9b Presentation, Q2 2020 Financial Performance Briefing
Item No. 9b _supp Meeting Date: August 11, 2020 Port of Seattle Q2 2020 Financial Performance Report Commission Briefing August 11, 2020 Context for Q2 Financial Performance On May 31, the Governor signed the Proclamation 20-25.4, which outlined the "Safe Start" to reopen the economy in phases. The COVID-19 pandemic continues to have a significant impact to the Port businesses. Airport passenger levels dipped 94% in April compared to the prior year but improved to 78% lower in June as limited non-essential travel resumed. 2020 cruise season has been cancelled due to the COVID-19 pandemic. The Port instituted Port wide cost reductions and identified over $30M in operating expenses and $40M in CIP deferrals. The Port is seeking reimbursement from FEMA for certain COVID-19 related costs. 2 Aviation Division Q2 2020 Financial Performance Report Aviation Division Financial Summary Business Highlights Revised Approved Forecasting 61% drop in passengers in 2020 Figures in $000s Forecast Budget Budget Variance compared to 2019 Revenues Aeronautical 297,373 401,342 401,342 (103,969) Received $192 million in CARES Act grant Non-aeronautical 115,448 135,074 283,167 (19,625) Implementing FlyHealthy@SEA strategy to Total 412,821 536,416 684,510 (123,595) address Covid-19, restore confidence for O&M expense 342,646 348,826 377,306 6,180 NOI 70,175 187,589 307,203 (117,415) travelers and workers Key Measures Will likely reduce current favorable O&M Non-Aero NOI 4,097 21,443 154,660 (17,346) variance CPE ($) 26.21 13.93 13.93 (12.28) Financial relief packages provided to airline Debt Service Coverage 1.36 1.80 1.80 -0.44 and non-airline customers Other Information Note: debt service coverage calculation ADF Balance 290.2M 314.4M -24.2M currently under review for treatment of Capital Spending 501,490 489,182 (12,308) CARES Act grant 4 Projected Passenger Change by Month Full year 2020 forecast: total passenger decline of 61% compared to 2019 5 Aviation Business Events Health & Safety: on track to achieve all objectives Security: Initiated mobile unpredictable screening for Airfield access points Employee Engagement: June pulse survey all responses 77% positive (or greater) Community: Completed Condo noise insulation design Innovation: Completed 2 Shark Tanks YTD, RFI for Virtual Queuing Social Responsibility: ACDBE Sales percent = 32.5% vs goal of 22% Customer Experience: Completed near-term FlyHealthy@SEA actions by June, active implementation of SEA brand Environment & Sustainability: signed long -term contract for purchase of renewable natural gas Financial Sustainability: Launched public parking Pre -Booked program Asset Management and Capital/Planning: Completed phase 1 of Baggage Optimization 6 Capital Spending 2020 Forecast: IAF = $185M NSAT = $156M Other = $160M Major 2020 Variances: IAF = $30M NSAT = ($22M) Other = ($20M) 2020 Includes CIP cash flow management reserve of -$36M 2020 spending variances primarily due to delayed spending impacted by COVID19 7 Non-Aviation Divisions Q2 2020 Financial Performance Report Non-Aviation YTD Performance Summary Fav (UnFav) 2020 YTD 2020 YTD 2020 YTD Fcst vs. Revised Revised Approved Budget Variance $ in 000's Actual Budget Budget $ % Revenues Revised Budget Maritime 18,338 18,214 28,465 124 1% Revenue on target Economic Development Division 5,359 6,450 7,930 (1,091) -17% Expenses favorable due Joint Venture 20,706 20,161 20,161 545 3% to variable costs and Total Revenue 44,403 44,825 56,557 (422) -1% timing Expenses Maritime 22,311 26,441 27,347 4,130 16% Economic Development Division 9,493 12,459 13,948 2,966 24% Approved Budget Joint Venture 486 389 390 (97) -25% No Cruise sailings Total Expense 32,290 39,289 41,685 6,999 18% driving down revenue NOI Before Stormwater Utility 12,113 5,536 14,872 6,577 119% NOI excluding Stormwater Utility Revenues 3,171 3,135 3,135 36 1% Stormwater down Stormawater Utility Expenses 2,068 2,669 2,718 601 23% $2.7M Stormwater Utility NOI 1,103 466 417 637 137% Total Non-Aviation Business NOI 13,216 6,002 15,289 7,214 120% Tightened Expenses offset Revenue Reductions 9 Maritime Division Q2 2020 Financial Performance Report Maritime Division Bottom Line Up Front Financial Summary Business Highlights Revised Approved Figure in $000s Forecast Budget Budget Variance COVID-19 Driven Revenues No return to the Cruise Business in Fishing, Commercial, & Recreational Marinas 22,771 22,747 22,747 24 2020. Cruise 4,261 5,909 26,261 (1,647) Maritime Portfolio Mgmt. 9,622 10,428 10,428 (806) Fishing, Commercial and Recreational Grain / Other 3,750 3,501 3,501 249 Marinas seeing limited impact. Total 40,405 42,585 62,938 (2,180) O&M Expense Elimination of Port Valet and further Direct 21,315 22,035 22,637 720 cuts in Central Services. Support Services 15,251 15,051 16,110 (200) Central Services and Other 14,580 15,106 15,650 526 Total 51,145 52,191 54,396 1,046 T117 restoration advancing faster than NOI (10,740) (9,606) 8,541 (1,134) planned. Capital Spending 22,697 19,712 2,985 Marinas and Grain terminal doing fine, Cruise an Real Estate impacted 11 Maritime Q2 2020 Financial Highlights Maritime YTD Net Operating Income is $4.3M favorable to revised budget and $9M below 2019 Revenue in line with revised budget and $9M below 2019, primarily from Cruise cancellation. Expenses $4.1M (13%) favorable to budget driven by delayed maintenance and timing of spend. Expenses are flat Y/Y despite the addition of T46 lease payment to NWSA. YTD Q2 Capital spend was $9.9M with forecasted spend at $22.7M (115% of budget). Fav (UnFav) Incr (Decr) Stormwater Utility 2018 YTD 2019 YTD 2020 YTD 2020 YTD 2020 YTD Fcst vs. Revised Change from 2019 Revised Approved Budget Variance revenue and $ in 000's Actual Actual Actual Budget Budget $ % $ % expenses are each Total Revenues 26,257 27,368 18,338 18,214 28,465 124 0% (9,030) -33% tracking favorable Total Operating Expenses 21,716 22,310 22,311 26,441 27,347 4,130 15% 1 0% Net Operating Income 4,541 5,058 (3,973) (8,227) 1,119 4,254 380% (9,031) -179% to budget. Depreciation 8,823 8,911 8,781 8,651 8,649 (130) -2% (130) -1% Net Income (4,281) (3,853) (12,754) (16,878) (7,530) 4,124 55% (8,901) -231% Revenue Flat , Expenses below Revised Budget 12 Maritime Events & Achievements Cruise Working with constituencies to develop guiding protocols for recommencing Cruise in 2021. Fishing: COVID Testing of fishers at FT. The F/V St. Jude conducted whole tuna sales at Fishermen's Terminal. The vessels held several days of sales which attracted over 1000 customers per day. Additionally, this encouraged purchases from other fishermen and Wild Salmon Seafood. Shilshole Bay Marina Customer Service Facilities and repaving project progresses with slight delays. All new buildings are scheduled to open early in Q3. Maritime Environmental Managed 'stand-down' process for T46 Cruise EIS to get consultants to a logical stopping point. Completed all permitting tasks for Terminal 117 Habitat Restoration and Public Shoreline Access project. Signed an Order with EPA to perform an Engineering Evaluation / Cost analysis for investigation and cleanup at T108. Awarded $6.6M (75% match is $5M) from DOE for NWSA T5 Stormwater. Moving programs forward, adapting to COVID-19 13 Stormwater Utility Q2 Financials Installed 3 tide gates and working with tenants on potential relief including deferrals Moving improvements forward while working with customers 14 Northwest Seaport Alliance Summary NWSA Operating Income Fav (UnFav) Incr (Decr) NWSA TEU Data Before GASB 87 Adjustment 2019 YTD 2020 Year-to-Date Budget Variance Change from 2019 $ in 000's Actual Actual Budget $ % $ % YTD June 2020, there was a total of 55 void sailings due to a combination of the lingering Operating Revenue 98,997 89,755 96,185 (6,430) -7% (9,242) -9% trade dispute with China and the pandemic. Of the 55 canceled sailings, 33 were in Q1 as Operating Expense 51,212 47,354 56,934 9,580 17% (3,858) -8% unprecedented disruptions from COVID-19 rippled across the global supply chain. Tariffs and Operating Income 47,785 42,401 39,251 3,150 8% (5,384) -11% COVID-19 show the risk of single-country sourcing. Many shippers are looking to diversify manufacturing and sourcing activities to SE Asia or other countries, which may have longer Cargo TEUs 1,915,249 1,559,903 (355,346) -19% term implications for the gateway as these origins may be better served by east coast ports Cargo Volume (Metric Tons) 15,129,071 13,036,960 (2,092,111) -14% due to shorter transits. NWSA total international TEUs are down 20.9% YTD while total TEUs are down 18.3%. Note: GASB 87 Accounting impact and Non-Operating Totals available on NWSA Site Exports (YTD Apr 2020 vs. YTD Apr 2019): Revenue Q2 YTD $6.4M below budget from lower cargo Japan, Korea, China, Taiwan and Indonesia were our top trading partners. volumes and lease terminations. Exports to Japan, Korea, China, Taiwan and Indonesia declined 12.0%, 14.9%, 4.2% Expenses Q2 YTD $9.6M favorable to budget. Operations costs ,37.4%, and 0.6%, respectively. were below budget Exports to Thailand and Vietnam grew 6.6% and 13.9%, albeit off a smaller base. $2.6M from timing of the crane removal at Husky Terminal. Exports are down 13.8% YTD Apr. $1.7M in reduced Maintenance spend Imports (YTD Apr 2020 vs. YTD Apr 2019): $3.7M in reduced Infrastructure, Commercial, and Administrative costs. China, Vietnam, Japan, Taiwan and Korea were our top trading partners. Imports from China, Japan, Taiwan and Korea are down 30.0%, 15.1%, 15.0% and 18.1%, respectively. Vietnam moved to our #2 origin country. Imports from Vietnam are up 66.7%, 39,119 TEUs vs. 23,461 TEUs. Imports are down 16.8% YTD Apr. *Export and import data source PIERS, full international Q2 volumes and operating expenses below budget 15 Joint Venture Q2 Financials Home Port Activities Fav (UnFav) Total Year 2020 YTD 2020 YTD 2020 YTD Fcst vs. Revised Budget Revenues: Revised Approved Budget Variance $ in 000's Actual Budget Budget $ % Joint Venture revenue above budget due to Revenue lower expenses at NWSA Joint Venture Revenue 21,218 20,968 20,968 250 1% 41,935 Contra Joint Venture Revenue (957) (957) (957) (0) 0% (1,913) Other Service Revenue higher than budget Other Service Revenue Tenant Reimbursements217 150 150 66 44% 301 Revenue On Port Property 229 - - 229 NA - due to tenant reimbursable Maintenance work Total Revenues 20,706 20,161 20,161 545 3% 40,322 Expenses Revenue on Port Property from Maintenance Expenses 304 325 325 (21) -6% 707 temporary moorage on the northwest face JV Direct 121 14 14 107 758% 28 Other Central Services 42 35 36 8 22% 71 of T46 Environmental & Sustainability 6 1 1 5 740% 1 Seaport Project Management 11 14 14 (3) -21% 29 Expenses EDD Expenses 1 - - 1 NA - Total Expenses 486 389 390 97 25% 837 Maintenance higher than budget due to NOI Before Depreciation 20,221 19,772 19,772 448 2% 39,486 late tenant reimbursements (Bad Debt) Depreciation 7,609 7,622 7,622 (13) 0% 15,227 NOI After Depreciation 12,611 12,151 12,150 461 -4% (24,258) JV Direct - SWU Fees at T46 (Not in Budget) 16 Economic Development Division Q2 2020 Financial Performance Report Economic Development Division Bottom Line Up Front Financial Summary Business Highlights COVID-19 Driven Figure in $000s Forecast Revised Approved Variance Budget Budget Additional BHICC cancellations resulting Revenues 10,517 15,658 19,110 (5,141) in additional forecast reductions of $4.5M O&M Expense in revenue and expense. EDD & Maritime 7,467 12,207 14,805 (4,740) Maintenance 3,476 3,476 3,819 0 Expenses forecasted $6M below budget Diversity in Contracting 151 151 197 0 Tourism 2,342 2,842 1,536 (500) from port -wide cost reductions, program EDD Grants 810 1,110 1,110 (300) spend timing, and variable expenses. Central Services and Other 6,982 7,437 7,901 (455) Total 21,227 27,222 29,368 (5,995) Executed 47 rent relief requests with waterfront tenants. NOI (10,711) (11,564) (10,258) 854 Capital Spending 8,436 10,699 (2,263) Bell Harbor Conference Center Modernization completion in Q3. Conference and Event Center Volumes Driving the P&L 18 Economic Development Financial Highlights 2020 Net Operating Income $1.9M favorable to revised budget and $1.8M lower than 2019 Revenue unfavorable to revised budget by $1.1M and $5M lower than 2019 driven primarily by deeper COVID-19 cancellations and construction at the Conference and Event Centers. Expenses favorable to revised budget by $3M driven by less conferences, favorable Maintenance and Central services cost. Expenses are lower by $3.2M Y/Y due to variable cost associated with lower Conference & Event Center volumes. EDD spent 72% of revised Fav (UnFav) Incr (Decr) 2018 YTD 2019 YTD 2020 YTD 2020 YTD 2020 YTD Fcst vs. Revised Change from 2019 Capital budget in Q1 with Revised Approved Budget Variance most attributed to the Bell $ in 000's Actual Actual Actual Budget Budget $ % $ % Total Revenues 9,765 10,384 5,359 6,450 7,930 (1,091) -17% (5,025) -48% Harbor Conference Center Total Operating Expenses 12,557 12,684 9,493 12,459 13,948 2,966 24% (3,191) -25% Modernization. The 2020 Net Operating Income (2,791) (2,300) (4,134) (6,009) (6,018) 1,875 31% (1,834) -80% forecasted spend is $8.4M Depreciation 1,980 1,833 1,774 1,705 1,704 (68) -4% (59) -3% (79% of revised budget). Net Income (4,771) (4,133) (5,908) (7,715) (7,722) 1,807 23% (1,775) -43% 19 Q2 2020 EDD Program Advancements Real Estate Development Finalized Pier 86 agreement with DFW. Completed 30% design on Fishermen's Terminal projects. Finalized Des Moines Creek RFP.Real Estate Strategic Plan at 50%. Pier 69: implemented coronavirus response measures: Installed signage, floor markings, and barriers to encourage good hygiene and physical distancing. Portfolio Management - Provided rent relief to landside tenants. Executed first amendment to the lease with Mad Anthony's and third amendment with Dukes at Shilshole Bay Marina. The Maritime Blue innovation accelerator cohort finished its program. Eleven entrepreneurs advanced through the four month program which concluded with an online showcase where each emerging business pitched its products or services to over 200 virtual attendees. Tourism Developed Cruise & Stay training videos and press releases to keep Seattle and WA top of mind for British, Australian and German markets. The videos are being utilized by CLIA international offices and cruise tour operator specialists promoting 2021 Alaska season. Diversity in Contracting: As of Quarter 2, the Port is currently exceeding its 2020 Port wide WMBE (Non-Construction) goal of 14.4%, obtaining 15% WMBE utilization. Conversely, construction achieved 4.7% WMBE utilization. Moving programs forward, adapting to COVID-19 20 Central Services Q2 2020 Financial Performance Report Central Services Financial Summary Business Highlights Operating revenues forecast to be $1.6M 2020 2020 2020 favorable due to unbudgeted revenue Revised Approved from Police. Figures in $000s Forecast Budget Budget Variance Revenues 1,665 40 40 1,625 O&M expenses is expected to be $3.2M Core Central Support Services 89,449 91,594 93,604 2,145 favorable due to hiring freeze, cutting Police 30,012 31,312 31,444 1,300 discretionary spending, and spending Capital Development 8,888 8,611 12,513 (277) delay. Environment & Sustainability 10,398 10,399 12,866 1 O&M Expenses 138,747 141,916 150,427 3,170 Capital spending is expected to be $2.9M favorable to the revised budget. Capital Spending 9,787 12,691 2,904 22 Central Services Business Events Developed and deployed the Self-Check Health Survey. This system allows any Port employee, volunteer, or non- construction contractor to affirm no known COVID-19 exposure or symptoms each day prior to visiting a Port facility POSPD provided mutual aid to the City of Seattle in response to the major civil unrest from May 31 to June 4. POSPD participated in the annual Special Olympics Torch Run on 6/6. This year the run was performed in virtual teams due to COVID-19 restrictions. The Office of Equity, Diversity and Inclusion developed a three-year workforce development strategic plan for 2021- 2023 with community feedback. Completed the Port's new budget planning system implementation in June after more than two years of planning. PeopleSoft Financials People Tools Upgrade: This upgrade finished earlier than expected, in Q2, continuing support and providing new features to enhance operations and the user-experience. HR implemented a new Applicant Management System, Taleo. Conducted Career Readiness Workshops for ten Duwamish Valley youth for POS spring and summer virtual internship program. Held media availability on June 25 to introduce nonprofits working with the Port to sponsor 220 Opportunity Initiative youth jobs this summer. 23 Central Services Financial Highlights Fav (UnFav) Incr (Decr) 2018 YTD 2019 YTD 2020 YTD 2020 YTD 2020 YTD Actual vs. Revised Change from 2019 Revised Approved Budget Variance $ in 000's Actual Actual Actual Budget Budget $ % $ % Total Operating Revenues 81 331 1,640 20 20 1,620 8101.4% 1,309 395.7% Core Central Support Services 37,027 38,479 41,186 43,566 45,683 2,380 5.5% 2,707 7.0% Police 13,188 13,997 14,819 15,697 15,784 878 5.6% 822 5.9% Capital Development 4,453 5,164 4,773 5,457 6,171 684 12.5% (391) -7.6% Environment & Sustainability 2,954 4,551 4,999 5,091 5,911 92 1.8% 448 9.9% Total Operating Expenses 57,621 62,191 65,777 69,812 73,549 4,035 5.8% 3,586 5.8% 2020 YTD Expenses are $4.0M favorable to the revised budget due to: Delay in contract spending, cutting/reducing discretionary spending, and implementing hiring freeze for all new and backfill vacant positions as part of the COVID-19 cost reduction measures. 2020 YTD Total Operating expenses are $3.6M higher compared to 2019 due to: Higher payroll costs due to merit increases. Additional FTEs and funding to support Portwide goals and initiatives. Increase in Outside Services costs in 2020. 24 Portwide Q2 2020 Financial Performance Report Portwide Financial Highlights Q2 YTD Actual: o Operating Revenues $26.6M unfavorable to the revised budget and $91.9M lower than 2019. o Operating Expenses $17.2M below the revised budget and $18.9M lower than 2019. o Net Operating Income before Depreciation $9.4M unfavorable to the revised budget and $73.0M lower than 2019. o Total capital spending YTD $257.4M, 48.1% of the revised budget. Year-End Forecast: o Operating Revenues $129.3M unfavorable to the revised budget and $253.7M lower than 2019. o Operating Expenses $13.4M favorable to the revised budget and $18.4M lower than 2019. o NOI before depreciation $115.9M unfavorable to the revised budget and $235.3M lower than 2019. o Total capital spending $543.7M, $8.1M above the revised budget. 26 Portwide Net Operating Income Performance Operating Revenues are expected to be $129.3M unfavorable to the revised budget due to reduced operations and lower airline activity. Total Operating expenses are expected to be $13.4M below the revised budget due to COVID-19 cost reductions in: o Payroll due to hiring freeze o Outside Services o Travel and Other Employee Expenses o Promotional Hosting 27 Non-Airport Net Operating Income Performance Non-Airport Operating Revenues are $5.7M unfavorable to the revised budget due to lower than anticipated revenues in Conference & Event Centers and Recreational Boating. Expenses are expected to be $7.2M favorable to the revised budget due cost saving measures which include hiring freeze, cutting/delay in implementing initiatives, and cutting travel and other employee expenses. 28 Portwide Capital Spending 750,000 617,748 596,633 600,000 YTD capital spending 543,679 535,584 $257.4M,48.1% of the Revised Budget. 450,000 324,523 Total capital 300,000 spending is expected to be $543.7M 169,461 for 2020. 150,000 0 2016 2017 2018 2019 2020 Forecast 2020 Revised Budget 29 Community Programs Summary 2020 2020 2020 2019 2020 Additions/ Revised YTD Program (in $000) Actuals Budget Reductions Budget Spending 1) Airport Community Ecology (ACE) Fund * 260 522 0 522 79 2) Duwamish Valley Community Equity Program - 292 292 43 3) South King County Support Program * - 1,500 0 1,500 - 4) EDD Partnership Grants 763 960 0 960 120 5) City of SeaTac Community Relief * 1,400 1,400 0 1,400 1,400 6) Airport Spotlight Ad Program 934 1,148 0 1,148 431 7) Energy & Sustainability Fund * 283 250 (100) 150 5 8) Maritime Innovation Center - 150 0 150 - 9) Tourism Marketing Support Program 1,338 1,536 1,306 2,842 374 10) Workforce Development 1,771 3,119 1,284 4,403 805 11) Diversity in Contracting (formerly Small Business) 883 1,520 (188) 1,331 502 12) High School Internship Program 629 775 (26) 749 175 13) Equity, Diversity & Inclusion 565 1,346 (420) 925 467 14) Sustainable Aviation Fuels & Air Emissions Program - 40 0 40 - 15) Low Carbon Fuel Standard Support - 150 (45) 105 67 TOTAL 8,826 14,708 1,810 16,519 4,465 30 Aviation Division Appendix Q2 2020 Financial Performance Report Airport Activity Year-to-date Q2: Passengers -54.2% Landed weight -34.3% Cargo metric tons -0.3% Passengers are forecasted to be down by 61% due to COVID19 impact 32 Airline Cost Management (CPE) 2020 Budget: Revenue Sharing ended in 2019 under terms of SLOA IV agreement 2020 CPE Forecast: Higher CPE based on reduction in Airline Activity assumptions due to COVID19 impact, and contractual end of revenue sharing under SLOA IV Higher CPE based on reduction in Airline Activity assumptions due to COVID19 impact 33 Non-Aeronautical Performance Significant COVID-19 impacts to all Non-Aero lines of business became visible in starting in March: YTD 2020 vs. 2019: Revenues 48.5% Unfavorable Expenses 3.9% Unfavorable NOI 86.4% Unfavorable 2020 Revenue Forecast vs. 2019: Reduction in Non-Aero Revenues of $154M or 57% against 2019 Actuals based on the current 2020 enplanement forecast of -61% decline in passenger volumes compared to prior year. COVID-19 impacts are significant. NOI forecasted at $147M or 97% below 2019 Actual results 34 Total Operating Expense Performance Q2 YTD vs Revised Budget: $9M favorable, 5.2% 2020 Forecast vs Revised Budget: $6.2M favorable, 2% 2020 Forecast favorable driven primarily by: Cost reductions in Outside Services, ERL, and Charges from Other Divisions in effort to reduce COVID-19 impact Expenses down due to forecasted Cost Savings based on enplanement forecast down 61% 35 Airport Activity % Change Passenger Activity YTD 2018 YTD 2019 YTD 2020 from 2019 Change 2020 Market Total Passengers (000's) Airline 2019 v. 2020 Share Domestic 20,897 21,616 10,074 -53.4% Alaska -50.0% 55.0% International 2,611 2,689 1,054 -60.8% Delta -54.8% 23.9% Total 23,508 24,304 11,128 -54.2% Southwest -59.5% 4.9% American -57.7% 4.3% Operations 210,722 214,749 142,657 -33.6% United -65.3% 4.2% Landed Weight (In Millions of lbs.) Cargo 1,147 1,165 1,254 7.6% Q2 2020: All other 13,328 13,738 8,537 -37.9% Total 14,476 14,903 9,791 -34.3% Passengers Cargo - Metric Tons YTD passenger reduction of Domestic freight 114,627 118,401 161,957 36.8% 54.2% is due to impact of International freight 64,749 63,388 47,466 -25.1% COVID-19 on travel starting Mail 28,326 28,314 - -100.0% in March 2020 Total 207,702 210,103 209,423 -0.3% 2020 YTD total passenger reduction of -54.2% 36 Aviation Financial Summary Fav (UnFav) Incr (Decr) 2018 2019 2020 2020 2020 Budget Variance Change from 2019 Revised Approved $ in 000's Actual Actual Forecast $ % $ % Budget Budget Operating Revenues: Aeronautical Revenues 291,268 357,598 297,373 401,342 401,342 (103,969) -25.9% (60,225) -16.8% Non-Aeronautical Revenues 257,707 269,037 115,448 135,074 283,167 (19,625) -14.5% (153,589) -57.1% Total Operating Revenues 548,975 626,636 412,821 536,416 684,510 (123,595) -23.0% (213,815) -34.1% Total Operating Expense 318,849 356,635 342,646 348,826 377,306 6,180 1.8% (13,988) -3.9% Net Operating Income 230,126 270,001 70,175 187,589 307,203 (117,415) -62.6% (199,826) -74.0% Capital Expenditures 579,135 573,598 501,490 489,182 513,131 (12,308) -2.5% (72,108) -12.6% 2020 Forecasted NOI $117M or 63% Unfavorable to Revised Budget 37 Key Performance Measures 2020 Forecast vs. 2020 Budget Fav (UnFav) Incr (Decr) 2018 2019 2020 2020 Budget Vairance Change from 2019 Key Performance Metrics Actual Actual Forecast Approved $ % $ % Budget CPE: Key Performance Metrics Increased by 88.2% driven by Cost per Enplanement (CPE) 10.79 12.85 26.21 13.92 (12.28) -88.2% 13.36 103.9% Non-Aeronautical NOI (in 000's) 149,959 150,752 4,097 154,660 (162,050) -97.5% (146,655) -97.3% lower airline activity assumptions Other Performance