11a. Attachment - Q2 2021 Financial Performance Briefing
Item No. 11a_attach Meeting Date: August 10, 2021 PORT OF SEATTLE Q2 2021 FINANCIAL PERFORMANCE REPORT AS OF JUNE 30, 2021 Q2 2021 FINANCIAL & PERFORMANCE REPORT 06/30/21 TABLE OF CONTENTS PAGE I. Portwide Performance Report 3-7 II. Aviation Division Report 8-17 III. Maritime Division Report 18-22 IV. Economic Development Division Report 23-27 V. Central Services Division Report 28-32 2 I. PORTWIDE FINANCIAL & PERFORMANCE REPORT 06/30/21 I. PORTWIDE EXECUTIVE SUMMARY The Port's second quarter results still reflect the effects of Covid-19 with lines of businesses showing different rates of recovery. Airport passenger volume is rebounding and is predicted to be 26% lower than 2019. Federal relief funds allow the airport to extend relief to concession tenants and improve the financial outlook for the Aviation division. The first revenue cruise for 2021 departed at Smith Cove Cruise Terminal in mid-July. This is the first of the 83 sailings scheduled this season. Cruise occupancy is expected at 50% on all calls with an estimated passenger volume of 227K compared to 1.2M in 2019. Cruise revenue is expected to be above budget. Grain volumes increased 55% year-over-year and is expected to exceed budget. On the other hand, conference center and parking revenues are down due to event cancellations and lower parking volume. The Port continues to implement planned initiatives and programs to lead an equitable recovery. The Port commission recently authorized another $2M for the Opportunity Youth Initiative. The 2021 initiative will be more expansive compared to last year's inaugural program and is expected to provide training to nearly 300 youth. Overall, prudent budgeting and careful cost management has positioned the Port well for 2021 despite the major disruption caused by the pandemic. However, there is still uncertainty due to emerging COVID variants. Staff will continue to closely monitor changes in business conditions. PORTWIDE FINANCIAL SUMMARY Fav (UnFav) Incr (Decr) 2019 YTD 2020 YTD 2021 YTD 2021 YTD Actual vs. Budget Change from 2020 Variance $ in 000's Actual Actual Actual Budge t $ % $ % Aeronautical Revenues 175,927 163,722 143,188 178,518 (35,330) -19.8% (20,534) -12.5% Airport Non-Aero Revenues 124,604 64,225 73,219 82,351 (9,131) -11.1% 8,995 14.0% Non-Airport Revenues 67,632 48,298 49,475 51,255 (1,779) -3.5% 1,178 2.4% Total Operating Revenues 368,164 276,244 265,883 312,124 (46,241) -14.8% (10,361) -3.8% Total Operating Expenses 215,765 197,820 195,776 209,132 13,356 6.4% (2,044) -1.0% NOI before Depreciation 152,399 78,424 70,107 102,992 (32,885) -31.9% (8,317) -10.6% Depreciation 82,447 87,855 91,246 82,470 (8,776) -10.6% 3,391 3.9% NOI after Depreciation 69,952 (9,431) (21,139) 20,523 (41,662) -203.0% (11,708) 124.1% 2021 YTD Actuals vs. 2021 YTD Budget: Total operating revenues were down $46.2M compared to budget due to lower revenues in Aeronautical and Non-Aeronautical lines of businesses (ADR & Terminal Leased Space, Public Parking, Rental Cars, Ground Transportation, Clubs and Lounges), Cruise, and Conference & Event Centers. Total operating expenses are $13.4M lower than budget due to delays in hiring and implementing projects/initiatives due to the pandemic. 2021 YTD Actuals vs. 2020 YTD Actuals: Total operating revenues for Q2 2021 were down $10.4M due to lower revenues in Aeronautical lines of businesses. Total operating expenses for Q2 2021 was $2.0M lower compared to 2020 because of lower Payroll, Equipment, Travel, and less contract spending. 