11a Presentation Q3 Financial Performance Briefing
Item No. 11a_supp Meeting Date: November 10, 2020 Port of Seattle Q3 2020 Financial Performance Report Commission Meeting November 10, 2020 Aviation Division Financial Summary Business Highlights Revised Approved Variance Forecast Budget Budget Forecast vs No change in passenger forecast: 61% drop Figures in $000s YE 2020 YE 2020 YE 2020 Revised Budget Revenues in 2020 compared to 2019 Aeronautical 293,683 401,342 401,342 (107,660) Non-aero revenues exceeding plan tied to Non-Aeronautical 118,060 135,074 283,167 (17,014) Total 411,742 536,416 684,510 (124,673) 61% drop in passengers ($113 million) O&M expense 337,502 348,826 377,306 11,325 Refined CARES Act grant use plan, will NOI 74,241 187,589 307,203 (113,349) CARES Grant 158,901 - - 158,901 reserve $33 million of $192 million for 2021 NOI (After CARES Grant) 233,142 187,589 307,203 45,553 Debt service coverage > 1.25x Key Measures Forecasted airline deficit <$1 million Non-Aero NOI (in $000s) 8,658 21,443 154,660 (12,785) CPE ($) 25.81 13.93 13.93 (11.88) Received ACI Health Accreditation on 10/1/20 Debt Service Coverage 1.35 1.80 1.80 (0.45) Began using renewable natural gas on Other Information ADF Balance 279.7M 314.4M 314.4M (24.2M) 10/1/20 Capital Spending (in $000s) 501,720 489,182 513,131 (12,538) Presently, 83 out of 91 ADR units are open 2 Non-Aviation Performance Summary Fav (UnFav) Revised Budget 2020 2020 2020 Fcst vs. Revised Revised Approved Budget Variance Revenue below budget with $ in 000's Forecast Budget Budget $ % higher COVID19 impact to Revenues Cruise and Conference Maritime 40,629 42,585 62,938 (1,956) -5% Centers than expected in Economic Development Division 10,024 15,658 19,110 (5,633) -36% March/April Joint Venture* 36,410 40,322 40,322 (3,912) -10% Expenses favorable due to Total Revenue 87,063 98,566 122,370 (11,502) -12% variable costs and timing Expenses Maritime 50,210 52,191 54,396 1,981 4% Economic Development Division 21,890 27,222 29,368 5,332 20% Approved Budget Joint Venture 940 836 837 (104) -12% No Cruise sailings driving Total Expense 73,041 80,250 84,601 7,209 9% NOI Before Stormwater Utility 14,023 18,316 37,769 (4,294) -23% down revenue NOI excluding Stormwater Stormwater Utility Revenues 6,270 6,270 6,270 0 0% down $23.7M Stormwater Utility Expenses 4,893 5,393 5,513 500 9% Stormwater Utility NOI 1,377 877 756 500 57% Total Non-Aviation Business NOI 15,399 19,193 38,526 (3,794) -20% *Note Based on 50% of 71.4M Distributable Income Forecast from NWSA Tightened Expenses offset Revenue Reductions 3 Maritime Division Financial Summary Business Highlights Revised Approved No return to the Cruise Business in 2020. Figure in $000s Forecast Budget Budget Variance Revenues Fishing, Commercial and Recreational Marinas Fishing, Commercial, & along with Leasing revenue seeing smaller impact. Recreational Marinas 22,398 22,747 22,747 (349) Cruise 4,150 5,909 26,261 (1,758) Demand for corn and soybeans driving higher Grain Maritime Portfolio Mgmt. 9,928 10,428 10,428 (500) revenue. Grain / Other 4,152 3,501 3,501 651 Elimination of Port Valet and further cuts in Central Total 40,629 42,585 62,938 (1,956) Services. O&M Expense Direct 20,595 22,035 22,637 1,440 Support Services 15,003 15,051 16,110 48 T117 restoration advancing as planned & Shilshole Central Services and Other 14,613 15,106 15,650 493 Bay Marina service buildings to be completed by end Total 50,210 52,191 54,396 1,981 of the year. NOI (9,582) (9,606) 8,541 25 Recovered $27.4M YTD in Environmental Capital Spending 21,875 19,712 (2,163) Remediation Liability (Non-Operating Income). Marinas, Leasing Portfolio, and Grain holding, Cruise driving variance 4 Economic Development Division Financial Summary Business Highlights Figure in $000s Forecast Revised Approved Variance COVID-19 Driven Budget Budget Revenues 10,024 15,658 19,110 (5,633) Additional BHICC cancellations resulting in additional forecast O&M Expense EDD & Maritime 8,874 12,207 14,805 3,333 reductions of $5M in revenue and Maintenance 3,276 3,476 3,819 200 expense. Diversity in Contracting 151 151 197 0 Tourism 1,642 2,842 1,536 1,200 Expenses forecasted $5.3M below EDD Grants 810 1,110 1,110 300 budget from port-wide cost reductions, Central Services and Other 7,138 7,437 7,901 299 program spend timing, and variable Total 21,890 27,222 29,368 5,332 expenses. NOI (11,866) (11,564) (10,258) (302) Bell Harbor Conference Center Capital Spending 10,167 10,699 532 Modernization completed. Conference and Event Center Volumes Driving the P&L 5 Central Services Financial Summary Business Highlights Awarded ACE Fund grants to nine non-profit 2020 2020 2020 Fcst vs. Rvsd organizations. Figures in $000s Forecast Rvsd Bud Appr. Bud Variance Held Groundbreaking Ceremony for Terminal Revenues 2,462 40 40 2,422 117 Habitat Restoration/Shoreline Public Core Central Support Services 89,946 91,594 93,604 1,648 Access and Park. Police 30,118 31,312 31,444 1,194 Delivered POS 38 Cities presentation to several Capital Development 8,804 8,611 12,513 (194) Environment & Sustainability 10,473 10,399 12,866 (74) rotaries, chambers of commerce, and Sound O&M Expenses 139,341 141,916 150,427 2,575 Cities Association. Capital Spending 8,976 12,691 3,715 Implemented security changes to achieve full compliance with payment card industry (PCI). 6 Port Wide Financial Summary o Operating Revenues: $133.8M unfavorable to the revised budget and $258.2M lower than 2019. o Operating Expenses: $19.2M favorable to the revised budget and $24.2M lower than 2019. o NOI before Depreciation: $114.5M unfavorable to the revised budget and $234.0M lower than 2019. 7 Aviation Division Appendix Q3 2020 Financial Performance Report Projected Passenger Change by Month: On Track Full year 2020 forecast: decline of 61% compared to 2019 Anticipate modest uptick for holidays 9 Aviation Business Events Health & Safety: Rate of major ground incidents 15.8 vs. goal of < 18.2 Security: On track to achieve Security Master Plan milestones for 2020; Initiated mobile unpredictable screening for Airfield access points in July Employee Engagement: June pulse survey all responses 77% positive (or greater), next pulse survey planned for November Community: Noise insulation delayed by challenges obtaining subordination agreements from lenders (needed for avigation easements) Innovation: Completed 3 Shark Tanks YTD Social Responsibility: WMBE spending on non -public works at 17.9% vs. goal of 15% Customer Experience: Completed draft of long-term FlyHealthy@SEA planning document Environment & Sustainability: NPDES permit renewal application submitted Financial Sustainability: On track to achieve revised 2020 targets for debt service coverage, O&M spending, non-aero revenues and ADF-funded capital spending Asset Management and Capital/Planning: Awarded phase 2 Baggage Optimization construction contract; advertised for C1 Building A/E consultant and GC/CM contracts 10 Capital Spending Expected to Top Budget 2020 Forecast: IAF = $171M NSAT = $159M Bag Opt. = $33M Other = $139M Major 2020 Variances: IAF = $44M NSAT = ($24M) Bag Opt. ($19M) Other = ($13M) 11 Airport Activity Year-to-date Q3: Passengers -60.2% Landed weight -37.5% Cargo metric tons -1.5% Passengers are forecasted to be down by 61% due to COVID19 impact 12 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 13 Non-Aeronautical Performance Significant COVID-19 impacts to all Non- Aero lines of business became visible in starting in March: YTD 2020 vs. 2019: Passenger volume 60.2% lower YTD Revenues 56.1% lower Expenses 5.5% lower NOI 92.6% lower 2020 Revenue Forecast vs. 2019: Passenger volume forecast of 61% lower for the year Reduction in Non-Aero Revenues forecasted to be $151M or 56% lower than 2019 Actuals. COVID-19 impacts closely aligned with passenger volume changes for most Non-Aero lines of business. NOI forecasted at $142M or 94% below 2019 Actual results 14 Total Operating Expense Performance Q3 YTD vs Revised Budget: $16.5M favorable, 6.3% 2020 Forecast vs Revised Budget: $11.3M favorable, 3.2% 2020 Forecast favorable driven primarily by: Cost reductions in Outside Services, lower ERL costs due to project schedule changes, and lower Charges from Other Divisions in effort to reduce COVID-19 impact Expenses down due to forecasted Cost Savings based on enplanement forecast down 61% 15 Airport Activity % Change Passenger Activity YTD 2018 YTD 2019 YTD 2020 from 2019 Change 2020 Total Passengers (000's) Airline 2019 v. 2020 Market Domestic 33,835 34,951 14,465 -58.6% Alaska -59.0% 59.0% Delta -71.8% 20.7% International 4,215 4,372 1,174 -73.1% American -55.7% 6.0% Total 38,050 39,323 15,640 -60.2% United -70.5% 5.2% Landed Weight (In Millions of lbs.) Southwest -71.7% 5.0% Cargo 1,821 1,838 1,967 7.0% All other 21,233 21,934 12,885 -41.3% Q3 2020: Total 23,054 23,772 14,852 -37.5% Passengers Cargo - Metric Tons YTD passenger reduction of Domestic freight 179,806 184,782 253,738 37.3% 60.2% is due to impact of International freight 104,423 110,461 77,833 -29.5% COVID-19 on travel starting Mail 42,011 41,309 - -100.0% in March 2020 Total 326,240 336,552 331,571 -1.5% 2020 YTD total passenger reduction of -60.2% 16 Aviation Financial Summary Fav(UnFav) Rev. Budget Incr/(Decr) Change from Financial Summary 2018 2019 2020 2020 2020 Variance 2019 ($ in 000's) Revised Approved Actual Actual Forecast Budget Budget $ % $ % Operating Revenue Aeronautical Revenues 291,268 357,598 293,683 401,342 401,342 (107,660) -26.8% (63,915) -17.9% Non-Aeronautical Revenues 257,707 269,037 118,060 135,074 283,167 (17,014) -12.6% (150,978) -56.1% Total Operating Revenues 548,975 626,636 411,742 536,416 684,510 (124,673) -23.2% (214,893) -34.3% Total Operating Expenses 318,849 356,635 337,502 348,826 377,306 11,325 3.2% (19,133) -5.4% Net Operating Income 230,126 270,001 74,241 187,589 307,203 (113,349) -60.4% (195,760) -72.5% CPE 10.79 12.85 25.81 13.92 13.92 (11.89) (0.85) 12.95 100.8% Non-Aero NOI ($ in 000s) 149,959 150,752 8,658 21,443 154,660 (12,785) -59.6% (142,093) -94.3% Enplaned passengers (in 000s) 24,894 25,874 10,172 26,667 26,667 (16,495) -61.9% (15,702) -60.7% - Capital Expenditures (in 000s) 579,135 573,598 501,720 489,182 513,131 (12,538) -2.6% (71,878) -12.5% 2020 Forecasted NOI $113M or 60% Unfavorable to Revised Budget 17 Key Performance Measures Fav (UnFav) Incr (Decr) 2020 Forecast vs. 2020 Budget 2018 2019 2020 2020 2020 Rev. Budget Vairance Change from 2019 Key Performance Metrics Revised Approved Actual Actual Forecast $ % $ % Budget Budget CPE: Key Performance Metrics Increased by 85.5% driven by Cost per Enplanement (CPE) 10.79 12.86 25.81 13.92 13.92 (11.89) -85.5% 12.95 100.7% lower airline activity Non-Aeronautical NOI (in 000's) 149,959 150,752 8,658 21,443 154,660 (12,785) -59.6% (142,093) -94.3% assumptions impacted by COVID- Other Performance Metrics 19, and the elimination of O&M Cost per Enplanement 12.81 13.78 33.18 13.08 14.15 (20.10) -153.6% 19.40 140.7% revenue sharing starting in 2020 Non-Aero Revenue per Enplanement 10.35 10.40 11.61 5.07 10.62 6.54 129.1% 1.21 11.6% Debt per Enplanement (in $) 133 133 322 123 123 (199) -162.2% 189 142.3% per SLOA IV Debt Service Coverage 1.66 1.68 1.35 1.80 1.80 (0.45) -24.9% (0.33) -19.6% Days cash on hand (10 months = 304 days) 235 314 302 332 332 -29 -8.8% (12) -3.8% Non-Aero NOI: Aeronautical Revenue Sharing ($ in 000's) (36,863) (17,146) - - - - 0.0% 17,146 100.0% Forecasted reduction in Non- Activity (in 000's) Enplanements 24,894 25,874 10,172 26,667 26,667 (16,495) -61.9% (15,702) -60.7% Aero NOI of $142M or 94.3% compared to prior year actuals is based on