Metrics impacted by COVID -19, and the O&M Cost per Enplanement 12.81 13.78 33.68 14.15 (20.60) -157.5% 19.90 144.4% elimination of revenue sharing Non-Aero Revenue per Enplanement 10.35 10.40 11.35 10.62 6.28 124.1% 0.95 9.1% Debt per Enplanement (in $) 133 133 322 122.95 (199) -162.2% 189 142.3% starting in 2020 per SLOA IV Debt Service Coverage 1.66 1.68 1.36 1.80 -0.43 -24.2% (0.32) -18.9% Days cash on hand (10 months = 304 days) 235 314 309 332 -23 -6.8% (5) -1.7% Aeronautical Revenue Sharing ($ in 000's) (36,863) (17,146) - - - 0.0% 17,146 100.0% Non- Aero NOI: Activity (in 000's) Forecasted reduction in Non - Enplanements 24,894 25,874 10,172 26,667 (16,495) -61.9% (15,702) -60.7% Aero NOI of $147M or 97.3% compared to prior year actuals is based on the current 2020 enplanement forecast of -61% decline in passenger volumes compared to 2019, which is impacting all Non-Aero business units Negative: Non-Aero NOI below budget and CPE above budget due to COVID-19 impacts38 Aviation Expense YTD Summary Fav (UnFav) Incr (Decr) 2018 YTD 2019 YTD 2020 YTD 2020 YTD 2020 YTD Budget Variance Change from 2019 2020 YTD Actuals to YTD 2019 Revised Approved $ in 000's Actual Actual Actual $ % $ % Actuals Budget Budget Operating Expenses: Expenses - $12.9M lower Payroll 67,619 72,996 77,615 76,753 77,918 (862) -1.1% 4,620 6.3% expenses compared to 2019 YTD, Outside Services 25,837 28,933 29,634 34,585 38,343 4,951 14.3% 700 2.4% Utilities 9,628 9,328 8,757 10,748 10,927 1,991 18.5% (571) -6.1% primarily driven by decreases in Other Airport Expenses 2,791 7,307 2,092 (893) 2,802 (2,985) 334.4% (5,215) -71.4% ERL expenses Total Airport Direct Charges 105,874 118,564 118,099 121,193 129,990 3,094 2.6% (466) -0.4% Environmental Remediation Liability 4,484 12,543 (2,776) 286 1,581 3,062 1070.8% (15,319) -122.1% Capital to Expense 8 83 - - - - N/A (83) -100.0% 2020 YTD Actuals to YTD 2020 Total Exceptions 4,492 12,627 (2,776) 286 1,581 3,062 1070.8% (15,402) -122.0% Revised Budget Total Airport Expenses 110,366 131,191 115,323 121,479 131,571 6,156 5.1% (15,868) -12.1% Expenses - $9M favorable due to Police Costs 10,659 11,117 12,162 13,096 13,169 933 7.1% 1,046 9.4% underspending in Outside Other Central Services 30,534 32,093 34,300 35,972 37,904 1,672 4.6% 2,207 6.9% Maritime/Economic Development 1,877 1,834 1,595 1,844 2,123 250 13.5% (240) -13.1% Services, ERL and charges from Total Charges from Other Divisions 43,070 45,044 48,057 50,912 53,196 2,856 5.6% 3,012 6.7% other divisions Total Operating Expense 153,436 176,235 163,380 172,391 184,767 9,012 5.2% (12,855) -7.3% Underspending in Q2 driven by COVID19 impact starting in March 39 Aviation Expense YE Summary Fav (UnFav) Incr (Decr) 2018 2019 2020 2020 2020 Budget Variance Change from 2019 2020 Forecast to 2020 Revised Approved $ in 000's Actual Actual Forecast $ % $ % Revised Budget Budget Budget Operating Expenses: Expenses - $6.2M Payroll 133,999 147,076 156,050 156,826 160,340 776 0.5% 8,974 6.1% Outside Services 65,475 68,801 71,255 70,401 79,889 (854) -1.2% 2,454 3.6% favorable due to cost Utilities 18,306 18,180 15,787 20,642 21,180 4,856 23.5% (2,394) -13.2% reductions in O&M, Other Airport Expenses 3,966 12,272 1,958 (1,682) 5,224 (3,640) 216.5% (10,314) -84.0% Total Airport Direct Charges 221,746 246,329 245,049 246,187 266,634 1,138 0.5% (1,279) -0.5% driven by COVID 19 Environmental Remediation Liability 6,233 15,900 (1,967) 878 2,648 2,845 324.0% (17,867) -112.4% impact Capital to Expense 6,891 2,089 - - - - 0.0% (2,089) -100.0% Total Exceptions 13,124 17,989 (1,967) 878 2,648 2,845 324.0% (19,956) -110.9% Total Airport Expenses 234,870 264,318 243,083 247,065 269,282 3,983 1.6% -8.0% (21,236) 2020 Forecast to 2019 Police Costs 19,231 22,290 25,024 26,122 26,233 1,098 4.2% 2,734 12.3% Other Central Services 60,659 65,671 70,546 71,646 77,460 1,100 1.5% 4,875 7.4% Expenses - $14M Maritime/Economic Development 4,088 4,355 3,993 3,993 4,331 0 0.0% (362) -8.3% higher due to planned Total Charges from Other Divisions 83,979 92,316 99,564 101,761 108,025 2,198 2.2% 7,247 7.9% strategic spending for Total Operating Expense 318,849 356,635 342,646 348,826 377,306 6,180 1.8% (13,988) -3.9% 2020, partially offset by 2020 cost reductions implemented in March to mitigate COVID 19 impact COVID19 Impact drives the reduction in Expenses 40 Aeronautical Business YTD Fav (UnFav) Incr (Decr) 2018 YTD 2019 YTD 2020 YTD 2020 YTD 2020 YTD Budget Variance Change from 2019 Revised Approved $ in 000's Actual Actual Actual $ % $ % 2020 YTD Actuals to YTD 2020 Budget Budget Revised Budget Revenues: Movement Area 59,656 61,289 54,693 63,160 63,160 (8,466) -13.4% (6,596) -10.8% Apron Area 8,209 9,883 9,575 10,618 10,618 (1,043) -9.8% (308) -3.1% Terminal Rents 83,956 100,229 77,111 103,711 103,711 (26,601) -25.6% (23,118) -23.1% Aero Rate Base Revenues Federal Inspection Services (FIS) 6,641 7,271 14,621 8,946 8,946 5,676 63.4% 7,351 101.1% ($30M) lower, driven by Total Rate Base Revenues 158,462 178,672 156,000 186,435 186,435 (30,434) -16.3% (22,672) -12.7% lower airline activity due to Commercial Area 5,072 5,569 7,720 8,048 8,048 (328) -4.1% 2,151 38.6% COVID19 impact that started Subtotal before Revenue Sharing 163,534 184,241 163,720 194,483 194,483 (30,763) -15.8% (20,521) -11.1% in March Revenue Sharing (15,964) (8,314) 1 - - 1 0.0% 8,315 100.0% Total Aeronautical Revenues 147,570 175,927 163,722 194,483 194,483 (30,762) -15.8% (12,206) -6.9% Aero Expenses $7.3M favorable to revised budget Total Aeronautical Expenses 112,401 118,910 108,286 115,573 121,288 7,288 6.3% (10,625) -8.9% due to lower spending in Net Operating Income 35,169 57,017 55,436 78,910 73,195 (23,474) -29.7% (1,581) -2.8% Outside Services, ERL, and lower allocations from other divisions YTD Aeronautical NOI continues lower due to COVID19 impact 41 Aeronautical Business YE Fav (UnFav) Incr (Decr) 2020 Forecast to 2020 Revised 2018 2019 2020 2020 2020 Budget Variance Change from 2019 Revised Approved Budget $ in 000's Actual Actual Forecast $ % $ % Budget Budget Revenue - $88M unfavorable Revenues: Movement Area 116,703 123,436 84,217 132,128 132,128 (47,911) -36.3% (39,218) -31.8% Rate based revenue lowerdriven Apron Area 15,627 22,016 9,837 22,011 22,011 (12,175) -55.3% (12,180) -55.3% by lower forecasted revenue Terminal Rents 169,318 205,283 161,140 212,943 212,943 (51,803) -24.3% (44,143) -21.5% Federal Inspection Services (FIS) requirement based on the CARES 16,226 12,321 25,685 18,162 18,162 7,523 41.4% 13,364 108.5% Total Rate Base Revenues 317,874 363,057 280,879 385,245 385,245 (104,366) -27.1% (82,177) -22.6% grant reducing costs 41.1% Commercial Area 10,257 11,687 16,493 16,097 16,097 396 2.5% 4,806 Subtotal before Revenue Sharing 328,131 374,744 297,373 401,342 401,342 (103,969) -25.9% (77,371) -20.6% Expenses $215K favorable Revenue Sharing (36,863) (17,146) - - - - 0.0% 17,146 100.0% Driven by cost reductions in Other Prior Year Revenues - - - - - - - - Total Aeronautical Revenues Outside Services and charges from 291,268 357,598 297,373 401,342 401,342 (103,969) -25.9% (60,225) -16.8% other divisions (driven by COVID Total Aeronautical Expenses 236,630 238,349 231,295 235,196 248,799 3,901 1.7% (7,054) -3.0% 19 impact), and ERL expense Net Operating Income 54,638 119,249 66,078 166,147 152,544 (100,068) -60.2% (53,171) -44.6% reductions Debt Service (1) (91,673) (110,945) (58,762) (121,410) (121,410) 62,647 51.6% 52,182 47.0% Net Cash Flow (37,035) 8,305 7,316 44,737 31,134 (37,421) 83.6% (989) 11.9% Lower Aero Revenues driven by 61% in enplanement forecast and other airline activity 42 Aero Cost Drivers 2020 Forecast to 2020 Budget O&M $18M lower primarily driven by two 2020 2020 2020 main factors: Aero Revenue Aero Revenue COVID budget cost reductions Requirements Requirements Budget Vs Forecast Additional forecasted savings from $ in 000's Budget Forecast additional contract savings and O&M $ 242,981 $ 224,628 $ 18,353 added vacancies Debt Service Gross $ 174,455 $ 169,890 $ 4,565 Debt Service Gross $5M lower due to Debt Service PFC Offset $ (62,998) $ (26,412) $ (36,587) deferring 2008 VRBD principal payment Debt Service Coverage $ - PFC Offset $36M lower due to applied PFC's reduced in Terminal, Baggage & FIS - adding CARES Grant Payroll $ (37,086) $ 37,086 $36M back to rate base CARES Grant Debt Service $ (77,992) $ 77,992 TSA Grant Other - $2.7M O&M Offset for Amortization $ 32,326 $ 32,493 $ (167) TSA Reimbursable Checkpoint Janitorial Space Vacancy $ (490) $ (914) $ 424 Increase TSA Operating Grant and Other $ (1,028) $ (3,727) $ 2,699 CARES Grant Aero Portion: Rate Base Revenues $ 385,246 $ 280,879 $ 104,366 Payroll Impact (O&M) Removing Commercial area $ 16,097 $ 16,493 $ (396) $37.1M from Rate Base Total Aero Revenues $ 401,343 $ 297,373 $ 103,970 Debt Service Impact - Removing $77.9M from Rate Base Aero rate base revenues based on cost recovery formulas 43 Non-Aeronautical Business YTD Fav (UnFav) Incr (Decr) 2020 YTD Actuals to YTD Prior Year 2019 YTD 2020 YTD 2020 YTD 2020 YTD Budget Variance Change from 2019 Non-Aero Revenue: Revised Approved $ in 000's Actual Actual $ % $ % Budget Budget Dramatic impact to Non-Aero Revenue Non-Aero Revenues from COVID-19 became evident Rental Cars - Operations 15,560 7,591 7,376 15,593 216 2.9% (7,969) -51.2% beginning in March. A significant Rental Cars - Operating CFC 4,505 - - 4,452 - N/A (4,505) -100.0% percentage of the tenants which Public Parking 40,401 20,002 18,747 44,159 1,255 6.7% (20,399) -50.5% temporarily closed operations in March Ground Transportation 9,979 4,374 4,576 10,751 (202) -4.4% (5,605) -56.2% & April, began to reopen in late Q2. In Airport Dining & Retail 29,581 13,856 12,019 30,617 1,837 15.3% (15,726) -53.2% general, most Non-Aero lines of Non-Airline Terminal Leased Space 3,108 3,063 2,729 2,791 334 12.2% (45) -1.5% business are performing slightly better Commercial Properties 7,072 5,777 5,658 7,978 119 2.1% (1,295) -18.3% than the decline in passengers, with Utilities 3,665 2,758 4,415 4,415 (1,657) -37.5% (907) -24.7% Employee Parking 5,193 4,678 3,348 5,049 1,330 39.7% (515) -9.9% Non-Aero Revenue 48.5% lower than Clubs and Lounges 4,456 1,714 1,714 4,950 (0) 0.0% (2,741) -61.5% prior year when passenger volume is Other 1,085 411 545 1,109 (134) -24.5% (674) -62.1% down 54.2%. Total Non-Aero Revenues 124,604 64,225 61,128 131,864 3,097 5.1% (60,380) -48.5% Total Non-Aero Expenses 57,316 55,094 56,818 63,479 1,724 3.0% (2,222) -3.9% 2020 YTD Actuals to YTD Revised Budget Net Operating Income 67,288 9,131 4,310 68,385 4,821 111.9% (58,158) -86.4% Non-Aero Revenue: YTD Non-Aero Revenue is 5.1% favorable to YTD Revised Budget despite lower actual enplanements than expected when the budget was revised in April. YTD Revenues slightly improved compared to Revised Budget 44 Non-Aeronautical Business YE Fav (UnFav) Incr (Decr) 2020 Forecast to 2019 Actuals 2018 2019 2020 2020 2020 Budget Variance Change from 2019 Revised Approved $ in 000's Actual Actual Forecast $ % $ % Non-Aero Revenue: Budget Budget Non-Aero Revenues All Non-Aero lines of business Rental Cars - Operations 37,306 36,793 15,100 19,209 37,363 (4,109) -21.4% (21,693) -59.0% impacted by COVID-19. Rental Cars - Operating CFC 16,263 15,773 - - 13,786 - N/A (15,773) -100.0% Public Parking 80,212 82,125 33,500 40,813 89,485 (7,313) -17.9% (48,625) -59.2% Extraordinary circumstances Ground Transportation 18,772 20,765 8,200 11,092 22,299 (2,892) -26.1% (12,565) -60.5% language in many Non-Aero Airport Dining & Retail 59,021 61,615 24,600 27,753 66,145 (3,153) -11.4% (37,015) -60.1% concession agreements (tied to Non-Airline Terminal Leased Space 5,302 6,398 5,600 5,152 5,700 448 8.7% (798) -12.5% reduction in passenger volume) Commercial Properties 15,434 15,773 10,900 11,854 16,660 (954) -8.1% (4,873) -30.9% Utilities 7,206 7,431 5,663 8,831 8,831 (3,168) -35.9% (1,768) -23.8% provides contractual relief of Employee Parking 10,269 10,438 7,700 5,100 10,137 2,600 51.0% (2,738) -26.2% minimum annual guaranteed Clubs and Lounges 6,802 10,274 3,400 4,441 10,536 (1,041) -23.4% (6,874) -66.9% rent. Other 1,119 1,653 785 829 2,225 (44) -5.3% (868) -52.5% Total Non-Aero Revenues 257,707 269,037 115,448 135,074 283,167 (19,625) -14.5% (153,589) -57.1% Revenue forecast