the cost the contractor proposed for the same coverage. The policy will remain in
effect during the temporary suspension of work on the facility in 2009.
Health & Safety:
o Annual Safety Evaluation on leading indicators and action plans for organizations.
Public Affairs:
o Industry and customer support demonstrated through public testimony at Commission meetings on
topics such as Performance, Northwest Ports Clean Air Strategy, and Viaduct.
o Positive coverage of the Port of Seattle's environmental initiatives in trade publications and local
media.
o Received ACI-NA's award for the Hainan Airlines launch event.
o Received positive local, regional, national, and international press coverage of the Third Runway
grand opening.
o Annual Community Meetings: achieved record attendance of more than 240 community members
o Sea-Air School, 2008 Seaport and 2007-2008 Airport Programs reached almost 10,000 students,
teachers and parents. Students participating in the Sea-Air School Airport and Seaport Programs
came from 34 cities and 116 schools.
o Sea-Air School Trade Classes  record number of 2445 attended the International Trade Classes in
the Commission Chambers, 13% more than 2007.
o Lunch Bus Tours: 2007 Attendance: 117; 2008 Attendance: 170
o Port 101: 2007 Attendance: 407; 2008 Attendance: 574
Government Relations:
o Continued support by King County, Snohomish County and suburban jurisdictions for POS
acquisition and planning for Eastside Rail Corridor.
o Tours and Briefings as requested for Federal, State and Local Elected Officials and Staff.
o Continued Promotion of Joint Marketing, Security, and Planning Efforts with the Port of Tacoma.
Economic, Business & Trade Development:
o Advanced Port of Seattle interests in regional economic development through pursuit of "Prosperity
Partnership" action strategies in logistics and international trade (China trade and logistics strategy),
life sciences (UK and French initiatives) and aerospace (initiating efforts with various regional and
state collaborators to assess the future development of Boeing aircraft, and to begin developing
strategies to enhance the state's competitive ability to support their R&D and manufacture in
Washington.


31

V.   CORPORATE PROF. & TECHNICAL SERVICES PERFORMANCE REPORT 12/31/08

Engineering:
o Engineering prepared analysis and provided briefings on performance measures to the operating
divisions and executive group. Construction costs and industry trends were the primary focus of
2008. In addition, the Engineering department is supporting the Port wide performance audit efforts
(TKW and SAO) of capital programs as requested by the Commission.
Port Construction Services (PCS):
o In 2008, PCS managed a total cost of 16.2 million dollars in spending. Contractor payments were
33.7 percent, PCS crew wages were 18.8 percent, material and equipment costs were 14.1 percent,
construction support costs were 19.5 percent and indirect costs were 13.9 percent.
Human Resources & Development:
o In 2008, approximately 755 employees participated in Learning Calendar classes. Additionally,
1,640 employees completed the Preventing Workplace Harassment refreshers.
o Opened 324 employment requisitions in 2008 as compared to 329 in 2007.
o Processed 9,854 employment applications in 2008 as compared to 7,983 in 2007.
o Participated in 26 career fairs including 9 military fairs.
o Approximately 234 job evaluations were finalized in 2008, including the following:
Project Job Evaluations              # of
Jobs 
Administrative Professionals         95
Project Management Group        45
Seaport Operations             22
Noise Programs               5
Non-project Job Evaluations           67
Project evaluations, in general take about 50% longer than individual evaluations as a result
of the additional project management time and increased need to review multiple jobs at the
same time. The Administrative Professionals and the Project Management Group Refresh
Projects included developing new matrices, which added additional time to this project.
Labor Relations:
o Contract Negotiation: Staff members serve as the chief negotiators for the Port in all labor contract
negotiations. Our department coordinates the market research and proposal development and
ensures that Port of Seattle collective bargaining agreements are in line with those of comparable
jurisdictions.
o Dispute Resolution: Works closely with managers and union representatives to resolve many issues
outside of the grievance process.
Information & Communication Technology (ICT):
o Continued virtualization and data center consolidation strategies have offset over $2 million in new
hardware and hardware refresh costs to date.
o In 2008, ICT completed 36 technology projects that combined were 11.6% under budget. ICT
projects resulted in over $1.3M in annual savings for the Port and our airline partners. In addition,
completion of two airport projects resulted in a reduction of Green House Gas (GHG) emissions by
8,500 tons per year for our airline partners.
o In 2008, ICT proved to be a National technology leader and an asset to Seattle's Port through
projects such as: Floor Count, Gate Tagging, SMS Text Messaging, and the Aviation Operations
Dashboard
o In 2008, ICT filtered and blocked 127.2 million spam emails (97.2% of total incoming emails). Also,
our anti-virus systems found and removed approximately 33 thousand viruses.