the current 2020 enplanement forecast of -61% decline in passenger volumes compared to 2019, which is impacting all Non-Aero business units Negative: Non-Aero NOI below budget and CPE above budget due to COVID-19 impacts18 Aviation Expense YTD Summary Variance to 2020 Revised Inc/(Dec) from 2019 2019 2020 2020 2020 2020 YTD Actuals to YTD Total Airport Expense Summary Budget Actuals YTD YTD 2019 Actuals ($ in 000's) Revised Approved YTD Actual YTD Actual Budget Budget $ Variance % Variance $ Change % Change Expenses - $14.9M Operating Expenses lower expenses Payroll 108,751 117,090 116,610 119,153 (481) -0.4% 8,339 7.7% compared to 2019 YTD, Outside Services 42,394 43,872 52,128 58,735 8,256 15.8% 1,479 3.5% primarily driven by Utilities 14,212 11,692 16,349 16,708 4,657 28.5% (2,520) -17.7% Other Expenses 12,547 1,904 (1,205) 4,795 (3,109) 258.0% (10,644) -84.8% decreases in ERL Total Airport Direct Charges 177,904 174,559 183,882 199,391 9,324 5.1% (3,346) -1.9% expenses Environmental Remediation Liability 12,543 (2,776) 286 1,581 3,062 1070.8% (15,319) -122.1% Capital to Expense 113 32 - - (32) (81) -71.5% 2020 YTD Actuals to YTD Total Exceptions 12,656 (2,743) 286 1,581 3,029 1059.6% (15,400) -121.7% 2020 Revised Budget Total Airport Expenses 190,561 171,815 184,168 200,972 12,353 6.7% (18,745) -9.8% Expenses - $16.5M Corporate 49,716 52,791 54,804 57,752 2,012 3.7% 3,075 6.2% favorable due to Police 16,535 17,807 19,342 19,435 1,535 7.9% 1,272 7.7% Maritime/Economic Development/Other 2,956 2,457 3,098 3,391 641 20.7% (499) -16.9% underspending in Total Charges from Other Divisions 69,207 73,056 77,244 80,578 4,188 5.4% 3,849 5.6% Outside Services, ERL and charges from other Total Operating Expenses 259,767 244,871 261,412 281,549 16,541 6.3% (14,897) -5.7% divisions Underspending in Q3 driven by COVID19 impact that started in March19 Aviation Expense YE Summary Variance to 2020 Inc/(Dec) from 2019 2018 2019 2020 2020 2020 2020 Forecast to 2020 Total Airport Expense Summary Revised Budget Actuals Revised Budget ($ in 000's) Revised Approved % Actual Actual Forecast Budget Budget $ Variance Variance $ Change % Change Expenses - $11.3M Operating Expenses favorable due to cost Payroll 133,999 147,076 155,016 156,826 160,340 1,810 1.2% 7,940 5.4% reductions in O&M, Outside Services 65,475 68,801 65,538 70,401 79,889 4,863 6.9% (3,263) -4.7% driven by COVID 19 Utilities 18,306 18,180 16,627 20,642 21,180 4,016 19.5% (1,554) -8.5% Other Expenses 3,966 12,272 2,644 (1,682) 5,224 (4,325) 257.2% (9,629) -78.5% impact Total Airport Direct Charges 221,746 246,329 239,824 246,187 266,634 6,364 2.6% (6,505) -2.6% Environmental Remediation Liability 6,233 15,900 (2,406) 878 2,648 3,284 374.0% (18,306) -115.1% 2020 Forecast to 2019 Capital to Expense 6,891 2,089 62 - - (62) (2,028) -97.1% Total Exceptions 13,124 17,989 (2,344) 878 2,648 3,222 367.0% (20,333) -113.0% Expenses - $19M Total Airport Expenses 234,870 264,318 237,480 247,065 269,282 9,586 3.9% (26,838) -10.2% lower due to cost Corporate 60,659 65,671 70,915 71,646 77,460 731 1.0% 5,244 8.0% reductions in Outside Police 19,231 22,290 25,114 26,122 26,233 1,008 3.9% 2,824 12.7% Services, ERL, and Maritime/Economic Development/Other 4,088 4,355 3,994 3,994 4,332 (0) 0.0% (362) -8.3% Other Airport Expenses Total Charges from Other Divisions 83,979 92,316 100,022 101,761 108,025 1,739 1.7% 7,706 8.3% in effort to reduce - Total Operating Expenses 318,849 356,635 337,502 348,826 377,306 11,325 3.2% (19,133) -5.4% COVID-19 impact COVID19 Impact drives the reduction in Expenses 20 Aeronautical Business YTD Variance to 2020 Revised Inc/(Dec) from 2019 2018 2019 2020 2020 2020 Aeronautical NOI Budget Actuals YTD YTD 2020 YTD Actuals to YTD 2020 ($ in 000's) Revised Approved YTD Actual YTD Actual YTD Actual Budget Budget $ Variance % Variance $ Change % Change Revised Budget Rate Base Revenues Airfield Movement Area 95,501 97,759 58,087 100,415 100,415 (42,328) -42.2% (39,672) -40.6% Airfield Apron Area 13,055 15,458 13,546 16,638 16,638 (3,091) -18.6% (1,912) -12.4% Aero Rate Base Revenues Terminal Rents 129,248 153,616 132,237 160,580 160,580 (28,343) -17.7% (21,378) -13.9% ($85M) lower, driven by Federal Inspection Services (FIS) 11,143 11,325 3,374 14,252 14,252 (10,878) -76.3% (7,950) -70.2% Total Rate Base Revenues 248,947 278,157 207,245 291,885 291,885 (84,640) -29.0% (70,912) -25.5% lower airline activity due to - COVID19 impact that started Airfield Commercial Area 7,549 8,405 12,812 12,073 12,073 739 6.1% 4,407 52.4% Subtotal before Revenue Sharing 256,496 286,563 220,057 303,958 303,958 (83,901) -27.6% (66,505) -23.2% in March Revenue Sharing (23,806) (12,561) 1 - - 1 12,562 -100.0% Aero Expenses $11.6M Total Aeronautical Revenues 232,689 274,002 220,058 303,958 303,958 (83,900) -27.6% (53,944) -19.7% - favorable to revised budget Total Aeronautical Expenses 169,735 173,836 163,655 175,286 184,360 11,631 6.6% (10,181) -5.9% due to lower spending in Aeronautical NOI 62,955 100,166 56,403 128,672 119,598 (72,269) -56.2% (43,763) -43.7% Outside Services, ERL, and lower allocations from other divisions YTD Aeronautical NOI continues lower due to COVID19 impact 21 Aeronautical Business YE Fav(UnFav) Rev. Budget Incr/(Decr) Change from Aeronautical NOI 2018 2019 2020 2020 2020 Variance 2019 2020 Forecast to 2020 Revised Budget ($ in 000's) Revised Approved Actual Actual Forecast Budget Budget $ % $ % Revenue - $108M unfavorable Rate Base Revenues Airfield Movement Area 116,703 123,436 83,775 132,128 132,128 (48,354) -36.6% (39,661) -32.1% Rate based revenue lower Airfield Apron Area 15,627 22,016 12,910 22,011 22,011 (9,101) -41.3% (9,106) -41.4% driven by lower forecasted Terminal Rents 169,318 205,283 175,540 212,943 212,943 (37,403) -17.6% (29,744) -14.5% Federal Inspection Services (FIS) 16,226 12,321 4,799 18,162 18,162 (13,364) -73.6% (7,523) -61.1% revenue requirement based Total Rate Base Revenues 317,874 363,057 277,024 385,245 385,245 (108,222) -28.1% (86,033) -23.7% on the CARES grant Airfield Commercial Area 10,257 11,687 16,659 16,097 16,097 562 3.5% 4,972 42.5% reducing costs Subtotal before Revenue Sharing 328,131 374,744 293,683 401,342 401,342 (107,660) -26.8% (81,061) -21.6% Revenue Sharing (36,863) (17,146) - - - - 17,146 -100.0% Total Aeronautical Revenues 291,268 357,598 293,683 401,342 401,342 (107,660) -26.8% (63,915) -17.9% Expenses $7.1M favorable Total Aeronautical Expenses 236,630 238,349 228,100 235,196 248,799 7,095 3.0% (10,248) -4.3% Driven by cost reductions in Aeronautical NOI 54,638 119,249 65,582 166,147 152,544 (100,564) -60.5% (53,667) -45.0% Outside Services and charges from other divisions (driven by COVID 19 impact), and ERL expense reductions Lower Aero Revenues driven by 61% in enplanement forecast and other airline activity 22 Aero Cost Drivers 2020 2020 2020 2020 Forecast to 2020 Budget Aero Revenue Aero Revenue Budget Vs O&M $22.4M lower primarily driven by Requirements Requirements two main factors: Forecast $ in 000's Budget Forecast COVID budget cost reductions O&M $ 242,981 $ 220,487 $ 22,494 Additional forecasted savings from Debt Service Gross $ 174,455 $ 167,564 $ 6,891 additional contract savings and Debt Service PFC Offset $ (62,998) $ (38,363) $ (24,635) added vacancies Debt Service Coverage $ - Debt Service Gross $6.8M lower due to CARES Grant Payroll $ (33,000) $ 33,000 deferring 2008 VRBD principal payment CARES Grant Debt Service $ (69,294) $ 69,294 PFC Offset $25M lower due to applied PFC's Amortization $ 32,326 $ 32,493 $ (167) reduced in Terminal, Baggage & FIS - adding Space Vacancy $ (490) $ (1,039) $ 549 $25M back to rate base TSA Operating Grant and Other $ (1,028) $ (1,824) $ 796 TSA Grant Other - $1.8M O&M Offset for TSA Reimbursable Checkpoint Janitorial Rate Base Revenues $ 385,246 $ 277,024 $ 108,222 Increase Commercial area $ 16,097 $ 16,659 $ (562) CARES Grant Aero Portion: Total Aero Revenues $ 401,343 $ 293,683 $ 107,660 Payroll Impact (O&M) Removing Rate Based Revenues (to be billed) 276,173 $33M from Rate Base Rate Based Revenues Requirement 277,024 Debt Service Impact - Removing $70M from Rate Base 2020 Settlement Surplus (Deficit) (850) Aero rate base revenues based on cost recovery formulas 23 Non-Aeronautical Business YTD 2020 YTD Actuals to YTD Prior Year Non-Aero Revenue: COVID-19 impacts to Non-Aero Revenue became evident in mid- Variance to 2020 Revised Inc/(Dec) from 2019 March. A significant percentage of 2018 2019 2020 2020 2020 Non-Aeronautical NOI Budget Actuals the tenants temporarily closed in YTD March & April. Some tenants began ($ in 000's) YTD Revised Approved reopening in late Q2 and nearly all YTD Actual YTD Actual YTD Actual Budget Budget $ Variance % Variance $ Change % Change were back open by late Q3. Non-Aeronautical Revenues Performance for most concession Public Parking 59,245 60,839 26,591 28,001 66,524 (1,409) -5.0% (34,248) -56.3% type Non-Aero lines of business is Rental Cars 43,433 42,277 12,318 12,125 41,978 193 1.6% (29,960) -70.9% closely aligned with passenger Ground Transportation 13,910 15,685 5,426 7,326 16,907 (1,900) -25.9% (10,259) -65.4% volumes. Airport Dining & Retail 44,353 47,541 20,063 17,931 49,382 2,132 11.9% (27,478) -57.8% Other 35,397 38,941 25,708 26,518 40,804 (810) -3.1% (13,232) -34.0% Overall Non-Aero Revenue is 56.1% Total Non-Aeronautical Revenues 196,338 205,283 90,106 91,901 215,596 (1,794) -2.0% (115,177) -56.1% lower than prior year YTD, during this period when passenger volume Total Non-Aeronautical Expenses 38,545 85,923 81,216 86,126 97,190 4,910 5.7% (4,707) -5.5% was down 60.2% YTD. Non-Aeronautical NOI 157,793 119,360 8,890 5,775 118,406 3,116 54.0% (110,470) -92.6% Less: CFC Surplus - - - - - - - 2020 YTD Actuals to Revised Budget Adjusted Non-Aeronautical NOI 157,793 119,360 8,890 5,775 118,406 3,116 54.0% (110,470) -92.6% Non-Aero Revenue: The 2020 Revised Budget was developed in April, on an enplanement forecast of -51%. The enplanement forecast was revised in May to -61%. YTD Revenues slightly better than actual decline in passenger volume 24 Non-Aero Revenue By Business Unit Total Non-Aero Revenues Non-Aero Revenues per Enplanement 300,000,000 4.50 4.00 250,000,000 3.50 200,000,000 3.00 Revenue 2.50 150,000,000 2.00 100,000,000 1.50 1.00 50,000,000 Revenue Per Enplanement 0.50 - - 2019 2020 2020 2020 2019 2020 2020 2020 Actual A Budget R Budget Forecast Actual A Budget R Budget Forecast Public Parking Rental Cars Ground Transportation Public Parking Rental Cars Ground Transportation Airport Dining & Retail Commercial Properties Other Non-Aero Airport Dining & Retail Commercial Properties Other Non-Aero Non-Aero Revenue overview: 2020 Non-Aero Revenue Forecast reflects -61% enplanement forecast Non-Aero revenue based on concession fees or transaction volume (Parking, Rental Car, GT, ADR, Clubs & Lounges, In-flight Kitchens) are closely aligned with the change in passenger volume Commercial Properties and other Non-Aero line of business with revenue from space rent for real estate leases were relatively unaffected by the COVID-19 decline in enplanements 26 Public Parking YTD YTD 2020 Actuals vs. 2019 Actuals General Garage Parking (includes prebooking program) Garage parking activity is closely aligned with decline in passenger volume. YTD decline of Public Parking - Revenue Detail Fav (UnFav) Incr (Decr) 57.8% when O&D passenger volume 2019 YTD 2020 YTD 2020 Year-to-Date Budget Variance Change from 2019 declined 62.5% reflects passenger $ in 000's Actual A Budget Actual R Budget $ % $ % preference for self-parking over other Parking Garage Revenue to Port modes of transportation. Revenue