9a. Attachment - Q1 2021 Financial Performance Report
Item No. 9a_attach Meeting Date: May 25, 2021 PORT OF SEATTLE Q1 2021 FINANCIAL PERFORMANCE REPORT AS OF MARCH 31, 2021 Q1 2021 FINANCIAL & PERFORMANCE REPORT 03/31/21 TABLE OF CONTENTS PAGE I. Portwide Performance Report 3-7 II. Aviation Division Report 8-17 III. Maritime Division Report 18-22 IV. Economic Development Division Report 23-27 V. Central Services Division Report 28-32 2 I. PORTWIDE FINANCIAL & PERFORMANCE REPORT 03/31/21 I. PORTWIDE EXECUTIVE SUMMARY The COVID-19 pandemic continues to affect many of the Port's lines of business; however, prudent budgeting and careful cost management has positioned the Port well for 2021. Passenger volume is expected to rebound in the next few months and is predicted to be 29% lower than 2019. Federal relief funds will allow the airport to extend relief to concession tenants and improve the financial outlook for the Aviation division. Current restrictions on gatherings has affected conference center revenue which has been partially offset by the increase in grain volumes and higher NWSA Distributable Revenues. The CDC has recently revised its guidance on cruises from U.S. ports setting the potential start date in mid-July but banning of cruises in Canada remains an obstacle to reopening of Alaskan cruises from Seattle. The Port is collaborating with cruise partners and local health officials for possible resumption of the Alaska cruise season while taking into consideration the health and safety of the crew, passengers, and the community. Despite the disruption presented by COVID-19, the Port continues to implement planned initiatives and programs to spur regional economic recovery and provide much needed support to communities hardest hit by the pandemic. While we are currently projecting to be closely on track with budget on a full-year basis, staff continues to closely monitor very dynamic business conditions. PORTWIDE FINANCIAL SUMMARY Fav (UnFav) Incr (Decr) 2019 YTD 2020 YTD 2021 YTD 2021 YTD Actual vs. Budget Change from 2020 Variance $ in 000's Actual Actual Actual Budge t $ % $ % Aeronautical Revenues 83,674 86,284 61,313 80,938 (19,625) -24.2% (24,971) -28.9% Airport Non-Aero Revenues 55,996 49,956 26,930 35,085 (8,154) -23.2% (23,025) -46.1% Non-Airport Revenues 28,382 25,313 24,658 24,311 348 1.4% (655) -2.6% Total Operating Revenues 168,052 161,553 112,901 140,333 (27,432) -19.5% (48,652) -30.1% Total Operating Expenses 96,729 103,591 94,866 101,431 6,566 6.5% (8,726) -8.4% NOI before Depreciation 71,323 57,962 18,036 38,901 (20,866) -53.6% (39,926) -68.9% Depreciation 41,038 43,728 44,829 40,209 (4,621) -11.5% 1,101 2.5% NOI after Depreciation 30,286 14,233 (26,794) (1,307) (25,486) 1949.7% (41,027) -288.2% 2021 YTD Actuals vs. 2021 YTD Budget: Total operating revenues were down $27.4M compared to budget due to lower revenues in Aeronautical and Non-Aeronautical lines of businesses (ADR & Terminal Leased Space, Public Parking, Rental Cars, Ground Transportation, Clubs and Lounges), Cruise, and Conference & Event Centers. Total operating expenses are 6.6M lower than budget due to delays in hiring and implementing projects/initiatives due to the pandemic. 2021 YTD Actuals vs. 2020 YTD Actuals: Total operating revenues for Q1 2021 were down $48.7M due to lower revenues in Aeronautical and Non- Aeronautical lines of businesses (Public Parking, ADR & Terminal Leased Space, Rental Cars, Ground Transportation, Clubs & Lounges, Airport Commercial Properties) and Conference & Event Centers. The Q1 2021 results reflect the full quarter effect of the pandemic as opposed to partial effect in Q1 2020. Total operating expenses for Q1 2021 were $8.7M lower compared to 2020 because of lower payroll, equipment and travel expenses, and less contract spending. 3 I. PORTWIDE FINANCIAL & PERFORMANCE REPORT 03/31/21 NON-AIRPORT FINANCIAL SUMMARY Fav (UnFav) Incr (Decr) 2019 YTD 2020 YTD 2021 YTD 2021 YTD Actual vs. Budget Change from 2020 Variance $ in 000's Actual Actual Actual Budge t $ % $ % NWSA Distributable Revenue 12,986 10,730 11,343 10,568 775 7.3% 613 5.7% Maritime Revenues 9,442 9,340 9,539 10,370 (831) -8.0% 199 2.1% EDD Revenues 4,674 3,277 2,002 2,436 (434) -17.8% (1,275) -38.9% SWU & Other 1,280 1,966 1,774 936 838 89.5% (192) -9.7% Total Operating Revenues 28,382 25,313 24,658 24,311 348 1.4% (655) -2.6% Total Operating Expenses 17,513 18,425 16,778 20,155 3,377 16.8% (1,648) -8.9% NOI before Depreciation 10,869 6,888 7,881 4,156 3,725 89.6% 993 14.4% Depreciation 9,852 9,423 9,510 8,814 (696) -7.9% 87 0.9% NOI after Depreciation 1,017 (2,535) (1,630) (4,658) 3,029 -65.0% 906 -35.7% 2021 YTD Actuals vs. 2021 YTD Budget Total non-airport operating revenues were up $348K compared to budget due to higher than anticipated revenues from Grain, NWSA Distributable revenues, and unbudgeted police forfeiture revenue. Assumptions regarding the timing of Norwegian Cruise Lines' lease payment ($1M) affected Maritime Revenues. Total non-airport operating expenses were $3.4M lower than budget because of delays in hiring, project spending delays, timing of tenant improvements, and lower utility expenses. 2021 YTD Actuals vs. 2020 YTD Actuals Non-airport operating revenues were $655K less compared to 2020 because of lower revenues from Conference and Event Centers, Fishing & Operations, and Central Harbor Management. The Conference and Event Centers and parking were affected by rescheduling/cancelling of events due to COVID-19; Q1 2021 revenues reflect the full quarter effect of the pandemic as opposed to partial effect for Q1 2020. Non-airport expenses were 1.6M less than 2020 due to lower Conference & Event Center expenses, lower payroll, utilities, travel, and contract expenses. MAJOR OPERATING REVENUES SUMMARY Fav (UnFav) Incr (Decr) 2019 YTD 2020 YTD 2021 YTD 2021 YTD Act/Bud Var Change from 2020 $ in 000's Actual Actual Actual Budget $ % $ % Aeronautical Revenues 83,674 86,284 61,313 80,938 (19,625) -24.2% (24,971) -28.9% Public Parking 19,956 16,720 9,330 10,595 (1,264) -11.9% (7,390) -44.2% Rental Cars - Operations 6,234 6,928 3,484 4,577 (1,092) -23.9% (3,444) -49.7% Rental Cars - Operating CFC 994 - - - - 0.0% - 0.0% ADR & Terminal Leased Space 14,336 12,376 6,297 9,119 (2,822) -30.9% (6,079) -49.1% Ground Transportation 4,523 3,931 1,459 2,441 (982) -40.2% (2,471) -62.9% Employee Parking 2,677 2,623 2,144 2,422 (278) -11.5% (479) -18.3% Airport Commercial Properties 3,212 3,641 2,557 2,911 (354) -12.2% (1,083) -29.8% Airport Utilities 1,719 1,606 1,297 1,892 (595) -31.4% (309) -19.3% Clubs and Lounges 1,902 1,714 175 936 (762) -81.3% (1,540) -89.8% Cruise 43 114 48 1,092 (1,044) -95.6% (66) -58.1% Recreational Boating 3,119 3,134 3,125 3,152 (27) -0.8% (9) -0.3% Fishing & Operations 2,291 2,501 2,203 2,187 16 0.7% (297) -11.9% Grain 1,434 1,048 1,719 1,421 298 21.0% 671 64.0% Maritime Portfolio Management 2,550 2,541 2,443 2,518 (75) -3.0% (98) -3.8% Central Harbor Management 2,150 2,158 1,870 1,964 (94) -4.8% (288) -13.3% Conference & Event Centers 2,519 1,115 127 468 (341) -72.9% (988) -88.6% NWSA Distributable Revenue 12,986 10,730 11,343 10,568 775 7.3% 613 5.7% Other 1,732 2,391 1,967 1,133 834 73.6% (424) -17.7% Total Operating Revenues (w/o Aero) 84,378 75,269 51,589 59,395 (7,807) -13.1% (23,680) -31.5% TOTAL 168,052 161,553 112,901 140,333 (27,432) -19.5% (48,652) -30.1% 4 I. PORTWIDE FINANCIAL & PERFORMANCE REPORT 03/31/21 MAJOR OPERATING EXPENSES SUMMARY Fav (UnFav) Incr (Decr) 2019 YTD 2020 YTD 2021 YTD 2021 YTD Act/Bud Change from 2020 $ in 000's Actual Actual Actual Budge t $ % $ % Salaries & Benefits 31,973 35,987 35,317 35,790 474 1.3% (670) -1.9% Wages & Benefits 31,457 34,133 31,551 32,623 1,072 3.3% (2,582) -7.6% Payroll to Capital Projects 5,673 6,497 6,398 7,949 1,551 19.5% (99) -1.5% Outside Services 17,698 20,420 19,135 23,660 4,525 19.1% (1,285) -6.3% Utilitie s 6,555 6,871 6,658 6,559 (99) -1.5% (213) -3.1% Equipment Expense 2,014 2,160 1,248 1,713 465 27.2% (913) -42.2% Supplies & Stock 2,898 2,503 2,127 2,368 241 10.2% (376) -15.0% Travel & Other Employee Expenses 905 1,101 445 744 299 40.1% (656) -59.6% Third Party Mgmt Op Exp 3,042 2,445 886 1,386 500 36.1% (1,559) -63.8% B&O Taxes 1,068 1,086 764 854 90 10.5% (322) -29.7% Other Expenses 4,666 3,989 2,270 2,605 335 12.9% (1,719) -43.1% Charges to Capital Projects/Overhead Alloc (11,221) (13,602) (11,933) (14,819) (2,886) 19.5% 1,669 -12.3% TOTAL 96,729 103,591 94,866 101,431 6,566 6.5% (8,726) -8.4% PORTWIDE FINANCIAL YEAR-END FORECAST SUMMARY Fav (UnFav) Incr (Decr) 2019 2020 2021 2021 