32

V.   CORPORATE PROF. & TECHNICAL SERVICES PERFORMANCE REPORT 12/31/08

o In 2008, ICT began to track customer satisfaction by conducting surveys. In response to the
question: "How would you rate your overall experience with the ICT department, on this project?
(1=poor, 5=excellent)," the average response was 4.0.
o To be responsive to our business partners and to decrease ICT expenses we replaced the majority
of our contract employees with full time employees.
o In 2008, ICT continued to save money through efficient financial and contract management, ICT also
began to generate a recurring revenue stream.
o ICT continued to help the Port increase mobility and productivity; to date, 910 employees have
laptops which enable them to work from any location. This was crucial in 2008, when during the
December snowstorm the Port had 154 Virtual Private Network users (10 times our average)
working from home.
Finance & Budget:
Budget 
o Provided adequate budget and MIS training for budget support staff.
o Made the necessary budget adjustments to meet the commitment control budgets.
o Received Distinguished Budget Presentation Award from the Government Finance Officers
Association of the United States and Canada.
Regional Transportation:
o Two FAST Corridor projects celebrated ground breakings: SR519 Phase 2 in the North Duwamish
(10/23) and the 228th Grade Separation in Kent (10/6). The Port increased its financial partnership
in SR519, contributing $5.5M, and anticipates participating in 228th subject to Commission
authorization.
o The Viaduct/Seawall Collaborative Process completed a year of study, and the Port Commission
sent a letter requesting the Bored Tunnel be retained for further study when a Surface Transit and
Elevated Viaduct were the only two projects recommended to move forward. Eventually in January
2009, this recommendation was adopted by the Governor, Mayor and County Executive.
Police:
o Jan  Dec 2008 Calls For Service  67,698
Jan  Dec 2007 Calls For Service  71,391
o July  Dec 2008 Arrests  1,115 (does not include warrant arrests)
Jan  Dec 2007 Arrests  1,161 (does not include warrant arrests)








33

V.   CORPORATE PROF. & TECHNICAL SERVICES PERFORMANCE REPORT 12/31/08

D.    OPERATING RESULTS---- NET OPERATING EXPENSE (in THOUSANDS $) [REPORTED BY ORG] 
2007 YTD    2008 YTD      2008 Bud Var.
In $ Thousands                     Actual   Actual Budget      $ %
Total Revenues                     2,223   1,735   1,258    477   37.9%
Executive                          2,293   2,333   2,633    300   11.4%
Commission                      577    899    791   (109)  -13.8%
Legal                            2,969   3,012   2,766    (246)   -8.9%
Risk Services                         2,572    2,768    3,107     339   10.9%
Health & Safety Services                   995     996    1,059     63    5.9%
Public Affairs                          3,961    4,356    4,681     325    6.9%
External Affairs                          821    1,097    1,460     363    24.8%
Economic & Trade Development           1,524   1,645   2,174    530   24.4%
Engineering                        1,188   1,253   1,355    101    7.5%
Port Construction Services                2,268    1,965    1,500    (465)   -31.0%
Human Resources & Development          3,644   3,973   4,432    458   10.3%
Labor Relations                       579     677    731     54    7.4%
Information & Communications Technology    13,346  14,577  15,010    433    2.9%
Finance & Budget                    1,456   1,667   1,821    154    8.5%
Accounting & Financial Reporting           6,174   5,863   7,189   1,326   18.4%
Office of Social Responsibility                200    1,246    1,738     492    28.3%
Consulting Services                      3 -      17     17   100.0%
Regional Transportation                  291     402    522    120   23.0%
Police                            18,607   19,484   20,474     990    4.8%
Industrial Development Corporation -    11 -    (11)   0.0%
Contingency                      6,788   4,200    750   (3,450)  -460.0%
Total Expenses                     70,257  72,425   74,210   1,785    2.4%
Corporate Professional and Technical Services revenues for the twelve months of 2008 were $477 thousand
favorable compared to the approved budget due to higher Police operating grants.
Corporate Professional and Technical Services expense performance for the year-ended 2008 was $72.4
million, $1.8 million or 2.4% favorable compared to the approved budget and $2.2 million or 3.1% higher than
2007. This favorable variance is primarily due to several position vacancies during the year and other cost
savings realized in several departments.
The favorable variance of $300 thousand in Executive is due to cost savings realized in Salaries and Benefits
for the Chief Administrative Officer position being vacant since the earlier part of the year and costs savings in
Travel & Other Employee Expenses due to decrease in executive travel.
Commission's unfavorable variance of 109K is due to higher Salaries & Benefits, Equipment Expense, Office
Supplies and Telecommunication Expenses.
The $246 thousand unfavorable variance in Legal is due to higher Salaries and Benefits and increased activity
costs for Outside Legal Services.
The favorable variance of $339 thousand in Risk Services is due to cost savings realized for both property and
liability insurance renewal.
The favorable variance of $63 thousand in Health & Safety is due to cost savings in Outside Services and
Travel & Other Employee Expenses.
Public Affairs' favorable variance of $325 thousand is due primarily to lower salary costs from several positions
being vacant during the year and under-spending in Advertising Expense.