to Port - General Parking 54,669 60,424 23,050 24,871 (1,821) -7.3% (31,619) -57.8% Other Garage Revenue Premier Corporate Negatively Premier Corporate Parking 1,046 1,002 404 741 (337) -45.5% (642) -61.4% impacted by Employee Parking Passport Parking Program 2,654 2,674 2,172 1,314 858 65.3% (482) -18.2% customers being allowed to park in the Revenue to Port - Parking Programs 3,700 3,676 2,576 2,055 521 25.4% (1,123) -30.4% main garage (rather than NEPL), so Total Parking Garage Revenue 58,368 64,100 25,626 26,926 (1,300) -4.8% (32,742) -56.1% those customers had less need to pay a Other Parking Revenue premium for Premier Corporate. Concession Rent - Doug Fox off-site parking 2,422 2,379 933 1,059 (126) -11.9% (1,488) -61.5% Passport program Majority of All Other Parking Revenue 49 45 32 15 17 109.4% (17) -35.3% customers are airport tenant Total Parking Revenue 60,839 66,524 26,591 28,001 (1,409) -5.0% (34,248) -56.3% employees. Reduction is usage been relatively minor, and is expected to be less sensitive to passenger fluctuations. Doug Fox revenue decline slightly worse than decline in passengers. Reflects customer preference for close in self-parking option in garage. Broad and severe impact to Landside revenue from COVID-19 28 Public Parking YE Forecast 2020 Forecast vs. 2019 Actuals General Garage Parking (includes Public Parking - Revenue Detail Fav (UnFav) Incr (Decr) pre-booking program) Garage 2019 2020 2020 2020 FCST to R Bud Var Change from 2019 parking activity is closely aligned $ in 000's Actual A Budget R Budget Forecast $ % $ % with decline in passenger volume. Parking Garage Revenue to Port Forecast of -57.7% compared to - General Parking/Terminal Direct 73,562 81,300 36,050 28,530 (7,520) -26.4% (45,032) -61.2% 61% decline in forecasted passenger Prebooking 217 - 640 2,690 2,050 76.2% 2,473 1141.1% volume (63% decline in O&D) Revenue to Port - General Parking 73,779 81,300 36,690 31,220 (5,470) -17.5% (42,559) -57.7% reflects passenger preference for Other Garage Revenue self-parking over other modes of Premier Corporate Parking 1,415 1,360 820 470 (350) -74.5% (945) -66.8% transportation. Passport Parking Program 3,582 3,570 1,720 2,750 1,030 37.5% (832) -23.2% Revenue to Port - Parking Programs 4,997 4,930 2,540 3,220 680 21.1% (1,777) -35.6% Premier Corporate Negatively Total Parking Garage Revenue 78,776 86,230 39,230 34,440 (4,790) -13.9% (44,336) -56.3% impacted by Employee Parking Other Parking Revenue customers allowed to park in the Concession Rent - Doug Fox off-site parking 3,292 3,200 1,560 1,270 (290) -22.8% (2,022) -61.4% main garage (rather than NEPL), All Other Parking Revenue 56 55 23 18 (5) -27.8% (38) -68.1% which is likely to continue through Total Parking Revenue 82,125 89,485 40,813 35,728 (5,085) -14.2% (46,397) -56.5% year-end. Passport program Reduction is usage has been relatively minor, as significant portion of usage is from airport tenant employees. Doug Fox revenue decline expected to be closely aligned with decline in passengers. Broad and severe impact to Landside revenue from COVID-19 29 Public Parking YE Forecast Metrics Parking Revenue Metrics Fav / (UnFav) Incr / (Decr) 2019 2020 2020 2020 FCST to R Bud Var Change from 2019 in 000's Actual A Budget R Budget Forecast # % # % Total Enplanements 25,875 26,667 12,777 10,172 (2,605) -25.6% (15,703) -60.7% O&D % 70.2% 71.0% 71.0% 66.0% -5.0% -7.6% -4.2% -6.0% O&D Enplanements 18,164 18,933 9,072 6,714 (2,358) -35.1% (11,451) -63.0% Revenue per O&D Enplanement Metrics Public Parking $ 4.06 $ 4.29 $ 4.04 $ 4.65 $ 0.61 13.0% $ 0.59 14.5% Premier Corporate Parking $ 0.08 $ 0.07 $ 0.09 $ 0.07 $ (0.02) -29.1% $ (0.01) -10.1% Passport Parking Program $ 0.20 $ 0.19 $ 0.19 $ 0.41 $ 0.22 53.7% $ 0.21 107.7% Total Garage Revenue per O&D Enplanement $ 4.34 $ 4.55 $ 4.32 $ 5.13 $ 0.81 15.7% $ 0.79 18.3% Concession Rent - Doug Fox off-site parking $ 0.18 $ 0.17 $ 0.17 $ 0.19 $ 0.02 9.1% $ 0.01 4.4% All Other Parking Revenue $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 5.4% $ (0.00) -13.7% Total Parking per O&D Enplanement $ 4.52 $ 4.73 $ 4.50 $ 5.32 $ 0.82 15.5% $ 0.80 17.7% Public Parking Key Metrics - 2020 Forecast vs. 2019 Actuals: General Garage Parking (includes pre-booking) revenue per enplanement increase during COVID-19 passenger decline, indicates passenger preference for close in self-parking Premier Corporate metric decline due to both COVID impacts of fewer passengers and offsetting benefit for Employee Parking customers able to park in the main garage at no additional cost (rather than parking at NEPL and utilizing shuttle bus) Passport parking programs this program is used by some airport tenant employees who continued to utilize during COVID impacts due to preference for close in self-parking Strength of Per Passenger metrics reflects preference for close in self-parking 30 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 19,585 20,244 7,815 8,443 (627) -7.4% (11,769) -60.1% 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 13,749 14,373 5,158 5,994 (836) -14.0% (8,590) -62.5% COVID-19 precautions have Gross Sales by Operators 264,235 272,880 94,840 92,276 2,564 2.8% (169,395) -64.1% been away from shared Total Transactions 1,097 1,058 405 420 (16) -3.7% (692) -63.1% vehicle type transportation Average Ticket $240.88 $257.92 $234.22 $219.45 $14.77 6.7% ($6.65) -2.8% and towards self-parking or Average Length of Stay 4.57 4.66 4.87 4.35 0.52 11.8% 0.30 6.6% rental cars. Revenue metrics Transactions/O&D Enplanements 7.98% 7.36% 7.85% 7.01% 0.84% 11.9% -0.13% -1.6% CFC Revenue Summary reflect this preference, on a Total Transaction Days 5,010 4,935 1,972 1,831 141 7.7% (3,039) -60.6% fraction of the prior year CFC Rate per Transaction Day $6.00 $6.00 $6.00 $6.00 $0.00 0.0% $0.00 0.0% passenger volume. CFC Revenue Earned 30,061 29,610 11,830 10,983 846 7.7% (18,232) -60.6% Other CFC Collections (232) 120 - - - N/A 232 -100.0% Total CFC Revenue 29,829 29,730 11,830 10,983 846 7.7% (17,999) -60.3% CFC Operating Revenue Debt Service Reserve Requirement (17,534) (17,937) (18,115) (17,935) (180) 1.0% (581) 3.3% YTD and projected CFC Residual - CFC Operating Revenue 12,295 11,793 - - - N/A (12,295) -100.0% collections are below the Fav / (UnFav) Incr / (Decr) 2020 Rental Car debt service Rental Car - Revenue Summary 2019 YTD 2020 YTD 2020 Year-to-Date Budget Variance Change from 2019 requirement, therefore no $ in 000's Actual A Budget Actual R Budget $ % $ % CFC Operating Revenue will RCF Concession Revenue to Port 27,052 27,288 9,359 9,228 131 1.4% (17,694) -65.4% be recognized in 2020. Residual - CFC Operating Revenue: 12,295 11,793 - - - N/A (12,295) -100.0% Land Rent/Space Rent/Other 2,930 2,897 2,959 2,897 62 2.1% 29 1.0% Total Rental Cars Operating Revenue 42,277 41,978 12,318 12,125 193 1.6% (29,960) -70.9% Broad and severe impact to Landside revenue from COVID-19 31 Rental Cars YE Forecast Rental Car - Revenue Detail Fav / (UnFav) Incr / (Decr) 2020 Forecast vs. 2019 Actuals 2019 2020 2020 2020 FCST vs R Bud Var Change from 2019 $ in 000's Actual A Budget R Budget Forecast $ % $ % Rental Car Concession Revenue Total Enplanements 25,874 26,667 12,777 10,172 (2,605) -25.6% (15,702) -60.7% overall COVID-19 impacts on Rental O&D % 71.1% 71.0% 71.0% 66.0% -5.0% -7.6% -5.1% -7.2% Car concession fees follows decline in O&D Enplanements 18,396 18,933 9,072 9,072 - 0.0% (9,325) -50.7% Gross Sales by Operators 328,156 335,405 153,455 115,000 (38,455) -33.4% (213,156) -65.0% enplanements, with some additional Total Transactions 1,414 1,369 653 500 (153) -30.6% (914) -64.6% reduction in pricing power. Customer Average Ticket $232.06 $ 245.00 $ 235.00 $ 230.00 ($5.00) -2.2% ($2.06) -0.9% preference during COVID-19 has been Average Length of Stay 4.49 4.59 4.50 4.65 0.15 3.2% 0.16 3.5% away from shared vehicle Transactions/O&D Enplanements 7.69% 7.23% 7.20% 7.45% 0.25% 3.4% -0.24% -3.1% transportation options and towards CFC Revenue Summary Total Transaction Days 6,356 6,284 2,939 2,325 (614) -26.4% (4,031) -63.4% self-parking or rental cars. Revenue CFC Rate per Transaction Day $6.00 $6.00 $6.00 $6.00 $0.00 0.0% $0.00 0.0% metrics reflect this preference, on a CFC Revenue Earned 38,137 37,700 17,630 13,950 (3,680) -26.4% (24,187) -63.4% fraction of the prior year passenger Other CFC Collections (9) 0 - - - N/A 9 -100.0% volume. Total CFC Revenue 38,128 37,700 17,630 13,950 (3,680) -26.4% (24,178) -63.4% Debt Service Reserve Requirement (23,655) (23,914) (23,914) (24,153) (240) 1.0% (498) 2.1% CFC Operating Revenue projected Reserve Fund Release (bond maturation) 1,300 - - - - N/A (1,300) -100.0% CFC collections continue to be below Net Debt Service (22,355) (23,914) (23,914) (24,034) (120) 0.5% (1,678) 7.5% the 2020 Rental Car debt service Residual - CFC Operating Revenue 15,773 13,786 - - - N/A (15,773) -100.0% requirement, therefore no CFC Fav / (UnFav) Incr / (Decr) Rental Car - Revenue Summary 2019 2020 2020 2020 FCST vs R Bud Var Change from 2019 Operating Revenue will be recognized $ in 000's Actual A Budget R Budget Forecast $ % $ % in 2020. CARES Act grant is anticipated RCF Concession Revenue to Port 32,870 33,500 15,346 11,500 (3,846) -33.4% (21,370) -65.0% to fill the gap in debt service as a non- Residual - CFC Operating Revenue: 15,773 13,786 - - - N/A (15,773) -100.0% operating cash inflow. Land Rent/Space Rent/Other 3,924 3,863 3,863 3,863 - 0.0% (61) -1.5% Total Rental Cars Operating Revenue 52,567 51,149 19,209 15,363 (3,846) -25.0% (37,204) -70.8% Broad and severe impact to Landside revenue from COVID-19 32 Ground Transportation YTD Revenue Detail Fav (UnFav) Incr (Decr) YTD 2020 Actuals vs. 2019 Actuals 2019 YTD 2020 YTD 2020 Year-to-Date FCST vs R Bud Var Change from 2019 Ground Transportation YTD revenues $ in 000's Actual A Budget Actual R Budget $ % $ % have been impacted by several Ground Transportation Revenues compounding factors: Transportation Network Companies 9,587 11,282 3,373 4,854 (1,481) -30.5% (6,214) -64.8% COVID-19 declines in passenger On Demand Taxis 2,868 2,475 744 1,013 (270) -26.6% (2,125) -74.1% volumes On Demand Limos 599 563 307 311 (4) -1.2% (292) -48.8% Shift in 2020 toward more Belled In Taxis (Annual Permit) 27 24 12 12 - 0.0% (15) -56.3% connecting traffic through SEA, Pre-Arranged Limos (Annual Permit) 483 455 154 179 (24) -13.7% (329) -68.1% thus further reducing the number Courtesy Cars (cost recovery) 1,517 1,502 675 658 17 2.6% (842) -55.5% of O&D passengers seeking All other Operators (cost recovery) 361 383 79 153 (74) -48.4% (282) -78.2% Landside transportation options Other Misc Revenues 242 223 83 147 (64) -43.7% (159) -65.8% Customer preference away from Total GT Revenue 15,685 16,907 5,426 7,326 (1,900) -25.9% (10,259) -65.4% shared ride transportation options Trip Activity Fav / (UnFav) Incr / (Decr) during this pandemic. 