11c. Presentation
Q1 2022 Financial Performance Briefing
Item No. 11c supp Meeting Date: May 24, 2022 Port of Seattle Q1 2022 Financial Performance Report Commission Meeting Key Highlights Port lines of businesses are still recovering from the disruption caused by the pandemic SEA passenger growth is rebounding; forecasting 7.6% fewer passengers than 2019 Federal Relief grants continue to improve SEA's bottom line Projecting a record 295 sailings and 1.26 million passengers in the 2022 cruise season Projecting operating expenses to be $4.7M favorable to the budget on a full-year basis Continuing to support investments aimed at regional economic recovery 2 Port Wide Financial Summary (YE Forecast) Fav (UnFav) Incr (Decr) 2020 2021 2022 2022 Fcst vs. Budget Change from 2021 Variance $ in 000's Actual Actual Fore cas t Budge t $ % $ % Aeronautical Revenues 297,909 317,513 385,706 394,963 (9,257) -2.3% 68,193 21.5% Airport Non-Aero Revenues 116,473 183,819 239,404 240,820 (1,415) -0.6% 55,586 30.2% Non-Airport Revenues 96,446 120,689 137,373 131,072 6,302 4.8% 16,685 13.8% Total Operating Revenues 510,828 622,020 762,484 766,854 (4,370) -0.6% 140,464 22.6% Total Operating Expenses 408,681 364,656 494,450 499,146 4,696 0.9% 129,794 35.6% NOI before Depreciation 102,147 257,364 268,033 267,708 325 0.1% 10,670 4.1% Depreciation 180,086 190,683 196,757 196,757 - 0.0% 6,074 3.2% NOI after Depreciation (77,939) 66,681 71,277 70,952 325 0.5% 4,596 6.9% Operating Revenues are expected to be $4.4M below budget due to $77M in Federal Relief grants applied to offset Aeronautical revenue requirements Total Operating expenses are expected to be $4.7M below budget mainly due to delayed hiring and project spending, offset by higher utility costs and capital to expense writeoff related to the Gateway Building project at Fishermen's Terminal Net Operating Income before Depreciation is forecasted to be $325K above budget 3 Aviation Division Financial Performance Summary Business Highlights Fo recast Budget Figures in $000s YE 2022 YE 2022 Variance Revenues Passenger level forecast slightly below Aeronautical 385,706 394,963 (9,257) budget, 7.6% below 2019 Non-Aeronautical 239,404 240,820 Total Revenues 625,110 635,783 (10,672) Aeronautical revenues below budget due O&M expense 396,831 397,622 791 to planned higher grant use NOI 228,279 238,160 (9,881) Federal Relief 118,794 98,000 20,794 Delay in Salty's and AMEX lounge Concessions Relief 21,419 21,419 - openings impacting non-aero revenues NOI (after Federal Relief Grants) 368,492 357,579 10,913 Key Measures Risks to O&M budget include payroll Non-Aero NOI (in $000s) 110,779 114,047 (3,268) vacancy, garage fire repairs, and CPE ($) 14.44 14.82 0.38 Debt Service Coverage 2.29 2.03 0.26 unplanned project costs to be expensed. Other Information ADF target shortfall will be addressed by ADF Balance (in $000s) 446,426 464,000 (17,574) Capital Spending (in $000s) 449,817 527,917 78,100 modifying funding plan and/or grant use plan 4 Seaport Performance Summary Fav (UnFav) Incr (Decr) Fav (UnFav) 2021 YTD 2022 YTD 2022 YTD Actual vs. Budget Change from 2021 2022 2022 Fcst vs. Budget Variance Variance $ in 000's Actual Actual B udg e t $ % $ % Forecast B udg e t $ % Revenues Maritime 9,539 10,511 9,969 542 5% 972 10% 67,920 59,137 8,783 15% Economic Development Division 2,002 2,580 3,338 (758) -23% 578 29% 14,470 18,769 (4,299) -23% Joint Venture* 10,988 13,982 11,975 2,007 17% 2,994 27% 47,899 47,899 0 0% Total Revenue 22,529 27,074 25,283 1,791 7% 4,545 20% 130,290 125,806 4,484 4% Expenses Maritime 10,937 12,729 14,013 1,283 9% 1,792 16% 58,862 57,865 (997) -2% Economic Development Division 4,049 5,049 5,775 726 13% 1,000 25% 25,332 28,301 2,969 10% Joint Venture 382 322 355 33 9% (60) -16% 1,727 1,727 0 0% Total Expense 15,368 18,100 20,142 2,043 10% 2,732 18% 85,922 87,894 1,972 2% NOI Before Stormwater Utility 7,161 8,974 5,140 3,834 75% 1,813 25% 44,368 37,912 6,456 17% Stormwater Utility Revenues 1,545 1,680 1,692 (12) -1% 135 9% 6,768 6,768 0 0% Stormwater Utility Expenses 1,123 1,199 1,530 331 22% 76 7% 6,266 6,266 0 0% Stormwater Utility NOI 422 481 162 319 197% 59 14% 502 502 0 0% Total Non-Aviation Business NOI 7,583 9,455 5,302 4,153 78% 1,872 25% 44,871 38,415 6,456 17% Year-to-Date Forecast Favorable timing of NWSA/Joint Venture income. Cruise expected to exceed revenue and passenger Better than expected waterside occupancy at Maritime budgets. terminals, piers and marinas. Expected in Q2: $1.2M remaining Capital to Expense for Gateway Building at Fishermen's Terminal. Slow return of conferences and events. Conference & Event Centers at 58% of budget. Employee vacancies driving lower expenses. Joint Venture and Stormwater utility on budget. 5 Central Services Financial Summary Business Highlights Port partnered with WorkSource to host the Job and 2022 2022 Resource Fair for newly arrived Afghan refugees; 250 Figures in $000s Forecast Budget Variance people attended Revenues 334 186 148 Shared the results of the port-wide Equity Assessment and Women of Color Assessment, the equity Core Central Services 97,419 96,677 (742) Police 31,686 32,746 1,060 performance goal requirements, and the new hiring Engineering/PCS 11,434 12,334 900 process requirements O&M Expenses 140,538 141,756 1,218 Police Assessment Implementation Team (PAIT) reviewed the 52 recommendations highlighted by the Capital Spending 9,778 10,889 1,111 consultant (21 CP) 6 Port Wide Capital Spending Total Q1 YTD capital spending was $63M For the full year, total capital spending is expected to be $494M, 85.9% of the budget 7
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