3 I. PORTWIDE FINANCIAL & PERFORMANCE REPORT 06/30/21 NON-AIRPORT FINANCIAL SUMMARY Fav (UnFav) Incr (Decr) 2019 YTD 2020 YTD 2021 YTD 2021 YTD Actual vs. Budget Change from 2020 Variance $ in 000's Actual Actual Actual Budge t $ % $ % NWSA Distributable Revenue 24,941 21,218 22,166 21,137 1,030 4.9% 949 4.5% Maritime Revenues 27,368 18,338 19,507 22,875 (3,368) -14.7% 1,169 6.4% EDD Revenues 10,384 5,359 4,089 5,371 (1,282) -23.9% (1,270) -23.7% SWU & Other 4,939 3,383 3,713 1,872 1,841 98.4% 330 9.8% Total Operating Revenues 67,632 48,298 49,475 51,255 (1,779) -3.5% 1,178 2.4% Total Operating Expenses 40,522 34,441 35,658 40,774 5,116 12.5% 1,218 3.5% NOI before Depreciation 27,110 13,857 13,817 10,481 3,337 31.8% (40) -0.3% Depreciation 19,623 18,794 18,949 17,632 (1,317) -7.5% 155 0.8% NOI after Depreciation 7,487 (4,936) (5,132) (7,152) 2,020 -28.2% (195) 4.0% 2021 YTD Actuals vs. 2021 YTD Budget Total non-airport operating revenues were down $1.8M compared to budget due to the delay of Cruise season, lower than anticipated revenues from Central Harbor Operations and the Conference and Event Center which were offset by higher Grain, NWSA Distributable revenues, and unbudgeted police forfeitures. Total non-airport operating expenses were $5.1M lower than budget because of delays in hiring, project spending delays, timing of tenant improvements, and lower utility expenses. 2021 YTD Actuals vs. 2020 YTD Actuals Non-airport operating revenues were $1.2M higher compared to 2020 because of higher revenues from Grain, NWSA Distributable revenues, and unbudgeted police forfeitures offset by lower Conference and Event Centers, Fishing & Operations, and Central Harbor Management. The Conference and Event Centers and parking were affected by rescheduling/cancelling of events due to COVID-19. Non-airport expenses were 1.2M higher than 2020 due to lower charges to Capital Projects offset by less contract spending. MAJOR OPERATING REVENUES SUMMARY Fav (UnFav) Incr (Decr) 2019 YTD 2020 YTD 2021 YTD 2021 YTD Act/Rvsd Bud Var Change from 2020 $ in 000's Actual Actual Actual Budge t $ % $ % Aeronautical Revenues 175,927 163,722 143,188 178,518 (35,330) -19.8% (20,534) -12.5% Public Parking 40,401 20,002 25,537 25,729 (192) -0.7% 5,536 27.7% Rental Cars - Operations 15,560 7,591 11,497 10,740 757 7.0% 3,906 51.5% Rental Cars - Operating CFC 4,505 - - - - 0.0% - 0.0% ADR & Terminal Leased Space 32,689 16,918 17,764 22,012 (4,248) -19.3% 845 5.0% Ground Transportation 9,979 4,374 4,208 5,961 (1,753) -29.4% (166) -3.8% Employee Parking 5,193 4,678 4,457 4,844 (386) -8.0% (221) -4.7% Airport Commercial Properties 7,072 5,777 5,541 6,367 (827) -13.0% (236) -4.1% Airport Utilities 3,665 2,758 3,010 3,784 (774) -20.4% 252 9.1% Clubs and Lounges 4,456 1,714 709 2,453 (1,744) -71.1% (1,005) -58.6% Cruise 8,473 133 61 4,466 (4,405) -98.6% (72) -54.3% Recreational Boating 6,228 6,211 6,330 6,406 (77) -1.2% 119 1.9% Fishing & Operations 5,071 5,091 4,768 4,407 361 8.2% (322) -6.3% Gra in 2,567 2,005 3,433 2,556 876 34.3% 1,427 71.2% Maritime Portfolio Management 5,019 4,884 4,914 5,039 (125) -2.5% 30 0.6% Central Harbor Management 4,406 4,104 3,654 4,027 (373) -9.3% (450) -11.0% Conference & Event Centers 5,963 1,240 420 1,329 (909) -68.4% (819) -66.1% NWSA Distributable Revenue 24,941 21,218 22,166 21,137 1,030 4.9% 949 4.5% Other 6,049 3,824 4,225 2,347 1,877 80.0% 400 10.5% Total Operating Revenues (w/o Aero) 192,237 112,523 122,695 133,606 (10,911) -8.2% 10,172 9.0% TOTAL 368,164 276,244 265,883 312,124 (46,241) -14.8% (10,361) -3.8% 4 I. PORTWIDE FINANCIAL & PERFORMANCE REPORT 06/30/21 MAJOR OPERATING EXPENSES SUMMARY Fav (UnFav) Incr (Decr) 2019 YTD 2020 YTD 2021 YTD 2021 YTD Act/Rvsd Bud Change from 2020 $ in 000's Actual Actual Actual Budge t $ % $ % Salaries & Benefits 65,172 71,427 71,476 72,315 839 1.2% 50 0.1% Wages & Benefits 64,028 67,147 64,484 65,276 792 1.2% (2,663) -4.0% Payroll to Capital Projects 12,648 14,460 14,733 16,280 1,547 9.5% 273 1.9% Outside Services 43,613 45,545 40,724 49,861 9,136 18.3% (4,821) -10.6% Utilitie s 13,103 12,104 12,860 14,620 1,760 12.0% 756 6.2% Equipment Expense 4,478 4,211 2,960 3,426 466 13.6% (1,250) -29.7% Supplies & Stock 5,286 4,653 4,030 4,519 489 10.8% (623) -13.4% Travel & Other Employee Expenses 2,476 1,603 864 1,375 511 37.2% (740) -46.1% Third Party Mgmt Op Exp 6,494 3,228 2,010 3,141 1,131 36.0% (1,218) -37.7% B&O Taxes 2,226 1,716 1,682 1,983 301 15.2% (34) -2.0% Other Expenses 20,272 2,188 6,392 7,031 639 9.1% 4,204 192.2% Charges to Capital Projects/Overhead Alloc (24,033) (30,462) (26,440) (30,694) (4,254) 13.9% 4,022 -13.2% TOTAL 215,765 197,820 195,776 209,132 13,356 6.4% (2,044) -1.0% PORTWIDE