2019 YTD 2020 YTD 2020 Year-to-Date Budget Variance Change from 2019 in 000's Actual A Budget Actual R Budget # % # % TNC trips YTD have declined 43.7%, Ground Transportation Trips during this period when O&D Transportation Network Companies 999 1,880 562 809 (247) -30.5% (437) -43.7% passengers declined by 62.5%. On Demand Taxis 309 413 124 169 (44) -26.3% (185) -59.8% On Demand Limos 34 27 12 15 (3) -20.6% (23) -65.5% Taxi trips YTD have declined 59.8%, Belled In Taxis (Annual Permit) 8 11 2 5 (4) -68.5% (6) -77.6% during this period when O&D Pre-Arranged Limos (Annual Permit) 34 263 74 103 (29) -28.3% 40 115.2% passengers declined by 62.5%. Courtesy Cars (cost recovery) 594 938 419 411 8 1.9% (175) -29.5% All other Operators (cost recovery) 55 59 13 25 (12) -47.8% (42) -76.6% Impacts to other GT operator types Total GT Trip Activity 2,034 3,591 1,206 1,537 (331) -21.6% (828) -40.7% varies Broad and severe impact to Landside revenue from COVID-19 33 Ground Transportation YE Forecast Revenue Detail Fav (UnFav) Incr (Decr) 2019 2020 2020 2020 FCST vs R Bud Var Change from 2019 2020 Forecast vs. 2019 Actuals $ in 000's Actual A Budget R Budget Forecast $ % $ % Ground Transportation Revenues Ground Transportation revenues have been Transportation Network Companies 12,982 14,794 7,492 5,016 (2,476) -49.4% (7,966) -61.4% impacted by several compounding factors: On Demand Taxis 3,578 3,321 1,504 1,043 (461) -44.2% (2,535) -70.8% COVID-19 declines in passenger On Demand Limos 837 837 411 289 (122) -42.2% (548) -65.5% volumes Belled In Taxis (Annual Permit) 27 24 12 12 - 0.0% (15) -56.3% Shift in 2020 toward more connecting Pre-Arranged Limos (Annual Permit) 611 581 278 110 (168) -153.4% (501) -82.0% traffic through SEA, thus further Courtesy Cars (cost recovery) 2,019 1,984 951 871 (80) -9.1% (1,147) -56.8% Airporters 57 71 34 26 (8) -33.2% (31) -54.9% reducing the number of O&D Charter 229 233 112 43 (69) -161.5% (187) -81.3% passengers requiring Landside Parcel Carriers 33 50 50 50 - 0.0% 17 51.3% transportation options Shared Ride vehicles 99 112 54 18 (36) -202.7% (81) -82.0% Customer preference away from All other Operators (cost recovery) 418 466 250 136 (114) -83.6% (282) -67.4% shared ride transportation options Other Misc Revenues 293 294 194 224 30 13.4% (69) -23.6% during this pandemic. Total GT Revenue 20,765 22,299 11,092 7,701 (3,391) -44.0% (13,064) -62.9% TNC trips are expected to decline by 61%, Trip Activity Fav / (UnFav) Incr / (Decr) 2019 2020 2020 2020 FCST vs R Bud Var Change from 2019 closely aligned with 63% decline in O&D in 000's Actual A Budget R Budget Forecast # % # % passengers (61% decline in total Ground Transportation Trips passengers) Transportation Network Companies 2,172 1,929 864 845 (19) -2.3% (1,327) -61.1% On Demand Taxis 616 696 207 174 (33) -18.9% (442) -71.8% Taxi trips are expected to decline more On Demand Limos 65 67 22 21 (1) -5.2% (45) -68.3% significantly, forecast of -71.8% decline on Belled In Taxis (Annual Permit) 13 18 3 3 (0) -7.8% (10) -78.1% 63% decline in O&D passengers (61% Pre-Arranged Limos (Annual Permit) 65 344 122 116 (6) -4.9% 51 78.0% Courtesy Cars (cost recovery) 1,236 1,160 558 527 (30) -5.8% (708) -57.3% decline in total passengers) All other Operators (cost recovery) 74 57 22 15 (7) -44.0% (59) -79.7% Impacts to other GT operator types varies Total GT Trip Activity 4,240 4,271 1,796 1,706 (90) -5.3% (2,534) -59.8% Broad and severe impact to Landside revenue from COVID-19 34 Airport Dining & Retail YTD YTD 2020 Actuals vs. 2019 Actuals COVID-19 impacts to Airport Dining & Retail became evident in early March, with severe impacts continuing through Q3. Tenant Sales Activity Unfavorable results are widespread in all ADR tenant categories due to the dramatic decline in passenger volumes Units Closed & Operations Curtailed a significant number of ADR units closed in March and remained closed for several months. ADR units began reopening in late-Q2, currently 91% of ADR are open, however some open units still have reduced operating hours. Broad and severe impact from COVID-19 on ADR revenue 35 Airport Dining & Retail YE Forecast 2021 Airport Dining & Retail 2019 2020 2020 2020 Fav/(UnFav) R. Inc/(Dec) PY Actuals 2020 Forecast vs. 2019 Actuals ORG Basis (in 000's) Actual Forecast R Budget A Budget $ % $ % ADR Revenue COVID-19 impacts to Airport Food & Beverage 26,314 9,057 10,371 28,077 (1,315) -12.7% (17,257) -65.6% Dining & Retail revenue has been Retail 16,313 6,147 8,496 17,398 (2,349) -27.6% (10,166) -62.3% severely and closely aligned with Duty Free 6,189 1,970 2,173 6,709 (203) -9.3% (4,219) -68.2% the reduction in passenger Personal Services 3,847 1,540 1,900 3,966 (360) -19.0% (2,307) -60.0% volumes. Recovery is expected to Advertising 7,326 5,307 4,176 8,103 1,131 27.1% (2,019) -27.6% remain closely aligned with the Space Rental 1,298 1,257 1,349 1,371 (92) -6.8% (40) -3.1% gradual return of passenger All other revenue 328 266 464 520 (198) -42.6% (62) -18.8% volumes to pre-COVID levels. Total ADR Revenue 61,615 25,545 27,753 66,145 (2,208) -8.0% (36,070) -58.5% ADR Revenue Forecast reflects a Revenue per Enplanement decline in passenger volume, and RPE - Food & Beverage $ 1.02 $ 0.89 $ 0.81 $ 1.05 $ 0.08 9.7% $ (0.13) -12.5% an additional decrease in both RPE - Retail Sales $ 0.63 $ 0.60 $ 0.66 $ 0.65 $ (0.06) -9.1% $ (0.03) -4.1% revenue per enplanement (RPE) RPE - Duty Free $ 0.24 $ 0.19 $ 0.17 $ 0.25 $ 0.02 13.9% $ (0.05) -19.0% and sales per enplanement (SPE). RPE - Personal Services $ 0.15 $ 0.15 $ 0.15 $ 0.15 $ 0.00 1.8% $ 0.00 1.8% RPE - Total ADR $ 2.04 $ 1.84 $ 1.80 $ 2.11 $ 0.04 2.5% $ (0.20) -9.6% Sales per Enplanement (SPE) has declined, but not as severely as Sales per Enplanement initially expected. SPE - Food & Beverage $ 7.56 $ 7.09 $ 6.58 $ 7.97 $ 0.51 7.8% $ (0.46) -6.2% Construction on new ADR units SPE - Retail Sales $ 3.99 $ 3.81 $ 3.62 $ 4.15 $ 0.19 5.3% $ (0.18) -4.6% SPE - Duty Free $ 0.77 $ 0.58 $ 0.60 $ 0.78 $ (0.02) -3.0% $ (0.19) -24.9% has been restarting but unit SPE - Personal Services $ 0.80 $ 0.66 $ 0.65 $ 0.84 $ 0.00 0.7% $ (0.14) -17.6% openings have been delayed from SPE - Total ADR $ 13.12 $ 12.14 $ 11.45 $ 13.73 $ 0.69 6.0% $ (0.98) -7.5% 2020 into 2021. Broad and severe impact from COVID-19 on ADR revenue 36 Commercial Properties YTD & YE Forecast YTD Version through 20Q3 2019 YTD 2020 YTD 2020 YTD 2020 YTD Fav/(UnFav) Rev. Inc/(Dec) from Prior 2020 Forecast vs. 2019 Actuals Revenue Summary (in $000s) Budget Variance Year Actuals COVID-19 impacts to Non-Aero Org(s): 3630-Non-Aero Commercial Revised Approved Commercial Properties revenue is Properties, Class: Top Level Actual Actual Budget Budget $ Var % Var $ Change % Change primarily limited to In-Flight Kitchen concession revenue. Operating Revenue Land / Space Rentals 3,770 4,699 4,687 4,584 13 0.3% 929 24.7% In-Flight Kitchen Revenue is closely In-Flight Kitchen Revenue 7,237 3,075 3,416 7,582 (341) -10.0% (4,162) -57.5% aligned with the decline in All Other Revenues 437 420 420 420 0 0.0% (17) -3.9% Total Operating Revenues 11,444 8,194 8,523 12,586 (328) -3.9% (3,250) -28.4% passenger volumes, however the full impact slightly lagged the initial Fav/(UnFav) Rev. Inc/(Dec) from Prior decline in passenger volumes. 2019 2020 2020 2020 Revenue Summary (in $000s) Budget Variance Year Actuals Revenue recovery in this tenant Org(s): 3630-Non-Aero Commercial Revised Approved category is expected to follow the Properties, Class: Top Level Actual Forecast Budget Budget $ Var % Var $ Change % Change gradual return in passenger volumes. Operating Revenue Land Rental 4,658 5,274 5,385 5,731 (111) -2.1% 615 13.2% Land/Space Rent revenues are Space Rental 464 960 797 390 163 20.4% 496 107.0% primarily fixed rates per sq.ft., and In-Flight Kitchen Revenue 10,053 4,179 5,106 9,974 (927) -18.2% (5,874) -58.4% are therefore relatively unaffected Other Service Revenues 548 566 566 566 (0) 0.0% 18 3.2% by COVID-19 impacts Operating Grant Revenues 49 0 0 0 0.0% (49) -100.0% Total Operating Revenues 15,773 10,979 11,854 16,660 (876) -7.4% (4,794) -30.4% Land Rent stable, but In-Flight Kitchen revenue negatively impacted by COVID-19 37 Clubs & Lounges YTD & YE Forecast YTD Version through 20Q3 2020 Forecast vs. 2019 Actuals 2019 YTD 2020 YTD 2020 YTD 2020 YTD Fav/(UnFav) Rev. Inc/(Dec) from Prior COVID-19 impacts to Port-owned Revenue Summary (in $000s) Budget Variance Year Actuals Clubs & Lounges reflects overall Org(s): 3690-Club International Revised Approved decline in passenger volume. As Lounge, Class: Top Level Actual Actual Budget Budget $ Var % Var $ Change % Change a result, both the South Satellite Operating Revenue lounge and the Concourse A Space Rental 7,598 1,866 2,597 8,012 (731) -28.1% (5,732) -75.4% lounges were closed in mid- Total Operating Revenues 7,598 1,866 2,597 8,012 (731) -28.1% (5,732) -75.4% March 2020 due to the decline in passengers and in response to social distancing requirements. Fav/(UnFav) Rev. Inc/(Dec) from Prior 2019 2020 2020 2020 Revenue Summary (in $000s) Budget Variance Year Actuals South Satellite Lounge was able Org(s): 3690-Club International Revised Approved to reopen on July 1st, 2020 with Lounge, Class: Top Level Actual Forecast Budget Budget $ Var % Var $ Change % Change new safety protocols and is Operating Revenue experiencing a steady increase in Space Rental 10,274 3,443 4,441 10,536 (998) -22.5% (6,831) -66.5% passenger activity using this Total Operating Revenues 10,274 3,443 4,441 10,536 (998) -22.5% (6,831) -66.5% lounge. A Concourse Lounge unfortunately is not planned to reopen until January 2021 due to low enplanement volumes. Clubs and Lounges revenue negatively impacted by COVID-19 related closures 38 2020 Capital Expenditures 2020 2020 2020 Fcst/Rvsd Budget (1) Substantial completion delayed from May 2020 to Feb 2021 for IAF Apr 21 for ped bridge/POD D. Primarily YTD Year-End Revised $ % related to pedestrian walkway scope $ in 000's Actual Forecast Budget (2) $24.4M Increase due to added construction costs associated with work pulled forward (Operation Silver Cloud) International Arrivals Facility (1) 141,103 171,403 215,000 43,597 20.3% that would have been performed in 2021, plus processing a significant amount of construction change orders for work NS NSAT Renov NSTS Lobbies (2) 117,594 158,956 134,528 (24,428) -18.2% already executed. Checked Bag Recap/Optimization (3) 25,419 33,184 14,500 (18,684) -128.9% (3) MII Rejection at the beginning of the year led to uncertainty whether the project would be rebid, so the spending was pushed out of the baseline. The contract has been executed and spending was accelerated. Terminal Security Enhancements Ph 2 (4) 344 383 6,916 6,533 94.5% (4) Cancellation of bollard purchase and major works contract have deferred work. AFLD Pvmnt Program 2016-2020 (5) 13,766 18,872 13,133 (5,739) -43.7% (5) Construction is expedited to take advantage of downturn in air traffic operation, and tranfer of scope from 2025 Remote Aircraft Deicing (6) 2,680 10,778 15,058 4,280 28.4% Pavement Improvement program Restroom Upgrades Conc B, C, D (7) 8,254 8,978 5,400 (3,578) -66.3% (6) New estimate has significant reduction as a result of value engineering, and bid came in lower than engineering ARC Flash Hazard Mitgation (8) 90 181 3,405 3,223 94.7% estimate (7) Bid overage for Phase 3 construction, increased construction costs for phase 2 with impacts from COVID-19 as a (9) 635 2,536 5,654 3,118 55.1% factor contributed to higher than anticipated costs for 2020 PLB Renew & Replace Phase 2 (8) Constructability reviews caused design delays, which pushed construction into next year RCF Pavement Remediation (10) 2,995 3,330 6,198 2,868 46.3% (9) New estimate has significant reduction as a result of value engineering, and bid came in lower than engineering Main Terminal Low Voltage Upgrade (11) 935 1,185 3,961 2,776 70.1% estimate Central Terminal Infrastructure & HVAC (12) 3,968 4,968 7,250 2,282 31.5% (10) Construction suspended and delayed one year due to Covid-19 Safedock Upgrade & Expansion (13) 1,495 4,008 6,209 2,201 35.5% (11) 1 year behind schedule due to delays in getting designer and general contractor onboard (12) Project is coming in under budget Highline School Insulation (14) - 6,273 13,734 7,461 54.3% (13) The variance is mostly due to a favorable bid. All Other 56,008 88,001 110,237 22,236 20.2% (14) Commission directed