Fcst vs. Budget Change from 2020 Variance $ in 000's Actual Actual Fore cas t Budge t $ % $ % Aeronautical Revenues 357,598 297,909 314,476 386,668 (72,192) -18.7% 16,567 5.6% Airport Non-Aero Revenues 269,037 116,473 171,312 189,548 (18,236) -9.6% 54,839 47.1% Non-Airport Revenues 137,538 96,446 104,968 104,645 323 0.3% 8,523 8.8% Total Operating Revenues 764,174 510,828 590,756 680,861 (90,104) -13.2% 79,928 15.6% Total Operating Expenses 441,700 408,681 425,177 423,412 (1,765) -0.4% 16,496 4.0% NOI before Depreciation 322,474 102,147 165,579 257,448 (91,869) -35.7% 63,432 62.1% Depreciation 174,903 180,086 176,509 176,509 - 0.0% (3,577) -2.0% NOI after Depreciation 147,571 (77,939) (10,930) 80,939 (91,869) -113.5% 67,009 -86.0% 1) 2021 Airport Non-Aero Revenues Forecast does not include the projected Federal Relief for Concessions of $26.8M. Year-End Forecast Operating Revenues are forecasted to be $90.1M lower than budget mainly due to the application of unplanned federal relief funds that will reduce Aeronautical revenues, which are based on cost recovery, and Non- Aeronautical revenues when used for tenant rent relief. Operating Expenses are expected to be $1.8M higher than budget due to a number of unbudgeted items. While expenses increased by $16.4 million compared to 2020, they would have been $700K lower than 2020 after adjusting for the $17.2M State pension credit in 2020. NOI before depreciation is forecasted to be $91.9M below budget primarily due to significantly lower operating revenues reflecting the impact of airport federal relief funds on Aeronautical and Non-Aeronautical revenues compared to budget. The federal relief funds will be booked as Non-Operating Revenues. KEY PERFORMANCE METRICS 5 I. PORTWIDE FINANCIAL & PERFORMANCE REPORT 03/31/21 Fav (UnFav) Incr (Decr) 2020 YTD 2021 YTD 2020 2021 2021 Fcst vs. Budget Change from 2020 Variance Actual Actual Actual Fore cas t Budge t Chg. % Chg. % Total Passengers (in 000's) 9,209 4,868 20,087 36,903 36,432 471 1.3% 16,815 83.7% Landed Weight (lbs. in millions) 6,889 5,266 20,262 24,461 26,233 (1,772) -6.8% 4,199 20.7% Passenger CPE (in $) N/A N/A 26.50 15.26 19.62 4.35 22.2% (11.24) -42.4% Grain Volume (metric tons in 000's) 915 1,393 4,240 4,366 4,219 147 3.5% 126 3.0% Cruise Passenger (in 000's) - - - N/A N/A - 0.0% - 0.0% Shilshole Bay Marina Occupancy 91.9% 93.1% 94.1% 95.0% 96.1% -1.1% -1.2% 0.9% 1.0% Note: Due to CDC COVID-19 Cruise restrictions, we are unable to Budget or Forecast Cruise Passengers at this time. 6 I. PORTWIDE FINANCIAL & PERFORMANCE REPORT 03/31/21 KEY BUSINESS EVENTS As a critical driver of economic growth in the region, the Port has been leading efforts to an equitable recovery by helping stabilize businesses and increasing investments in communities. The Port awarded fourteen organizations in the six Highline cities with an environmental grant that will support projects for park restoration, garden expansion, environmental justice education and service learning, community engagement, and soil and water stewardship training. The Commission also approved the lease for a job and economic resource center as part of the Duwamish Valley Community Equity Program. The Port, with assistance from the US Department of Transportation Small Business Transportation Resource Center (SBTRC), conducted workshop series to small, disadvantaged minority, women-owned, 8A certified, and HUB Zone certified businesses. The Port has also joined the City of Seattle and Sound Transit in a regional effort to reduce equity gap in workforce development and Priority Hire programs. The joint partnership invests a total of 1.75M to support workers, especially women and people of color through outreach and training, recruitment, placement and referral, and retention and career advancement support services. The Port announced the 23 recipients of the sixth annual Tourism Marketing Support Program. The program will provide $200,000 in matching dollars to help revive the tourism and hospitality industry which is one of the hardest hit economic sectors in WA state with job losses estimated at over 100,000. The Port is also working with WA Tourism Alliance to implement statewide tourism recovery initiative. The Port, in partnership with Washington Maritime Blue and the state Department of Commerce, announced the second cohort of the Maritime Blue Innovation Accelerator. Eleven start-up companies were chosen based on how they could help advance the state's strategy to create a sustainable economy. The cohort will work closely with global network of mentors and advisors with unique backgrounds, experiences, and expertise to help guide and inspire them as they work toward innovative solutions to help the maritime industry thrive in the future. In addition to working with mentors, the cohort will have opportunities to secure funding for their ideas. The Commission authorized the procurement of a 14-acre surplus WSDOT (Washington State Department of Transportation) parcel that will be combined with a similar sized POS parcel to create the 28-acre Des Moines Creek-West development. This project will create local jobs and spur local business activity. To further support the community through this pandemic, the Port has partnered with the Department of Health, FEMA, and Safeway/Albertsons to host the On-site COVID-19 vaccination clinic at the airport for transportation workers. Port employees and badged SEA stakeholders have completed 426 hours of volunteer shifts during the first 5 weeks of the vaccine clinic. Moreover, the Port coordinated with Discovery Health MD, to offer COVID testing and vaccines at Terminal 91 for Maritime Professionals. The Port has also received approval from the FAA to distribute masks (received from FEMA) to community groups and small businesses outside of the aviation industry. Organizations that have received the mask donations include Communities in Schools of Seattle (CISS), El Centro de la Raza, Duwamish River Clean Up Coalition, Urban League of Metropolitan Seattle, and Community International Health Services. The Port adopted the NW Ports Clean Air Strategy and made progress on the Maritime Climate and Air Action Plan, and T117 construction. Fishermen's Terminal, Salmon Bay Marina and Maritime Industrial Center earned Clean Marina Certification from Puget Soundkeeper. The Northwest Mountain Minority Supplier Development Council also named the Port of Seattle as its Public Agency of the Year. 7 I. PORTWIDE FINANCIAL & PERFORMANCE REPORT 03/31/21 CAPITAL SPENDING SUMMARY 2021 2021 2021 Budget Variance $ in 000's YTD Actual Forecast Budget $ % Aviation 92,329 468,094 491,202 23,108 4.7% Maritime 2,094 21,279 26,195 4,916 18.8% Economic Development 325 4,604 5,647 1,043 18.5% Central Services & Other (note 1) 4,047 12,892 13,605 713 5.2% TOTAL 98,795 506,869 536,649 29,781 5.5% Note: (1) "Other" includes 100% Port legacy projects in the North Harbor and Storm Water Utility Small Capital projects. Total capital spending is forecast to be $506.9M for 2021, $29.8M lower than the approved budget mainly due to spending delays in International Arrival Facility and North Satellite projects. PORTWIDE INVESTMENT PORTFOLIO During the first quarter of 2021, the investment portfolio earned 1.33% versus the benchmark's (the Bank of America Merrill Lynch 1-3 Year US Treasury & Agency Index) of 0.19%. Over the last twelve months, the portfolio and the benchmark have earned 1.67% and 0.16%, respectively. Since the Port became its own Treasurer in 2002, the life-to-date earnings of the Port's portfolio and the benchmark are 2.40% and 1.72%, respectively. 