FINANCIAL YEAR-END FORECAST SUMMARY Fav (UnFav) Incr (Decr) 2019 2020 2021 2021 Fcst vs. Budget Change from 2020 Variance $ in 000's Actual Actual Fore cas t Budge t $ % $ % Aeronautical Revenues 357,598 297,909 300,332 386,668 (86,336) -22.3% 2,423 0.8% Airport Non-Aero Revenues 269,037 116,473 166,133 189,548 (23,414) -12.4% 49,660 42.6% Non-Airport Revenues 137,538 96,446 106,658 104,645 2,013 1.9% 10,212 10.6% Total Operating Revenues 764,174 510,828 573,123 680,861 (107,737) -15.8% 62,296 12.2% Total Operating Expenses 441,700 408,681 425,322 423,412 (1,910) -0.5% 16,641 4.1% NOI before Depreciation 322,474 102,147 147,801 257,448 (109,647) -42.6% 45,655 44.7% Depreciation 174,903 180,086 176,509 176,509 - 0.0% (3,577) -2.0% NOI after Depreciation 147,571 (77,939) (28,708) 80,939 (109,647) -135.5% 49,231 -63.2% Year-End Forecast Operating Revenues forecast to be $107.7M lower than budget mainly due to increased federal reliefs that lower the rates and charges for Aeronautical revenues. Operating Expenses are expected to be $1.9M higher than budget due to some unbudgeted items and would have been $559K lower than 2020 after adjusting the $17.2M state pension credit for 2020. NOI before depreciation forecast to be $109.7M below budget due to significant lower revenues and slightly higher operating costs. KEY PERFORMANCE METRICS Fav (UnFav) Incr (Decr) 2020 YTD 2021 YTD 2020 2021 2021 Fcst vs. Budget Change from 2020 Variance Actual Actual Actual Fore cas t Budge t Chg. % Chg. % Total Passengers (in 000's) 11,128 14,298 20,087 38,264 36,432 1,832 5.0% 18,177 90.5% Landed Weight (lbs. in millions) 9,791 11,993 20,071 26,922 26,233 689 2.6% 6,851 34.1% Passenger CPE (in $) N/A N/A 26.50 13.97 19.62 5.65 28.8% (12.53) -47.3% Grain Volume (metric tons in 000's) 1,735 2,691 4,240 4,698 4,219 479 11.4% 458 10.8% Cruise Passenger (in 000's) - - - 227 N/A - 0.0% - 0.0% Shilshole Bay Marina Occupancy 93.3% 93.7% 94.1% 94.5% 96.1% -1.6% -1.7% 0.4% 0.4% Note: Due to CDC COVID-19 Cruise restrictions, we were unable to Budget for Cruise Passengers. 5 I. PORTWIDE FINANCIAL & PERFORMANCE REPORT 06/30/21 KEY BUSINESS EVENTS The Port continues to invest in initiatives that support equitable recovery with the launch of the first-ever PortGen Accelerator, an intensive two-month business development program, that will provide women and minority-owned small businesses access to mentorship and help them acquire future business opportunities. The Port commission also approved to invest another $2M for the Opportunity Youth Initiative. The program was launched last year with $1.5M funding to restore youth jobs and training to those deeply affected by the pandemic. The Port will once again partner with local nonprofits: Partner in Employment, Seattle Goodwill, Seattle Parks Foundation, and Urban League of Metropolitan Seattle. The Port hosted a Sustainable Aviation Fuels (SAF) Study Session to review progress in implementing the SAF strategic plan and significant investments of the private sector in SAF production and use in Washington. Several Port commissioners also joined Governor Jay Inslee, State Senator Reuven Carlyle, and other Washington state leaders for the Climate Bill Signing which includes the Clean Fuel Standard, the Port's longtime top legislative priority. Moreover, the Port, along with other NW Ports (Tacoma and Vancouver, B.C.) and the Northwest Seaport Alliance committed to a new vision to phase out emissions from seaport-related activities by 2050. Each Port will develop its own implementation plans and will continue to report its progress annually. The Port will partner with Expedia and Washington Department of Fish and Wildlife for a Cost and Feasibility study. The study will help determine the technical requirements and potential costs of rebuilding the public fishing pier at Pier 86 with a "ferry float" to support commuter service. The Port will also continue to partner with the City of Seattle, King County, and The Boeing Company for further clean-up action on the middle third of the Lower Duwamish Waterway Superfund site. Seattle-Tacoma International Airport (SEA) launched