acceleration of the sound insulation projects in Q1 2020. Highline insulation is funded by Subtotal 375,286 513,037 561,182 48,145 8.6% 67% AIP grants, 16% tax levy, and 17% airport funds. CIP Cashflow Mgmt Reserve (15) - (11,317) (72,000) (60,683) 84.3% (15) Reduced the negative amount to $11,317(original was $72,000) as some projects were accelerated in YTD Total Spending 375,286 501,720 489,182 (12,538) -2.6% spending and there is greater certainty in Q4 spending forecast. Forecast spending variances primarily due to COVID-19 impact 39 Airport Development Fund Balance Airport Development Fund Balance in 000's 350,000 300,000 NOTES: 250,000 ADF target is set as $314.4M which is 10 months of O&M based on 2020 200,000 approved budget 150,000 $158.9M of CARES Act grants assumed in the forecast 100,000 ADF balance is forecasted to be $280M 50,000 - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Actual Actual Actual Actual Actual Actual Actual Actual Actual Forecast Forecast Forecast ADF Ending Balance Target 40 CARES Act Grant Claiming to Date $74.7M Employment Grant Condition First reimbursement received on 7/20 for Q2 Debt Airport must maintain 90% employment through Dec 31 Service Variance since March a results of natural attrition Q4 claim targeted to specific cost centers to manage rates & charges Full Time Equivalents (FTEs) As of Baseline % of 9/30/2020 3/27/2020 Baseline $0 Full-Time 1,045 1,070 98% Part-Time 38 37 104% "" "" "" Total 1,083 1,107 98% Total Employees As of Baseline % of 9/30/2020 3/27/2020 Baseline Full-Time 1,050 1,078 97% $192 Part-Time "" 77 "" 76 "" 101% $ in millions Total 1,127 1,154 98% 41 Maritime Division Appendix Q3 2020 Financial Performance Report Non-Aviation Performance Summary Fav (UnFav) 2020 YTD 2020 YTD 2020 YTD Actual vs. Revised Revised Budget Revised Approved Budget Variance Revenue below budget with $ in 000's Actual Budget Budget $ % higher COVID19 impact to Revenues Cruise and Conference Maritime 31,284 35,478 53,051 (4,194) -12% Centers than expected in Economic Development Division 7,678 9,866 12,766 (2,188) -22% March/April Joint Venture 29,687 30,242 30,242 (555) -2% Total Revenue 68,649 75,586 96,059 (6,938) -9% Expenses favorable due to Expenses variable costs and timing Maritime 35,363 39,700 41,198 4,338 11% Economic Development Division 14,889 19,363 21,566 4,474 23% Approved Budget Joint Venture 693 639 640 (53) -8% No Cruise sailings driving Total Expense 50,944 59,703 63,405 8,759 15% down revenue NOI Before Stormwater Utility 17,704 15,883 32,654 1,821 11% NOI excluding Stormwater Stormwater Utility Revenues 4,778 4,702 4,702 76 2% down $15M Stormwater Utility Expenses 3,327 3,964 4,051 637 16% Stormwater Utility NOI 1,451 738 651 713 97% Total Non-Aviation Business NOI 19,155 16,621 33,305 2,534 15% Tightened Expenses offset Revenue Reductions 43 Maritime Q3 2020 Financial Highlights Maritime YTD Net Operating Income is $144K favorable to revised budget and $19.3M below 2019 Revenue in $4.2M below revised budget and $18.6M below 2019, primarily from Cruise cancellation. Expenses $4.3M (11%) favorable to revised budget driven by delayed maintenance, no Port Valet, and timing of spend. Expenses up $732K Y/Y including the addition of $1.5M in T46 lease payments to NWSA. YTD Q3 Capital spending was $13.8M with forecasted spending at $21.9M (111% of budget). Fav (UnFav) Incr (Decr) Stormwater 2018 YTD 2019 YTD 2020 YTD 2020 YTD 2020 YTD Actual vs. Revised Change from 2019 Utility revenue Revised Approved Budget Variance $ in 000's Actual Actual Actual Budget Budget $ % $ % on budget and Total Revenues 47,446 49,843 31,284 35,478 53,051 (4,194) -8% (18,559) -37% expenses Total Operating Expenses 33,055 34,630 35,363 39,700 41,198 4,338 11% 732 2% tracking Net Operating Income 14,391 15,213 (4,078) (4,222) 11,852 144 1% (19,292) -127% favorable to Depreciation 13,313 13,267 13,131 12,963 12,959 (168) -1% (136) -1% budget. Net Income 1,078 1,946 (17,209) (17,185) (1,107) (25) -2% (19,156) -984% Revenue and Expenses below Revised Budget 44 Q3 2020 Maritime Achievements Recreational Boating First of 3 customer facilities opened at Shilshole Bay Marina. The two larger facilities scheduled to open in November. Elliott Bay Fishing and Commercial Operations - Executed Agreement with Arrow Launch to provide moorage space north of West Seattle Bridge as failure back up plan. Continue to add process improvements to ensure safe operations upon return of fleet in Q4. Ship Canal Fishing & Operations Summer Recreational Boating exceeded expectations, generating a 21% annual revenue increase. Cruise The Cruise team is working with cruise lines, CLIA, AAPA, CDC, and other stakeholders to plan for and implement new health protocols at T91 and P66, as well as developing a strategy and community communication plan in preparation of recommencing cruise operations for the 2021 cruise season. Stormwater Utility T46 pipe replacement complete and five-year rate plan vetted with advisory committee. Moving programs forward, adapting to COVID-19 45 Stormwater Utility Q3 Financials Expenses are under budget based on pandemic stay home order affecting maintenance team Moving improvements forward while working with customers 46 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 YTD September 2020, there was a total of 59 void sailings due to a combination of the $ in 000's Actual Actual Budget $ % $ % lingering trade dispute with China and the pandemic. Tariffs and COVID-19 show the Operating Revenue 146,733 136,600 145,876 (9,276) -6% (10,133) -7% risk of single-country sourcing. Many shippers are looking to diversify manufacturing Operating Expense 75,277 75,555 86,613 11,058 13% 278 0% Operating Income 71,456 61,045 59,263 1,782 3% (10,411) -15% and sourcing activities to SE Asia or other countries, which may have longer term implications for the gateway as these origins may be better served by east coast ports Cargo TEUs 2,909,606 2,419,741 (489,865) -17% due to shorter transits. NWSA total international TEUs are down 19.2% YTD while total Cargo Volume (Metric Tons) 22,936,244 19,686,336 (3,249,908) -14% TEUs are down 16.8%. Note: GASB 87 Accounting impact and Non-Operating Totals available on NWSA Site Exports (YTD Aug 2020 vs. YTD Aug 2019): Japan, China, Korea, Taiwan and Indonesia were our top trading partners. Revenue Q3 YTD $9.3M below budget from lower cargo Exports to Japan, China, Korea and Taiwan declined 14.2%, 1.3%, 22.8% and volumes and lease terminations/amendments in the 28.9%, respectively. container business. Exports to Indonesia grew 4.1%, albeit off a smaller base. Expenses Q3 YTD $11.1M favorable to budget. Operations Exports are down 16.1% YTD Aug. costs were below budget Imports (YTD Aug 2020 vs. YTD Aug 2019): Volume related variable expenses Timing of the crane removal at Husky Terminal. China, Vietnam, Japan, Taiwan and Korea were our top trading partners. Reduced Infrastructure, Commercial, and Administrative Imports from China, Japan, Taiwan and Korea are down 21.7%, 32.7%, 12.4% and costs. 21.0%, respectively. Imports from Vietnam are up 49.6%, 82,510 TEUs vs. 55,140 TEUs. Imports are down 15.2% YTD Aug. *Export and import data source PIERS, full international YTD Q3 volumes and operating expenses below budget 47 Joint Venture Q3 Financials Fav (UnFav) Total Year 2020 YTD 2020 YTD 2020 YTD Actual vs. Revised Budget Home Port Activities Revised Approved Budget Variance Revenues: $ in 000's Actual Budget Budget $ % Revenue Joint Venture below budget due to lower Joint Venture Revenue 30,545 31,451 31,451 (906) -3% 31,451 volumes at NWSA Contra Joint Venture Revenue (1,435) (1,435) (1,435) (0) 0% (1,435) Subtotal Distributable Revenue from NWSA 29,110 30,016 30,016 (906) -3% 30,016 Other Service Revenue higher than budget Other Service Revenue Tenant Reimbursements 343 225 225 117 52% 215 due to tenant reimbursable Maintenance Port Revenue from NWSA Facilities 233 - - 233 NA - work Port Revenue from NWSA Facilities Total Revenues 29,687 30,242 30,242 (555) -2% 30,232 Expenses temporary moorage on the northwest face JV Direct 218 20 20 (198) -987% 20 of T46 Maintenance Expenses 379 544 544 165 30% 544 Environmental & Sustainability 23 1 1 (22) -2074% 1 Expenses Other Central Services 54 52 53 (2) -3% 53 Seaport Project Management 19 22 22 3 12% 22 Maintenance lower than budget due to - timing Total Expenses 693 639 640 (53) -8% 640 JV Direct - SWU Fees at T46 (Not in NOI Before Depreciation 28,994 29,603 29,602 (609) -2% 29,592 Legacy Depreciation for NWSA Facilities 11,405 11,427 11,427 23 0% - Budget) NOI After Depreciation 17,589 18,175 18,174 (586) 3% (29,591) 48 Maritime 2020 Financial Forecast Summary Fav (UnFav) Incr (Decr) Revenue Variance from Revised Budget 2018 2019 2020 2020 2020 Fcst vs. Revised Change from 2019 Revised Approved Budget Variance Cruise cancelled full year vs. a few $ in 000's Actual Actual Forecast Budget Budget $ % $ % sailings later in the season. Ship Canal Fishing & Operations 3,502 3,929 4,653 4,264 4,264 389 9% 724 18% Elliott Bay Fishing & Commercial Operations 6,755 6,095 5,021 5,123 5,123 (102) -2% (1,075) -18% Other variances based on YTD results. Recreational Boating 12,035 12,484 12,725 13,361 13,361 (636) -5% 241 2% Cruise 18,880 22,410 4,150 5,909 26,261 (1,758) -30% (18,259) -81% Grain 5,167 4,266 4,141 3,490 3,490 651 19% (125) -3% Expense Variance from Revised Budget Maritime Portfolio Management 11,305 10,108 9,928 10,428 10,428 (500) -5% (179) -2% Direct No Port Valet expenses Jul- Other (69) (3) 11 11 11 (0) 0% 14 -462% Total Revenue 57,575 59,289 40,629 42,585 62,938 (1,956) -5% (18,660) -31% Oct. Expenses Support services - Higher Maritime (Excl. Maint) 11,326 13,789 15,408 16,408 16,881 1,000 6% 1,620 12% Expense/Capital ratio. Economic Development 4,347 4,987 5,186 5,626 5,756 440 8% 199 4% Total Direct 15,673 18,776 20,595 22,035 22,637 1,440 7% 1,819 10% Central services deeper reductions in Maintenance Expenses 11,416 12,186 12,076 12,426 13,073 350 3% (110) -1% External Relations and Police. Envir Services & Planning 1,553 2,250 2,537 2,295 2,681 (242) -11% 287 13% Seaport Project Management 295 175 390 330 356 (60) -18% 215 123% Total Support Services 13,265 14,611 15,003 15,051 16,110 48 0% 392 3% IT 2,558 2,685 2,875 2,895 2,906 20 1% 189 7% Police Expenses 4,041 4,086 3,238 3,368 3,382 130 4% (848) -21% External Relations 1,379 1,564 1,032 1,501 1,635 469 31% (532) -34% Other Central Services 6,117 6,645 7,100 6,974 7,481 (126) -2% 455 7% Aviation Division / Other 220 278 368 368 245 0 0% 90 32% Total Central Services / Other 14,315 15,258 14,613 15,106 15,650 493 3% (645) -4% Total Expense 43,252 48,644 50,210 52,191 54,396 1,981 4% 1,566 3% NOI Before Depreciation 14,323 10,644 (9,582) (9,606) 8,541 25 0% (20,226) -190% Depreciation 18,022 17,627 17,249 17,249 17,244 0 0% (378) -2% NOI After Depreciation (3,699) (6,982) (26,830) (26,855) (8,703) 25 0% (19,848) -284% 49 Maritime 2020 YTD 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 $ % $ % Ship Canal Fishing & Operations 2,504 2,913 3,516 3,127 3,127 389 12% 604 21% Elliott Bay Fishing & Commercial Operations 4,231 4,108 3,729 3,831 3,835 (102) -3% (379) -9% Recreational Boating 9,075 9,445 9,449 10,085 10,085 (636) -6% 4 0% Cruise 19,025 22,666 4,028 8,170 25,738 (4,142) -51% (18,638) -82% Grain 4,043 3,187 3,101 2,451 2,451 651 27% (85) -3% Maritime Portfolio Management 8,551 7,500 7,434 7,806 7,806 (372) -5% (66) -1% Other 17 25 26 8 8 18 231% 2 7% Total Revenue 47,446 49,843 31,284 35,478 53,051 (4,194) -12% (18,559) -37% Expenses Maritime (Excl. Maint) 9,184 9,474 10,903 12,625 12,941 1,722 