8 II. AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/21 II. AVIATION DIVISION FINANCIAL SUMMARY Fav(UnFav) Fcst. vs. Budget Incr/(Decr) Financial Summary 2019 2020 2021 2021 Variance Change from 2020 ($ in 000's) Actual Actual Forecast Budget $ % $ % Operating Revenue Aeronautical Revenues 357,598 297,909 314,476 386,668 (72,192) -18.7% 16,567 5.6% Non-Aeronautical Revenues 269,037 116,473 171,312 189,548 (18,236) -9.6% 54,839 47.1% Total Operating Revenues 626,636 414,382 485,788 576,215 (90,428) -15.7% 71,406 17.2% Total Operating Expenses 355,245 329,680 342,282 339,908 (2,374) -0.7% 12,602 3.8% Net Operating Income 271,390 84,702 143,506 236,308 (92,802) -39.3% 58,804 69.4% Federal Relief 147,148 161,601 37,899 123,702 326.4% 14,453 9.8% Federal Relief (Concessions) 26,755 26,755 26,755 NOI (After Federal Relief) 271,390 231,850 331,862 274,207 57,655 21.0% 100,012 43.1% CPE 12.86 26.50 15.26 19.62 4.35 0.22 (11.24) -42.4% Non-Aero NOI ($ in 000s) 6,671 4,426 90,892 82,742 8,150 9.9% 86,466 1953.6% Enplaned passengers (in 000s) 25,874 10,044 18,451 18,216 236 1.3% 8,408 83.7% - Capital Expenditures (in 000s) 573,598 573,598 468,094 491,202 23,108 4.7% (105,504) -18.4% 2021 Forecast vs. 2021 Budget Net Operating Income (NOI) for 2021 is forecasted to be (-$92.8M or -39.3%) unfavorable to the budget before Federal Relief applied, driven by: o Lower Aeronautical revenue (-$72.2M or -18.7%) due to grants of approximately $119M projected to offset Aeronautical costs in 2021. See the Airline Rate Base Cost Drivers table for more details. o Non-Aeronautical revenue (-18.2M or -9.6%) unfavorable. Although improvement is seen in Landside operations due to the improvement in the forecasted passenger volume recovery, Concessions will be requiring Federal Relief. Federal Relief for the concessions area is projected for $26.7M. o Total Operating Expenses ($-2.4M or -0.7%) unfavorable driven partially by the Snow Removal ($2.2M) in the Airfield and Maintenance cost centers and emergency watermain repair ($570K) in Q1, and projection for increased expenses in PMG Consultant Support for ADR and Tenants ($634K). 2021 Forecasts vs. 2020 Actuals Net Operating Income for 2021 is projected to be ($59M or 69.4%) higher than prior year before Federal Relief primarily driven by: o Higher Operating Revenue ($71.4M or 17.2%) compared to prior year is due to passenger levels improving with a forecast of being down 29% compared to 2019 vs. 61% down in 2020 compared to 2019. o Higher Operating Expenses ($12.6M or 3.8%) compared to prior year were primarily driven by higher Environmental Remediation Liability, Outside Services, Utilities, and Police spending in 2021 vs. 2020. Spending in 2020 was lower than normal due to directives to spend less due to the business environment related to the pandemic. 9 II. AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/21 A. BUSINESS EVENTS Higher than expected passenger levels, new forecast now 29% lower than 2019. Increased federal relief improves bottom line, helps customers: o $37 million for CRRSAA o $154 million for ARPA o $27 million for tenant concessions relief (CRRSAA and ARPA) o Planning to reserve $75 million for 2022 Planning for mid-year airline rate adjustment effective July 1. B. KEY PERFORMANCE METRICS % YTD Change YTD 2019 YTD 2020 YTD 2021 from 2020 Total Passengers (000's) Domestic 9,658 8,205 4,662 -43.2% International 1,207 1,004 205 -79.5% Total 10,865 9,209 4,868 -47.1% Operations 100,740 99,983 75,878 -24.1% Landed Weight (In Millions of lbs.) Cargo 565 606 709 17.0% All other 6,300 6,283 4,557 -27.5% Total 6,865 6,889 5,266 -23.6% Cargo - Metric Tons Domestic freight 69,054 75,866 84,502 11.4% International & Mail freight 29,423 25,795 25,223 -2.2% Total 98,477 101,661 109,725 7.9% *Mail weight for 2021 forward is incorporated in freight 10 II. AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/21 Key Performance Measures Fav(UnFav) 2019 2020 2021 2021 Fcst. vs. Budget Incr/(Decr) Variance Change from 2020 Approved Actual Actual Forecast Budget $ % $ % Key Performance Metrics Cost per Enplanement (CPE) 12.86 26.50 15.26 19.62 4.35 22.2% (11.24) -42.4% Non-Aeronautical NOI (in 000's)1 143,917 6,671 90,892 82,742 8,150 9.9% 84,221 1262.6% Other Performance Metrics O&M Cost per Enplanement 6.86 16.41 9.28 9.33 0.05 0.6% (7.14) -43.5% Non-Aero Revenue per Enplanement 5.20 5.80 5.37 5.20 0.16 3.2% (0.43) -7.4% Debt per Enplanement (in $) 66 163 84 85 1 1.3% (79) -48.4% Debt Service Coverage 1.68 1.40 2.35 1.36 0.99 73.4% 0.95 67.9% Days cash on hand (10 months = 304 days) 314 327 363 369 -6 -1.6% 36 11.2% Aeronautical Revenue Sharing ($ in 000's) (17,146) 1 - - - 0.0% (1) 100.0% Activity (in 000's) Enplanements 25,874 10,044 18,451 18,216 236 1.3% 8,408 83.7% Total Passengers 51,748 20,087 36,903 36,432 471 1.3% 16,815 83.7% (1) Assumes Federal Relief for Concessions applied in the 2021 Forecast Key Performance Metrics 2021 Forecast vs. 2021 Budget Cost per Enplanement (CPE): o CPE is ($4.35, or 22.2%) favorable driven primarily by the Federal Relief to help lower the Aeronautical costs to recover. o Non-Aero NOI is ($8.2M or 9.9%) favorable to original approved budget due to projection of improved revenues in the Landside operations and due to Federal Relief. 2021 Forecast vs. 2020 Actuals CPE is $11.24 lower compared to prior year due to lower costs expected to recover due to the Federal Relief offsetting the costs compared to prior year. Non-Aero NOI is $84.2M higher than prior year due to projection of improved revenues in the Landside operations and due to Federal Relief. 11 II. AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/21 C. OPERATING RESULTS Division Summary YTD Actuals Fav(UnFav) Actual vs. Budget Incr/(Decr) Total Airport Expense Summary 2019 YTD 2020 YTD 2021 YTD 2021 YTD Variance Change from 2020 ($ in 000's) Actual Actual Actual Budget $ % $ % Operating Expenses Payroll 35,372 39,071 37,305 37,513 208 0.6% (1,766) -4.5% Outside Services 12,737 14,011 13,477 15,498 2,022 13.0% (534) -3.8% Utilities 4,656 4,884 5,060 4,312 (748) -17.3% 175 3.6% Other Expenses 5,406 3,061 24 74 51 68.2% (3,037) -99.2% Total Airport Direct Charges 58,171 61,027 55,865 57,397 1,532 2.7% (5,162) -8.5% Environmental Remediation Liability - - - - - - Capital to Expense 72 - 75 - (75) 75 Total Exceptions 72 - 75 - (75) 75 Total Airport Expenses 58,243 61,027 55,940 57,397 1,457 2.5% (5,087) -8.3% Corporate 15,030 16,791 15,891 16,625 734 4.4% (900) -5.4% Police 5,182 6,509 5,537 6,389 852 13.3% (972) -14.9% Maritime/Economic Development/Other 761 838 720 865 146 16.8% (119) -14.2% Total Charges from Other Divisions 20,973 24,139 22,148 23,880 1,731 7.3% (1,991) -8.2% Total Operating Expenses 79,216 85,166 78,088 81,277 3,189 3.9% (7,078) -8.3% Expenses 2021 YTD Actuals vs. 2021 YTD Budget Operating Expenses were ($3.2M or 3.9%) favorable driven primarily by the underspend in Charges from other Divisions of $1.7M, and in Outside Services of $2M across multiple business areas - Commercial Management (208k), F&I and Capital Program (716k), PMG (629k), and Maintenance (933k). 12 II. AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/21 Division Summary YE Forecast Fav(UnFav) Fcst. vs. Budget Incr/(Decr) Total Airport Expense Summary 2019 2020 2021 2021 Variance Change from 2020 ($ in 000's) Actual Actual Forecast Budget $ % $ % Operating Expenses Payroll 144,051 152,895 153,293 153,293 - 0.0% 398 0.3% Outside Services 68,162 63,922 69,015 65,174 (3,841) -5.9% 5,093 8.0% Utilities 18,180 15,695 20,244 20,244 - 0.0% 4,549 29.0% Other Expenses 14,721 3,341 814 1,359 545 40.1% (2,527) -75.6% Total Airport Direct Charges 245,114 235,854 243,366 240,071 (3,295) -1.4% 7,512 3.2% Environmental Remediation Liability 15,900 (2,361) 2,162 2,001 (161) -8.0% 4,523 -191.6% Capital to Expense 2,089 2,588 283 - (283) (2,305) -89.1% Total Exceptions 17,989 227 2,445 2,001 (444) -22.2% 2,218 978.2% Total Airport Expenses 263,104 236,081 245,811 242,072 (3,739) -1.5% 9,730 4.1% Corporate 65,729 68,316 68,402 69,767 1,365 2.0% 87 0.1% Police 22,290 22,150 23,964 23,964 - 0.0% 1,814 8.2% Maritime/Economic Development/Other 4,123 3,134 4,105 4,105 - 0.0% 971 31.0% Total Charges from Other Divisions 92,141 93,599 96,471 97,836 1,365 1.4% 2,872 3.1% - Total Operating Expenses 355,245 329,680 342,282 339,908 (2,374) -0.7% 12,602 3.8% Operating Expenses 2021 YE Forecast compared to 2021 YE Budget (-$2.4M or -0.7% unfavorable) Total Operating Expenses is forecasted to over-run Budget by $2.4M driven partially by the Snow Removal ($2.2M) in the Airfield and Maintenance cost centers and emergency watermain repair ($570K) in Q1, and projection for increased expenses in PMG Consultant Support for ADR and Tenants ($634K). 