Item 9c Supp

ITEM NO.  9c_Supp
DATE OF
MEETING Aug 11, 2009

Seaport Division
2010 Business Plan Overview
Commission Presentation
August 11, 2009

Pier 90/91  Pier 86

Pier 66

Terminal 46

BNSF (SIG - North)

Terminal 30

Terminal 5 On-Dock Rail                                                             BNSF (SIG - South)
Terminal 25

Terminal 5                   Terminal 18


UPRR (ARGO)


2

SEAPORT STRATEGIES
2010
========================================
Protect our current business
Position ourselves for recovery and
change in the container shipping market
Collaborate with others to advance our key
initiatives

3

CRITICAL 2010 WORK
================================================
Maintain high performance level for critical
functions
Deliver on commitments - clean truck plan and
container terminal customer support plan
Continue the transition and development of
Terminal 91 into a multi-use facility
Adjust and align our resources to meet our
business strategies
4

2010 Preliminary Capital Plan
Committed & Business Plan Prospective

$'s in 000's                     2010
Renewal/Enhancement          40,894
Revenue/Capacity Growth          7,235
Environmental/Safety             2,969
Total                     51,098

5

2010 MARKET OUTLOOK
========================================================================================
Overall Container Market (Transpacific) Projected to
Grow: -1.5% for imports and 8.9% for exports
Seattle Import Container Volumes Projected at a
5-10% Reduction vs. 2009 Plan
Cruise Business to Alaska Projected to Remain Strong
Grain Volumes (Corn/Soybeans) will again be Positive
Demand for Industrial Properties Uncertain

6

FINANCIAL OUTLOOK
====================================
Operating Revenue (excluding grants and
reimbursements) is projected to be
approximately flat compared to 2009 Budget
Primary components of revenue:
In place leases
Volume: Cruise, Grain, Crane Rent
Grants/Reimbursements
7

FINANCIAL OUTLOOK
=========================================
Key Revenue Assumptions
TEU volume 8% decrease from 2009 budget
Eagle Rate increase in July
Container Terminal Customer Support Plan
T25/30 lease  full year of lease payments in
2010
Cruise forecast 6% increase in passengers
Grain volumes  similar to 2009 budget
Properties in transition
8

FINANCIAL OUTLOOK
=========================================
Expenses 10% below 2009 Budget (excluding Grant
Expenses)
Expense Trends and Risks
Asset Condition Assessments
Repair Costs
Environmental Reserves
Stormwater
Implementation of NW Clean Air Strategy
Maintenance Dredging
Fender Piling Expense Projects
9

GROWTH RISKS
======================================
U.S. and Global Economic Uncertainties
West Coast Terminal over Capacity Increasing
Competition for Less Container Volume
Port Competitiveness with Respect to Intermodal
Pricing
Continued West Coast Volume Erosion to All Water
Services
Prince Rupert's Continued Growth
Panama Canal Expansion in 2014
10

CONTAINERS
FINANCIAL OVERVIEW
Containers & Support Properties             2008   2009
$'s in 000's             2005   2006   2007  Actual  Budget
Revenue           49,743  53,017  51,865  56,501  62,938
Direct Expenses       10,089   9,799  10,808  14,495  19,133
Income from Operations   39,654  43,218  41,057  42,006  43,805
Corp Allocations        5,383   6,293   5,510   7,314   7,823
Environmental Reserve    (2,113)  1,228   3,821     0     0
Net Operating Income    36,383  35,697  31,726  34,692  35,982
Depreciation          20,779  19,291  20,608  17,276  19,125
Net Income          15,604  16,406  11,118  17,416  16,857

11

BUSINESS UNITS MAJOR GOALS
2010
======================================================
CONTAINERS
Maximize efforts to Joint Market our Gateway
Market unique value/benefits of Port of Seattle
Implement customer support package including clean
air plan components
Conduct priority asset assessments and/or repairs
Increase seaport revenues  find tenants for vacant
properties (i.e. T-104/106)

12

CRUISE
FINANCIAL OVERVIEW
Cruise                              2008   2009
$'s in 000's             2005   2006   2007  Actual  Budget
Revenue           4,014  5,461  7,448  9,375  9,252
Direct Expenses        1,782  2,029  1,964  3,109  3,613
Income from Operations   2,232   3,432   5,484   6,267   5,639
Corp Allocations          538    542   1,193   1,558   1,845
Environmental Reserve       0     0     0     0     0
Net Operating Income    1,693   2,890   4,291   4,709   3,795
Depreciation           3,466   3,784   5,373   3,749   4,536
Net Income          (1,773)   (894)  (1,082)   959   (742)

13

BUSINESS UNITS MAJOR GOALS
2010
======================================
CRUISE
Negotiate long-term agreement for cruise
lines calling at Pier 66
Evaluate first year operations at Smith Cove
cruise terminal and make changes as needed
Develop plan for use of Smith Cove cruise
terminal as events venue
14

FINANCIAL OVERVIEW
INDUSTRIAL DOCKS & PROPERTIES
Bulk, Docks & Industrial                    2008   2009
$'s in 000's             2005   2006   2007  Actual  Budget
Revenue           15,526  16,842  18,736  19,549  17,940
Direct Expenses        6,938  7,539  6,793  6,968  6,866
Income from Operations   8,588   9,303  11,943  12,581  11,074
Corp Allocations        3,232   3,324   3,266   3,520   3,331
Environmental Reserve      11     2     0     0     0
Net Operating Income    5,345   5,977   8,677   9,061   7,742
Depreciation           4,449   3,824   5,006   5,587   5,806
Net Income           896  2,153  3,671  3,474  1,936

15

BUSINESS UNITS MAJOR GOALS
2010
====================================
INDUSTRIAL DOCKS & PROPERTIES
Determine customer needs at T-91 and develop
plan to meet needs
Conduct priority asset assessments and/or
repairs
Develop operations plan for T-91
Develop capital improvement program for T86
grain facility and align lease accordingly
16

SERVICE UNITS MAJOR GOALS
2010
=========================================
FINANCE
Financial analysis of business opportunities
Financial return metrics by property
Budgeting & reporting

17

SERVICE UNITS MAJOR GOALS
2010
======================================
PLANNING
Complete port-wide maintenance dredging plan
City shoreline plan update
City comprehensive plan update
T-91  operations & planning
Transportation  Alaskan Way viaduct impacts

18

SERVICE UNITS MAJOR GOALS
2010
======================================
SECURITY
Regulatory compliance
Transportation Worker Identification Credential
(TWIC) card reader implementation
Security grants  effective use of available
funds, seek flexibility in programs

19

SERVICE UNITS MAJOR GOALS
2010
======================================
ENVIRONMENTAL
Northwest Ports Clean Air Strategy Implementation
Meet end of year goals - vessels, trucks, cargo handling
Stormwater compliance
Cleanup sites
Completion of key work
Regulatory agency negotiations
Cost recovery
Regulatory compliance
Environmental Review & Permitting
20

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