14% 1,429 15% Economic Development 3,357 3,552 3,409 4,290 4,386 881 21% (143) -4% Total Direct 12,542 13,026 14,312 16,914 17,327 2,603 15% 1,286 10% Maintenance Expenses 8,362 8,350 8,638 9,506 9,928 868 9% 288 3% Envir Services & Planning 856 1,666 1,760 1,725 1,991 (35) -2% 94 6% Seaport Project Management 233 180 280 246 268 (34) -14% 100 55% Total Support Services 9,452 10,196 10,677 11,477 12,187 800 7% 482 5% IT 1,984 2,027 2,099 2,141 2,149 42 2% 72 4% Police Expenses 3,252 2,953 2,298 2,494 2,506 196 8% (655) -22% External Relations 964 1,145 906 1,117 1,240 212 19% (239) -21% Other Central Services 4,704 5,075 4,849 5,292 5,607 443 8% (226) -4% Aviation Division / Other 159 209 221 264 183 42 16% 13 6% Total Central Services / Other 11,062 11,409 10,374 11,309 11,685 935 8% (1,035) -9% Total Expense 33,055 34,630 35,363 39,700 41,198 4,338 11% 732 2% NOI Before Depreciation 14,391 15,213 (4,078) (4,222) 11,852 144 3% (19,292) -127% Depreciation 13,313 13,267 13,131 12,963 12,959 (168) -1% (136) -1% NOI After Depreciation 1,078 1,946 (17,209) (17,185) (1,107) (25) 0% (19,156) 984% 50 Cruise Q3 Financials Fav (UnFav) Incr (Decr) Variance from Budget 2019 YTD 2020 YTD 2020 YTD 2020 YTD Budget Change from Variance 2019 Revenue $4.1M lower due to no cruise $ in 000's Actual Actual Revised Budget Approved Budget $ % $ % season T-91 & Bell St Cruise Operations (5455 & 5446) 22,601 4,013 8,149 25,717 (4,136) -51% (18,588) -82% Outside services, promotional hosting, Bell Street Vessel Operations (5448) 65 15 21 21 (7) -31% (50) -77% Total Revenue 22,666 4,028 8,170 25,738 (4,142) -51% (18,638) -82% & travel ~$600K less than revised Expenses budget in Q3 Maritime (Excl. Maint) 2,246 3,124 4,101 4,491 978 24% 877 39% Economic Development 323 294 330 348 36 11% (30) -9% Variance from 2019 Total Direct 2,570 3,418 4,431 4,838 1,013 23% 848 33% Revenue $18.6M lower at T91 and P66 Maintenance Expenses 2,151 1,949 2,038 2,202 89 4% (202) -9% due to no cruise calls in 2020 Envir Services & Planning 390 280 394 474 114 29% (110) -28% ~$1.4M NWSA lease payment in 2020 Seaport Project Management 67 69 78 84 9 11% 2 3% Total Support Services 2,608 2,297 2,509 2,761 212 8% (310) -12% COVID-19 Impact to 2020 Revenue significantly impacted due to IT 477 516 534 534 18 3% 39 8% Police Expenses 873 707 767 771 60 8% (166) -19% no 2020 cruise season External Relations 338 280 415 453 135 33% (59) -17% Reduction in travel expenses and Port Other Central Services 1,502 1,491 1,596 1,693 104 7% (11) -1% Valet to mitigate revenue impacts Aviation Division / Other 72 81 93 68 12 13% 9 12% Total Central Services / Other 3,263 3,075 3,404 3,518 329 10% (188) -6% Total Expense 8,440 8,790 10,344 11,117 1,555 15% 349 4% NOI Before Depreciation 14,225 (4,762) (2,174) 14,621 (2,587) 119% (18,987) 133% Depreciation 4,711 4,554 4,421 4,420 (133) -3% (157) -3% NOI After Depreciation 9,514 (9,316) (6,596) 10,201 (2,720) -41% (18,830) 198% 51 Recreational Boating Q3 Financials Fav (UnFav) Revised Inc (Dec) 2019 2020 Year-to-Date Variance from Revised Budget Budget Variance Change from 2019 Revisde Revenue $636K lower due to lower guest $ in 000's Actual Actual Budget $ % $ % moorage occupancy as we expected at SBM and Berthage and Moorage & Concession Services 8,695 8,746 9,312 (567) -6% 51 1% BHM partially related to COVID-19 business Utility Sales Revenue 343 360 369 (9) -2% 17 5% disruptions as well as processing delays Other Service Revenue 331 299 325 (26) -8% (32) -10% Other 76 44 78 (35) -44% (32) -42% Operation expenses ~$227K favorable to the Total Revenue 9,445 9,449 10,085 (636) -6% 4 0% revised budgeted in YTD contributed by $266K Expenses favorable in Maritime direct charges, $196K Maritime (excl Maint) 3,071 3,334 3,628 294 8% 263 9% favorable in Central Services due to lower Economic Development 171 251 224 (27) -12% 80 47% Total Direct 3,242 3,585 3,852 266 7% 343 11% allocation, and offset by $235K unfavorable in Maintenance Expenses 1,741 1,912 1,716 (196) -11% 171 10% Support Service Envir Services & Planning 299 264 273 8 3% (35) -12% Variance from 2019 Seaport Project Management 46 95 48 (48) -100% 49 106% Revenue $4K higher due to 5% rate increase in Total Suport Service 2,086 2,271 2,036 (235) -12% 185 9% 2020, offset by lower occupancy from 2019 IT 536 555 569 15 3% 18 3% Operation expenses ~$224K increase in 2020 Police Expenses 676 506 550 43 8% (169) -25% due to by $343K increase in Maritime (excluding External Relations 262 199 224 24 11% (63) -24% Other Central Services 1,154 1,063 1,168 105 9% (91) -8% Maintenance) expenses, $185K increase in Aviation Division/Other 45 46 55 9 16% 0 1% Support Service, and offset by $304K decrease Total Central Services/Other 2,674 2,369 2,566 196 8% (304) -11% in Central Services Total Expense 8,002 8,226 8,453 227 3% 224 3% COVID-19 Impact to 2020 NOI Before Depreciation 1,443 1,223 1,631 408 25% (220) -15% Revenue will be reduced due to event Depreciation 2,072 2,056 2,188 132 6% (15) -1% NOI After Depreciation (629) (834) (557) (277) 50% (205) 33% cancellations and potentially reduced demand for slips Includes Shilshole Bay Marina, Bell Harbor Marina, and Harbor Island Marina. 52 Ship Canal Fishing & Ops Q3 Financials Fav (UnFav) Revised Inc (Dec) 2019 2020 Year-to-Date Variance from Budget Budget Variance Change from 2019 Revisde Revenue $389K higher than the revised budget $ in 000's Actual Actual Budget $ % $ % primarily due to Derelict Vessels project payments, as Berthage and Moorage & Concession Services 2,563 2,863 2,709 154 6% 301 12% well as Ballard Lock closures by the US Army Corps Space Rental 175 141 222 (81) -36% (34) -20% Engineers (February - April) Utility Sales Revenue 61 77 68 9 14% 16 25% Other 113 435 128 307 241% 322 285% Operation expenses ~$448K favorable to the revised Total Revenue 2,913 3,516 3,127 389 12% 604 21% budgeted YTD contributed by $433K favorable in Expenses Maritime direct charges, $91K favorable in Central Maritime (excl Maint) 1,806 1,881 2,304 423 18% 75 4% Economic Development 31 40 49 9 19% 9 28% Services due to lower allocation, and offset by $75K Total Direct 1,837 1,921 2,353 433 18% 84 5% unfavorable in Support Services Maintenance Expenses 1,182 1,448 1,438 (10) -1% 266 22% Variance from 2019 Envir Services & Planning 177 228 162 (66) -41% 50 28% Revenue $604K or 21% higher due to Derelict Vessels Seaport Project Management 14 36 36 0 1% 22 152% project payments, 5% rate increase in 2020, and a Total Suport Service 1,374 1,711 1,636 (75) -5% 338 25% better performance in moorage related to Ballard Lock IT 255 254 262 8 3% (1) 0% Police Expenses 290 198 215 17 8% (91) -32% closures from Feb to April External Relations 112 78 88 10 11% (34) -30% Operation expenses ~$196K increase in 2020 related to Other Central Services 523 425 477 53 11% (99) -19% $338K increase in Support Service, $84K increase in Aviation Division/Other 16 15 19 3 18% (1) -5% Total Central Services/Other 1,196 971 1,061 91 9% (225) -19% Maritime direct charges, and offset by $225K decrease Total Expense 4,406 4,602 5,050 448 9% 196 4% in Central Services allocation NOI Before Depreciation (1,493) (1,086) (1,924) 837 -44% 407 -27% COVID-19 Impact to 2020 Depreciation 1,632 1,738 1,604 (133) -8% 106 7% Expense projects either delayed or cancelled NOI After Depreciation (3,125) (2,824) (3,528) 704 -20% 301 -10% Includes Fishermen's Terminal, Maritime Industrial Center, and Salmon Bay Marina. 53 Elliott Bay Fishing & Commercial Ops Q3 Financials Fav (UnFav) Revised Inc (Dec) 2019 2020 Year-to-Date Variance from Budget Budget Variance Change from 2019 Revisde Revenue $106K or 3% lower due to events cancellations $ in 000's Actual Actual Budget $ % $ % due to COVID-19, offset by new agreement with Golden Berthage and Moorage & Dockage 2,373 2,052 1,889 163 9% (322) -14% Alaska Seafood and increase in moorage demand at T91 Space Rental 1,226 1,176 1,331 (155) -12% (50) -4% Utility Sales Revenue 281 301 381 (80) -21% 21 7% related to Ballard Locks closure Other 229 201 235 (34) -15% (28) -12% Operation expenses ~$535K favorable to the budgeted Total Revenue 4,108 3,729 3,835 (106) -3% (379) -9% YTD Expenses Variance from 2019 Maritime (excl Maint) 1,875 1,689 2,097 408 19% (185) -10% Economic Development 70 113 129 16 12% 43 62% Revenue $379K or 9% lower primarily due to 680' Ocean Total Direct 1,944 1,802 2,226 424 19% (142) -7% phoenix left in Q3 2019 and replaced by new lease Maintenance Expenses 827 1,031 1,317 286 22% 203 25% agreement with 305' Golden Alaska in 2020, as well as Envir Services & Planning 132 455 169 (286) -169% 324 246% 2019 had project related moorage, like EBM floats and Seaport Project Management 11 31 26 (4) -17% 20 178% Total Suport Service 970 1,516 1,512 (4) 0% 547 56% Pacific Legacy. IT 205 274 279 5 2% 69 34% Operation expenses ~$619K increase in 2020 Police Expenses 268 279 302 24 8% 11 4% contributed by mis-coded Derelict Vessels project External Relations 104 109 122 13 11% 5 4% expense from Ship Canal to Elliott Bay Fishing and Other Central Services 469 593 661 68 10% 124 26% Aviation Division/Other 15 21 26 5 19% 6 43% higher maintenance expenses, as well as higher Total Central Services/Other 1,061 1,275 1,390 115 8% 215 20% allocation expenses from Central Services. Total Expense 3,975 4,594 5,129 535 10% 619 16% COVID-19 Impact to 2020 NOI Before Depreciation 134 (865) (1,293) 429 -33% (998) -746% Terminal 91 getting more dockage requests than normal Depreciation 2,507 2,494 2,478 (16) -1% (13) -1% Expense projects either delayed or cancelled NOI After Depreciation (2,373) (3,358) (3,771) 413 -11% (986) 42% 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. 54 Maritime Portfolio Management Q3 Financials Fav (UnFav) Revised Incr/(Decr) Variance from Revised Budget 2019 YTD 2020 Year-to-Date Budget Variance Change from 2019 Revenue $372K unfavorable to revised $ in 000's Actual Actual Budget $ % $ % Marina Office & Retail 2,777 2,778 2,984 (206) -7% 0 0% budget due to lower than anticipated Maritime Industrial 3,002 3,133 2,905 228 8% 132 4% utility sales and concession rents Utilities 1,721 1,523 1,918 (394) -21% (198) -11% partially offset by higher than anticipated Total Revenue 7,500 7,434 7,806 (372) -5% (66) -1% space rental revenue mainly from Lineage PM Direct 2,576 2,082 3,031 949 46% (494) -19% Expenses $1,606K lower than revised EDD PM Direct 189 228 258 30 13% 39 20% budget due to favorable utilities and EDD Other 161 359 229 (131) -36% 198 123% maintenance expenses. MD Direct 333 352 335 (17) -5% 19 6% Total Direct 3,259 3,021 3,853 832 28% (238) -7% Maintenance Expenses 2,104 1,922 2,496 574 30% (183) -9% Variance from 2019 Enviromental & Sustainability 260 180 227 46 26% (79) -31% Revenue down $66K due to lower than Seaport Project Management 27 38 43 5 13% 11 40% prior year utility sales. Total Support Services 2,392 2,140 2,766 626 29% (251) -11% Expenses down $825K or 10% due to Police Expenses 640 475 515 40 9% (165) -26% lower than prior year utilities and Other Corp Expenses 1,870 1,699 1,807 108 6% (171) -9% maintenance expense. Total Central Services/Other 2,510 2,174 2,322 148 7% (336) -13% Total Expense 8,160 7,335 8,941 1,606 22% (825) -10% NOI Before Depreciation (660) 99 (1,135) 1,234 109% 759 115% COVID -19 Impact to 2020 Depreciation 1,922 1,881 1,865 (16) -1% (41) -2% Expense projects either delayed or NOI After Depreciation (2,582) (1,782) (3,000) 1,218 41% 800 31% cancelled. 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. 