13 II. AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/21 Aeronautical Business Unit Summary YTD Actuals Fav(UnFav) Actual vs. Budget Incr/(Decr) Aeronautical NOI 2019 YTD 2020 YTD 2021 YTD 2021 YTD Variance Change from 2020 ($ in 000's) Actual Actual Actual Budget $ % $ % Rate Base Revenues Airfield Movement Area 28,300 25,223 15,396 20,399 (5,003) -24.5% (9,827) -39.0% Airfield Apron Area 4,706 5,360 4,302 4,225 77 1.8% (1,057) -19.7% Terminal Rents 48,570 47,756 35,605 48,679 (13,074) -26.9% (12,151) -25.4% Federal Inspection Services (FIS) 3,267 4,019 1,869 3,769 (1,901) -50.4% (2,150) -53.5% Total Rate Base Revenues 84,843 82,357 57,172 77,073 (19,901) -25.8% (25,185) -30.6% - Airfield Commercial Area 2,793 3,927 4,139 3,865 274 7.1% 212 5.4% Subtotal before Revenue Sharing 87,635 86,284 61,311 80,938 (19,627) -24.2% (24,973) -28.9% Revenue Sharing (3,961) - - - - - Total Aeronautical Revenues 83,674 86,284 61,311 80,938 (19,627) -24.2% (24,973) -28.9% - Total Aeronautical Expenses 53,251 50,268 54,141 56,473 2,332 4.1% 3,873 7.7% Aeronautical NOI 30,423 36,016 7,169 24,464 (17,295) -70.7% (28,846) -80.1% Aeronautical 2021 YTD Actuals vs. 2021 YTD Budget Net Operating Income was (-$17.3M or -70.7%) unfavorable to budget due to $19.6M in lower aeronautical revenues driven by lower costs to recover driven by lower operating expenses in Outside Services and Charges from Other Divisions. Aeronautical 2021 YTD Actuals vs. 2020 YTD Actuals Net Operating Income was (-$28.8M or -80.1%) lower than 2020 due to the lower aeronautical costs to recover driven by lower activity when compared to the 1st quarter in 2020 where the COVID-19 impact didn't start until March 2020. The first two months in 2020 (January and February) were at normal levels. Aeronautical Business Unit Summary - YE Forecast Fav(UnFav) Fcst. vs. Budget Incr/(Decr) Aeronautical NOI 2019 2020 2021 2021 Variance Change from 2020 ($ in 000's) Actual Actual Forecast Budget $ % $ % Rate Base Revenues Airfield Movement Area 123,436 84,906 87,718 115,037 (27,319) -23.7% 2,812 3.3% Airfield Apron Area 22,016 15,146 14,974 21,418 (6,444) -30.1% (172) -1.1% Terminal Rents 205,283 171,607 177,661 213,147 (35,485) -16.6% 6,054 3.5% Federal Inspection Services (FIS) 12,321 8,616 17,679 21,454 (3,775) -17.6% 9,063 105.2% Total Rate Base Revenues 363,057 280,275 298,032 371,056 (73,023) -19.7% 17,757 6.3% Airfield Commercial Area 11,687 17,633 16,444 15,612 832 5.3% (1,189) -6.7% Subtotal before Revenue Sharing 374,744 297,908 314,476 386,668 (72,192) -18.7% 16,568 5.6% Revenue Sharing (17,146) 1 - - - (1) -100.0% Total Aeronautical Revenues 357,598 297,909 314,476 386,668 (72,192) -18.7% 16,567 5.6% Total Aeronautical Expenses 236,959 219,878 235,107 233,102 (2,005) -0.9% 15,230 6.9% Aeronautical NOI 120,639 78,031 79,369 153,566 (74,197) -48.3% 1,338 1.7% Debt Service (110,945) (62,607) (57,903) (125,747) 67,844 -54.0% 4,704 -7.5% Net Cash Flow 9,694 15,424 21,466 27,819 (6,353) -22.8% 6,042 39.2% 14 II. AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/21 Airline Rate Base Cost Drivers Impact on Aero Revenues 2020 2021 2021 Budget vs Forecast $ in 000's Actual Budge t Fore cas t $ % O&M (1) 213,775 227,420 229,450 2,029 0.9% Federal Relief Grants O&M (22,507) (3,500) (18,492) (14,992) 428.3% Net O&M 191,268 223,920 210,958 (12,962) -5.8% Debt Service Before Offsets 166,848 193,302 195,975 2,672 1.4% Debt Service PFC Offset (36,390) (47,549) (38,614) 8,935 -18.8% Federal Relief Grants Debt Service (71,763) (29,399) (101,211) (71,812) 244.3% Net Debt Service 58,694 116,354 56,149 (60,204) -51.7% Amortization 32,359 32,681 32,681 - 0.0% Space Vacancy (1,083) (1,141) (998) 143 -12.5% TSA Operating Grant and Other (960) (758) (758) - 0.0% Rate Base Revenues 280,279 371,056 298,032 (73,023) -20% Commercial area 17,633 15,612 16,444 832 5% Total Aero Revenues 297,912 386,668 314,476 (72,192) -19% (1) O&M, Debt Service Gross, and Amortization do not include commercial area costs or the international incentive expenses 2021 Forecast to 2021 Budget O&M $2.0M higher mostly in Apron, FIS, and Queue Management: o Apron Large Snow Expenses o FIS Increased Interpretation Services, Increased VIP Hospitality, Furniture Capital to Expense, Contingencies [IAF Oversize Baggage Relocate, IAF Wall Protections] o Queue Management VIP Divesting Debt Service before Offsets: Forecast is $2.6M higher primarily because the Budget assumed a reduction of $5.8M of Debt Service exclusion for assets not in use which were partially offset by an increase in Capital Interest. PFC Offset $8.9M lower due to lower anticipated collections Federal Relief Grants Aero Portion: o Payroll Impact (O&M) Removing $18.5M from Rate Base o Debt Service Impact - Removing $101.2M from Rate Base 15 II. AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/21 Non-Aero Business Unit Summary YTD Actuals Fav(UnFav) Actual vs. Budget Incr/(Decr) Non-Aeronautical NOI 2019 YTD 2020 YTD 2021 YTD 2021 YTD Variance Change from 2020 ($ in 000's) Actual Actual Actual Budget $ % $ % Non-Aeronautical Revenues Public Parking 19,956 16,720 9,330 10,595 (1,264) -11.9% (7,390) -44.2% Rental Cars 7,229 6,928 3,484 4,577 (1,092) -23.9% (3,444) -49.7% Ground Transportation 4,523 3,931 1,459 2,441 (982) -40.2% (2,471) -62.9% Employee Parking 2,677 2,623 2,144 2,422 (278) -11.5% (479) -18.3% Landside Total 34,384 30,202 16,418 20,035 (3,617) -18.1% (13,784) -45.6% Airport Dining & Retail 12,815 10,680 4,865 7,896 (3,031) -38.4% (5,815) -54.4% Tenant Marketing 262 227 2 167 (164) -98.6% (225) -99.0% Commercial Properties 3,212 3,641 2,557 2,911 (354) -12.2% (1,083) -29.8% Clubs and Lounges 1,902 1,714 175 936 (762) -81.3% (1,540) -89.8% Non-Airline Terminal Leased Space 1,522 1,696 1,432 1,223 209 17.1% (264) -15.6% AOB Conference Center 91 57 1 - 1 (56) -98.3% Commercial ManagementTotal 19,804 18,014 9,032 13,133 (4,101) -31.2% (8,982) -49.9% Utilities 1,719 1,606 1,297 1,892 (595) -31.4% (309) -19.3% Other 89 133 183 25 158 636.2% 50 37.4% Total Non-Aeronautical Revenues 55,996 49,956 26,930 35,085 (8,154) -23.2% (23,025) -46.1% Total Non-Aeronautical Expenses 17,206 34,898 23,947 24,804 857 3.5% (10,951) -31.4% Non-Aeronautical NOI 38,790 15,058 2,984 10,281 (7,297) -71.0% (12,074) -80.2% Less: CFC Surplus - - - - - Adjusted Non-Aeronautical NOI 38,790 15,058 2,984 10,281 (7,297) -71.0% (12,074) -80.2% Non-Aeronautical 2021 YTD Actuals vs. 2021 YTD Budget Net Operating Income was (-$7.3M or -71.0%) unfavorable to revised budget driven by: o Continued impact of COVID-19 driving passenger levels impacting revenues from concession fees or transaction volume (Parking, Rental Car, Ground Transportation, Airport Dining & Retail, Clubs & Lounges, In-flight Kitchens) are closely aligned with the decline in passenger volume. o Non-Aeronautical operating expenses were ($857K or 3.5%) favorable. Non-Aeronautical 2021 YTD Actuals vs. 2020 YTD Actuals Net Operating Income was (-$12.1M or -80.2%) lower than 2020 driven by: o Lower passenger levels and activity when compared to the 1st quarter in 2020 where the COVID-19 impact didn't start until March 2020. The first two months in 2020 (January and February) were at normal levels. 16 II. AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/21 Non-Aero Business Unit Summary - YE Forecast Fav(UnFav) Fcst. vs. Budget Incr/(Decr) Non-Aeronautical NOI 2019 2020 2021 2021 Variance Change from 2020 ($ in 000's) Actual Actual Forecast Budget $ % $ % Non-Aeronautical Revenues Public Parking 82,125 34,502 64,699 59,597 5,102 8.6% 30,197 87.5% Rental Cars 52,567 16,637 33,160 26,880 6,280 23.4% 16,523 99.3% Ground Transportation 20,765 6,557 14,321 13,628 693 5.1% 7,764 118.4% Airport Dining & Retail 61,615 25,418 44,567 45,936 (1,369) -3.0% 19,149 75.3% Other 51,966 33,359 41,319 43,506 (2,187) -5.0% 7,961 23.9% Total Non-Aeronautical Revenues 269,037 116,473 198,067 189,548 8,519 4.5% 81,594 70.1% Total Non-Aeronautical Expenses 118,286 109,802 107,175 106,806 (369) -0.3% (2,627) -2.4% Non-Aeronautical NOI1 150,752 6,671 90,892 82,742 8,150 9.9% 84,221 1262.6% Less: CFC Surplus (6,834) - - - - - Adjusted Non-Aeronautical NOI 143,917 6,671 90,892 82,742 8,150 9.9% 84,221 1262.6% Debt Service (49,299) (33,065) (23,358) (53,025) 29,666 -55.9% 9,707 -29.4% Net Cash Flow 94,619 (26,394) 67,533 29,717 37,816 127.3% 93,928 -355.9% (1) Assumes Federal Relief for Concessions applied in the 2021 Forecast Non-Aeronautical 2021 Forecast vs. 2021 Budget Non-Aeronautical net operating income is forecasted to be ($8.2M or 9.9%) favorable to budget based on improvement in revenues on the Landside operations due to the improvement in the forecasted passenger volume recovery. The Non-Aeronautical Revenues assumes Federal Relief for the concessions area of $26.7M. Non-Aeronautical 2021 Forecast vs. 2020 Actuals Net Operating Income for 2021 is forecasted to be ($84.2M or 1262.6%) compared to prior year due to passenger levels improving with a forecast of being down 29% compared to 2019 vs. 61% down in 2020 compared to 2019. 