two pilot programs, SEA Spot Saver and Happyhover. SEA Spot Saver is a free reservation-based system for TSA general screening security checkpoints. Happyhover is a technology deployed to airline check-in kiosks for travelers to check in and drop off luggage without touching the electronic screens. SEA also added two unique customer amenities to better serve the airport's diverse community of travelers. The Sensory Room is a quiet area for travelers with neurological or developmental disabilities such as sensory processing disorders or autism spectrum disorders. The Interfaith Prayer and Meditation Room welcomes all faiths and beliefs as an inclusive and peaceful place for meditation, worship, and reflection. SEA reached another milestone in the North Satellite Modernization project with the early opening of remodeled gates and a new airport destination the Marketplace at N with a stage for live performances and open seating with airfield views. The new North Satellite feature museum-quality art pieces that reflect the diversity in the Pacific Northwest. The building was designed and constructed with sustainability features such as the use of nearly 21 million recycled materials, energy-efficient LED lighting, and renewable natural gas (RNG) to heat the facility. The Port collaborated with Visit Seattle and cruise lines on a cruise webinar to inform hospitality/tourism partners on 2021 operations, health and safety protocols and environmental stewardship. The Port also completed cruise terminal upgrades which include touchless restroom facilities, COVID signage, health barriers, water bottle filling stations, and air filtration improvements to keep guests and workers healthy during the Alaska cruise season. The Port commission authorized a long-term ground lease for a portion of Terminal 106 to Trammell Crow Company (TCC). This will facilitate the development of a 700,000-square-foot, two-story light industrial warehouse. The building's location can potentially limit the number of trucks hauling cargo on I-5 which will help in managing traffic, noise, and air pollution in the region. The project, expected to be completed in 2024, is estimated to provide 140 prevailing wage construction jobs during the build out of the property and will support approximately 650 to 1,200 full-time employees. 6 I. PORTWIDE FINANCIAL & PERFORMANCE REPORT 06/30/21 CAPITAL SPENDING SUMMARY 2021 2021 2021 Budget Variance $ in 000's YTD Actual Forecast Budget $ % Aviation 200,138 456,620 491,202 34,582 7.0% Maritime 5,059 21,701 26,195 4,494 17.2% Economic Development 973 4,001 5,647 1,646 29.1% Central Services & Other (note 1) 5,804 12,704 13,605 901 6.6% TOTAL 211,974 495,026 536,649 41,623 7.8% Note: (1) "Other" includes 100% Port legacy projects in the North Harbor and Storm Water Utility Small Capital projects. Total capital spending is forecast to be $495M for 2021, $41.6M lower than the approved budget mainly due to spending delays in International Arrival Facility and North Satellite projects. PORTWIDE INVESTMENT PORTFOLIO During the second quarter of 2021, the investment portfolio earned 1.23% versus the benchmark's (the Bank of America Merrill Lynch 1-3 Year US Treasury & Agency Index) of 0.25%. Over the last twelve months, the portfolio and the benchmark have earned 1.48% and 0.18%, respectively. Since the Port became its own Treasurer in 2002, the life-to-date earnings of the Port's portfolio and the benchmark are 2.38% and 1.71%, respectively. 7 II. AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/21 II. AVIATION DIVISION FINANCIAL SUMMARY Fav(UnFav) Fcst. vs. Budget Incr/(Decr) Financial Summary 2019 2020 2021 2021 Variance Change from 2020 ($ in 000's) Actual Actual Forecast Budget $ % $ % Operating Revenue Aeronautical Revenues 357,598 297,909 300,332 386,668 (86,336) -22.3% 2,423 0.8% Non-Aeronautical Revenues 269,037 116,473 166,133 189,548 (23,414) -12.4% 49,660 42.6% Total Operating Revenues 626,636 414,382 466,465 576,215 (109,750) -19.0% 52,083 12.6% Total Operating Expenses 355,245 329,680 341,260 339,908 (1,353) -0.4% 11,581 3.5% Net Operating Income 271,390 