55 Grain Terminal Q3 Financials Fav (UnFav) Incr (Decr) 2019 YTD 2020 YTD 2020 YTD 2020 YTD Actual vs. Revised Change from 2019 Variance from Budget Revised Approved Budget Variance Revenue on tracking ahead of budget $ in 000's Actual Actual Budget Budget $ % $ % with greater demand for feedstock from Lease Revnue 3,187 3,101 2,451 2,451 651 27% (85) -3% Total Revenue 3,187 3,101 2,451 2,451 651 27% (85) -3% China Expenses Expenses tracking lower than budget Maritime (Excl. Maint) 141 122 159 168 37 23% (19) -14% due to organizational cost cutting Economic Development 30 40 40 41 0 0% 9 31% initiatives Total Direct 172 162 199 210 37 19% (10) -6% Maintenance Expenses 289 286 481 481 196 41% (4) -1% Variance from 2019 Envir Services & Planning 77 54 65 79 11 17% (23) -30% Seaport Project Management 8 9 7 8 (1) -20% 0 5% Revenue and volumes flat to 2019 YTD, Total Support Services 374 348 553 569 205 37% (26) -7% but 4th quarter is trending higher IT 85 76 76 76 1 1% (10) -11% Police Expenses 207 133 144 145 11 8% (74) -36% COVID -19 Impact to 2020 External Relations 80 52 58 65 6 11% (28) -35% No known direct issues on impact Other Central Services 344 273 307 325 34 11% (71) -21% Aviation Division / Other 11 9 12 7 3 23% (2) -14% Total Central Services / Other 728 542 598 618 55 9% (185) -25% Total Expense 1,273 1,052 1,350 1,397 298 22% (221) -17% NOI Before Depreciation 1,913 2,049 1,100 1,053 949 86% 136 7% Depreciation 414 398 395 395 (2) -1% (16) -4% NOI After Depreciation 1,500 1,652 705 658 947 134% 152 10% 56 Maritime Capital 2020 T117 Restoration costs moved forward with Budget Variance 2020 YTD 2020 2020 Revised expedited schedule from contactor. Actual Forecast Budget $ % $ in 000's New Cruise Terminal 1,472 1,472 1,259 (213) -17% SBM Restrooms/Bldgs Foundation work completed, FT Gateway Building (44) 520 700 180 26% reducing amount of project contingency. T91 Berth 6&8 Redev 50 95 460 365 79% FT Maritime Innovation Center 204 330 700 370 53% T91 Northwest Fender construction spending T117 Restoration 1,339 6,339 5,000 (1,339) -27% SBM Restrms/Service Bldgs Rep 7,432 8,310 9,400 1,090 12% delayed to Q1 2021. T91 New Cruise Gangway 1 16 30 14 47% T91 Northwest Fender 59 85 785 700 89% FT MD Innovation Center Project delays due to T102 HIM E Dock 19 39 110 71 65% COVID 19. SBM Paving 1,010 1,580 1,810 230 13% FT Docs 3,4,5 Fixed Pier 528 528 510 (18) -4% All Other 1,747 4,459 6,448 1,989 31% T91 Berth 6&8 Updated CPO estimate that design Subtotal 13,817 23,773 27,212 3,439 13% contract will be executed by end of Oct instead of Jun. CIP Cashflow Mgmt Reserve 0 (1,898) (7,500) 5,602 75% Total Maritime 13,817 21,875 19,712 (2,163) -11% New Cruise Terminal project placed on hold. Will be evaluating post-COVID-19 effects on cruise. 57 Economic Development Division Appendix Q3 2020 Financial Performance Report Economic Development Financial Highlights 2020 Q3 YTD Net Operating Income $2.3M favorable to revised budget and $3.4M lower than 2019 Revenue unfavorable to revised budget by $2.2M and $7.1M lower than 2019 driven primarily by COVID- 19 cancellations and construction at the Conference and Event Centers. Expenses favorable to revised budget by $4.5M driven by less conferences, timing of EDD Grant Program, Maintenance and Central services cost. Expenses are lower by $3.8M Y/Y due to variable cost associated with lower Conference & Event Center volumes. EDD spent 79% of revised Fav (UnFav) Incr (Decr) Capital budget through Q3 2018 YTD 2019 YTD 2020 YTD 2020 YTD 2020 YTD Actual vs. Revised Change from 2019 Revised Approved Budget Variance with most attributed to the $ in 000's Actual Actual Actual Budget Budget $ % $ % Bell Harbor Conference Total Revenues 14,590 14,815 7,678 9,866 12,766 (2,188) -22% (7,137) -48% Total Operating Expenses 18,854 18,665 14,889 19,363 21,566 4,474 23% (3,776) -20% Center Modernization. The Net Operating Income (4,264) (3,850) (7,211) (9,497) (8,800) 2,286 24% (3,361) -87% 2020 forecasted spending Depreciation 2,977 2,747 2,631 2,553 2,551 (78) -3% (116) -4% is $10.2M (95% of revised Net Income (7,241) (6,597) (9,842) (12,050) (11,351) 2,209 18% (3,244) -49% budget). 59 Q3 2020 EDD Program Advancements Portfolio Management is managing rent relief efforts. Forty-seven tenants are receiving relief and most began repayment plans on Oct 1st. With few exceptions, tenants are on track and paying rent again. Real Estate Development is midway through updating the Port's Real Estate Strategic Plan. Recommendations on development of Port properties are being shared with Commission at an October Study session. Staff is also advancing design work on the Maritime Innovation Center, the FT Gateway building and T91 Uplands light industrial facilities. Diversity in Contracting executed a contract with Highline College's Small Business Development Center (and related Startzone program) to provide small businesses resources to recover and pivot operations in the face of pandemic challenges. Tourism staff is working to execute contract with WA Tourism Alliance to support tourism recovery. Implementation of recovery initiative will start in Q4. Economic Development and Innovation Staff is supporting Greater Seattle Partners' Economic Recovery plan development. We also executed a contract with WA Maritime Blue to support the 2nd Maritime Blue innovation accelerator. 60 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 $ % $ % Revenue 9,002 8,912 8,324 8,824 9,124 (500) -6% (588) -7% Lower Parking Revenues at Conf & Event Centers 11,703 12,239 1,700 6,833 9,985 (5,133) -75% (10,539) -86% Bell Street Garage Total Revenue 20,705 21,151 10,024 15,658 19,110 (5,633) -36% (11,127) -53% Anticipated potential Expenses Portfolio Management 3,571 3,732 3,608 3,988 4,008 380 10% (123) -3% COVID related vacancies. Conf & Event Centers 9,889 10,218 3,750 6,703 8,902 2,953 44% (6,468) -63% Updated Conference and P69 Facilities Expenses 235 215 226 226 230 0 0% 11 5% RE Dev & Planning 149 136 145 145 208 0 0% 9 6% Event volumes, lower than EconDev Expenses Other 785 930 632 632 932 0 0% (298) -32% originally expected. Maintenance Expenses 3,914 3,145 3,276 3,476 3,819 200 6% 130 4% Maritime Expenses (Excl Maint) 281 253 512 512 524 0 0% 259 103% Total EDD & Maritime Expenses 18,824 18,630 12,149 15,682 18,624 3,533 23% (6,481) -35% Expense Variance from Diversity in Contracting 132 152 151 151 197 0 0% (1) -1% Tourism 1,408 1,337 1,642 2,842 1,536 1,200 42% 305 23% Revised Budget EDD Grants 838 785 810 1,110 1,110 300 27% 25 3% Reduction in Conference Total EDD Initiatives 2,378 2,274 2,603 4,103 2,843 1,500 37% 329 14% Environmental & Sustainability 281 344 297 260 323 (37) -14% (47) -14% and Event center variable Police Expenses (76) 61 223 232 233 9 4% 162 267% expenses. Other Central Services 5,466 5,732 6,425 6,752 7,223 327 5% 693 12% Aviation Division 155 114 193 193 123 0 0% 78 69% Total Central Services & Aviation 5,825 6,251 7,138 7,437 7,901 299 4% 886 14% Envir Remed Liability 0 0 0 0 0 0 NA 0 NA Total Expense 27,028 27,156 21,890 27,222 29,368 5,332 20% (5,265) -19% NOI Before Depreciation (6,323) (6,005) (11,866) (11,564) (10,258) (302) -3% (5,861) -98% Depreciation 3,948 3,647 3,389 3,392 3,389 2 0% (258) -7% NOI After Depreciation (10,271) (9,651) (15,255) (14,956) (13,647) (299) -2% (5,604) -58% 61 EDD 2020 YTD Financial Detail 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 $ % $ % Revenue 6,954 6,668 6,079 6,589 6,889 (510) -8% (589) -9% Conf & Event Centers 7,636 8,147 1,599 3,277 5,877 (1,678) -51% (6,548) -80% Total Revenue 14,590 14,815 7,678 9,866 12,766 (2,188) -22% (7,137) -48% Expenses Portfolio Management 2,856 2,791 2,291 3,144 3,159 853 27% (499) -18% Conf & Event Centers 6,479 6,867 3,632 4,002 5,815 369 9% (3,234) -47% P69 Facilities Expenses 173 153 176 171 175 (5) -3% 24 16% RE Dev & Planning 110 79 157 100 148 (57) -57% 78 100% EconDev Expenses Other 648 584 704 484 709 (220) -46% 120 21% Maintenance Expenses 2,948 2,264 2,042 2,645 2,866 603 23% (222) -10% Maritime Expenses (Excl Maint) 188 193 354 384 393 30 8% 161 83% Total EDD & Maritime Expenses 13,402 12,930 9,357 10,930 13,265 1,573 14% (3,573) -28% Diversity in Contracting 84 130 75 120 148 45 37% (55) -42% Tourism 942 868 600 1,597 1,150 997 62% (268) -31% EDD Grants 65 (12) (26) 1,073 1,073 1,099 102% (14) 111% Total EDD Initiatives 1,091 986 649 2,789 2,371 2,140 77% (337) -34% Environmental & Sustainability 178 268 145 193 239 48 25% (123) -46% Police Expenses 122 150 158 172 173 14 8% 7 5% Other Central Services 3,944 4,248 4,464 5,142 5,428 678 13% 216 5% Aviation Division 118 83 115 138 91 22 16% 33 40% Total Central Services & Aviation 4,361 4,749 4,882 5,644 5,931 761 13% 133 3% Envir Remed Liability 0 0 0 0 0 0 NA 0 NA Total Expense 18,854 18,665 14,889 19,363 21,566 4,474 23% (3,776) -20% NOI Before Depreciation (4,264) (3,850) (7,211) (9,497) (8,800) 2,286 24% (3,361) -87% Depreciation 2,977 2,747 2,631 2,553 2,551 (78) -3% (116) -4% NOI After Depreciation (7,241) (6,597) (9,842) (12,050) (11,351) 2,209 18% (3,244) -49% 62 Portfolio Management Q3 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 Conference & Events Centers' revenue decline as a $ in 000's Actual Actual Budget $ % $ % result of government mandates caused by COVID- Central Harbor 5,499 4,807 5,420 (613) -11% (692) -13% T-91 Uplands 1,144 1,247 1,143 104 9% 103 9% 19 pandemic. Conference & Events Centers 8,147 1,599 3,277 (1,678) -51% (6,548) -80% Expenses lower than revised budget due to Foreign Trade Zone 25 25 25 0 0% 0 NA favorable maintenance expenses and lower BHICC Total Revenue 14,815 7,678 9,865 (2,187) -22% (7,137) -48% volumes. PM Outside Services 422 278 747 469 63% (144) -34% PM Direct 9,235 5,645 6,399 753 12% (3,590) -39% EDD Other 946 1,113 996 (117) -12% 168 18% Variance from 2019 MD Direct 137 264 334 69 21% 127 93% Bell Harbor International Conference Center Total Direct 10,740 7,301 8,475 1,174 14% (3,439) -32% (BHICC) revenue significantly declined due to Maintenance Expenses 2,262 2,042 2,644 602 23% (220) -10% Enviromental & Sustainability 245 122 173 51 29% (123) -50% COVID-19 social distancing requirements between Seaport Project Management 56 89 50 (39) -77% 33 59% March 13 and May 31. Closing ala carte lunch Total Support Services 2,564 2,254 2,867 613 21% (310) -12% service and event space at WTC Seattle. Police Expenses 150 158 172 14 8% 7 5% Expenses down from BHICC volumes. Other Corp Expenses 3,925 3,870 4,206 336 8% (56) -1% Total Central Services/Other 4,076 4,027 4,377 350 8% (48) -1% Total Expense 17,379 13,582 15,720 2,137 14% (3,797) -22% COVID -19 Impact to 2020 NOI Before Depreciation (2,565) (5,904) (5,855) (49) -1% (3,340) -130% BHICC events initially rescheduled into 3rd & 4th Depreciation 2,743 2,628 2,551 (77) -3% (115) -4% quarter continue to get cancelled and rescheduled NOI After Depreciation (5,308) (8,533) (8,406) (127) -2% (3,224) -61% due to the longer than expected re-opening. 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. 