34

V.   CORPORATE PROF. & TECHNICAL SERVICES PERFORMANCE REPORT 12/31/07

External Affairs' favorable variance of $363 thousand is due to costs savings in Salaries and Benefits for two
vacant positions since the early part of year, and cost savings in Travel & Other Employee Expenses due to
reduced travel because of the vacant Federal Government Manager's position.
Economic & Trade Development's favorable variance of $530 thousand is due to under-spending in Outside
Services for not being able to secure a consultant contract, and savings in Travel & Other Employee Expenses
due to cancellation of several trips.
Engineering Services' favorable variance of $101 thousand is due to reduced or deferred costs in order to do
work on the performance audit and additional expense projects that were not included in the budget.
Port Construction Services' unfavorable variance of $465K is due to working on the performance audit, performing
additional expense work for the divisions that was not included in the budget and doing less work on capital projects than
originally anticipated.
Human Resources and Development incurred a favorable variance of $458 thousand due to costs savings in
Salaries and Benefits caused by vacancies during the year and cost savings in Outside Services.
Labor Relations incurred a favorable variance of $54 thousand due primarily to costs savings in Salaries and
Benefits due to several vacancies during the year and in Travel & Other Employee Expenses.
Information and Communication Technology incurred a favorable variance of $433 thousand due primarily to
costs savings in Salaries and Benefits due to several vacancies during the year and consolidating and
terminating software license maintenance agreements.
The favorable variance of $154 thousand in Finance & Budget is due to savings realized due to delayed in
filling the Corporate Budget Manager's position and other costs savings in the Travel and Other Employee
Expenses category due to cancellation of some travel plans.
Accounting and Financial Reporting year-end performance resulted in a favorable variance of $1.3 million
compared to the approved budget due primarily to cost savings in Salaries and Benefits as a result of several
unfilled and vacant positions during the year, and in Outside Services, Travel and Other Employee Expenses.
Office of Social Responsibility year-end performance resulted in a favorable variance of $492 thousand
compared to the approved budget due primarily to cost savings in Salaries and Benefits as a result of several
unfilled positions during the year, in Outside Services and Trade Business & Community.
The favorable variance of $17 thousand in Consulting Services is based on the Port's decision not to pursue
legislative authority in this session.
The favorable variance of $120 thousand in Regional Transportation is due to capitalizing some of the projects
that would have been expensed and using in house staff on other projects as opposed to consultants.
The favorable variance of $990 thousand in Police is due to cost savings in Salaries and Benefits due to several
vacant positions.
Industrial Development Corporation unfavorable variance of $11K is due to charges incurred for the IDC/ET
Fellowship Program.
Contingency is unfavorable by $3.5M, primarily due to the Performance Audit and the Special Investigation costs.





35

V.   CORPORATE PROF. & TECHNICAL SERVICES PERFORMANCE REPORT 12/31/07

DIRECT CHARGES 
$ in Thousands       2007        2008         2008 Bud Var
Actual    Actual   Budget     $ %
Total             1,556    9,341   10,025     (684)    -6.8% 
Corporate Direct Charges for the year-ended 2008 were $684 thousand or 6.8% below the approved budget.

E.   CAPITAL SPENDING RESULTS 
($ Millions)
Annual Results:
2008 Plan of Finance                  $ 14.84
2008 Approved Budget                $ 21.99
2008 Actuals                       $ 8.12
Variance (Budget vs Actuals)              $ 13.87
















36

VI.   DEFINITION OF TERMS
Airline Cost Per Enplanement (CPE): Airline cost per enplanement reflects the overall cost to the airlines for each
passenger enplaned.  The CPE measures the total costs borne by the airlines divided by the number of enplaned
passengers (roughly half of the total passengers).
Basic Airlines Landing Fee (BALA): Revenues derived from airlines that have signed the basic airline lease agreement.
Capital Budget and Draft Plan of Finance: The Capital Budget is a detailed plan of proposed expenditures arising from the
acquisition or improvement of fixed assets and the means of financing them. The Draft Plan of Finance document is prepared
and presented to the Port Commission concurrently with the budget.
Income from Operations: Represents the net income to the Port derived from revenues less direct operating and
maintenance expenses but prior to Corporate Administrative expenses.
Inter-Division Charges: Charges from one division to another.
Net Operating Income (NOI): Income from Operations after administrative expenses, but before non-operating revenues
and expenses.
Net Non-Operating Income: The difference between Non-Operating Revenues (excluding the Ad Valorem Taxes) and Non-
Operating Expenses.
Non-Airline Revenues: Include concession, parking and other fees not charged directly to the airlines. These revenues
help offset the residual landing fee requirement.
Operating and Maintenance Expenses: Costs or charges that arise from the normal operation of business.
Operating Revenues: Gross earnings or billings from operations that results from facilities and/or equipment leased or
operated.
Performance or Operating Budget: A financial plan that incorporates an estimate of proposed revenues and expenses for
a given period. 













37

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.