is based on 61% Total Non-Aero Expenses 82,219 118,286 111,352 113,631 128,508 2,279 2.0% (6,934) -5.9% decline in passenger volume Net Operating Income 175,488 150,752 4,097 21,443 154,660 (17,346) -80.9% (146,655) -97.3% scenario compared to prior year. Less: CFC (Surplus) / Deficit (1) (7,724) (6,834) - (4,128) (4,128) 4,128 100.0% 6,834 100.0% Adjusted Non-Aero NOI 167,764 143,917 4,097 17,315 150,531 (13,218) -76.3% (139,821) -97.2% Non-Aero Expenses: Debt Service (1) (44,545) (49,299) (30,824) (50,064) (30,824) 19,240 38.4% 18,475 37.5% Net Cash Flow 123,219 94,619 (26,727) (32,749) 119,707 6,022 -18.4% (121,346) -128.2% Lower planned spending reflects cost cutting measures in response to COVID-19. Forecasted Non-Aero Revenue is based on 61% decline in passengers 45 SAMP Overview YTD Summary Fav (Unfav) Inc (Decr) 2018 YTD 2019 YTD 2020 Year-to-Date 2020 Budget Variance Change from 2019 $ in 000's Actual Actual Actual Budget $ % $ % SAMP Completion & Transition to Env Review 161 99 74 100 26 26.4% (25) -25.6% Adv Planning IDIQ - Master Plan 1,296 1,895 1,844 1,150 (694) -60.4% (51) -2.7% Environmental Review - Master Plan 0 127 395 790 395 50.1% 267 209.7% SAMP Utilities Master Plan 0 540 651 920 269 29.3% 111 20.5% Total SAMP-Related Spending 1,457 2,661 2,963 2,960 (3) -0.1% 302 11.3% Fav (Unfav) Inc (Decr) YEAR END 2018 2019 2020 2020 Budget Variance Change from 2019 $ in 000's Actual Actual Forecast Budget $ % $ % SAMP Completion & Transition to Env Review 462 148 100 150 50 33.3% (48) -32.4% Adv Planning IDIQ - Master Plan 3,905 2,448 2,300 2,300 0 0.0% (148) -6.0% Environmental Review - Master Plan 521 866 1,100 1,100 0 0.0% 234 27.0% SAMP Utilities Master Plan 459 1,358 1,700 1,760 60 3.4% 342 25.2% Total SAMP-Related Spending 5,347 4,820 5,200 5,310 110 2.1% 380 7.9% 46 Public Parking YTD Public Parking - Revenue Detail Fav (UnFav) Incr (Decr) YTD 2020 Actuals vs. 2019 Actuals 2019 YTD 2020 YTD 2020 Year-to-Date Budget Variance Change from 2019 $ in 000's Actual A Budget Actual R Budget $ % $ % General Garage Parking Garage Parking Garage Revenue to Port parking activity decline tracking General Parking/Terminal Direct 36,200 40,109 16,522 16,300 222 1.4% (19,678) -54.4% marginally better than passenger Prebooking - - 823 - 823 N/A 823 N/A volume decline. Revenue to Port - General Parking 36,200 40,109 17,345 16,300 1,045 6.4% (18,855) -52.1% Other Garage Revenue Prebooking Prebooking program Premier Corporate Parking 697 667 363 684 (321) -46.9% (333) -47.9% utilization has increased with widget Passport Parking Program 1,751 1,749 1,594 1,019 575 56.4% (157) -9.0% addition to website. Revenue to Port - Parking Programs 2,448 2,416 1,957 1,703 254 14.9% (491) -20.1% Total Parking Garage Revenue 38,648 42,525 19,302 18,003 1,299 7.2% (19,346) -50.1% Premier Corporate Negatively Other Parking Revenue impacted by Employee Parking NEPL Concession Rent - Doug Fox off-site parking 1,723 1,608 679 734 (56) -7.6% (1,044) -60.6% customers being allowed to park in All Other Parking Revenue 31 26 21 9 12 124.7% (10) -31.5% the garage and have less need to Total Parking Revenue 40,401 44,159 20,002 18,747 1,255 6.7% (20,399) -50.5% pay a premium for Premier Parking Transactions by duration Fav / (UnFav) Incr / (Decr) 2019 YTD 2020 YTD 2020 Year-to-Date Budget Variance Change from 2019 Corporate. in 000's Actual A Budget Actual Budget # % # % Passport Majority of customers Total Enplanements 12,079 12,485 5,559 5,300 260 4.9% (6,520) -54.0% are airport tenants and billings at O&D % 70.2% 71.0% 66.0% 71.0% -5.0% -7.0% -4.2% -6.0% the beginning of the month. O&D Enplanements 8,480 8,864 3,669 3,763 (94) -2.5% (4,810) -56.7% Revenue per O&D Enplanement Metrics Passport expected to be less Public Parking $ 4.27 $ 4.52 $ 4.73 $ 4.33 $ 0.40 9.1% $ 0.46 10.7% sensitive to passenger fluctuations. Premier Corporate Parking $ 0.08 $ 0.08 $ 0.10 $ 0.18 $ (0.08) -45.6% $ 0.02 20.5% Doug Fox Customer preference Passport Parking Program $ 0.21 $ 0.20 $ 0.43 $ 0.27 $ 0.16 60.4% $ 0.23 110.3% Total Garage Revenue per O&D Enplanement $ 4.56 $ 4.80 $ 5.26 $ 4.78 $ 0.48 10.0% $ 0.70 15.4% for in-close parking, while off-site Concession Rent - Doug Fox off-site parking $ 0.20 $ 0.18 $ 0.18 $ 0.20 $ (0.01) -5.2% $ (0.02) -9.0% parking impacted more by All Other Parking Revenue $ 0.00 $ 0.00 $ 0.01 $ 0.00 $ 0.00 130.4% $ 0.00 58.4% passenger decline. Total Parking per O&D Enplanement $ 4.76 $ 4.98 $ 5.45 $ 4.98 $ 0.47 9.4% $ 0.69 14.4% Broad and severe impact to Landside revenue from COVID-19 47 Public Parking YE Forecast Public Parking - Revenue Detail Fav (UnFav) Incr (Decr) 2020 Forecast vs. 2019 Actuals 2019 2020 2020 2020 Budget Variance Change from 2019 $ in 000's Actual A Budget Forecast R Budget $ % $ % COVID-19 impacts to Parking Parking Garage Revenue to Port Revenue expected to be severe General Parking/Terminal Direct 73,562 81,300 28,530 36,050 (7,520) -20.9% (43,943) -60.6% through year-end. Prebooking 217 - 1,340 640 700 109.4% 1,340 N/A Revenue to Port - General Parking 73,779 81,300 29,870 36,690 (6,820) -18.6% (42,603) -58.8% Other Garage Revenue General Garage Parking Premier Corporate Parking 1,415 1,360 540 820 (280) -34.1% (685) -55.9% revenue impact from COVID-19 Passport Parking Program 3,582 3,570 1,810 1,720 90 5.2% (1,409) -43.8% expected to be aligned with Revenue to Port - Parking Programs 4,997 4,930 2,350 2,540 (190) -7.5% (2,094) -47.1% decline in 2020 enplanements. Total Parking Garage Revenue 78,776 86,230 32,220 39,230 (7,010) -17.9% (44,697) -58.1% Other Parking Revenue Prebooking Program demand Concession Rent - Doug Fox off-site parking 3,292 3,200 1,230 1,560 (330) -21.2% (2,008) -62.0% for Prebooking parking program All Other Parking Revenue 56 55 18 23 (5) -21.7% (38) -67.9% expected to be similarly Total Parking Revenue 82,125 89,485 33,468 40,813 (7,345) -18.0% (46,744) -58.3% impacted. Parking Transactions by duration Fav / (UnFav) Incr / (Decr) 2019 2020 2020 2020 Budget Variance Change from 2019 Premier Corporate & Passport in 000's Actual A Budget Forecast R Budget # % # % parking programs recovery is Total Enplanements 25,875 26,667 10,172 12,777 (2,605) -20.4% (14,722) -59.1% limited by uncertainty in O&D % 70.2% 71.0% 66.0% 71.0% -5.0% -7.0% -5.2% -7.3% demand. O&D Enplanements 18,164 18,933 6,714 9,072 (2,358) -26.0% (11,011) -62.1% Revenue per O&D Enplanement Metrics Doug Fox Revenue Public Parking $ 4.06 $ 4.29 $ 4.45 $ 4.04 $ 0.40 10.0% $ 0.36 8.8% performance expected to be Premier Corporate Parking $ 0.08 $ 0.07 $ 0.08 $ 0.09 $ (0.01) -11.0% $ 0.01 16.3% slightly worse than decline in Passport Parking Program $ 0.20 $ 0.19 $ 0.27 $ 0.19 $ 0.08 42.2% $ 0.09 48.4% enplanements. Total Garage Revenue per O&D Enplanement $ 4.34 $ 4.55 $ 4.80 $ 4.32 $ 0.47 11.0% $ 0.46 10.6% Concession Rent - Doug Fox off-site parking $ 0.18 $ 0.17 $ 0.18 $ 0.17 $ 0.01 6.5% $ 0.00 0.3% All Other Parking Revenue $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 5.7% $ (0.00) -15.2% Total Parking per O&D Enplanement $ 4.52 $ 4.73 $ 4.99 $ 4.50 $ 0.49 10.8% $ 0.46 10.2% Broad and severe impact to Landside revenue from COVID-19 48 Rental Cars YTD Rental Car - Revenue Detail Fav / (UnFav) Incr / (Decr) YTD 2020 Actuals vs. 2019 2019 YTD 2020 YTD 2020 Year-to-Date Budget Variance Change from 2019 Actuals $ in 000's Actual A Budget Actual R Budget $ % $ % Total Enplanements 9,626 9,958 5,014 4,889 125 2.6% (4,612) -47.9% Concession Revenue O&D % 70.2% 71.0% 66.0% 71.0% -5.0% -7.0% -4.2% -6.0% Customer preference during O&D Enplanements 6,757 7,070 3,309 3,471 (162) -4.7% (3,448) -51.0% COVID-19 precautions have Gross Sales by Operators 97,921 98,997 50,040 49,506 534 1.1% (47,881) -48.9% been away from shared Total Transactions 507 505 244 238 6 2.4% (262) -51.8% vehicle type transportation Average Ticket $193.27 $196.03 $204.84 $207.58 ($2.74) -1.3% $11.57 6.0% Average Length of Stay 4.16 4.24 4.47 4.24 0.23 5.5% 0.31 7.5% and towards self-parking or Transactions/O&D Enplanements 7.50% 7.14% 7.38% 6.87% 0.51% 7.4% -0.12% -1.5% rental cars. Revenue metrics CFC Revenue Summary have skewed positively on a Total Transaction Days 2,108 2,143 1,093 1,012 82 8.1% (1,015) -48.1% fraction of prior year CFC Rate per Transaction Day $6.00 $6.00 $6.00 $6.00 $0.00 0.0% $0.00 0.0% passengers. CFC Revenue Earned 12,650 12,858 6,559 6,069 490 8.1% (6,091) -48.1% Other CFC Collections (442) - (174) (4) (170) 4250.8% 268 -60.6% Total CFC Revenue 12,208 12,858 6,385 6,065 320 5.3% (5,823) -47.7% CFC Operating Revenue Debt Service Reserve Requirement (9,741) (9,965) (6,385) (6,065) (320) 5.3% 3,356 -34.5% YTD and projected CFC Residual - CFC Operating Revenue 2,467 2,893 - - - N/A (2,467) -100.0% collections are below the Rental Car - Revenue Summary Fav / (UnFav) Incr / (Decr) 2019 YTD 2020 YTD 2020 Year-to-Date Budget Variance Change from 2019 2020 Rental Car debt service $ in 000's Actual A Budget Actual R Budget $ % $ % requirement, therefore no RCF Concession Revenue to Port 9,841 9,900 5,139 4,951 189 3.8% (4,701) -47.8% CFC Operating Revenue will Residual - CFC Operating Revenue: 2,467 2,893 - - - N/A (2,467) -100.0% be recognized in 2020. Land Rent/Space Rent/Other 1,606 1,322 1,655 1,610 45 2.8% 49 3.0% Total Rental Cars Operating Revenue 13,914 14,115 6,794 6,560 234 3.6% (7,120) -51.2% Broad and severe impact to Landside revenue from COVID-19 49 Rental Cars YE Forecast Rental Car - Revenue Detail Fav / (UnFav) Incr / (Decr) 2020 Forecast vs. 2019 Actuals 2019 2020 2020 2020 Budget Variance Change from 2019 $ in 000's Actual A Budget Forecast R Budget $ % $ % Total Enplanements 25,874 26,667 10,172 12,777 (2,605) -20.4% (15,702) -60.7% Concession Revenue Overall O&D % 71.1% 71.0% 66.0% 71.0% -5.0% -7.0% -5.1% -7.2% COVID-19 impacts on Rental O&D Enplanements 18,396 18,933 6,714 9,072 (2,358) -26.0% (11,683) -63.5% Gross Sales by Operators 328,156 335,405 112,800 153,455 (40,655) -26.5% (215,356) -65.6% Cars follows enplanements, Total Transactions 1,414 1,369 480 653 (173) -26.5% (934) -66.1% with some reductions in pricing Average Ticket $232.06 $ 245.00 $ 235.00 $ 235.00 $0.00 0.0% $2.94 1.3% power. Average Length of Stay 4.49 4.59 4.50 4.50 - 0.0% 0.01 0.1% Transactions/O&D Enplanements 7.69% 7.23% 7.15% 7.20% -0.05% -0.7% -0.54% -7.0% CFC Revenue Summary CFC Operating Revenue Total Transaction Days 6,356 6,284 2,160 2,939 (779) -26.5% (4,196) -66.0% projected CFC collections are CFC Rate per Transaction Day $6.00 $6.00 $6.00 $6.00 $0.00 0.0% $0.00 0.0% below the 2020 Rental Car debt CFC Revenue Earned 38,137 37,700 12,960 17,630 (4,670) -26.5% (25,177) -66.0% service requirement, therefore Other CFC Collections (9) 0 - - - N/A 9 -100.0% Total CFC Revenue 38,128 37,700 12,960 17,630 (4,670) -26.5% (25,168) -66.0% no CFC Operating Revenue will Debt Service Reserve Requirement (23,655) (23,914) (23,914) (23,914) - 0.0% (258) 1.1% be recognized in 2020. CARES Reserve Fund Release (bond maturation) 1,300 - - - - N/A - N/A Act grant is anticipated to fill Net Debt Service (22,355) (23,914) (23,914) (23,914) - 0.0% (2,112) 9.7% the gap in debt service as a Residual - CFC Operating Revenue 15,773 13,786 - - - N/A (15,773) -100.0% non-operating inflow. Rental Car - Revenue Summary Fav / (UnFav) Incr / (Decr) 2019 2020 2020 2020 Budget Variance Change from 2019 $ in 000's Actual A Budget Forecast R Budget $ % $ % RCF Concession Revenue to Port 32,870 33,500 11,280 15,346 (4,066) -26.5% (22,194) -66.3% Residual - CFC Operating Revenue: 15,773 13,786 - - - N/A (16,263) -100.0% Land Rent/Space Rent/Other 3,924 3,863 3,863 3,863 - 0.0% 30 0.8% Total Rental Cars Operating Revenue 52,567 51,149 15,143 19,209 (4,066) -21.2% (38,426) -71.7% Broad and severe impact to Landside revenue from COVID-19 50 Ground Transportation YTD Revenue to Port Fav (UnFav) Incr (Decr) 2020 Forecast vs. 2019 Actuals 2019 YTD 2020 YTD 2020 Year-to-Date Budget Variance Change from 2019 $ in 000's Actual A Budget Actual R Budget $ % $ % Ground Transportation operators are Ground Transportation Revenues experiencing COVID-19 impacts Transportation Network Companies 5,997 7,057 2,765 2,941 (176) -6.0% (3,232) -53.9% unevenly. Operators that were On Demand Taxis 1,856 1,614 632 657 (25) -3.8% (1,224) -65.9% growing were more resilient to falling On Demand