17 II. AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/21 D. CAPITAL RESULTS Capital Variance 2021 2021 2021 Budget Variance YTD Year-End Budget $ % $ in 000's Actual F or ecast NS NSAT Renov NSTS Lobbies (1) 32,459 90,814 96,408 5,594 5.8% 2021-25 AFLD Pvmnt&Spprt Infr (2) 718 25,047 29,560 4,513 15.3% Concourse A Expansion (3) 31 9,613 5,215 (4,398) -84.3% International Arrivals Facility (4) 22,947 82,447 86,500 4,053 4.7% NEPL Improvements (5) 18 3,616 496 (3,121) -629.6% Concourse C New Power Center (6) 1,181 5,253 2,961 (2,292) -77.4% Terminal Security Enhancements (7) 63 1,721 3,479 1,758 50.5% A12A Jet Bridge (8) - 509 2,227 1,718 77.2% SAMP Near Term Planning (9) 171 3,672 5,025 1,354 26.9% C1 Building Floor Expansion (10) 108 7,487 8,763 1,277 14.6% Checkpoint 1 Relocation (11) 63 3,111 1,954 (1,158) -59.3% N. Terminals Utilities Upgrade (12) 4,200 7,273 8,399 1,126 13.4% Parking Garage Elevators Moder (13) 870 2,932 3,942 1,011 25.6% Checked Bag Recap/Optimization 15,089 86,289 86,100 (189) -0.2% All Other 14,411 176,475 192,151 15,676 8.2% Subtotal 92,329 506,258 533,180 26,922 5.0% CIP Cashflow Mgmt Reserve - (38,164) (41,978) (3,814) 9.1% Total Spending 92,329 468,094 491,202 23,108 4.7% 1. $1M less Overhead; $1.5M less Construction (contract/OFCI & sales tax); $1.3M under Permit costs that are delayed; PM/CM/AD/ART invoice slip & underrun. 2. Bid result lower than Engineer's Estimate by $4.7M 3. 2021 baseline was set previous to Notebook approval (03/05/21), whereas the project budget went from $60M to 71.4M 4. The pedestrian walkway continues to slide to the right and is likely going to complete late August 2021. Additionally, issues with control systems and smoke control have caused delays to the IAF building. Potential COVID impact payment settlement. 5. Increased scope via approved DCD's 6. Construction accelerated by 6 months. 7. Previous procurement cancelled, cashflow per anticipated DB schedule. 8. Still in Planning Mode have not drilled on the Schedule. 9. Continued scoping and analysis extended to gain better information deferring spending. 10. Commission Authorization delays, due to re-evaluating financial impacts with COVID-19. 11. 2020 'Plan' based on a 'Hot' project, but then requested to be 'slowed', due to COVID-19. 12. Phase 1 is coming in under budget; Savings will be used to fund Phase 2 13. A protracted delay in AE contract negotiations resulted in slower than anticipated design costs. 18 III. MARITIME DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/21 III. MARITIME DIVISION FINANCIAL SUMMARY Fav (UnFav) Incr (Decr) 2019 2020 2021 2021 Fcst vs. Budget Change from 2020 Variance $ in 000's Actual Actual Forecast B udg e t $ % $ % Total Revenues 59,289 42,111 45,355 45,280 75 0% 3,244 8% Total Operating Expenses 48,644 50,228 49,716 50,243 527 1% (512) -1% Net Operating Income 10,644 (8,117) (4,361) (4,963) 602 12% 3,755 -46% Capital Expenditures 7,887 19,698 21,279 26,195 4,916 19% 1,581 8% Note: Assumes partial year of the Alaskan Cruises. 2021 Forecast vs. 2021 Budget Operating Revenues are $75K higher than budget driven by higher volumes at the Grain Terminal. Operating Expenses forecasted $527K lower than budget from a change in maintenance allocation. Net Operating Income Planned $602K favorable to budget. Capital Spending forecasted at 81% of $26.2M budget. 2021 Forecast vs. 2020 Actuals Operating Revenues expected $3.2M higher than 2020 due to higher grain volumes and resumption of cruise business. Operating Expenses forecasted $512K lower than 2020 actual driven by lower support service costs, partially offset by increased central services from allocation changes and a favorable pension adjustment in 2020. Net Operating Income forecasted $3.8M above 2020 actual. Net Operating Income before Depreciation by Business Fav (UnFav) Incr (Decr) 2020 YTD 2021 YTD 2021 YTD Actual vs. Budget Change from 2020 Variance $ in 000's Actual Actual B udg e t $ % $ % Ship Canal Fishing & Operations (399) (372) (596) 224 38% 27 7% Elliott Bay Fishing & Commercial Operations (135) (261) (512) 251 49% (125) NA Recreational Boating 501 304 (15) 319 2104% (197) -39% Cruis e (2,889) (2,517) (1,736) (782) -45% 372 -13% Gra in 744 1,431 994 437 -44% 688 92% Maritime Portfolio (65) 88 (714) 802 112% 153 -236% All Other (77) (71) (132) 61 46% 6 7% Total Maritime (2,321) (1,398) (2,710) 1,312 48% 923 40% 19 III. MARITIME DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/21 A. BUSINESS EVENTS Recreational Boating Conducted satisfaction survey in response to COVID-19 business disruptions with 26% of the customers responding. Team received overwhelmingly favorable results. Customers noted the challenges and appreciation for quick transitions & excellent customer service. Elliott Bay Fishing and Commercial Operations - Coordinated with Discovery Health MD to ensure COVID testing and administering of vaccinations could take place at Terminal 91 for Maritime Professionals. Ship Canal Fishing & Operations Fishermen's Terminal, Salmon Bay Marina and Maritime Industrial Center earned Clean Marina Certification from Puget Soundkeeper. Maritime Portfolio Management Entered into negotiations for new tenant at Maritime Industrial Center. Stormwater Utility The strategic plan draft was reviewed by stakeholders and is close to being finalized. B. KEY PERFORMANCE METRICS Grain Volume Metric Tons in 000's 20 III. MARITIME DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/21 C. OPERATING RESULTS Fav (UnFav) Incr (Decr) 2019 YTD 2020 YTD 2021 YTD 2021 YTD Actual vs. Budget Change from 2020 Variance $ in 000's Actual Actual Actual B udg e t $ % $ % Ship Canal Fishing & Operations 1,014 1,082 1,067 1,056 11 1% (15) -1% Elliott Bay Fishing & Commercial Operations 1,277 1,418 1,136 1,131 5 0% (283) -20% Recreational Boating 3,119 3,134 3,125 3,152 (27) -1% (9) 0% Cruis e 43 114 48 1,092 (1,044) -96% (66) -58% Gra in 1,434 1,048 1,719 1,421 298 21% 671 64% Maritime Portfolio Management 2,550 2,541 2,443 2,518 (75) -3% (98) -4% Other 5 3 1 0 1 NA (2) -67% Total Revenue 9,442 9,340 9,539 10,370 (831) -8% 199 2% Expenses Maritime (Excl. Maint) 3,304 3,724 3,576 3,837 261 7% (148) -4% Economic Development 1,215 1,314 1,059 1,769 709 40% (254) -19% Total Direct 4,520 5,038 4,635 5,606 970 17% (403) -8% Maintenance Expenses 2,229 2,671 2,357 3,091 734 24% (314) -12% Envir Services & Planning 402 447 359 533 175 33% (89) -20% Seaport Finance & Cost Recovery 267 227 237 238 1 0% 11 5% Seaport Project Management 69 43 76 81 4 6% 34 79% Total Support Services 2,967 3,387 3,029 3,943 914 23% (358) -11% IT 652 689 651 700 50 7% (39) -6% Police Expenses 881 842 722 831 110 13% (120) -14% External Relations 353 305 281 335 54 16% (24) -8% Other Central Services 849 1,340 1,549 1,609 60 4% 209 16% Aviation Division / Other 64 59 71 56 (15) -26% 11 19% Total Central Services / Other 2,799 3,236 3,273 3,532 259 7% 37 1% Total Expense 10,286 11,661 10,937 13,080 2,143 16% (724) -6% NOI Before Depreciation (844) (2,321) (1,398) (2,710) 1,312 48% 923 40% Depreciation 4,509 4,395 4,464 4,043 (421) -10% 69 2% NOI After Depreciation (5,353) (6,715) (5,862) (6,753) 891 13% 853 13% 2021 YTD Actuals vs. 2021 YTD Budget Operating Revenues were $831K lower than budget driven by: 1) Cruise $1,044K lower due to timing of lease invoice to NCL. 2) Grain $298K higher from 52% increase in annual volumes. 3) Maritime Portfolio Management $75K lower from vacancy at Maritime Industrial Center. 4) All other variances add up to $10K lower. Operating Expenses were $2,143K lower than budget: 1) Direct Expenses were $970K lower than budget Rec Boating $49K higher than budget due to COVID-19 expenses. Ship Canal Fishing and Operations $70K lower from reversal of bad debt expense. Elliot Bay Fishing and Commercial $177K below due to lower utilities expenses. Cruise $60K under from lower outside services and promotional hosting. Maritime Security $13K over budget. Maritime Marketing $66K below budget from event cancellations. Portfolio Management $702K favorable from salaries and open headcount, lower utility expense and timing of tenant improvements. Divisional contingency open headcount vacancy factor created a $54K unfavorable variance All other Direct Expenses net to $11K under budget. 2) Total Support Services were $914K favorable to budget. Maintenance $734K favorable due to reduced wage expenses and favorable allocation change. 21 III. MARITIME DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/21 Environmental Services and Planning were $175K lower than budget due to open position and outside services timing. 3) Total Central Services / Other were $259K favorable to budget. Net Operating Income was $1,312 favorable to budget. 2021 YTD Actuals vs. 2020 YTD Actuals Operating Revenues were $199K higher than 2020 due to increased volumes at the Grain terminal. Operating Expenses were $724K lower than 2020 actual driven by: 1. Lower Utility costs across most business lines. 