Item 6c Supp
ITEM NO. 6c-Supp DATE OF MEETING March 5, 2009 2008 Financial Performance Port of Seattle March 5, 2009 Total Port Income Summary 2007 2008 2008 2008 Bud vs. Act ($ in thousands) Actual Actual Budget Var $ Var % Operating Revenues 461,146 489,347 476,477 12,870 2.7% Operating Expenses 241,618 279,656 265,391 (14,265) -5.4% Income before Depreciation 219,528 209,691 211,086 (1,395) -0.7% Depreciation 141,588 145,849 147,070 1,221 0.8% Income after Depreciation 77,939 63,843 64,017 (174) -0.3% 2 Net Operating Income Net Operating Income 500,000 500,000 450,000 450,000 400,000 400,000 350,000 350,000 300,000 300,000 In Thousands 250,000 250,000 200,000 200,000 150,000 150,000 100,000 100,000 50,000 50,000 Revenues - - Expenses 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 NOI Before Depreciation Year 3 Non-Ops Income Summary 2007 2008 2008 Bud ($ in millions) Actual Actual Budget Var Revenue Bond Interest Expense (113.0) (107.2) (118.9) 11.7 Interest Income (Expense) 57.2 35.7 20.9 14.8 Other Non-Op Revenue (Expense) (29.6) (6.1) (11.3) 5.2 Ad Valorem Tax Revenue 68.6 75.7 75.9 (0.2) Grants & Donations 94.9 40.8 80.0 (39.2) Public Expense (8.7) (26.8) (21.6) (5.2) GO Bond Interest Income (Expense) (15.6) (16.7) (15.2) (1.5) PFC Income 63.1 62.8 62.4 0.4 CFC Income 22.6 23.5 20.3 3.2 PFC Bond Interest (11.8) (11.4) (11.4) (0.0) Total 127.7 70.2 81.1 (10.9) 4 2008 Capital Spending by Division Total Spending: Seaport Division $327.6 million 27.0% Professional & Tech. Services Div. 2.5% Aviation Division Real Estate 64.0% Division 6.5% Not including $112.8M of Business Plan Prospective Projects 5 Total Port 2008 Capital Spending 2008 2008 Budget Plan of Division Actual Budget Variance Finance ($ in millions) Aviation 209.8 303.8 94.1 354.2 Seaport 88.5 126.9 38.4 132.0 Real Estate 21.2 125.3 104.1 118.1 Corporate 8.1 22.0 13.9 14.8 Total 327.6 578.1 250.5 619.1 6 Aviation Division 2008 Financial Performance 7 Aviation Business Highlights Airline activity: Enplanements down 4.8% in Q4, up 2.7% for year Non-aeronautical NOI flat vs. 2007; up $6M vs. 2008 budget Revenues up 5.1%, offset expense increases O & M costs over budget due to exceptional items Additional Other Post Employment Benefit (OPEB) costs Environmental reserves Capital write offs Snow event Airline cost per enplanement (CPE) of 11.87 up 1.1 % over 2007 Excluding exceptional items, CPE = 11.17, below 2007, and below budget of 11.63 Major project milestones: Third Runway opened on November 20th 8 Summary 2006 2007 2008 2008 Actual/Budget $ in 000s Actual Actual Budget Actual Var $ Var % Operating Revenues 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 2,285 1.5% Operating Grant / Fuel Hydrant 9,627 9,640 9,238 4,526 (4,712) -51.0% Total Operating Revenues 337,500 347,487 355,842 358,680 2,839 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% 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% 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% 9 Air Traffic Enplanements vs. Prior Year Landed Weight vs. Prior Year 15% 10.03% 15% 10% 10% Growth Rate 4.26% 5.15% 4.56% 2.40% Growth Rate 3.52% 5% 5% 0% -4.81% 0% -3.53% -5% -5% -10% -10% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Enplanements 2007 Actual 2008 Actual Change % Change Landed Weight 2007 Actual 2008 Actual Change % Change YTD TOTAL 15,661,753 16,085,311 423,558 2.70% YTD TOTAL 21,014,331 21,516,007 501,676 2.39% 10 Revenues 2006 2007 2008 2008 Actual/Budget $ in 000s Actual Actual Budget Actual Var $ Var % Aeronautical Revenues Landing Fees 46,730 53,188 58,878 65,633 6,756 11.5% Terminal Rental 128,957 129,200 126,224 125,548 (676) -0.5% Other Aero Revenues 10,685 11,569 12,465 11,651 (814) -6.5% Total Aero Revenues 186,372 193,957 197,567 202,833 5,266 2.7% Non-Aeronautical Revenues Public Parking 52,617 55,463 60,870 59,111 (1,759) -2.9% Rental Cars 34,010 36,408 36,014 36,019 5 0.0% Concessions 28,322 31,085 31,853 33,547 1,694 5.3% Other Non-airline Revenues 26,552 21,020 20,300 22,644 2,344 11.5% Total 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 Revenues 337,500 347,572 355,842 358,680 2,838 0.8% Comparison to 2008 Budget: Airline revenues based on cost recovery. Parking revenue down due to decline in long term transactions. Concessions revenues increased in space rent, food & beverages, and personal services. Lease overpayment in form of capitalized interest in amount of $5 million for Fuel Hydrant affected Other Revenues. Comparison to 2007 Results: Non-aero 5.1% growth vs. 2007. Concessions + 7.9% Parking + 6.6% 11 Operating Expenses 2006 2007 2008 2008 Actual/Budget $ in 000s Actual Actual Budget Actual Var $ Var % Expenses Airport Expenses 119,191 126,171 134,061 142,318 (8,257) -6.2% Corporate & Capital Development Expenses 26,441 29,717 36,368 35,119 1,249 3.4% Police Costs 14,007 14,386 16,340 15,287 1,053 6.4% Seaport & Real Estate Expenses 1,173 1,350 1,212 1,317 (105) -8.6% Total Operating Expenses 160,811 171,624 187,982 194,042 (6,060) -3.2% Exceptional items: Other Post Employment Benefts (OPEB) Accrual 4,407 Environmental Reserves 2,542 Capital Writeoffs 2,824 Snow Event 1,303 11,076 O&M Excluding Exceptional Items 182,966 5,016 2.7% 12 Expense Variance Explanations Exceptional Items $ in 000s OPEB - Retired Firefighters' post-employment benefits (4,407) Environmental Reserves Lora Lake (810) Angle Lake School Fire (469) Fuel Farm Environmental Investigation (271) Legacy Fuel Master System Project (224) All Other (769) Capital Writeoffs South Access Study (1,646) Lora Lake (528) 16C Pavement Joint Resealing (350) All Other (299) Snow Event (1,303) Subtotal (11,076) Other Security Fund Expense (774) Credit Card Processing Fees (673) Worker's Compensation - Major injury expenses, claim of former employee (1,983) (3,430) Other Savings - Net 6,249 Total (8,257) 13 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% Passenger Airline CPE 11.79 11.73 11.63 11.87 (0.24) -2.1% 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 14 Capital Spending 2004 - 2008 $ in millions $450 $417 $413 $400 $362 $350 $298 $304 $300 $250 $210 $200 $150 $100 $50 $- 2004 2005 2006 2007 2008 Act 2008 Bud 15 2008 Capital Spending: Major Variances 2008 2008 2008 $ in 000s Actual Budget Variance % POF Explanation Rental Car Facility 39,592 58,181 (18,589) -32.0% 79,469 Project suspended pending improvement in bond market MT 100% Baggage Screening 35,012 46,000 (10,988) -23.9% 58,634 Work not completed as planned; extended into 2009 STEP Security Bag and Checkpoint 14,158 24,183 (10,025) -41.5% 20,614 Dispute resolution process resulted in delays Alaska Air 2 Step 188 7,099 (6,911) -97.4% 7,086 Delayed as a result of delays to C-1 project 3RW Overflights Acquistion 11,502 18,013 (6,511) -36.1% 15,013 Offers made on all parcels but not all closed during the year North Expressway Relocation 20,546 26,000 (5,454) -21.0% 17,000 Contractors still completing punch lists Consolidated Warehouse 1,383 5,302 (3,919) -73.9% 5,546 New site presented to Commission ARFF Station Update 147 3,625 (3,478) -95.9% 4,402 Re-scoped and redesigned after bids exceeded estimates Garage Escalators and "A" Elevator 297 3,066 (2,769) -90.3% 2,100 Delayed due to bid climate and to ensure multiple bidders Home Insulation Retrofit 1 2,291 (2,290) -100.0% 1,661 Slowed while research on remaining eligible parcels completed Third Runway Projects 27,433 30,045 (2,612) -8.7% 49,366 All Other 86,987 110,075 (23,088) -21.0% 142,713 Total 209,813 303,835 (94,022) -30.9% 354,238 16 Seaport Division 2008 Financial Performance Seaport Business Goals Provide Compelling Value and Asset Utilization 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. 