Limos 403 382 259 238 22 9.1% (144) -35.7% passenger activity than operators Belled In Taxis (Annual Permit) 27 23 12 12 - 0.0% (15) -55.3% that were already in decline. Pre-Arranged Limos (Annual Permit) 350 331 95 107 (11) -10.5% (254) -72.7% Courtesy Cars (cost recovery) 986 981 493 446 47 10.5% (493) -50.0% All other Operators (cost recovery) 208 214 46 78 (32) -40.8% (161) -77.7% TNC trips declined -54% YOY, tracking Other Misc Revenues 153 149 71 98 (27) -27.1% (82) -53.6% closely with -54% change in O&D Total GT Revenue 9,979 10,751 4,374 4,576 (202) -4.4% (5,605) -56.2% enplanements. Trip Activity Fav / (UnFav) Incr / (Decr) 2019 YTD 2020 YTD 2020 Year-to-Date Budget Variance Change from 2019 in 000's Actual A Budget Actual R Budget # % # % On Demand Taxis trips have declined Ground Transportation Trips an additional -12% over O&D Transportation Network Companies 999 1,176 461 490 (29) -6.0% (539) -53.9% enplanements declines. The original On Demand Taxis 309 269 106 110 (4) -3.4% (204) -65.8% 2020 budget assumed a -10% trend On Demand Limos 34 18 12 12 0 0.3% (23) -65.9% above enplanement changes. Belled In Taxis (Annual Permit) 8 7 1 1 (0) -3.1% (6) -82.1% Pre-Arranged Limos (Annual Permit) 34 166 63 64 (1) -2.1% 28 82.3% Courtesy Cars (cost recovery) 594 613 305 293 12 4.0% (289) -48.7% All other Operators (cost recovery) 55 37 10 10 (0) -0.4% (44) -81.0% Total GT Trip Activity 2,034 2,286 958 981 (23) -2.3% (1,076) -52.9% Broad and severe impact to Landside revenue from COVID-19 51 Ground Transportation YE Forecast Ground Transportation - Revenue Detail Fav (UnFav) Incr (Decr) 2020 Forecast vs. 2019 Actuals 2019 2020 2020 2020 Budget Variance Change from 2019 COVID-19 impacts to Ground $ in 000's Actual A Budget Forecast R Budget $ % $ % Transportation Revenue expected Ground Transportation Revenues to be severe through year-end. Transportation Network Companies 12,982 14,794 5,203 7,492 (2,289) -30.6% (7,780) -59.9% On Demand Taxis 3,578 3,321 1,228 1,504 (276) -18.4% (2,350) -65.7% Ground Transportation operators On Demand Limos 837 837 370 411 (41) -9.9% (466) -55.7% Belled In Taxis (Annual Permit) 27 24 15 12 3 25.0% (12) -45.4% trip forecast is generally expected Pre-Arranged Limos (Annual Permit) 611 581 206 278 (72) -25.9% (405) -66.3% to align with the overall decline in Courtesy Cars (cost recovery) 2,019 1,984 915 951 (36) -3.7% (1,103) -54.7% passenger volume. Individual All other Operators (cost recovery) 418 466 149 250 (101) -40.2% (269) -64.3% operator categories will be closely Other Misc Revenues 293 294 119 194 (75) -38.9% (175) -59.6% monitored in the coming months Total GT Revenue 20,765 22,299 8,205 11,092 (2,887) -26.0% (12,560) -60.5% for diverging trends between GT Trip Activity Fav / (UnFav) Incr / (Decr) operators and other modes of 2019 2020 2020 2020 Budget Variance Change from 2019 transportation. in 000's Actual A Budget Forecast R Budget # % # % Ground Transportation Trips TNC trips began the year better Transportation Network Companies 2,172 1,929 867 864 3 0.3% (1,305) -60.1% than enplanement performance On Demand Taxis 616 696 205 207 (2) -1.0% (411) -66.8% On Demand Limos 65 67 20 22 (2) -9.9% (46) -70.0% and dipped below in COVID-19 Belled In Taxis (Annual Permit) 13 18 4 3 1 25.0% (9) -70.5% affected months. Forecast reflects Pre-Arranged Limos (Annual Permit) 65 344 90 122 (31) -25.9% 25 38.4% the recent trend of declines. Courtesy Cars (cost recovery) 1,236 1,160 537 558 (21) -3.7% (699) -56.6% All other Operators (cost recovery) 74 57 13 22 (8) -37.7% (60) -81.8% Total GT Trip Activity 4,240 4,271 1,735 1,796 (61) -3.4% (2,505) -59.1% Broad and severe impact to Landside revenue from COVID-19 52 Airport Dining & Retail YTD Fav / (Unfav) Budget Incr / (Decr) from YTD 2020 Actuals vs. 2019 Actuals YTD Airport Dining & Retail 2019 YTD 2020 YTD 2020 Year-to-Date Variance Prior Year COVID-19 impacts to Airport Dining & Subclass Basis (in 000's) Actual A Budget Actual R Budget $ % $ % Retail began being felt in early ADR Revenue March, with severe impact through Food & Beverage 12,266 13,132 5,047 4,511 535 11.9% (7,219) -58.9% Q2. Retail 7,717 7,950 3,090 2,989 102 3.4% (4,626) -60.0% Duty Free 3,263 3,198 1,263 996 268 26.9% (1,999) -61.3% Tenant Sales Activity Unfavorable Personal Services 1,982 1,785 992 972 19 2.0% (990) -50.0% results are widespread in all Advertising 3,502 3,614 2,691 1,690 1,001 59.3% (811) -23.1% categories due to the dramatic Space Rental - Terminal 660 684 632 663 (31) -4.7% (28) -4.2% decline in passenger volumes related All other revenue 193 254 140 198 (58) -29.2% (53) -27.4% to COVID-19. Total ADR Revenue 29,581 30,617 13,856 12,019 1,837 15.3% (15,726) -53.2% Units Closed & Operations Curtailed Sales per Enplanement ADR units began reopening in the SPE - Food & Beverage $ 7.63 $ 7.96 $ 7.63 $ 6.66 $ 0.96 14.5% $ (0.00) 0.0% latter part of Q2, currently 58 out of SPE - Retail Sales $ 4.03 $ 4.05 $ 3.88 $ 3.31 $ 0.57 17.3% $ (0.15) -3.7% 72 F&B and Retail units are open, but SPE - Duty Free $ 0.77 $ 0.79 $ 0.59 $ 0.64 $ (0.05) -7.8% $ (0.18) -22.9% many open units have reduced SPE - Personal Services $ 0.83 $ 0.86 $ 0.61 $ 0.65 $ (0.04) -5.9% $ (0.22) -26.5% operating hours. SPE - Airport Dining & Retail $ 13.26 $ 13.67 $ 12.71 $ 11.26 $ 1.45 12.8% $ (0.55) -4.1% Sales per Enplanement (SPE) The decline in SPE was not as deep as we anticipated with actual SPE exceeding the revised budget by $1.45 Broad and severe impact from COVID-19 on ADR revenue 53 Airport Dining & Retail YE Forecast Fav / (Unfav) Budget Incr / (Decr) from 2020 Forecast vs. 2019 Actuals 2020 Airport Dining & Retail 2019 2020 2020 2020 Variance Prior Year COVID-19 impacts to ADR Revenue Subclass Basis (in 000's) Actual A Budget Forecast R Budget $ % $ % ADR Revenue expected to be severe through year- Food & Beverage 26,436 28,077 8,708 10,371 (1,663) -16.0% (17,728) -67.1% end. Retail 16,313 17,398 5,853 8,496 (2,643) -31.1% (10,460) -64.1% Duty Free 6,189 6,709 1,917 2,173 (255) -11.8% (4,272) -69.0% Revenue Forecast reflects both a Personal Services 3,847 3,966 1,519 1,900 (381) -20.1% (2,328) -60.5% decline in passenger traffic and a Advertising 7,326 8,103 5,048 4,176 872 20.9% (2,278) -31.1% decrease in sales per enplanement Space Rental - Terminal 1,298 1,371 1,269 1,349 (80) -5.9% (29) -2.2% (SPE). All other revenue 328 520 265 464 (200) -43.0% (63) -19.3% Total ADR Revenue 59,022 66,145 24,580 27,753 (3,173) -11.4% (34,442) -58.4% Construction on new units has been Sales per Enplanement restarting but unit openings have SPE - Food & Beverage $ 7.56 $ 7.97 $ 7.09 $ 6.58 $ 0.51 7.8% $ (0.47) -6.2% been delayed into Q4 and 2021. SPE - Retail Sales $ 3.99 $ 4.15 $ 3.81 $ 3.62 $ 0.19 5.3% $ (0.18) -4.6% SPE - Duty Free $ 0.77 $ 0.78 $ 0.58 $ 0.60 $ (0.02) -3.0% $ (0.19) -24.9% SPE - Personal Services $ 0.80 $ 0.84 $ 0.66 $ 0.65 $ 0.00 0.7% $ (0.14) -17.6% SPE - Airport Dining & Retail $ 13.12 $ 13.73 $ 12.14 $ 11.45 $ 0.69 6.0% $ (0.98) -7.5% Broad and severe impact from COVID-19 on ADR revenue 54 Commercial Properties YTD & YE Forecast Fav / (Unfav) Incr / (Decr) from 2020 Forecast vs. 2019 Actuals Commercial Properties (3630) 2019 YTD 2020 YTD 2020 Year to Date Budget Variance Prior Year COVID-19 impacts to Non-Aero Subclass Basis (in 000's) Actual A Budget Actuals R Budget $ % $ % Commercial Properties revenue Revenue is primarily limited to In-Flight In-Flight Kitchen Revenue 4,408 4,653 2,323 2,190 133 6.1% (2,085) -47.3% Kitchen concession activity. Land/Space Rents 2,408 3,047 3,177 3,191 (15) -0.5% 769 31.9% All Other Commercial Properties Revenue 256 277 277 277 0 0.0% 21 8.3% Non-Aero Commercial Properties Revenue: 7,072 7,978 5,777 5,658 119 2.1% (1,295) -18.3% In-Flight Meal Revenue forecast is closely aligned with decline in Fav / (Unfav) Incr / (Decr) from passenger volumes, but the Commercial Properties (3630) 2019 2020 2020 Bdgt Variance 2018 impact was delayed. Subclass Basis (in 000's) Actual A Budget FCST R Budget $ % $ % Revenue In-Flight Kitchen Revenue 10,053 9,974 4,123 5,106 (983) -19.3% (5,930) -59.0% Land/Space Rent revenues are Land/Space Rents 4,658 6,120 6,221 6,120 100 1.6% 1,562 33.5% primarily fixed rates per sq.ft., All Other Commercial Properties Revenue 1,061 566 576 628 (52) -8.3% (485) -45.7% and are therefore relatively Non-Aero Commercial Properties Revenue: 15,773 16,660 10,920 11,854 (935) -7.9% (4,853) -30.8% unaffected by COVID-19 impacts Land Rent stable, but In-Flight Kitchen revenue negatively impacted by COVID-19 55 2020 Capital Expenditures 2020 2020 2020 Fcst/Rvsd Budget (1) Delays and complications related to the pedestrian walkway have pushed work to the right. Updated schedule slides the YTD Year-End Revised IAF substantial completion date 6 months to the right and the pedestrian walkway into Q1 2021 Actual Forecast Approved $ % $ in 000's Budget (2) Increase due to added construction costs associated with work pulled forward (Operation Silver Cloud) that would have International Arrivals Facility (1) 99,340 185,340 215,000 29,660 13.8% been performed in 2021, plus processing a significant amount of construction change orders for work already executed. NS NSAT Renov NSTS Lobbies (2) 75,290 156,246 134,528 (21,718) -16.1% (3) MII Rejection at the beginning of the year led to uncertainty whether the project would be rebid, so the spending was Checked Bag Recap/Optimization (3) 7,178 19,748 14,500 (5,248) -36.2% pushed out of the baseline. Now the contract has been executed and spending will be accelerated. AFLD Pvmnt Program 2016-2020 (4) 5,123 17,781 13,133 (4,648) -35.4% Restroom Upgrades Conc B, C, D (5) 6,011 8,428 5,400 (3,028) -56.1% (4) Construction is expedited to take advantage of downturn in air traffic operation, and tranfer of scope from 2025 Pavement Improvement program Remote Aircraft Deicing (6) 812 8,673 15,058 6,385 42.4% (5) COVID impacts and change order cost in Phase 2 for unforseen conditions increased the expenditures for 2020 SSAT HVAC Infrastructure Upgrade (7) 7,668 17,628 14,950 (2,678) -17.9% N. Terminals Utilities Upgrade (8) 2,043 8,538 10,600 2,062 19.5% (6) New estimate has significant reduction as a result of value engineering, and bid came in lower than engineering estimate Service Tunnel Renewal/Replace (9) 3,011 4,270 5,529 1,258 22.8% (7) Accelerated work due to more available space because of low volume of passengers Checkpoint 1 Relocation (10) 289 989 1,884 895 47.5% (8) Phase 2 delayed PLB Renew & Replace Phase 2 (11) 280 2,969 5,654 2,685 47.5% (9) Project savings (12) - 14,900 13,734 (1,166) -8.5% (10) 2020 Plan based on a 'HOT' project, but then requested to be 'slowed', due to COVID-19 Highline School Insulation (11) Delayed work, moved 2 bridge installs until next year Safedock Upgrade & Expansion (13) 302 615 6,209 5,594 90.1% (12) Commission directed acceleration of the sound insulation projects in Q1 2020. Highline insulation is funded by 67% All Other 28,387 92,066 111,212 19,147 17.2% AIP grants, 16% tax levy, and 17% airport funds. Subtotal 235,734 538,189 567,391 29,201 5.1% (13) Favorable bid CIP Cashflow Mgmt Reserve (14) - (36,084) (72,000) (35,916) 49.9% (14) Reduced the negative amount to $36,084(original was $72,000) as much of the underspending for the year was Total Spending 235,734 501,490 489,182 (12,309) -2.5% included in the cash flow updates as of Q2. Forecast spending variances primarily due to COVID-19 impact 56 Airport Development Fund Balance Airport Development Fund Balance in 000's ADF Ending Balance Target NOTES: 350,000 ADF target is set as $314.4M 300,000 which is 10 months of O&M based on 2020 approved 250,000 budget $173.13M of CARES act 200,000 grants assumed in the forecast 150,000 ADF ending balance is 100,000 forecasted to be $290.2M. Higher than expected because of $85.3M back funding and 50,000 $6.2M O&M savings - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Actual Actual Actual Actual Actual Actual Forecast Forecast Forecast Forecast Forecast Forecast 57 CARES Act Grant Claiming to Date $74.7M Employment Grant Condition First reimbursement received on 7/20 for Q2 Debt Service Airport must maintain 90% employment through Dec 31 Full Time Equivalents (FTEs) Full Time Equivalents (FTEs) $0 Baseline As of 3/27/2020 06/30/2020 Change