2. Change in Maintenance Allocation Net Operating Income was $923K better than 2020 actual. Fav (UnFav) Incr (Decr) 2019 2020 2021 2021 Fcst vs. Budget Change from 2020 Variance $ in 000's Actual Actual Forecast B udg e t $ % $ % Ship Canal Fishing & Operations 3,929 4,704 4,135 4,135 0 0% (569) -12% Elliott Bay Fishing & Commercial Operations 6,095 5,752 4,509 4,509 0 0% (1,243) -22% Recreational Boating 12,484 12,611 12,915 12,915 0 0% 304 2% Cruis e 22,410 3,824 8,558 8,558 0 0% 4,734 124% Gra in 4,266 5,142 5,203 4,903 300 6% 61 1% Maritime Portfolio Management 10,108 10,074 10,034 10,259 (225) -2% (40) 0% Other (3) 4 0 0 0 NA (4) -100% Total Revenue 59,289 42,111 45,355 45,280 75 0% 3,244 8% Expenses Maritime (Excl. Maint) 13,789 16,256 15,539 15,539 0 0% (717) -4% Economic Development 4,987 4,511 5,365 5,365 0 0% 854 19% Total Direct 18,776 20,767 20,904 20,904 0 0% 137 1% Maintenance Expenses 12,186 12,029 11,295 11,595 300 3% (734) -6% Envir Services & Planning 2,250 2,739 2,140 2,140 0 0% (598) -22% Seaport Finance & Cost Recovery 835 937 977 977 0 0% 40 4% Seaport Project Management 175 1,061 416 316 (100) -32% (644) -61% Total Support Services 15,446 16,765 14,828 15,028 200 1% (1,937) -12% IT 2,685 2,719 2,838 2,853 15 1% 120 4% Police Expenses 4,086 2,865 3,079 3,118 39 1% 213 7% External Relations 1,564 1,200 1,050 1,347 297 22% (150) -13% Other Central Services 5,810 5,596 6,773 6,749 (24) 0% 1,177 21% Aviation Division / Other 278 315 243 243 0 0% (72) -23% Total Central Services / Other 14,423 12,695 13,984 14,311 327 2% 1,288 10% Total Expense 48,644 50,228 49,716 50,243 527 1% (512) -1% NOI Before Depreciation 10,644 (8,117) (4,361) (4,963) 602 12% 3,755 46% Depreciation 17,627 17,624 16,899 16,899 0 0% (725) -4% NOI After Depreciation (6,982) (25,741) (21,260) (21,862) 602 3% 4,480 17% 2021 Forecast vs. 2021 Budget Operating Revenues are $75K higher than budget with improved grain volumes offset by increased vacancy time at Maritime Industrial Center. Operating Expenses forecasted $527K favorable to budget from change in maintenance allocations and reduced external relations expenses. Net Operating Income Planned $602K favorable to budget. 22 III. MARITIME DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/21 2021 Forecast vs. 2020 Actuals Operating Revenues expected $3.2M higher than 2020 with partial resumption of Cruise offset by 2020 revenue benefitting from the lengthy closure of the Ballard Locks. Operating Expenses forecasted $0.5M lower than 2020 actual driven primarily by favorable Maintenance, Seaport Project Management, and Environmental allocations, offset by unfavorable changes to central services allocations. Net Operating Income forecasted $3.8M better than 2020 actual. D. CAPITAL RESULTS 2021 YTD 2021 2021 Budget Variance $ in 000's Actual Fore cas t Budge t $ % T117 Restoration 729 8,359 8,809 450 5% T91 Northwest Fender 51 6,131 7,761 1,630 21% MD Small Projects 295 3,816 5,548 1,732 31% MD Fleet 0 260 1,036 776 75% FT Maritime Innovation Center 90 768 1,475 707 48% T91 Berth 6&8 Redev 131 839 1,025 186 18% P91 Pass Term Upgrade COV 1 230 1,000 770 77% P66 Shore Power 74 714 765 51 7% SBM Restrms/Service Bldgs Rep 178 378 665 287 43% FT Gateway Building 175 446 600 154 26% All Other Projects 370 (662) (2,489) (1,827) 73% Total Maritime 2,094 21,279 26,195 4,916 19% Comments on Key Projects T91 Northwest Fender Construction bid well under Engineer's Estimate. Have reduced forecast accordingly. FT Maritime Innovation Center Total project cost updated on 2/1 based on 60% Construction. MD Fleet Delays in microprocessors and raw materials are causing worldwide delays in producing new fleet assets. This trend is expected to continue into 2022 as production of vital components catches up. MD Small Projects - P66 Cruise Wall Protection was deferred out to 2022. T91 Upland Lighting Improvements and HIM Operational Facility Cameras have a larger amount of spending pushed out to 2022. T91 Cruise Wayfinding Signage was moved out of the small CIP and into Cruise Upgrades COVID-19. 23 IV. ECONOMIC DEVELOPMENT DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/21 IV. ECONOMIC DEVELOPMENT DIVISION FINANCIAL SUMMARY Fav (UnFav) Incr (Decr) 2019 2020 2021 2021 Fcst vs. Budget Change from 2020 Variance $ in 000's Actual Actual Forecast B udg e t $ % $ % Total Revenues 21,151 9,470 12,648 13,348 (700) -5% 3,178 34% Total Operating Expenses 27,155 20,611 20,966 21,413 447 2% 355 2% Net Operating Income (6,004) (11,141) (8,318) (8,065) (253) -3% 2,823 -25% Capital Expenditures 3,121 9,314 4,604 5,647 1,043 18% (4,710) -51% 2021 Forecast vs. 2021 Budget Operating Revenues forecasted to $700K unfavorable to budget due to lower volumes at the Conference & Event Center related COVID-19 cancellations and variable revenue at parking facilities. Operating Expenses $447K favorable to budget due to variable cost impact of conference cancellations, delayed hiring, and reductions in external relations, offset by change in Maintenance allocation. Net Operating Income forecasted at $253K below budget. Capital spending forecasted to 82% of $5.6M budget. 2021 Forecast vs. 2020 Actuals Operating Revenues forecasted to $3.2M above 2020 due to favorable 2nd half outlook at the Conference & Event Center. Operating Expenses $355K higher than 2020 with higher Washington Tourism Alliance expenses, offset by favorable Central Services costs. Net Operating Income forecasted $2.8M better than 2020 actual. Net Operating Income before Depreciation by Business Fav (UnFav) Incr (Decr) 2020 YTD 2021 YTD 2021 YTD Actual vs. Budget Change from 2020 Variance $ in 000's Actual Actual B udg e t $ % $ % Portfolio Management (556) (845) (558) (288) -52% (290) -52% Conference & Event Centers (1,118) (1,030) (1,029) (1) 0% 88 8% Tourism (212) (169) (243) 74 30% 43 20% EDD Grants 57 21 (38) 58 156% (36) -64% Env Grants/Remed Liab/ERC (130) (23) 27 (50) -187% 107 82% Total Econ Dev (1,959) (2,047) (1,840) (207) -11% (88) -4% 24 IV. ECONOMIC DEVELOPMENT DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/21 A. BUSINESS EVENTS Diversity in Contracting The Northwest Mountain Minority Supplier Development Council named the Port of Seattle as its Public Agency of the Year. Q1 PortGens have already seen more than 120 businesses participate. Economic Development and Innovation Staff is working to execute 25 contracts with City's participating in the Port's economic development grant program. Staff is also supporting Greater Seattle Partners' Economic Recovery plan development and WA Maritime Blue's 2nd Maritime innovation accelerator. Portfolio Management Maintained 95% occupancy across real estate portfolio despite ongoing COVID-19 pandemic challenges. As a reference, vacancy rate downtown Seattle reached 17% (83% occupancy) in March. Real Estate Development Finished a new strategic plan to guide Port development projects and initiatives. Staff is also advancing development work on the Maritime Innovation Center, and T91 Uplands light industrial facilities. Tourism Awarded 23 Tourism Marketing grants. Working with WA Tourism Alliance to implement statewide tourism recovery initiative. B. KEY PERFORMANCE METRICS Building Occupancy by Location: 100% 100% 100% 100% 100% 100% 100%100% 100% 100%100% 95% 90% 88% Central Harbor 87% 87% 87% 87% 87% T-91 Uplands 85% Marina Office & Retail 80% 80% T-91 Industrial 78% T-106 Warehouse 75% 70% Q2 2020 Q3 2020 Q4 2020 Q1 2021 25 IV. ECONOMIC DEVELOPMENT DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/21 C. OPERATING RESULTS Fav (UnFav) Incr (Decr) 2019 YTD 2020 YTD 2021 YTD 2021 YTD Actual vs. Budget Change from 2020 Variance $ in 000's Actual Actual Actual B udg e t $ % $ % Revenue 2,155 2,163 1,875 1,969 (94) -5% (288) -13% Conf & Event Centers 2,519 1,115 127 468 (341) -73% (988) -89% Total Revenue 4,674 3,277 2,002 2,436 (434) -18% (1,275) -39% Expenses Portfolio Management 932 899 839 779 (60) -8% (60) -7% Conf & Event Centers 2,276 1,557 545 850 305 36% (1,012) -65% P69 Facilities Expenses 51 55 47 57 10 18% (9) -15% RE Dev & Planning 25 41 48 38 (10) -27% 7 18% EconDev Expenses Other 157 291 187 258 71 28% (104) -36% Maintenance Expenses 716 635 847 600 (247) -41% 213 33% Maritime Expenses (Excl Maint) 276 244 235 264 29 11% (9) -4% Total EDD & Maritime Expenses 4,434 3,722 2,748 2,847 99 3% (974) -26% Diversity in Contracting 47 25 26 30 4 13% 1 4% Tourism 194 207 167 235 68 29% (40) -19% EDD Grants (54) (57) (21) 38 58 156% 36 -63% Total EDD Initiatives 187 175 172 302 130 43% (3) -2% Environmental & Sustainability 10 8 5 6 2 27% (3) -41% Police Expenses 45 58 48 56 7 13% (9) -16% Other Central Services 1,160 1,244 1,041 1,034 (7) -1% (203) -16% Aviation Division 27 29 35 30 (5) -16% 5 18% Total Central Services & Aviation 1,241 1,339 1,129 1,127 (2) 0% (210) -16% Envir Remed Liability 0 0 0 0 0 NA 0 NA Total Expense 5,862 5,236 4,049 4,277 228 5% (1,187) -23% NOI Before Depreciation (1,187) (1,959) (2,047) (1,840) (207) -11% (88) -4% Depreciation 918 909 958 758 (200) -26% 49 5% NOI After Depreciation (2,105) (2,867) (3,005) (2,598) (407) -16% (137) -5% 2021 YTD Actuals vs. 2021 YTD Budget Operating revenue were $434K unfavorable to budget due primarily to lower than anticipated Conference and Event Center volumes as a result of the on-going COVID-19 restrictions on meetings and events. Operating Expenses were $228K favorable to budget: 1) Conference and Event Center $305K favorable from lower activity as a result of the on-going COVID-19 restrictions on meetings and events. 