84,702 125,205 236,308 (111,103) -47.0% 40,503 47.8% Federal Relief 147,148 161,601 37,899 123,702 326.4% 14,453 9.8% Federal Relief (Concessions) 26,774 26,774 26,774 NOI (After Federal Relief) 271,390 231,850 313,579 274,207 39,373 14.4% 81,729 35.3% CPE 12.86 26.50 13.97 19.62 5.65 0.29 (12.53) -47.3% Non-Aero NOI ($ in 000s) 6,671 9,750 86,046 82,742 3,304 4.0% 76,296 782.5% Enplaned passengers (in 000s) 25,874 10,044 19,132 18,216 916 5.0% 9,088 90.5% - Capital Expenditures (in 000s) 573,598 573,598 456,620 491,202 34,582 7.0% (116,978) -20.4% 2021 Forecast vs. 2021 Budget Net Operating Income (NOI) for 2021 is forecasted to be (-$111M or -47%) unfavorable to the budget before Federal Relief is applied, driven by: o Lower Aeronautical revenue (-$86.3M or -22.3%) due to grants of approximately $107.8M projected to offset Aeronautical costs in 2021. See the Airline Rate Base Cost Drivers table for more details. o Non-Aeronautical revenue (-23.4M or -12.4%) unfavorable. Although improvement is seen in Landside operations due to the improvement in the forecasted passenger volume recovery, Concessions will be requiring Federal Relief. Federal Relief for the concessions area is projected for $26.8M. o Total Operating Expenses ($-1.3M or -0.4%) unfavorable driven primarily by the Snow Removal ($2.2M) in the Airfield and Maintenance cost centers, partially offset by savings from Other Divisions of $256K. 2021 Forecasts vs. 2020 Actuals Net Operating Income for 2021 is projected to be ($40.5M or 47.8%) higher than prior year before Federal Relief primarily driven by: o Higher Operating Revenue ($52M or 12.6.2%) compared to prior year is due to passenger levels improving with a forecast of being down 26% compared to 2019 vs. 61% down in 2020 compared to 2019. o Higher Operating Expenses ($11.6M or 3.5%) compared to prior year were primarily driven by higher Environmental Remediation Liability, Outside Services, Utilities, and Police spending in 2021 vs. 2020. Spending in 2020 was lower than normal due to directives to spend less due to the business environment related to the pandemic. 8 II. AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/21 A. BUSINESS EVENTS Higher than expected passenger levels, new forecast now 26% lower than 2019. Increased federal relief improves bottom line, helps customers: o $37 million for CRRSAA o $154 million for ARPA o $27 million for tenant concessions relief (CRRSAA and ARPA) o Planning to reserve $75 million for 2022 Implemented the mid-year airline rate adjustment effective July 1. B. KEY PERFORMANCE METRICS % YTD Change YTD 2019 YTD 2020 YTD 2021 from 2020 Total Passengers (000's) Domestic 21,616 10,074 13,770 36.7% International 2,689 1,054 528 -49.9% Total 24,304 11,128 14,298 28.5% Operations 214,749 142,657 171,873 20.5% Landed Weight (In Millions of lbs.) Cargo 1,165 1,254 1,409 12.4% All other 13,738 8,537 10,584 24.0% Total 14,903 9,791 11,993 22.5% Cargo - Metric Tons Domestic freight 145,262 161,957 174,449 7.7% International & Mail freight 64,841 47,466 60,738 28.0% Total 210,103 209,423 235,187 12.3% *Mail weight for 2021 forward is incorporated in freight 9 II. AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/21 Key Performance Measures Fav(UnFav) 2019 2020 2021 2021 Fcst. vs. Budget Incr/(Decr) Variance Change from 2020 Approved Actual Actual Forecast Budget $ % $ % Key Performance Metrics Cost per Enplanement (CPE) 12.86 26.50 13.97 19.62 5.65 28.8% (12.53) -47.3% Non-Aeronautical NOI (in 000's)1 143,917 6,671 86,046 82,742 3,304 4.0% 79,375 1189.9% Other Performance Metrics O&M Cost per Enplanement 6.86 16.41 8.92 9.33 0.41 4.4% (7.49) -45.7% Non-Aero Revenue per Enplanement 5.20 5.80 5.04 5.20 (0.16) -3.1% (0.76) -13.1% Debt per Enplanement (in $) 66 163 94 85 (8) -9.7% (70) -42.7% Debt Service Coverage 1.68 1.40 2.70 1.36 1.34 99.2% 1.30 92.9% Days cash on hand (10 months = 304 days) 314 327 418 369 49 13.4% 92 28.1% Aeronautical Revenue Sharing ($ in 000's) (17,146) 1 - - - 0.0% (1) 100.0% Activity (in 000's) Enplanements 25,874 10,044 19,132 18,216 916 5.0% 9,088 90.5% Total Passengers 51,748 20,087 38,264 36,432 1,832 5.0% 18,177 90.5% (1) Assumes Federal Relief for Concessions applied in the 2021 Forecast Key Performance Metrics 2021 Forecast vs. 2021 Budget Cost per Enplanement (CPE): o CPE is ($5.65, or 28.8%) favorable driven primarily by the Federal Relief to help lower the Aeronautical costs to recover. o Non-Aero NOI is ($3.3M or 4%) favorable to original approved budget due to projection of improved revenues in the Landside operations and due to Federal Relief. 