Full-Time 1,069.8 1,069.0 (0.8) Part-Time 36.8 38.4 1.6 Total 1,106.6 1,107.4 0.9 90% Test 995.9 996.7 Variance 110.7 110.7 $192 $ in millions 58 Maritime Division Appendix Q2 2020 Financial Performance Report Maritime 2020 Financial Forecast Summary Fav (UnFav) Incr (Decr) 2018 2019 2020 2020 2020 Fcst vs. Revised Change from 2019 Revenue Variance from Revised Budget Revised Approved Budget Variance Cruise cancelled full year vs. a few $ in 000's Actual Actual Forecast Budget Budget $ % $ % Ship Canal Fishing & Operations 3,502 3,929 4,324 4,264 4,264 61 1% 396 10% sailings later in the season. Elliott Bay Fishing & Commercial Operations 6,755 6,095 5,483 5,123 5,123 360 7% (613) -10% Maritime Portfolio Management Recreational Boating 12,035 12,484 12,964 13,361 13,361 (397) -3% 480 4% Cruise 18,880 22,410 4,261 5,909 26,261 (1,647) -28% (18,148) -81% anticipating some additional COVID -19 Grain 5,167 4,266 3,740 3,490 3,490 249 7% (527) -12% Maritime Portfolio Management 11,305 10,108 9,622 10,428 10,428 (806) -8% (485) -5% related vacancies once payments resume. Other (69) (3) 11 11 11 (0) 0% 14 -462% Other variances based on YTD results. Total Revenue 57,575 59,289 40,405 42,585 62,938 (2,180) -5% (18,884) -32% Expenses Maritime (Excl. Maint) 11,326 13,789 15,688 16,408 16,881 720 4% 1,900 14% Expense Variance from Revised Budget Economic Development 4,347 4,987 5,626 5,626 5,756 0 0% 639 13% Total Direct 15,673 18,776 21,315 22,035 22,637 720 3% 2,539 14% Direct No Port Valet expenses Jul-Oct. Maintenance Expenses 11,416 12,186 12,426 12,426 13,073 0 0% 240 2% Support services - Higher Envir Services & Planning 1,553 2,250 2,345 2,295 2,681 (50) -2% 95 4% Expense/Capital ratio. Seaport Project Management 295 175 480 330 356 (150) -45% 305 175% Total Support Services 13,265 14,611 15,251 15,051 16,110 (200) -1% 640 4% Central services deeper reductions in IT 2,558 2,685 2,868 2,895 2,906 27 1% 182 7% External Relations and Police. Police Expenses 4,041 4,086 3,226 3,368 3,382 142 4% (860) -21% External Relations 1,379 1,564 1,118 1,501 1,635 383 26% (446) -29% Other Central Services 6,117 6,645 7,000 6,974 7,481 (26) 0% 355 5% Aviation Division / Other 220 278 368 368 245 0 0% 90 32% Total Central Services / Other 14,315 15,258 14,580 15,106 15,650 526 3% (678) -4% Total Expense 43,252 48,644 51,145 52,191 54,396 1,046 2% 2,501 5% NOI Before Depreciation 14,323 10,644 (10,740) (9,606) 8,541 (1,134) -12% (21,385) -201% Depreciation 18,022 17,627 17,249 17,249 17,244 0 0% (378) -2% NOI After Depreciation (3,699) (6,982) (27,989) (26,855) (8,703) (1,134) -4% (21,006) -301% 60 Maritime 2020 YTD Financial Summary Fav (UnFav) Incr (Decr) 2018 YTD 2019 YTD 2020 YTD 2020 YTD 2020 YTD Fcst vs. Revised Change from 2019 Revised Approved Budget Variance $ in 000's Actual Actual Actual Budget Budget $ % $ % Ship Canal Fishing & Operations 1,610 2,004 2,182 2,122 2,122 61 3% 178 9% Elliott Bay Fishing & Commercial Operations 3,012 3,067 2,908 2,548 2,548 360 14% (158) -5% Recreational Boating 6,068 6,228 6,211 6,607 6,607 (397) -6% (17) 0% Cruise 6,806 8,473 133 49 10,300 84 173% (8,340) -98% Grain 3,123 2,567 2,005 1,756 1,756 249 14% (562) -22% Maritime Portfolio Management 5,628 5,019 4,884 5,127 5,127 (243) -5% (135) -3% Other 11 10 15 5 5 9 173% 5 45% Total Revenue 26,257 27,368 18,338 18,214 28,465 124 1% (9,030) -33% Expenses Maritime (Excl. Maint) 5,852 5,745 6,869 8,301 8,506 1,432 17% 1,124 20% Economic Development 2,351 2,369 2,325 2,920 2,996 595 20% (44) -2% Total Direct 8,202 8,114 9,194 11,220 11,502 2,026 18% 1,080 13% Maintenance Expenses 5,576 5,521 4,879 6,438 6,635 1,559 24% (642) -12% Envir Services & Planning 502 1,055 1,226 1,162 1,296 (65) -6% 172 16% Seaport Project Management 160 130 188 163 178 (26) -16% 58 45% Total Support Services 6,238 6,705 6,294 7,762 8,109 1,469 19% (412) -6% IT 1,367 1,320 1,393 1,424 1,428 30 2% 74 6% Police Expenses 2,169 1,988 1,569 1,689 1,698 119 7% (418) -21% External Relations 628 751 615 748 812 134 18% (136) -18% Other Central Services 3,007 3,298 3,109 3,441 3,680 332 10% (189) -6% Aviation Division / Other 105 135 137 157 117 20 13% 2 2% Total Central Services / Other 7,276 7,491 6,823 7,458 7,735 635 9% (667) -9% Total Expense 21,716 22,310 22,311 26,441 27,347 4,130 16% 1 0% NOI Before Depreciation 4,541 5,058 (3,973) (8,227) 1,119 4,254 52% (9,031) -179% Depreciation 8,823 8,911 8,781 8,651 8,649 (130) -2% (130) -1% NOI After Depreciation (4,281) (3,853) (12,754) (16,878) (7,530) 4,124 24% (8,901) -231% 61 Cruise Q2 Financials Fav (UnFav) Incr (Decr) Variance from Budget 2019 YTD 2020 YTD 2020 YTD 2020 YTD Fcst vs. Revised Change from 2019 Revised Approved Budget Variance Revenue $84K higher due to utility sales $ in 000's Actual Actual Budget Budget $ % $ % and misc. revenue at T91 and P66 T-91 & Bell St Cruise Operations (5455 & 5446) 8,455 118 34 10,286 84 243% (8,337) -99% Promotional and marketing expenses Bell Street Vessel Operations (5448) 18 15 14 14 1 4% (4) -20% ~$175K less than revised budget in Q2 Total Revenue 8,473 133 49 10,300 84 173% (8,340) -98% Expenses Maritime (Excl. Maint) 998 2,067 2,472 2,783 405 16% 1,069 107% Variance from 2019 Economic Development 208 198 217 234 20 9% (11) -5% Revenue $8.3M lower at T91 and P66 Total Direct 1,206 2,265 2,690 3,018 424 16% 1,059 88% due to no cruise calls in 2020 Maintenance Expenses 1,584 1,156 1,399 1,470 243 17% (428) -27% ~$1M NWSA lease payment in 2020 Envir Services & Planning 256 193 266 306 73 27% (63) -25% Seaport Project Management 52 46 51 56 5 10% (6) -12% COVID-19 Impact to 2020 Total Support Services 1,892 1,395 1,717 1,833 321 19% (496) -26% Revenue significantly impacted due to IT 312 342 357 357 15 4% 31 10% no 2020 cruise season Police Expenses 588 483 519 522 37 7% (105) -18% Reduction in travel expenses and Port External Relations 222 190 278 298 88 32% (32) -14% Valet to mitigate revenue impacts Other Central Services 991 961 1,038 1,112 76 7% (30) -3% Aviation Division / Other 47 51 56 43 5 9% 4 9% Total Central Services / Other 2,159 2,027 2,248 2,332 221 10% (132) -6% Total Expense 5,257 5,687 6,654 7,183 967 15% 431 8% NOI Before Depreciation 3,216 (5,555) (6,605) 3,117 1,051 -16% (8,771) 273% Depreciation 3,211 3,056 2,950 2,950 (106) -4% (156) -5% NOI After Depreciation 5 (8,610) (9,555) 168 945 10% (8,615) 178493% 62 Recreational Boating Q2 Financials Fav (UnFav) Revised Inc (Dec) 2019 2020 Year-to-Date Variance from Revised Budget Budget Variance Change from 2019 Revisde Revenue $397K lower due to lower occupancy $ in 000's Actual Actual Budget $ % $ % as we expected at SBM and BHM partially Berthage and Moorage & Concession Services 5,684 5,700 6,068 (368) -6% 16 0% related to COVID-19 business disruptions as Utility Sales Revenue 264 285 266 18 7% 20 8% well as processing delays Other Service Revenue 222 196 217 (21) -10% (25) -11% Other 58 30 56 (26) -46% (27) -48% Operation expenses ~$569K favorable to the Total Revenue 6,228 6,211 6,607 (397) -6% (17) 0% revised budgeted in YTD contributed by $339K Expenses favorable in Maritime direct charges, $135K Maritime (excl Maint) 2,027 2,166 2,472 306 12% 139 7% favorable in Central Services due to lower Economic Development 113 116 149 33 22% 3 3% Total Direct 2,140 2,282 2,621 339 13% 142 7% allocation, and $95K favorable in Support Maintenance Expenses 1,064 1,028 1,158 129 11% (35) -3% Service Envir Services & Planning 192 191 184 (7) -4% (0) 0% Seaport Project Management 32 59 31 (27) -87% 26 82% Variance from 2019 Total Suport Service 1,288 1,278 1,374 95 7% (9) -1% Revenue $17K lower due to 11% lower IT 348 369 378 9 2% 21 6% occupancy from 2019 Police Expenses 455 346 372 26 7% (109) -24% Operation expenses ~$66K decrease in 2020 External Relations 172 135 150 15 10% (37) -21% Other Central Services 751 678 759 81 11% (72) -10% due to $199K decrease in Central Services, and Aviation Division/Other 30 28 32 4 14% (2) -6% offset by $139K increase in Maritime Total Central Services/Other 1,755 1,556 1,691 135 8% (199) -11% (excluding Maintenance) expenses Total Expense 5,183 5,117 5,686 569 10% (66) -1% NOI Before Depreciation 1,045 1,094 922 (172) -19% 49 5% COVID-19 Impact to 2020 Depreciation 1,378 1,375 1,461 87 6% (3) 0% NOI After Depreciation (333) (281) (540) 259 -48% 53 -16% Revenue will be reduced due to event cancellations and potentially reduced demand Includes Shilshole Bay Marina, Bell Harbor Marina, and Harbor Island Marina. for slips 63 Ship Canal Fishing & Ops Q2 Financials Fav (UnFav) Revised Inc (Dec) 2019 2020 Year-to-Date Variance from Budget Budget Variance Change from 2019 Revisde Revenue $61K higher than the revised budget $ in 000's Actual Actual Budget $ % $ % primarily due to Ballard Lock closures by the US Berthage and Moorage & Concession Services 1,750 1,935 1,837 97 5% 185 11% Army Corps Engineers (February - April) Space Rental 119 120 147 (28) -19% 0 0% Utility Sales Revenue 50 56 51 5 10% 6 12% Operation expenses ~$812K favorable to the revised Other 85 72 86 (14) -16% (13) -15% budgeted YTD contributed by $511K favorable in Total Revenue 2,004 2,182 2,122 61 3% 178 9% Maritime direct charges, $231K favorable in Support Expenses Maritime (excl Maint) 1,227 1,107 1,612 505 31% (120) -10% Services, and $90K favorable in Central Services due Economic Development 20 27 33 6 18% 8 39% to lower allocation Total Direct 1,246 1,134 1,646 511 31% (112) -9% Maintenance Expenses 679 812 1,029 217 21% 132 19% Variance from 2019 Envir Services & Planning 100 98 110 13 11% (3) -3% Seaport Project Management 10 23 24 1 6% 13 127% Revenue $178K or 9% higher due to 5% rate increase Total Suport Service 789 932 1,163 231 20% 143 18% in 2020 and a better performance in moorage related IT 165 169 174 5 3% 5 3% to Ballard Lock closures from Feb to April Police Expenses 195 135 146 10 7% (60) -31% Operation expenses ~$109K decrease in 2020 related External Relations 74 53 59 6 10% (20) -28% Other Central Services 325 263 310 48 15% (63) -19% to $139K decrease in Central Services allocation, Aviation Division/Other 10 9 11 2 14% (1) -11% $120K decrease in Maritime direct charges. Offset Total Central Services/Other 769 630 699 70 10% (139) -18% by $132K increase in Maintenance expenses Total Expense 2,805 2,696 3,508 812 23% (109) -4% NOI Before Depreciation (800) (513) (1,386) 873 -63% 287 -36% Depreciation 1,089 1,154 1,071 (83) -8% 65 6% COVID-19 Impact to 2020 NOI After Depreciation (1,889) (1,667) (2,457) 790 -32% 222 -12% Expense projects either delayed or cancelled Includes Fishermen's Terminal, Maritime Industrial Center, and Salmon Bay Marina. 64 Elliott Bay Fishing & Commercial Ops Q2 Financials Fav (UnFav) Revised Inc (Dec) 2019 2020 Year-to-Date Variance from Budget Budget Variance Change from 2019 Revisde Revenue $360K or 14% higher due to new agreement $ in 000's Actual Actual Budget $ % $ % with Golden Alaska Seafood and increase in moorage Berthage and Moorage & Dockage 1,771 1,651 1,252 398 32% (121) -7% demand at T91 related to Ballard Locks closure Space Rental 856 792 886 (94) -11% (64) -8% Utility Sales Revenue 242 277 254 24 9% 36 15% Operation expenses ~$171K favorable to the budgeted Other 197 188 156 32 20% (9) -5% YTD Total Revenue 3,067 2,908 2,548 360 14% (158) -5% Expenses Variance from 2019 Maritime (excl Maint) 1,202 1,228 1,427 199 14% 26 2% Economic Development 49 74 86 12 13% 25 51% Revenue $158K or 5% lower primarily due to 680' Ocean Total Direct 1,251 1,302 1,513 211 14% 51 4% phoenix left in Q3 2019 and replaced by new lease Maintenance Expenses 516 599 784 185 24% 83 16% agreement with 305' Golden Alaska in 2020, as well as Envir Services & Planning 79 414 115 (299) -260% 336 427% 2019 had project related moorage, like EBM floats and Seaport Project Management 8 24 17 (6) -36% 16 208% Pacific Legacy. Total Suport Service 603 1,037 917 (120) -13% 434 72% Operation expenses ~$623K increase in 2020 IT 133 182 185 3 2% 49 37% Police Expenses 180 190 205 14 7% 10 6% contributed by mis-coded Derelict Vessels project External Relations 68 74 82 8 10% 6 8% expense from Ship Canal to Elliott Bay Fishing as well Other Central Services 307 377 430 52 12% 70 23% as higher allocation expenses from Central Services. Aviation Division/Other 9 13 15 2 15% 3 35% Total Central Services/Other 698 836 916 80 9% 138 20% Total Expense 2,552 3,175 3,345 171 5% 623 24% COVID-19 Impact to 2020 NOI Before Depreciation 515 (266) (797) 531 -67% (781) -152% Terminal 91 getting more dockage requests than normal Depreciation 1,671 1,666 1,653 (13) -1% (6) 0% Expense projects either delayed or cancelled NOI After Depreciation (1,157) (1,932) (2,450) 518 -21% (775) 67% Includes Terminal 91 (waterside non-Cruise), Terminal 46 Docks, Kellogg Island, Terminal 25, Terminal 18 Dolphins, Pier 69 Vessels, Pier 28 Docks, Pier 34 Dolphins, Pier 2 Docks, and Terminal 108 Moorage. 