18 Seaport Organizational Goals Environmental Stewardship: One environmental/regulatory violation dredging depth. Developed and implemented plan for ship and cargo handling equipment emissions reduction for Northwest Ports Clean Air Strategy. Received $8.8 million in retroactive cleanup grant money from the Department of Ecology. Regional Transportation: SR-519 Phase II Memorandum of Agreement finalized. Alaskan Way Viaduct agreement reached on south end interchange design. Security: Leadership role with Tacoma in the Transportation Worker Identification Credential (TWIC) roll-out. 19 Seaport 2008 Operating Results 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% Net Operating Income (NOI) 43,875 49,689 44,501 5,188 12% NOI Excl Envir Grants/Reserve 47,884 46,853 45,245 1,608 4% 20 Seaport Division Key Variances Revenue Detail ($'s in Millions) 2008 Full Year Variance to Budget Better (Worse) Containers $( .8) Support Properties $ .4 Cruise $ 1.4 Grain $ 1.4 Docks/Industrial Properties $ .3 Security $(4.2) Environmental Grants $8.6 Total $7.1 21 Seaport Division Key Variances Expense Detail ($'s in Millions) 2008 Full Year Variance to Budget Better (Worse) Environmental Reserve $(5.0) Maintenance $(1.3) Corporate $(1.7) Litigated Injuries & Damages $ .8 Security Expenses $4.4 All Other $ .9 Total Expense $(1.9) 22 Operating Expenses Yr to Yr Change Expenses ($'s in Millions) Key Expense Changes Expense 2008 Actual vs. 2007 Actual Incr (Decr) Salaries & Benefits (includes 6 FTE Reorg Transfers) $ 1.8 Expense Projects $ 3.7 Maintenance (includes $.6 customer reimburse offset) $ 1.0 Litigation Reserve Change $(1.5) Capital to Expense in 2007 $(1.4) Allocations (Corporate and Division) $ 4.4 Environmental Reserve $ 1.0 Other $ .4 Total Expense Change $9.4 2008 Performance Report 23 Seaport Business Groups NOI Before Depreciation ($'s in Millions) 2008 Variance to Budget Actual NOI Better (Worse) Containers $33.3 $(2.2) Container Support Props $1.2 $0.0 Cruise $4.6 $0.7 Grain $5.0 $1.9 Docks/Indust Props $3.9 $1.0 Security $(1.2) $0.2 Envir Grants/Reserve $2.8 $3.6 Total Seaport $49.7 $5.2 24 Seaport Capital 2008 2008 Approved Variance Est. Act. Plan of Actual Budget to as % of Finance Budget App. Bud $88.5 $126.9 $38.4 70% $132.0 25 Real Estate Division 2008 Financial Performance Real Estate 2008 Key Events Establishment of Real Estate Division effective January 1, 2008 Completion of Fishermen's Terminal and Shilshole Bay Marina capital projects Odyssey lease terminated Sale of Pier 48 North Bay Resolution Eastside Rail Corridor 27 Real Estate Business Goals Provide Compelling Value and Asset Utilization 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. 28 Real Estate Organizational Goals Relationships: 48 speaking engagements. Environmental Stewardship: No environmental/regulatory violations. High Performance Workplace: Occupational Injury Rate at 11.12 down from 12.25 in 2007. 29 Real Estate Division 2008 Operating Results 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% Net Operating Income (NOI) 2,868 (3,941) (584) (3,357) -575% NOI Excl Envir Grants/Reserve 2,345 (3,338) (527) (2,811) -533% 30 Real Estate Division 2008 Key Variances Revenue Detail ($'s in Thousands) 2008 Full Year Variance to Budget Business Unit Better (Worse) Recreational Boating ($219) Fishing & Commercial $ 132 Commercial Properties $ 748 Third Party Management $2,339 RE Development & Planning $ 603 Facilities/Maintenance $12 Environmental Grants ($892) Total $2,723 31 Real Estate Division 2008 Key Variances Expense Detail ($'s in Thousands) 2008 Full Year Variance to Budget Expense Better (Worse) Capital to Expense $(7,274) Bad Debt Expense $ 1,158 Third Party Management $ (1,000) Salaries and Benefits $ 545 Outside Services $ 461 Maintenance Expense $ (385) Environmental Reserve $346 All Other $68 Total Expense (6,081) 32 Real Estate Business Groups NOI Before Depreciation ($'s in Thousands) 2008 Variance to Budget Actual NOI Better (Worse) Recreational Boating $1,896 $(244) Fishing & Commercial $(1,515) $498 Commercial & Third Party $3,235 $3,479 RE Development & Planning $(6,954) $(6,544) Envir Grants/Reserve $(603) $(546) Total Real Estate $(3,941) $(3,357) 33 Real Estate Capital 2008 2008 Approved Variance Est. Act. Plan of Actual Budget to as % of Finance Budget App. Bud $21.2 $125.3 $104.1 17% $118.1 34 Corporate Professional & Technical Services 2008 Financial Performance Corporate Key Events Audit Response Milestone Report submitted to the State Auditor's Office addressing his 51 recommendations Completed implementation of organizational changes outlined in 2007 Six fellows participated in the Military Veterans Fellow Program Acquisition is nearly finalized for Eastside Rail Corridor Completed the 2007 Economic Impact Study 36 Corporate Business Goals Continued the strategic planning process with input from key stakeholders Continued to implement "Green Initiative" to the entire organization Continued to indentify potential budget savings Continued to develop alternatives for Rental Car funding Continued to enhance regional transportation and freight mobility 37 Corporate Indicators Annual Community Meetings: 240 participants Sea-Air School Programs: reached 10,000 students Sea-Air School Trade Class: 2445 attendees Participated in 26 career fairs, including 9 military fairs Wellness Incentive Program: 1024 employees achieved the 1,000 point goal Received 18 major awards in 2008 recognizing achievements in a number of areas 38 Major Awards in 2008 Award For Excellence (Airport Facilities Council) Comprehensive Environmental Management Award (AAPA) 2008 Best in State Gold Award for Complexity (ACEC WA) Best Concessions Award for Large Airports (ACI-NA) 2008 Environmental Achievement Award (ACI-NA) Best Workplaces Recycling Award (King County) Certificate of Achievement for Financial Reporting (GFOA) Distinguished Budget Award (GFOA) Award of Excellence - 2007 Airport Concessions Contest (ACI-NA) Patriot Award (ESRG) 5-star EnviroStars (King County) Diamond Award for Organizational Leadership (Commuter Challenge) 39 Corporate Operating Results 2007 2008 2008 2008 2008 Bud Var. Rvsd Bud In $ Thousands Actual Actual Budget Rvsed Bud $ % Var. $ Total Revenues 2,223 1,735 1,258 1,258 477 37.9% 477 Executive 2,293 2,333 2,633 2,633 300 11.4% 300 Commission 577 899 791 791 (109) -13.8% (109) Legal 2,969 3,012 2,766 2,766 (246) -8.9% (246) Risk Services 2,572 2,768 3,107 3,107 339 10.9% 339 Health & Safety Services 995 996 1,059 1,059 63 5.9% 63 Public Affairs 3,961 4,356 4,681 4,481 325 6.9% 125 External Affairs 821 1,097 1,460 1,460 363 24.8% 363 Economic & Trade Development 1,524 1,645 2,174 2,128 529 24.3% 483 Engineering 1,188 1,253 1,355 1,355 101 7.5% 101 Port Construction Services 2,268 1,965 1,500 1,434 (465) -31.0% (532) Human Resources & Development 3,644 3,973 4,432 4,237 458 10.3% 263 Labor Relations 579 677 731 731 54 7.4% 54 Information & Communications Technology 13,346 14,577 15,010 14,647 433 2.9% 70 Finance & Budget 1,456 1,667 1,821 1,736 154 8.5% 69 Accounting & Reporting Services 6,174 5,863 7,189 6,232 1,326 18.4% 370 Office of Social Responsibility 200 1,246 1,738 1,678 492 28.3% 432 Consulting Services 3 - 17 17 17 100.0% 17 Regional Transportation 291 402 522 522 120 23.0% 120 Police 18,607 19,484 20,474 20,224 990 4.8% 740 Industrial Development Corporation - 11 - - (11) 0.0% (11) Contingency 6,788 4,200 750 3,879 (3,450) -460.0% (321) Total Expenses 70,257 72,425 74,210 75,116 1,785 2.4% 2,692 CDD Admin - 93 - - (93) 0.0% (93) CPO 37 1,313 20 1,269 (1,293) -6559.7% (44) Total CDD 37 1,406 20 1,269 (1,387) -7032.9% (138) 40
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