2) Maintenance Expenses $247K unfavorable due to change in Maintenance allocation methodology. 3) EDD Initiatives $130K favorable due to timing of spending related to COVID-19. 4) All other expenses net to $40K below budget. Net Operating Income was $207K below budget. 2021 YTD Actuals vs. 2020 YTD Actuals Operating Revenues were $1,275K lower than 2020 actual Operating Expenses were $1,187K lower than 2020 actual: 1) Conference and Event Centers $1,012K lower than 2020 due to variable costs associated with lower Conference and Event Center volumes as a result of the on-going COVID-19 restrictions on meetings and events. 2) Maintenance Expenses $213K higher than 2020 due to change in Maintenance allocation methodology. 3) Central Services $210K lower than 2020. 4) All other Expenses net to $178K lower than 2020. Net Operating Income was $88K below 2020 actual. 26 IV. ECONOMIC DEVELOPMENT DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/21 Fav (UnFav) Incr (Decr) 2019 2020 2021 2021 Fcst vs. Budget Change from 2020 Variance $ in 000's Actual Actual Forecast B udg e t $ % $ % Revenue 8,912 7,808 8,213 8,313 (100) -1% 405 5% Conf & Event Centers 12,239 1,662 4,435 5,035 (600) -12% 2,773 167% Total Revenue 21,151 9,470 12,648 13,348 (700) -5% 3,178 34% Expenses Portfolio Management 3,732 3,073 3,401 3,401 0 0% 327 11% Conf & Event Centers 10,218 4,440 4,420 4,920 500 10% (19) 0% P69 Facilities Expenses 215 232 222 222 0 0% (11) -5% RE Dev & Planning 136 209 154 154 0 0% (55) -26% EconDev Expenses Other 930 938 635 835 200 24% (303) -32% Maintenance Expenses 3,145 3,042 3,027 2,537 (490) -19% (15) 0% Maritime Expenses (Excl Maint) 1,070 1,035 1,060 1,060 0 0% 24 2% Total EDD & Maritime Expenses 19,448 12,969 12,918 13,128 210 2% (52) 0% Diversity in Contracting 152 103 142 142 0 0% 39 38% Tourism 1,337 954 2,481 2,481 0 0% 1,527 160% EDD Grants 785 778 1,060 1,060 0 0% 282 36% Total EDD Initiatives 2,274 1,834 3,683 3,683 0 0% 1,848 101% Environmental & Sustainability 24 44 27 31 4 13% (17) -39% Police Expenses 61 64 206 209 3 1% 143 225% Other Central Services 5,234 5,539 4,012 4,242 230 5% (1,527) -28% Aviation Division 114 161 120 120 0 0% (41) -25% Total Central Services & Aviation 5,433 5,808 4,366 4,603 237 5% (1,442) -25% Envir Remed Liability 0 0 0 0 0 NA 0 NA Total Expense 27,155 20,611 20,966 21,413 447 2% 355 2% NOI Before Depreciation (6,004) (11,141) (8,318) (8,065) (253) -3% 2,823 25% Depreciation 3,647 3,611 3,216 3,216 0 0% (395) -11% NOI After Depreciation (9,651) (14,753) (11,534) (11,281) (253) -2% 3,219 22% 2021 Forecast vs. 2021 Budget Operating Revenues forecasted to $700K unfavorable to budget due to lower volumes at the Conference & Event Center related COVID-19 cancellations and variable revenue at Bell Street Garage. Operating Expenses $447K favorable to budget due to variable cost impact of conference cancellations, deferred positions, reduced External Affairs spend, offset by unfavorable Maintenance allocation. Net Operating Income forecasted at $253K below budget. 2021 Forecast vs. 2020 Actuals Operating Revenues forecasted to $3.2M above 2020 due to favorable 2nd half outlook at the Conference & Event Center. Operating Expenses $355K higher than 2020 with higher Washington Tourism Alliance expenses, offset by favorable Central Services costs. Net Operating Income forecasted $2.8M better than 2020 actual. 27 IV. ECONOMIC DEVELOPMENT DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/21 D. CAPITAL RESULTS Comments on Key Projects BHICC Modernization Project has encountered unforeseen site conditions, additional effort required to execute change orders P69 Under Dock Utility Replacement Design delayed due to the need for a two steps design and construction authorization approvals rather than the one step construction authorization that was previously assumed. T -91 Upland Development Decrease in projected spending for 2021 due to the need to procure new Service Agreement for Professional Design Services, after terminating contract with former design consultant. Design can resume after the new contract is executed, in Q4 2021. 28 V. CENTRAL SERVICES DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/21 V. CENTRAL SERVICES DIVISION FINANCIAL SUMMARY Fav (UnFav) Incr (Decr) 2019 YTD 2020 YTD 2021 YTD 2021 YTD Actual vs. Budget Change from 2020 Variance $ in 000's Actual Actual Actual Budge t $ % $ % Total Operating Revenues 182 907 956 45 910 2013.0% 49 5.4% Core Central Support Services 17,445 19,359 18,743 20,382 1,639 8.0% (616) -3.2% P olic e 6,506 7,908 6,748 7,547 799 10.6% (1,160) -14.7% Engineering/PCS 2,083 2,158 1,965 2,175 210 9.7% (193) -9.0% Total Operating Expenses 26,034 29,425 27,455 30,104 2,649 8.8% (1,970) -6.7% 2021 YTD Actuals vs. 2021 YTD Budget Operating Revenues favorable due primarily to Police forfeiture seizures of $947K. Operating Expenses $2.6M favorable to budget mainly due to staffing vacancies, projects spending delays, and delayed Outside Services costs. 2021 YTD Actuals vs. 2020 YTD Actuals Operating Revenues $49K above 2020 mainly due to higher Police forfeiture seizures in 2021. Operating Expenses $2.0M higher than 2020 mainly due to lower payroll and Outside Services offset by lower charges to Capital Projects. A. BUSINESS EVENTS Port Commission approved a building lease for a job and economic resource center as part of the Duwamish Valley Community Equity Program, supporting the Green Jobs Initiative, the Duwamish River People's Park (T117) habitat restoration, the PCAT and Maritime High School. Fourteen South King County Fund Environmental Grants were awarded as part of the newly expanded program to community-based organizations within the six Highline cities. The Port, City of Seattle and Sound Transit will jointly fund $1.7M to support construction worker training, placement and other services for residents of economic distressed communities, people of color and women. OEDI hosted a 4-part caucusing series, From Internalized Racism to Allyship, between the months of March- April, and hosted a book club featuring, Ijeoma Oluo's So You Want to Talk About Race and Isabel Wilkerson's Caste. OEDI also hosted its first town hall that featured updates about the Port's Racial Bias & Equity Motion, Port-wide Change Team, and OEDI's plans for 2021. The Port's chapter of Blacks in Government and OEDI sponsored an event to celebrate the Black History Month featuring a panel of Black women leaders - State Represented Debra Entenman, Michelle Merriweather (President of the Urban League of Metropolitan Seattle), and Michele Storms (Executive Director of ACLUWA ). The event was open to employees and external partners with nearly 300 in attendance. Engineering Department hosted an Engineering Career Workshop for Highline School District high school students in March. Information Security Department conducted a Cyber Disruption Summit focusing on employee awareness on the emerging threats that can potentially disrupt Port operations. Maritime Core Plus Curriculum and Framework is now available for adoption by school districts state-wide. The Port invested the initial funding for the Manufacturing Industrial Council to create the curriculum in 2016. The Port hosted the on-site COVID-19 vaccination clinic at SEA in partnership with the Department of Health, FEMA and Safeway/Albertson's. The clinic opened in March and is open for badged employees only who meet the state's eligibility requirements. 