65 Maritime Portfolio Management Q2 Financials Fav (UnFav) Revised Incr/(Decr) Variance from Revised Budget 2019 YTD 2020 Year-to-Date Budget Variance Change from 2019 Revenue $243K unfavorable to revised $ in 000's Actual Actual Budget $ % $ % budget due to lower than anticipated Marina Office & Retail 1,814 1,838 1,950 (112) -6% 25 1% Maritime Industrial 2,019 2,055 1,942 113 6% 36 2% utility sales and concession rents Utilities 1,187 991 1,235 (244) -20% (196) -16% partially offset by higher than anticipated Total Revenue 5,019 4,884 5,127 (243) -5% (135) -3% space rental revenue mainly from Lineage PM Direct 1,704 1,540 2,088 548 36% (164) -10% Expenses $1,262K lower than revised EDD PM Direct 158 152 172 20 13% (6) -4% budget due to favorable utilities and EDD Other 98 189 148 (41) -22% 91 92% maintenance expenses. MD Direct 208 245 222 (23) -9% 36 17% Total Direct 2,169 2,126 2,630 504 24% (43) -2% Maintenance Expenses 1,451 1,094 1,733 638 58% (357) -25% Variance from 2019 Enviromental & Sustainability 166 122 153 32 26% (45) -27% Overall revenue relatively flat. Seaport Project Management 19 29 29 (1) -3% 11 58% Expenses down $636K or 12% due to Total Support Services 1,636 1,245 1,915 669 54% (391) -24% lower than prior year utilities and Police Expenses 431 324 349 25 8% (106) -25% maintenance expense. Other Corp Expenses 1,213 1,118 1,182 64 6% (95) -8% Total Central Services/Other 1,643 1,442 1,530 88 6% (201) -12% COVID -19 Impact to 2020 Total Expense 5,449 4,813 6,075 1,262 26% (636) -12% NOI Before Depreciation (430) 71 (948) 1,019 107% 501 116% Expense projects either delayed or Depreciation 1,279 1,258 1,245 (13) -1% (21) -2% cancelled. NOI After Depreciation (1,709) (1,187) (2,193) 1,006 46% 522 31% Includes uplands of Shilshole Bay Marina, Terminal 91 (Industrial), Fishermen's Terminal, Maritime Industrial Center, Salmon Bay Marina, T-115, T-108, and T-106. 66 Grain Terminal Q2 Financials Fav (UnFav) Incr (Decr) Variance from Budget 2019 YTD 2020 YTD 2020 YTD 2020 YTD Fcst vs. Revised Change from 2019 Revised Approved Budget Variance Revenue on track with budget $ in 000's Actual Actual Budget Budget $ % $ % Expenses tracking lower than budget Lease Revnue 2,567 2,005 1,756 1,756 249 14% (562) -22% Total Revenue 2,567 2,005 1,756 1,756 249 14% (562) -22% due to organizational cost cutting Expenses initiatives Maritime (Excl. Maint) 86 87 95 97 8 9% 1 2% Economic Development 18 27 27 28 0 1% 9 48% Total Direct 104 114 122 126 8 7% 10 10% Variance from 2019 Revenue and volumes lower due to Maintenance Expenses 193 150 321 321 171 53% (43) -22% Envir Services & Planning 48 33 44 51 11 26% (16) -32% continued tariff issues with Asia Seaport Project Management 6 6 5 6 (1) -24% 0 2% Total Support Services 247 188 369 378 181 49% (59) -24% COVID-19 Impact to 2020 IT 56 50 51 50 1 2% (6) -11% No known direct issues on impact Police Expenses 139 91 98 98 7 7% (49) -35% External Relations 53 35 39 43 4 10% (17) -33% Other Central Services 224 174 200 214 26 13% (50) -23% Aviation Division / Other 7 6 7 5 1 19% (1) -19% Total Central Services / Othe r 479 355 394 410 39 10% (124) -26% Total Expense 830 657 886 913 228 26% (173) -21% NOI Before Depreciation 1,737 1,348 870 843 478 55% (389) -22% Depreciation 275 266 264 264 (2) -1% (9) -3% NOI After Depreciation 1,462 1,082 606 579 476 78% (380) -26% 67 Maritime Environmental Highlights Slide 1 of 2 Energy & Air Completed the second round of stakeholder engagement toward development of the 2020 Northwest Ports Clean Air Strategy Commission approval to execute two IDIQ contracts to advance energy, air and sustainability initiatives Maintained compliance with Seattle Municipal Code by completing Building Tune-Ups and Energy Benchmarking Completed the annual 2019 Maritime emissions inventory for scope 1, 2, and 3 GHG sources from port lines of business Hiring freeze exemption approved and initiated hiring for a Seattle Waterfront Clean Energy Strategic Plan project manager Permitting , Habitat, Compliance Managed 'stand-down' process for T46 Cruise EIS to get consultants to a logical stopping point Initiated Sustainable Evaluation Framework review for Tier 3 projects at FT and T91 Completed all permitting tasks for Terminal 117 Habitat Restoration and Public Shoreline Access project Worked with planning team partners to develop draft recommendations for Quiet Sound underwater noise reduction program Initiated migration of SharePoint data to new SharePoint Online platform Executed Interlocal Agreement with UW to support bio-barge research project Received Commission authorization to enter into ILAs with DNR and Ecology to support Smith Cove Blue Carbon Study Remediation Signed an Order with EPA to perform an Engineering Evaluation / Cost analysis for investigation and cleanup at T108 which was a former Chiyoda and Chevron site and a City of Seattle wastewater treatment plant site. Signed an Order with Ecology to implement a remedial investigation/feasibility study for T115 Plant 1 Executed a contract with a consultant to perform a remedial investigation for T91 sediments under an order with Ecology 68 Maritime Environmental Highlights Slide 2 of 2 Stormwater Utility Finalized over 20 Stormwater Utility Policy documents Reviewed and submitted comments on City of Seattle stormwater codes and manuals, and on the Federal multi-sector general permit revisions Presented on the Port's stormwater utility for the virtual Infrastructure Week 2020 Summit Initiated planning meetings for the Marine Stormwater Utility Strategic Plan development Presented SWU 2021 Capital plan for division review and approval Initiated ICT process to move inspection process to mobile platform Cost Recovery Awarded $7.98M (50% match is $3.99M) from Department of Ecology for Lower Duwamish Superfund Site. Recovered a total of $1,473,205 from Department of Ecology for cleanup sites. Submitted 3 grant requests totaling $5.6M from DERA, VW and TransAlta for P66 shore power. As of Q2 end, awarded $323,000 from DERA, acceptance pending negotiation. Potential $300,000 estimated cost recovery from WA Dept. of Natural Resources to cover the disposal of Fire Boat Alki Recovered over $15,000 in utility rebates for LED lighting replacements and energy efficiency improvements Awarded $6.6M (75% match is $5M)from DOE for NWSA T5 Stormwater. 69 Maritime Capital 2020 2020 2020 2020 Fcst/Rvsd Budget YTD Actual Year-End Revised New Cruise Terminal project placed $ % $ in 000's Forecast Budget on hold. Will be evaluating post- New Cruise Terminal 1,194 1,569 1,259 (310) -24.6% COVID-19 effects on cruise. FT Gateway Building 278 678 700 22 3.1% T91 Berth 6 & 8 Redev 34 183 460 277 60.2% P66 Shore Power 64 201 470 269 57.2% T117 Restoration costs moved FT Maritime Innovation Center 125 425 700 275 39.3% forward with expedited schedule from T117 Restoration 958 8,342 5,000 (3,342) -66.8% SBM Restrms/Service Bldgs Rep 5,258 8,657 9,400 743 7.9% contactor. T91 New Cruise Gangway - 20 30 10 33.3% T91 Northwest Fender 52 97 785 688 87.6% SBM Paving/Restrooms Foundation T102 HIM E Dock 7 75 110 35 31.8% SBM Paving 416 1,664 1,810 146 8.1% work completed, reducing amount of FT Docks 3,4,5 Fixed Pier Imp 527 528 510 (18) -3.5% project contingency. All Other 965 7,758 5,978 (1,780) -29.8% Subtotal 9,878 30,197 27,212 (2,985) -11.0% T91 Northwest Fender construction CIP Cashflow Mgmt Reserve - (7,500) (7,500) 0 0.0% spending delayed to Q1 2021. Total Spending 9,878 22,697 19,712 (2,985) -15.1% 70 Economic Development Division Appendix Q2 2020 Financial Performance Report EDD 2020 Yr.-End Financial Forecast Fav (UnFav) Incr (Decr) 2018 2019 2020 2020 2020 Fcst vs. Revised Change from 2019 Revenue Variance from Revised Approved Budget Variance Revised Budget $ in 000's Actual Actual Forecast Budget Budget $ % $ % Lower Parking Revenues at Revenue 9,002 8,912 8,020 8,824 9,124 (804) -9% (892) -10% Conf & Event Centers 11,703 12,239 2,496 6,833 9,985 (4,337) -63% (9,742) -80% Bell Street Garage Total Revenue 20,705 21,151 10,517 15,658 19,110 (5,141) -33% (10,634) -50% Anticipated potential Expenses Portfolio Management 3,571 3,732 3,853 3,988 4,008 135 3% 122 3% COVID related vacancies. Conf & Event Centers 9,889 10,218 2,098 6,703 8,902 4,605 69% (8,120) -79% Updated Conference and P69 Facilities Expenses 235 215 226 226 230 0 0% 11 5% Event volumes, lower than RE Dev & Planning 149 136 145 145 208 0 0% 9 6% EconDev Expenses Other 785 930 632 632 932 0 0% (298) -32% originally expected. Maintenance Expenses 3,914 3,145 3,476 3,476 3,819 0 0% 330 10% Maritime Expenses (Excl Maint) 281 253 512 512 524 0 0% 259 103% Expense Variance from Total EDD & Maritime Expenses 18,824 18,630 10,943 15,682 18,624 4,740 30% (7,687) -41% Diversity in Contracting 132 152 151 151 197 0 0% (1) -1% Revised Budget Tourism 1,408 1,337 2,342 2,842 1,536 500 18% 1,005 75% Reduction in Conference EDD Grants 838 785 810 1,110 1,110 300 27% 25 3% and Event center variable Total EDD Initiatives 2,378 2,274 3,303 4,103 2,843 800 19% 1,029 45% Environmental & Sustainability 281 344 265 260 323 (5) -2% (79) -23% expenses. Police Expenses (76) 61 222 232 233 10 4% 161 266% Other Central Services 5,466 5,732 6,302 6,752 7,223 450 7% 570 10% Aviation Division 155 114 193 193 123 0 0% 78 69% Total Central Services & Aviation 5,825 6,251 6,982 7,437 7,901 455 6% 730 12% Envir Remed Liability 0 0 0 0 0 0 NA 0 NA Total Expense 27,028 27,156 21,227 27,222 29,368 5,995 22% (5,928) -22% NOI Before Depreciation (6,323) (6,005) (10,711) (11,564) (10,258) 854 7% (4,706) -78% Depreciation 3,948 3,647 3,389 3,392 3,389 2 0% (258) -7% NOI After Depreciation (10,271) (9,651) (14,100) (14,956) (13,647) 856 6% (4,448) -46% 72 EDD 2020 YTD Financial Detail Fav (UnFav) Incr (Decr) 2018 YTD 2019 YTD 2020 YTD 2020 YTD 2020 YTD Fcst vs. Revised Change from 2019 Revised Approved Budget Variance $ in 000's Actual Actual Actual Budget Budget $ % $ % Revenue 4,577 4,421 4,119 4,295 4,475 (176) -4% (302) -7% Conf & Event Centers 5,188 5,963 1,240 2,155 3,455 (915) -42% (4,723) -79% Total Revenue 9,765 10,384 5,359 6,450 7,930 (1,091) -17% (5,025) -48% Expenses Portfolio Management 1,952 1,922 1,583 2,125 2,138 542 26% (339) -18% Conf & Event Centers 4,306 4,833 2,378 2,714 3,621 336 12% (2,455) -51% P69 Facilities Expenses 114 92 119 117 119 (2) -2% 27 30% RE Dev & Planning 74 48 91 63 103 (28) -45% 43 89% EconDev Expenses Other 473 352 488 337 487 (152) -45% 136 39% Maintenance Expenses 1,995 1,563 1,170 1,814 1,912 644 35% (393) -25% Maritime Expenses (Excl Maint) 117 106 229 257 264 28 11% 123 115% Total EDD & Maritime Expenses 9,033 8,916 6,058 7,426 8,644 1,368 18% (2,857) -32% Diversity in Contracting 37 99 50 85 100 35 41% (48) -49% Tourism 620 526 374 638 747 264 41% (152) -29% EDD Grants 28 (4) (27) 555 555 582 105% (24) 679% Total EDD Initiatives 685 621 397 1,278 1,402 881 69% (224) -36% Environmental & Sustainability 121 173 101 127 153 26 20% (72) -41% Police Expenses 81 101 108 116 117 8 7% 7 6% Other Central Services 2,558 2,819 2,760 3,430 3,574 671 20% (59) -2% Aviation Division 79 53 69 81 58 13 15% 15 29% Total Central Services & Aviation 2,839 3,147 3,037 3,755 3,902 718 19% (109) -3% Envir Remed Liability 0 0 0 0 0 0 NA 0 NA Total Expense 12,557 12,684 9,493 12,459 13,948 2,966 24% (3,191) -25% NOI Before Depreciation (2,791) (2,300) (4,134) (6,009) (6,018) 1,875 31% (1,834) -80% Depreciation 1,980 1,833 1,774 1,705 1,704 (68) -4% (59) -3% NOI After Depreciation (4,771) (4,133) (5,908) (7,715) (7,722) 1,807 23% (1,775) -43% 73 Portfolio Management Q2 Financials Fav (UnFav) Revised Incr (Decr) Variance from Revised Budget 2019 YTD 2020 Year-to-Date Budget Variance Change from 2019 Revenue unfavorable to