2021 Forecast vs. 2020 Actuals CPE is $12.53 lower compared to prior year due to lower costs expected to recover due to the Federal Relief offsetting the costs compared to prior year. Non-Aero NOI is $79.4M higher than prior year due to projection of improved revenues in the Landside operations and due to Federal Relief. 10 II. AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/21 C. OPERATING RESULTS Division Summary YTD Actuals Fav(UnFav) Actual vs. Budget Incr/(Decr) Total Airport Expense Summary 2019 YTD 2020 YTD 2021 YTD 2021 YTD Variance Change from 2020 ($ in 000's) Actual Actual Actual Budget $ % $ % Operating Expenses Payroll 71,218 77,615 76,202 75,468 (734) -1.0% (1,414) -1.8% Outside Services 28,619 29,634 26,770 31,583 4,813 15.2% (2,863) -9.7% Utilities 9,328 8,757 9,750 10,458 708 6.8% 993 11.3% Other Expenses 8,487 2,092 (461) 476 937 196.8% (2,553) -122.0% Total Airport Direct Charges 117,652 118,099 112,261 117,985 5,723 4.9% (5,837) -4.9% Environmental Remediation Liability 12,543 (2,776) 801 1,569 768 48.9% 3,577 -128.9% Capital to Expense 83 - 288 - (288) 288 Total Exceptions 12,627 (2,776) 1,090 1,569 479 30.6% 3,865 -139.3% Total Airport Expenses 130,279 115,323 113,351 119,554 6,203 5.2% (1,972) -1.7% Corporate 32,175 34,298 34,011 34,199 188 0.6% (287) -0.8% Police 11,117 12,162 11,336 12,662 1,326 10.5% (827) -6.8% Maritime/Economic Development/Other 1,672 1,596 1,420 1,943 523 26.9% (176) -11.0% Total Charges from Other Divisions 44,964 48,057 46,767 48,804 2,037 4.2% (1,290) -2.7% Total Operating Expenses 175,243 163,380 160,118 168,358 8,240 4.9% (3,262) -2.0% Expenses 2021 YTD Actuals vs. 2021 YTD Budget Operating Expenses were ($8.2M or 4.9%) favorable driven primarily by the underspend in Charges from other Divisions of $2M, and in Outside Services of $4.8M across multiple business areas - including Commercial Management $400k, F&I and Capital Program $1.6M, PMG $1M, and Maintenance $2.1M. 11 II. AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/21 Division Summary YE Forecast Fav(UnFav) Fcst. vs. Budget Incr/(Decr) Total Airport Expense Summary 2019 2020 2021 2021 Variance Change from 2020 ($ in 000's) Actual Actual Forecast Budget $ % $ % Operating Expenses Payroll 144,051 152,895 153,183 153,293 111 0.1% 287 0.2% Outside Services 68,162 63,922 66,406 65,174 (1,232) -1.9% 2,483 3.9% Utilities 18,180 15,695 19,619 20,244 625 3.1% 3,924 25.0% Other Expenses 14,721 3,341 2,059 1,359 (700) -51.5% (1,282) -38.4% Total Airport Direct Charges 245,114 235,854 241,267 240,071 (1,196) -0.5% 5,413 2.3% Environmental Remediation Liability 15,900 (2,361) 2,196 2,001 (195) -9.8% 4,557 -193.0% Capital to Expense 2,089 2,588 218 - (218) (2,370) -91.6% Total Exceptions 17,989 227 2,414 2,001 (413) -20.6% 2,187 964.4% Total Airport Expenses 263,104 236,081 243,680 242,072 (1,609) -0.7% 7,600 3.2% Corporate 65,729 68,316 70,076 69,767 (308) -0.4% 1,760 2.6% Police 22,290 22,150 23,513 23,964 450 1.9% 1,364 6.2% Maritime/Economic Development/Other 4,123 3,134 3,991 4,105 114 2.8% 857 27.4% Total Charges from Other Divisions 92,141 93,599 97,580 97,836 256 0.3% 3,981 4.3% - Total Operating Expenses 355,245 329,680 341,260 339,908 (1,353) -0.4% 11,581 3.5% Operating Expenses 2021 YE Forecast compared to 2021 YE Budget (-$1.3M or -0.4% unfavorable) Total Operating Expenses is forecasted to over-run Budget by $1.3M driven partially by the Snow Removal ($2.2M) in the Airfield and Maintenance cost centers. 