63 EDD Capital 2020 Budget Variance 2020 YTD 2020 Year- 2020 Revised T-91 Upland Development Actual End Forecast Budget $ % Unanticipated delays in the $ in 000's T91 Upland Development 122 226 1,000 774 77% finalization of the design contract. BHICC Interior Modernization 7,301 8,401 8,358 (43) -1% WTC HVAC Replacement 226 251 260 9 3% BHICC Modernization Project P66 HVAC Systems Upgrade 380 385 912 527 58% P66 Roof Upgrades 24 54 50 (4) -8% complete. CW Bridge Elev Modernization 96 121 350 229 65% All Other Projects 496 1,152 1,769 617 35% P66 HVAC Costs shifted to future Subtotal 8,645 10,590 12,699 2,109 17% Cash Flow Mgt 0 (423) (2,000) 1,577 79% due to delay in projected hand Total Economic Development 8,645 10,167 10,699 532 5% over from MM to PMG. 64 Central Services Appendix Q3 2020 Financial Performance Report Central Services Business Events Delivered POS 38 Cities presentation to Mercer Island Rotary, Renton Rotary, Kent Chamber of Commerce, Redmond Rotary, Snoqualmie Valley Chamber of Commerce, Kirkland Chamber, Bellevue Rotary, Sound Cities Association. Awarded ACE Fund grants to nine non-profit organizations. Held Groundbreaking Ceremony for Terminal 117 Habitat Restoration/Shoreline Public Access and Park. Achieved full compliance with payment card industry (PCI) standards for transmitting credit card data. Established a new partnership with the African Chamber of Commerce and local partners (Youth Maritime Collaborative, Airport Jobs and ANEW), to promote port-related careers with immigrant and refugee youth. Held teacher curriculum workshops to support the Port's connections with Washington Association for Better Schools. Included students from the Duwamish Valley and the Muckleshoot and Suquamish Tribes in our High School Internship Program. Launched Incredible Parks want Incredible Names Campaign to rename six Port public access sites/parks. Executed contracts for Community Capacity Building, the Green Jobs Initiative and Racial Equity as part of the Duwamish Valley Community Equity Program. 66 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 237 1,045 2,445 30 30 2,415 8050.0% 1,400 134.0% Core Central Support Services 56,535 59,741 63,871 67,398 69,796 3,527 5.2% 4,130 6.9% Police 20,023 21,882 21,967 23,188 23,298 1,222 5.3% 85 0.4% Capital Development 6,736 7,547 7,284 8,175 9,357 891 10.9% (263) -3.5% Environment & Sustainability 4,932 7,064 7,244 7,741 9,419 496 6.4% 181 2.6% Total Operating Expenses 88,225 96,234 100,366 106,502 111,870 6,136 5.8% 4,132 4.3% 2020 YTD Total Operating Expenses are $6.1M favorable to the Revised Budget due to: Delay in contract spending, hiring freeze for both new and backfill vacant positions, and reducing discretionary spending. 2020 YTD Total Operating expenses are $4.1M 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. 67 Central Services Expense by Category Fav (UnFav) Incr (Decr) 2018 YTD 2019 YTD 2020 Year-to-Date Act/Rvsd Bud Var Change from 2019 $ in 000's Actual Actual Actual Rvsd Bud Appr. Bud $ % $ % Salaries & Benefits 54,301 56,676 59,624 61,689 63,111 2,065 3.3% 2,948 5.2% Wages & Benefits 18,577 20,578 20,809 22,437 22,437 1,628 7.3% 231 1.1% Payroll to Capital Projects 12,446 12,696 13,418 15,138 16,148 1,719 11.4% 722 5.7% Equipment Expense 1,596 2,180 1,515 1,621 1,985 107 6.6% (665) -30.5% Supplies & Stock 812 945 660 988 1,091 328 33.2% (285) -30.1% Outside Services 15,588 19,038 23,730 26,462 28,151 2,732 10.3% 4,692 24.6% Travel & Other Employee Expenses 1,661 1,832 1,081 1,479 2,722 398 26.9% (751) -41.0% Insurance Expense 1,637 1,700 1,821 1,730 1,730 (91) -5.3% 121 7.1% Litigated Injuries & Damages (82) - 500 - - (500) 0.0% 500 0.0% Other Expenses 1,884 2,556 2,477 2,478 3,096 1 0.0% (79) -3.1% Charges to Capital Projects/Overhead Alloc (20,195) (21,968) (25,270) (27,521) (28,602) (2,251) 8.2% (3,301) 15.0% TOTAL 88,225 96,234 100,366 106,502 111,870 6,136 5.8% 4,132 4.3% Payroll savings due to staff vacancies/hiring freeze. Wages favorable due to lower overtime for Police due to cancellation of cruise season and vacancies. Outside Services favorable to budget due to spending delays and cost reduction measures. Charges to Capital unfavorable to budget due to delay of some capital projects. 68 Central Service Year End 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 2,462 40 40 2,422 6056.1% 1,180 92.1% Core Central Support Services 74,419 79,276 89,946 91,594 93,604 1,648 1.8% 10,670 13.5% Police 23,908 27,793 30,118 31,312 31,444 1,194 3.8% 2,325 8.4% Capital Development 8,999 10,038 8,804 8,611 12,513 (194) -2.2% (1,233) -12.3% Environment & Sustainability 8,770 10,748 10,473 10,399 12,866 (74) -0.7% (275) -2.6% Total Operating Expenses 116,097 127,855 139,341 141,916 150,427 2,575 1.8% 11,486 9.0% 69 Central Services Capital Spending 2020 2020 2020 Fcst/Rvsd Budget YTD Year-End Revised $ % $ in 000's Actual Forecast Budget Infrastructure - Small Cap 937 1,590 2,100 510 24.3% Services Tech - Small Cap 1,446 1,947 1,350 (597) -44.2% Radio System Upgrade 430 3,018 3,687 669 18.1% New Budget System 223 293 583 290 49.7% Regional Workforce Tracking - - 500 500 100.0% Learning Management System - - 400 400 100.0% Maximo Upgrade 283 283 462 179 38.7% Phone System Upgrade 43 63 900 837 93.0% Customer Relationship Mgmt 833 1,098 1,400 302 21.6% CDD Fleet Replacement 211 721 1,644 923 56.1% Corporate Fleet Replacement 239 259 1,065 806 75.7% CIP Cashflow Adjustment - (1,000) (3,000) (2,000) 66.7% Other (note 1) 418 704 1,600 896 56.0% TOTAL 5,063 8,976 12,691 3,715 29.3% Note: (1) "Other" includes remaining ICT projects and small capital projects/acquisitions. 70 Port Wide Appendix Q3 2020 Financial Performance Report Port Wide 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 232,689 274,002 220,058 303,958 303,958 (83,900) -27.6% (53,944) -19.7% Airport Non-Aero Revenues 196,338 205,283 90,106 91,901 215,596 (1,794) -2.0% (115,177) -56.1% Non-Airport Revenues 99,439 109,261 74,173 79,142 99,611 (4,970) -6.3% (35,088) -32.1% Total Operating Revenues 528,466 588,546 384,337 475,001 619,165 (90,664) -19.1% (204,208) -34.7% Total Operating Expenses 293,158 322,948 299,766 326,788 350,702 27,022 8.3% (23,182) -7.2% NOI before Depreciation 235,308 265,597 84,571 148,213 268,462 (63,642) -42.9% (181,026) -68.2% Depreciation 122,757 130,820 131,955 134,716 134,716 2,762 2.0% 1,135 0.9% NOI after Depreciation 112,551 134,777 (47,383) 13,497 133,746 (60,880) -451.1% (182,161) -135.2% 72 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 34,007 37,678 30,545 31,451 31,451 (906) -2.9% (7,133) -18.9% Maritime Revenues 47,446 49,843 31,284 35,482 53,051 (4,198) -11.8% (18,559) -37.2% EDD Revenues 14,590 14,815 7,678 9,866 12,766 (2,188) -22.2% (7,137) -48.2% SWU & Other 3,395 6,925 4,665 2,342 2,342 2,323 99.2% (2,259) -32.6% Total Operating Revenues 99,439 109,261 74,173 79,142 99,611 (4,970) -6.3% (35,088) -32.1% Total Operating Expenses 57,028 61,896 54,895 65,376 69,153 10,481 16.0% (7,000) -11.3% NOI before Depreciation 42,411 47,365 19,278 13,766 30,458 5,511 40.0% (28,088) -59.3% Depreciation 30,011 29,242 28,105 27,840 27,865 (264) -1.0% (1,138) -3.9% NOI after Depreciation 12,399 18,123 (8,827) (14,074) 2,592 5,247 -37.3% (26,950) -148.7% Non-Airport Operating Revenue lower than budget by $5.0M due to less revenues from Cruise, Conference & Event Centers, and NWSA Distributable Revenues, partially offset by unbudgeted Police Revenues. Expenses are $10.5M lower than budget due cost savings measures which include hiring freeze, delay in implementing program initiatives, and cutting travel and other employee expenses. 73 Port Wide Operating Revenues Summary Fav (UnFav) Incr (Decr) 2018 YTD 2019 YTD 2020 Year-to-Date Act/Rvsd Bud Var Change from 2019 $ in 000's Actual Actual Actual Rvsd Bud Appr. Bud $ % $ % Aeronautical Revenues 232,689 274,002 220,058 303,958 303,958 (83,900) -27.6% (53,944) -19.7% Public Parking 59,245 60,839 26,591 28,001 66,524 (1,409) -5.0% (34,248) -56.3% Rental Cars - Operations 30,025 29,982 12,318 12,125 30,185 193 1.6% (17,664) -58.9% Rental Cars - Operating CFC 13,407 12,295 - - 11,793 - 0.0% (12,295) -100.0% ADR & Terminal Leased Space 48,196 52,283 24,487 21,841 53,678 2,646 12.1% (27,795) -53.2% Ground Transportation 13,910 15,685 5,426 7,326 16,907 (1,900) -25.9% (10,259) -65.4% Employee Parking 7,744 7,803 6,751 4,198 7,601 2,554 60.8% (1,051) -13.5% Airport Commercial Properties 11,804 11,444 8,195 8,523 12,586 (328) -3.8% (3,249) -28.4% Airport Utilities 5,464 5,518 4,043 6,623 6,623 (2,580) -39.0% (1,474) -26.7% Clubs and Lounges 4,801 7,598 1,866 2,597 8,012 (731) -28.1% (5,732) -75.4% Cruise 19,025 22,666 4,028 8,170 25,738 (4,142) -50.7% (18,638) -82.2% Recreational Boating 9,075 9,445 9,449 10,085 10,085 (636) -6.3% 4 0.0% Fishing & Operations 6,735 7,021 7,246 6,962 6,962 284 4.1% 225 3.2% Grain 4,043 3,187 3,101 2,451 2,451 651 26.5% (85) -2.7% Maritime Portfolio Management 8,551 7,500 7,434 7,806 7,806 (372) -4.8% (66) -0.9% Central Harbor Management 6,924 6,643 6,054 6,563 6,863 (509) -7.8% (589) -8.9% Conference & Event Centers 7,636 8,147 1,599 3,277 5,877 (1,678) -51.2% (6,548) -80.4% NWSA Distributable Revenue 34,007 37,678 30,545 31,451 31,451 (906) -2.9% (7,133) -18.9% Other 5,184 8,811 5,145 3,044 4,063 2,100 69.0% (3,667) -41.6% Total Operating Revenues (w/o Aero) 295,776 314,544 164,279 171,043 315,207 (6,764) -4.0% (150,265) -47.8% TOTAL 528,466 588,546 384,337 475,001 619,165 (90,664) -19.1% (204,208) -34.7% 74 Port Wide Operating Expense Summary Fav (UnFav) Incr (Decr) 2018 YTD 2019 YTD 2020 Year-to-Date Act/Rvsd Bud Change from 2019 $ in 000's Actual Actual Actual Rvsd Bud Appr. $ % $ % Salaries & Benefits 95,520 101,403 108,303 110,702 113,789 2,399 2.2% 6,900 6.8% Wages & Benefits 91,655 97,838 100,407 100,121 100,021 (286) -0.3% 2,570 2.6% Payroll to Capital Projects 20,049 19,991 21,408 26,214 27,786 4,805 18.3% 1,418 7.1% Outside Services 62,048 66,743 68,660 84,969 93,185 16,309 19.2% 1,917 2.9% Utilities 19,805 19,955 16,297 22,488 22,853 6,191 27.5% (3,657) -18.3% Equipment Expense 5,882 7,520 6,925 6,159 7,790 (765) -12.4% (596) -7.9% Supplies & Stock 7,178 7,763 7,093 7,473 6,896 380 5.1% (670) -8.6% Travel & Other Employee Expenses 3,377 3,860 2,053 3,031 5,557 978 32.3% (1,807) -46.8% Third Party Mgmt Op Exp 8,061 9,569 4,343 5,238 8,851 895 17.1% (5,226) -54.6% B&O Taxes 3,629 3,805 2,448 2,916 3,823 468 16.1% (1,358) -35.7% Other Expenses 13,515 23,042 5,258 8,267 12,399 3,009 36.4% (17,783) -77.2% Charges to Capital Projects/Overhead Alloc (37,561) (38,541) (43,429) (50,790) (52,248) (7,361) 14.5% (4,888) 12.7% TOTAL 293,158 322,948 299,766 326,788 350,702 27,022 8.3% (23,182) -7.2% Payroll expenses were $2.1M 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 $16.3M favorable to budget due to project delays related to COVID-19 cost-reduction measures. Travel & Other Employee Expenses were $978K lower than budget due to cutting/eliminating non-essential business travel and training. Other Expenses were $3.0M 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. 75 Port Wide Net Operating Income Performance Airport Non-Aero Revenues Aeronautical Revenues Non-Airport Revenues Total Operating Expenses NOI In 000s Operating Revenues are expected to be $131.0M 900 unfavorable to the revised budget due to 800 reduced operations and lower airline activity . 700 Total Operating expenses 600 are expected to be $19.2M below the revised 500 budget due to COVID - 19 cost reductions in: 400 o Payroll due to hiring freeze 300 o Outside Services o Travel and Other 200 Employee Expenses o Promotional Hosting 100 - 2016 2017 2018 2019 2020 Fcst 2020 2020 Bud Rvsd_Bud 76 Port Wide Capital Spending Summary 2020 2020 2020 Fcst/Rvsd Budget YTD Year-End Revised $ % $ in 000's Actual Forecast Budget Aviation 375,286 501,720 489,182 (12,538) -2.6% Maritime 13,817 21,875 19,712 (2,163) -11.0% Economic Development 8,645 10,167 10,699 532 5.0% Central Services & Other (note 1) 5,456 9,925 15,991 6,066 37.9% TOTAL 403,204 543,687 535,584 (8,103) -1.5% Note: (1) "Other" includes 100% Port legacy projects in the North Harbor and Storm Water Utility Small Capital projects. 77 Port Wide Capital Spending YTD capital spending $403.2M, $75.3% of the Revised Budget. Total capital spending is expected to be $543.7M for 2020. 78
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