revised budget due to Revised $ in 000's Actual Actual Budget $ % $ % Conference & Events Centers' revenue decline as a Central Harbor 3,701 3,264 3,503 (238) -7% (437) -12% result of government mandates caused by COVID -19 T-91 Uplands 705 840 776 63 8% 135 19% pandemic. Conference & Events Centers 5,963 1,240 2,155 (915) -42% (4,723) -79% Expenses lower than revised budget due to favorable Foreign Trade Zone 15 15 15 0 0% 0 NA Total Revenue 10,384 5,359 6,449 (1,090) -17% (5,025) -48% maintenance expenses and lower BHICC volumes. PM Outside Services 232 193 498 305 61% (40) -17% PM Direct 6,522 3,768 4,342 573 13% (2,754) -42% Variance from 2019 EDD Other 591 749 675 (73) -11% 158 27% Bell Harbor International Conference Center MD Direct 72 171 224 53 24% 99 138% Total Direct 7,417 4,881 5,738 858 15% (2,537) -34% (BHICC) revenue significantly declined due to Maintenance Expenses 1,561 1,170 1,813 643 35% (391) -25% COVID -19 social distancing requirements between Enviromental & Sustainability 158 85 117 31 27% (73) -46% March 13 and May 31. Closing ala carte lunch Seaport Project Management 34 58 33 (25) -75% 24 68% service and event space at WTC Seattle. Total Support Services 1,754 1,314 1,962 649 33% (440) -25% Police Expenses 101 108 116 8 7% 7 6% Expenses down from BHICC volumes. Other Corp Expenses 2,555 2,534 2,756 222 8% (21) -1% Total Central Services/Other 2,656 2,642 2,872 230 8% (14) -1% COVID -19 Impact to 2020 Total Expense 11,827 8,836 10,573 1,737 16% (2,991) -25% BHICC events cancelled or postponed to the second NOI Before Depreciation (1,443) (3,477) (4,124) 647 16% (2,034) -141% Depreciation 1,831 1,772 1,704 (68) -4% (59) -3% half of 2020. NOI After Depreciation (3,273) (5,249) (5,827) 579 10% (1,975) -60% Expense projects either delayed or cancelled. Includes non-alliance & upland real-estate at Tsubota, T-91 (General), T-86, P-69, Bell Street Garage, Smith Cove Conference Center, Bell Harbor International Conference Center, World Trade Center, Foreign Trade Zone, Pier 2, T-34, and T-102. 74 EDD Capital 2020 2020 2020 2020 Fcst/Rvsd Budget T-91 Upland Industrial YTD Actual Year-End Revised $ % $ in 000's Forecast Budget Unanticipated delays in the T91 Uplands Development 96 396 1,000 604 60.4% finalization of the design contract. P66 BHICC Interior Modernize 6,784 8,084 8,358 274 3.3% WTC HVAC Replacement 156 231 260 29 11.2% P66 HVAC Systems Upgrade 298 466 912 446 48.9% BHICC Modernization Project P66 Roof Upgrades - 60 50 (10) -20.0% expected to close out in Q3. CW Bridge Elev Modernizations 29 104 350 246 70.3% All Other 318 1,595 1,769 174 9.8% Subtotal 7,681 10,936 12,699 1,763 13.9% P66 HVAC Costs shifted to future CIP Cashflow Mgmt Reserve - (2,500) (2,000) 500 -25.0% due to delay in projected hand Total Spending 7,681 8,436 10,699 2,263 21.2% over from MM to PMG. 75 Central Services Appendix Q2 2020 Financial Performance Report Central Services Financial Highlights Core Central Support Services Police Capital Development Environment & Sustainability In 000s 160 140 120 100 80 60 40 20 - 2016 2017 2018 2019 2020 Fcst 2020 Rvsd_Bud 2020 Bud 77 Central Services Expense by Category Payroll savings due to Staff Fav (UnFav) Incr (Decr) 2018 YTD 2019 YTD 2020 YTD 2020 YTD 2020 YTD Actual vs. Revised Change from 2019 vacancies/hiring freeze. Revised Approved Budget Variance Wages favorable due to $ in 000's Actual Actual Actual Budget Budget $ % $ % lower Overtime for Police Salaries & Benefits 35,384 36,992 39,026 40,389 41,370 1,363 3.4% 2,034 5.5% Wages & Benefits 12,345 13,320 14,376 15,134 15,134 757 5.0% 1,056 7.9% due to cancellation of Payroll to Capital Projects 8,332 8,541 9,262 10,150 10,700 888 8.7% 721 8.4% cruise season and Equipment Expense 1,039 978 987 1,133 1,391 146 12.9% 9 0.9% Supplies & Stock 544 477 437 640 723 203 31.7% (39) -8.3% vacancies. Outside Services 9,498 11,914 15,580 16,521 17,844 941 5.7% 3,666 30.8% Outside Services favorable Travel & Other Employee Expenses 1,140 1,133 834 1,051 1,892 216 20.6% (298) -26.3% Insurance Expense 1,079 1,117 1,085 1,154 1,154 69 6.0% (32) -2.9% to budget due to spending Litigated Injuries & Damages (82) - - - - - 0.0% - 0.0% delays and cost reduction Other Expenses 1,079 1,836 1,433 1,718 2,013 285 16.6% (404) -22.0% Charges to Capital Projects/Overhead Alloc (12,736) (14,117) (17,244) (18,078) (18,670) (834) 4.6% (3,127) 22.1% measures. TOTAL 57,621 62,191 65,777 69,812 73,549 4,035 5.8% 3,586 5.8% Charge to Capital unfavorable to budget due to delay of some capital projects. 78 Central Service YE Financial Forecast Fav (UnFav) Incr (Decr) 2018 2019 2020 2020 2020 Fcst vs. Revised Change from 2019 Revised Approved Budget Variance $ in 000's Actual Actual Forecast Budget Budget $ % $ % Total Operating Revenues (500) 1,282 1,665 40 40 1,625 4063.2% 383 29.9% Core Central Support Services 74,419 79,276 89,449 91,594 93,604 2,145 2.3% 10,173 12.8% Police 23,908 27,793 30,012 31,312 31,444 1,300 4.2% 2,219 8.0% Capital Development 8,999 10,038 8,888 8,611 12,513 (277) -3.2% (1,150) -11.5% Environment & Sustainability 8,770 10,748 10,398 10,399 12,866 1 0.0% (350) -3.3% Total Operating Expenses 116,097 127,855 138,747 141,916 150,427 3,170 2.2% 10,892 8.5% 79 Central Services Capital Spending 2020 YTD 2020 2020 Fav (UnFav) Year-End Revised YE Fcst vs. Revised $ in 000's Actual Forecast Budget $ % Infrastructure - Small Cap 984 2,100 2,100 0 0.0% Services Tech - Small Cap 979 1,350 1,350 0 0.0% Radio System Upgrade 328 3,079 3,687 608 16.5% New Budget System 151 317 583 266 45.6% Regional Workforce Tracking - - 500 500 100.0% Learning Management System - 150 400 250 62.5% Maximo Upgrade 279 394 462 68 14.7% Phone System Upgrade 34 900 900 0 0.0% Customer Relationship Mgmt 482 1,185 1,400 215 15.4% CDD Fleet Replacement 210 1,111 1,644 533 32.4% Corporate Fleet Replacement 225 245 1,065 820 77.0% CIP Cashflow Adjustment - (2,000) (3,000) (1,000) 33.3% Other (note 1) 353 956 1,600 644 40.3% TOTAL 4,025 9,787 12,691 2,904 22.9% Note: (1) "Other" includes remaining ICT projects and small capital projects/acquisitions. 80 Portwide Appendix Q2 2020 Financial Performance Report Portwide Financial Summary Fav (UnFav) Incr (Decr) 2018 YTD 2019 YTD 2020 YTD 2020 YTD 2020 YTD Actual vs. Revised Change from 2019 Revised Approved Budget Variance $ in 000's Actual Actual Actual Budget Budget $ % $ % Aeronautical Revenues 147,570 175,927 163,722 194,483 194,483 (30,762) -15.8% (12,206) -6.9% Airport Non-Aero Revenues 118,864 124,604 64,225 61,128 131,864 3,097 5.1% (60,380) -48.5% Non-Airport Revenues 64,054 67,632 48,298 47,193 58,925 1,105 2.3% (19,334) -28.6% Total Operating Revenues 330,489 368,164 276,244 302,804 385,271 (26,560) -8.8% (91,920) -25.0% Total Operating Expenses 191,577 216,758 197,820 214,991 230,151 17,171 8.0% (18,937) -8.7% NOI before Depreciation 138,912 151,407 78,424 87,813 155,121 (9,389) -10.7% (72,983) -48.2% Depreciation 81,949 82,481 87,855 89,958 89,958 2,103 2.3% 5,374 6.5% NOI after Depreciation 56,963 68,926 (9,431) (2,145) 65,163 (7,286) 339.7% (78,357) -113.7% 82 Portwide Financial Summary YE Forecast 83 Non-Airport Financial Summary Fav (UnFav) Incr (Decr) 2018 YTD 2019 YTD 2020 YTD 2020 YTD 2020 YTD Actual vs. Revised Change from 2019 Revised Approved Budget Variance $ in 000's Actual Actual Actual Budget Budget $ % $ % NWSA Distributable Revenue 25,844 24,941 21,218 20,968 20,968 250 1.2% (3,723) -14.9% Maritime Revenues 26,257 27,368 18,338 18,214 28,465 124 0.7% (9,030) -33.0% EDD Revenues 9,765 10,384 5,359 6,450 7,930 (1,091) -16.9% (5,025) -48.4% SWU & Other 2,187 4,939 3,383 1,562 1,562 1,822 116.7% (1,556) -31.5% Total Operating Revenues 64,054 67,632 48,298 47,193 58,925 1,105 2.3% (19,334) -28.6% Total Operating Expenses 38,141 40,522 34,441 42,600 45,384 8,159 19.2% (6,082) -15.0% NOI before Depreciation 25,913 27,110 13,857 4,593 13,541 9,264 201.7% (13,252) -48.9% Depreciation 19,988 19,623 18,794 18,577 18,594 (217) -1.2% (829) -4.2% NOI after Depreciation 5,925 7,487 (4,936) (13,984) (5,053) 9,047 -64.7% (12,423) -165.9% Non-Airport Operating Revenue exceeded budget by $1.1M due to NWSA Distributable Revenues, higher Grain and Fishing & Operations revenues, and unbudgeted Police Revenues. Expenses are $8.2M lower than budget due cost savings measures which include hiring freeze, delay in implementing program initiatives, and cutting travel and other employee expenses. 84 Portwide Operating Expense Summary Fav (UnFav) Incr (Decr) 2018 YTD 2019 YTD 2020 YTD 2020 YTD 2020 YTD Actual vs. Revised Change from 2019 Revised Approved Budget Variance $ in 000's Actual Actual Actual Budget Budget $ % $ % Salaries & Benefits 62,507 66,098 71,427 72,681 74,470 1,254 1.7% 5,328 8.1% Wages & Benefits 60,073 64,034 67,147 66,281 66,028 (866) -1.3% 3,113 4.9% Payroll to Capital Projects 13,602 13,523 14,460 17,565 18,372 3,105 17.7% 937 6.9% Outside Services 38,271 43,951 45,545 54,566 60,166 9,022 16.5% 1,594 3.6% Utilities 13,453 13,103 12,104 14,975 15,159 2,871 19.2% (999) -7.6% Equipment Expense 3,866 4,481 4,211 4,217 5,021 7 0.2% (271) -6.0% Supplies & Stock 4,633 5,290 4,653 4,878 4,616 225 4.6% (637) -12.0% Travel & Other Employee Expenses 2,299 2,486 1,603 2,278 3,873 675 29.6% (883) -35.5% Third Party Mgmt Op Exp 5,273 6,494 3,228 3,507 5,542 278 7.9% (3,266) -50.3% B&O Taxes 2,181 2,226 1,716 1,874 2,380 158 8.4% (510) -22.9% Other Expenses 9,546 19,978 2,188 5,790 8,872 3,603 62.2% (17,791) -89.0% Charges to Capital Projects/Overhead Alloc (24,126) (24,908) (30,462) (33,622) (34,349) (3,160) 9.4% (5,554) 22.3% TOTAL 191,577 216,758 197,820 214,991 230,151 17,171 8.0% (18,937) -8.7% Payroll expenses were $3.5M below budget primarily due to hiring freeze offset by higher Maintenance wages and new Police contracts paying out Holiday pay in January instead of December. Outside Services were $9.0M favorable to budget due to project delays related to COVID-19 cost-reduction measures. Travel & Other Employee Expenses were $675K lower than budget due to cutting/eliminating non-essential business travel and training. Other Expenses were $3.6M lower than budget mainly due Environmental Remediation Liability adjustment, lower Promotional Expenses and Room/Space/Land Rental expenses because of cancellation of planned events, lower spending in Telecommunications, and Miscellaneous expense as part of the cost-reduction measures. 85 Portwide Operating Revenues Summary Fav (UnFav) Incr (Decr) 2018 YTD 2019 YTD 2020 YTD 2020 YTD 2020 YTD Actual vs. Revised Change from 2019 Revised Approved Budget Variance $ in 000's Actual Actual Actual Budget Budget $ % $ % Aeronautical Revenues 147,570 175,927 163,722 194,483 194,483 (30,762) -15.8% (12,206) -6.9% Public Parking 39,402 40,401 20,002 18,747 44,159 1,255 6.7% (20,399) -50.5% Rental Cars - Operations 14,922 15,560 7,591 7,376 15,593 216 2.9% (7,969) -51.2% Rental Cars - Operating CFC 5,497 4,505 - - 4,452 - 0.0% (4,505) -100.0% ADR & Terminal Leased Space 30,179 32,689 16,918 14,748 33,409 2,170 14.7% (15,771) -48.2% Ground Transportation 8,885 9,979 4,374 4,576 10,751 (202) -4.4% (5,605) -56.2% Employee Parking 5,191 5,193 4,678 3,348 5,049 1,330 39.7% (515) -9.9% Airport Commercial Properties 7,593 7,072 5,777 5,658 7,978 119 2.1% (1,295) -18.3% Airport Utilities 3,438 3,665 2,758 4,415 4,415 (1,657) -37.5% (907) -24.7% Clubs and Lounges 2,773 4,456 1,714 1,714 4,950 () 0.0% (2,741) -61.5% Cruise 6,806 8,473 133 49 10,300 84 173.2% (8,340) -98.4% Recreational Boating 6,068 6,228 6,211 6,607 6,607 (397) -6.0% (17) -0.3% Fishing & Operations 4,622 5,071 5,091 4,670 4,670 421 9.0% 20 0.4% Grain 3,123 2,567 2,005 1,756 1,756 249 14.2% (562) -21.9% Maritime Portfolio Management 5,628 5,019 4,884 5,127 5,127 (243) -4.7% (135) -2.7% Central Harbor Management 4,557 4,406 4,104 4,279 4,459 (175) -4.1% (302) -6.9% Conference & Event Centers 5,188 5,963 1,240 2,155 3,455 (915) -42.5% (4,723) -79.2% NWSA Distributable Revenue 25,844 24,941 21,218 20,968 20,968 250 1.2% (3,723) -14.9% Other 3,201 6,049 3,824 2,128 2,692 1,696 79.7% (2,225) -36.8% Total Operating Revenues (w/o Aero) 182,918 192,237 112,523 108,321 190,788 4,202 3.9% (79,714) -41.5% TOTAL 330,489 368,164 276,244 302,804 385,271 (26,560) -8.8% (91,920) -25.0% 86
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