12 II. AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/21 Aeronautical Business Unit Summary YTD Actuals Fav(UnFav) Actual vs. Budget Incr/(Decr) Aeronautical NOI 2019 YTD 2020 YTD 2021 YTD 2021 YTD Variance Change from 2020 ($ in 000's) Actual Actual Actual Budget $ % $ % Rate Base Revenues Airfield Movement Area 61,289 54,693 37,192 49,789 (12,597) -25.3% (17,502) -32.0% Airfield Apron Area 9,883 9,575 10,932 9,557 1,375 14.4% 1,357 14.2% Terminal Rents 100,229 77,111 83,321 102,193 (18,872) -18.5% 6,210 8.1% Federal Inspection Services (FIS) 7,271 14,621 3,560 9,225 (5,665) -61.4% (11,061) -75.6% Total Rate Base Revenues 178,672 156,000 135,005 170,763 (35,758) -20.9% (20,995) -13.5% - Airfield Commercial Area 5,569 7,720 8,177 7,755 422 5.4% 456 5.9% Subtotal before Revenue Sharing 184,241 163,720 143,182 178,518 (35,336) -19.8% (20,538) -12.5% Revenue Sharing (8,314) 1 - - - (1) -100.0% Total Aeronautical Revenues 175,927 163,722 143,182 178,518 (35,336) -19.8% (20,540) -12.5% - Total Aeronautical Expenses 117,918 108,286 111,036 115,710 4,673 4.0% 2,751 2.5% Aeronautical NOI 58,009 55,436 32,146 62,809 (30,663) -48.8% (23,290) -42.0% Aeronautical 2021 YTD Actuals vs. 2021 YTD Budget Net Operating Income was (-$30.6M or -49%) unfavorable to budget due to $35.3M in lower aeronautical revenues driven by lower costs to recover driven by lower operating expenses in Outside Services and Charges from Other Divisions. Aeronautical 2021 YTD Actuals vs. 2020 YTD Actuals Net Operating Income was (-$23.3M or -42%) lower than 2020 YTD because aeronautical revenues in 2021 were based on lower rates and charges in anticipation of a recovering year that is not yet back to pre-pandemic activity levels, whereas in 2020 rates and charges were based on pre-pandemic activity levels. Aeronautical Business Unit Summary - YE Forecast Fav(UnFav) Fcst. vs. Budget Incr/(Decr) Aeronautical NOI 2019 2020 2021 2021 Variance Change from 2020 ($ in 000's) Actual Actual Forecast Budget $ % $ % Rate Base Revenues Airfield Movement Area 123,436 84,906 87,899 115,037 (27,138) -23.6% 2,993 3.5% Airfield Apron Area 22,016 15,146 15,184 21,418 (6,234) -29.1% 38 0.2% Terminal Rents 205,283 171,607 166,593 213,147 (46,554) -21.8% (5,014) -2.9% Federal Inspection Services (FIS) 12,321 8,616 14,373 21,454 (7,081) -33.0% 5,757 66.8% Total Rate Base Revenues 363,057 280,275 284,048 371,056 (87,007) -23.4% 3,773 1.3% Airfield Commercial Area 11,687 17,633 16,284 15,612 672 4.3% (1,349) -7.7% Subtotal before Revenue Sharing 374,744 297,908 300,332 386,668 (86,336) -22.3% 2,424 0.8% Revenue Sharing (17,146) 1 - - - (1) -100.0% Total Aeronautical Revenues 357,598 297,909 300,332 386,668 (86,336) -22.3% 2,423 0.8% Total Aeronautical Expenses 236,959 219,878 234,400 233,102 (1,298) -0.6% 14,522 6.6% Aeronautical NOI 120,639 78,031 65,932 153,566 (87,634) -57.1% (12,099) -15.5% 13 II. AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/21 Airline Rate Base Cost Drivers Impact on Aero Revenues 2020 2021 2021 Budget vs Forecast $ in 000's Actual Budget Forecast $ % O&M (1) 213,775 227,420 228,844 1,424 0.6% Federal Relief Grants O&M (22,507) (3,500) (21,100) (17,600) 502.9% Net O&M 191,268 223,920 207,744 (16,176) -7.2% Debt Service Before Offsets 166,848 193,302 190,120 (3,183) -1.6% Debt Service PFC Offset (36,390) (47,549) (57,839) (10,290) 21.6% Federal Relief Grants Debt Service (71,763) (29,399) (86,778) (57,378) 195.2% Net Debt Service 58,694 116,354 45,503 (70,851) -60.9% Amortization 32,359 32,681 32,624 (58) -0.2% Space Vacancy (1,083) (1,141) (1,063) 78 -6.9% TSA Operating Grant and Other (960) (758) (759) (1) 0.1% Rate Base Revenues 280,279 371,056 284,048 (87,007) -23% Commercial area 17,633 15,612 16,284 672 4% Total Aero Revenues 297,912 386,668 300,332 (86,336) -22% (1) O&M, Debt Service Gross, and Amortization do not include commercial area costs or the international incentive expenses 2021 Forecast to 2021 Budget O&M $1.4M higher mostly in Apron, FIS, and Queue Management: o Apron Large Snow Expenses o FIS Increased Interpretation Services, Increased VIP Hospitality, Furniture Capital to Expense, Contingencies [IAF Oversize Baggage Relocate, IAF Wall Protections] o Queue Management VIP Divesting Debt Service before Offsets: Forecast is $3.2M lower primarily because the 3rd runway PFC debt was refunded