29 V. CENTRAL SERVICES DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/21 B. KEY PERFORMANCE METRICS Century Agenda Strategic Objectives 2019 2020 2021 Responsibly Invest in the Economic Growth of the Region and all its Communities A. Job seekers placed in jobs at SEA Airport through the Employment Center 417 366 166 B. Number of SEA Airport tenants supported in finding employees 91 56 66 C. Employment Center training completions 320 230 75 D. K-12 Career Connected Learning: WFD engagement with teachers/faculty 450 1800 0 E. Community members entering employment in construction, maritime and 38 0 9 environmental sustainability F. Residents engaged from near-port communities to create awareness and N/A N/A 150 access to family-wage careers in port-related industries G. Number of Job Openings created 238 201 66 H. Job applications received 3,940 2,855 2,276 I. Number of job interviews conducted 454 351 171 J. Number of new employees hired 97 95 24 K. Number of interns 30 25 1 L. Number of Veteran Fellows 1 0 0 M. Number of employees participating in Tuition Reimbursement 23 27 11 Become a Model for Equity, Diversity and Inclusion A. Employee participation in Caucusing (Black Lives Matter and Caucusing N/A N/A 41 for Change) B. Employee participation in EDI Port Reads book club N/A N/A 109 C. Port employees and supervisors completing required racial equity N/A N/A 178 orientations/trainings. Be a Highly Effective Public Agency A. Corporate costs as a % of Total Operating Expenses 26.3% 27.8% 28.3% B. Investment portfolio earnings versus the benchmark (the Bank of America 2.17%/ 2.15%/ 1.33%/ Merrill Lynch 1-3 Year US Treasury & Agency Index) 2.32% 0.21% 0.19% C. Comply with Public Disclosure Act and respond in a timely manner 149 135 153 D. Litigation and Claim Reserves $1.8M $3.0M $1.4M E. Claims/Injury Damages Reserves $1.3M $260K $256K F. Percent of annual audit work plan completed each year 100% 100% 100% G. Employee Development Class Attendees/Structured Learning 437 1100 492 H. Total Recordable Incident Rate (previous Occupational Injury Rate) 5.51 4.28 5.49 I. Lost Work Day Rate (previously Days Away Severity Rate) 2.12 35.38 32.69 J. Respond to Public Disclosure Requests 149 135 153 K. Customer Survey for Police Service Excellent or Above Average 83% 92% 100% 30 V. CENTRAL SERVICES DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/21 C. OPERATING RESULTS Financial Summary (Year-End Forecast) Fav (UnFav) Incr (Decr) 2019 2020 2021 2021 Budget Variance Change from 2020 $ in 000's Notes Actual Actual Fore cas t Budge t $ % $ % Total Revenues 1,282 2,512 1,129 181 948 524.1% (1,383) -55.1% Executive 2,018 2,263 2,386 2,285 (101) -4.4% 123 5.4% Commission 2,022 1,755 2,203 2,169 (33) -1.5% 448 25.5% Legal 4,987 6,290 4,116 3,919 (197) -5.0% (2,174) -34.6% External Relations 7,760 7,481 8,263 9,878 1,615 16.3% 782 10.4% Equity Diversity and Inclusion 2,337 4,676 3,647 3,743 97 2.6% (1,030) -22.0% Human Resources 9,187 8,380 11,275 11,385 111 1.0% 2,895 34.5% Labor Relations 1,230 1,286 1,361 1,346 (15) -1.1% 75 5.8% Internal Audit 1,450 1,540 1,655 1,637 (19) -1.1% 116 7.5% Accounting & Financial Reporting Services 7,341 8,165 8,723 8,724 1 0.0% 557 6.8% Information & Communication Technology 23,014 24,732 24,427 24,427 () 0.0% (304) -1.2% Information Security 1,203 1,656 1,782 1,913 131 6.9% 126 7.6% Finance & Budget 2,037 2,177 2,292 2,292 () 0.0% 115 5.3% Business Intelligence 1,302 1,181 1,442 1,523 81 5.3% 260 22.0% Risk Services 3,137 3,349 3,937 3,939 2 0.1% 588 17.5% Office of Strategic Initiatives 1,448 934 923 1,059 136 12.9% (11) -1.1% Central Procurement Office 4,452 4,280 5,723 5,532 (191) -3.5% 1,443 33.7% Contingency 39 (190) (1,502) (1,502) () 0.0% (1,312) 690.3% Core Central Support Services 74,966 79,956 82,653 84,270 1,617 1.9% 2,697 3.4% P olic e 27,793 27,538 27,968 28,317 349 1.2% 430 1.6% Total Before Cap Dev & Environment 102,759 107,494 110,621 112,587 1,966 1.7% 3,127 2.9% Capital Development Engineering 5,696 4,959 5,600 5,580 (20) -0.4% 641 12.9% Port Construction Services 4,341 4,138 4,080 3,619 (461) -12.7% (58) -1.4% Sub-Total 10,038 9,096 9,680 9,199 (481) -5.2% 584 6.4% Environment & Sustainability Environment & Sustainability 976 692 1,329 1,408 80 5.7% 637 92.0% Sub-Total 976 692 1,329 1,408 80 5.7% 637 92.0% Industrial Development Corporation 1 - - - - 0.0% - 0.0% Capital to Expense 117 193 - - - 0.0% (193) -100.0% Total Expenses 113,891 117,476 121,629 123,194 1,565 1.3% 4,154 3.5% 31 V. CENTRAL SERVICES DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/21 2021 Forecast vs. 2021 Budget Operating Expenses for 2021 are $1.6M under budget due primarily to: o Executive unfavorable variance of ($101K) due to higher Outside Services. o Commission unfavorable variance of ($33K) due to increased Payroll of 1 FTE ($46K) offset by planned lower Travel of $10K. o Legal unfavorable variance of ($197K) is due to higher than budgeted Outside Services. o External Relations favorable variance of $1.6M primarily due to reduced Outside Services of $1.5M and lower Payroll from vacant positions of $81K, and Travel of $42K. o Equity, Diversity and Inclusion favorable variance of $97K primarily due to lower Payroll of $26K and Property Rentals of $79K offset by higher Outside Services of $7K. o Human Resources favorable variance of $111K primarily due to lower Payroll of $150K offset by higher planned Outside Services of ($39K). o Labor Relations unfavorable variance of ($15K) due to higher Payroll of ($25K) offset by lower Travel of $5K, Equipment of $2K, and Outside Services of $2K. o Internal Audit unfavorable variance of ($19K) due to higher Payroll from job refresh. o Accounting and Financial Reporting Services favorable variance of $1K from savings in Supplies and Stock. o Information & Communication Technology plans to be on target. o Information Security favorable variance of $131K primarily due to lower Outside Services of $125K. o Corporate Finance & Budget plans to be on target. o Business Intelligence favorable variance of $81K due to lower Payroll. o Risk Services favorable variance of $2K due to lower Payroll. o Office of Strategic Initiative favorable variance of $136K is primarily due to lower Payroll. o Central Procurement Office unfavorable variance of ($191K) due to higher Payroll from increased FTEs. o Police $349K favorable variance primarily due to lower Payroll of $420K offset by higher costs for General Expenses of ($106K). o Engineering unfavorable variance of ($20K) is primarily due to lower Payroll of $1.7M, Outside Services of $184K, and Property Rentals of $142K offset by lower than planned charges to Capital Projects of ($2M). o PCS unfavorable variance of ($461K) primarily due to lower charges to Capital Projects of ($632K) and unplanned Worker's Compensation of ($95K) which were offset by lower Payroll of $45K, Equipment of $84K, Supplies of $50K, and Outside Services of $38K. o Environment & Sustainability Admin favorable variance of $80K due to delayed Outside Services. o Contingency plans to be on target. 32 V. CENTRAL SERVICES DIVISION FINANCIAL & PERFORMANCE REPORT 03/31/21 2021 Forecast vs. 2020 Actuals Operating Expenses for 2021 are forecasted to be $4.2M higher than 2020 actuals mainly due to: o Core Central Support Services $2.7M higher than 2020 primarily due to higher payroll in 2021 due to planned new hires, and full year salaries of people hired in 2020. o Police $430K above 2020 due to the following: There were several vacancies in 2020 that are planned to be filled in 2021 and 2020 had much lower overtime due to cancellation of Cruise season. o Capital Development $584K higher than 2020 primarily due to higher payroll due to 2021 new hires, annual pay increases, full year salaries of people hired in 2020, and higher planned Outside Services. o Environment & Sustainability $637K higher than 2020 due to planned increases to Outside Services to support key initiatives. D. CAPITAL RESULTS 2021 2021 2021 Budget Variance YTD Year-End Budget $ % $ in 000's Actual Fore cas t Infrastructure - Small Cap 272 1,911 1,911 0 0.0% Services Tech - Small Cap 173 1,166 1,226 60 4.9% Radio System Upgrade 1,844 2,455 2,955 500 16.9% Office Wi-Fi Refresh 0 1,350 1,350 0 0.0% Phone System Upgrade 21 840 840 0 0.0% Environmental MIS projects 0 600 600 0 0.0% CDD Fleet Replacement 170 803 1,123 320 28.5% Corporate Fleet Replacement 0 685 685 0 0.0% Other (note 1) 185 1,904 1,968 64 3.3% Subtotal 2,665 11,714 12,658 944 7.5% CIP Cashflow Adjustment 0 (3,000) (3,000) 0 0.0% TOTAL 2,665 8,714 9,658 944 9.8% Note: (1) "Other" includes remaining ICT projects and small capital projects/acquisitions. 33
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