with revenue bond which increased debt service and offset with refunding savings. PFC Offset $10.3M lower due to lower anticipated collections Federal Relief Grants Aero Portion: o Payroll Impact (O&M) Removing $21.1M from Rate Base o Debt Service Impact - Removing $86.8M from Rate Base 14 II. AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/21 Non-Aero Business Unit Summary YTD Actuals Fav(UnFav) Actual vs. Budget Incr/(Decr) Non-Aeronautical NOI 2019 YTD 2020 YTD 2021 YTD 2021 YTD Variance Change from 2020 ($ in 000's) Actual Actual Actual Budget $ % $ % Non-Aeronautical Revenues Public Parking 40,401 20,002 25,537 25,729 (192) -0.7% 5,536 27.7% Rental Cars 20,064 7,591 11,497 10,740 757 7.0% 3,906 51.5% Ground Transportation 9,979 4,374 4,208 5,961 (1,753) -29.4% (166) -3.8% Airport Dining & Retail 29,581 13,856 14,871 19,470 (4,599) -23.6% 1,015 7.3% Other 24,578 18,402 17,106 20,451 (3,345) -16.4% (1,296) -7.0% Total Non-Aeronautical Revenues 124,604 64,225 73,219 82,351 (9,131) -11.1% 8,995 14.0% Total Non-Aeronautical Expenses 38,294 55,094 49,082 52,648 3,567 6.8% (6,012) -10.9% Non-Aeronautical NOI 86,310 9,131 24,138 29,703 (5,565) -18.7% 15,007 164.4% Less: CFC Surplus - - - - - - Adjusted Non-Aeronautical NOI 86,310 9,131 24,138 29,703 (5,565) -18.7% 15,007 164.4% Non-Aeronautical 2021 YTD Actuals vs. 2021 YTD Budget Net Operating Income was (-$5.6M or -18.7%) unfavorable to revised budget driven by: o Continued impact of COVID-19 driving passenger levels impacting revenues from concession fees or transaction volume (Parking, Rental Car, Ground Transportation, Airport Dining & Retail, Clubs & Lounges, In-flight Kitchens) are closely aligned with the decline in passenger volume. o Non-Aeronautical operating expenses were ($3.5M or 6.8%) favorable. Non-Aeronautical 2021 YTD Actuals vs. 2020 YTD Actuals Net Operating Income was ($12M or 164.4%) higher than 2020 driven by: o Increasing passenger levels and activity when compared to the 2nd quarter in 2020 where the COVID-19 impact was ramping up. 15 II. AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/21 Non-Aero Business Unit Summary - YE Forecast Fav(UnFav) Fcst. vs. Budget Incr/(Decr) Non-Aeronautical NOI 2019 2020 2021 2021 Variance Change from 2020 ($ in 000's) Actual Actual Forecast Budget $ % $ % Non-Aeronautical Revenues Public Parking 82,125 34,502 65,301 59,597 5,704 9.6% 30,799 89.3% Rental Cars 52,567 16,637 33,690 26,880 6,810 25.3% 17,053 102.5% Ground Transportation 20,765 6,557 11,238 13,628 (2,391) -17.5% 4,680 71.4% Airport Dining & Retail 61,615 25,418 43,317 45,936 (2,619) -5.7% 17,899 70.4% Other 51,966 33,359 39,361 43,506 (4,145) -9.5% 6,003 18.0% Total Non-Aeronautical Revenues 269,037 116,473 192,907 189,548 3,359 1.8% 76,434 65.6% Total Non-Aeronautical Expenses 118,286 109,802 106,861 106,806 (55) -0.1% (2,941) -2.7% Non-Aeronautical NOI1 150,752 6,671 86,046 82,742 3,304 4.0% 79,375 1189.9% Less: CFC Surplus (6,834) - - - - - Adjusted Non-Aeronautical NOI 143,917 6,671 86,046 82,742 3,304 4.0% 79,375 1189.9% Debt Service (49,299) (33,065) (15,935) (53,025) 37,090 -69.9% 17,131 -51.8% Net Cash Flow 94,619 (26,394) 70,111 29,717 40,394 135.9% 96,506 -365.6% (1) Assumes Federal Relief for Concessions applied in the 2021 Forecast Non-Aeronautical 2021 Forecast vs. 2021 Budget Non-Aeronautical net operating income is forecasted to be ($3.3M or 4%) favorable to budget based on improvement in revenues on the Landside operations due to the improvement in the forecasted passenger volume recovery. The Non-Aeronautical Revenues assumes Federal Relief for the concessions area of $26.7M. Non-Aeronautical 2021 Forecast vs. 2020 Actuals Net Operating Income for 2021 is forecasted to be ($79.4M or 1190%) higher compared to prior year due to passenger levels improving with a forecast of being down 26% compared to 2019 vs. 61% down in 2020 compared to 2019. 16 II. AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/21 D. CAPITAL RESULTS Capital Variance 2021 2021 2021 Budget Variance YTD Year-End Budget $ % $ in 000's Actual F or ecast Checked Baggage (1) 42,510 105,610 86,100 (19,510) -22.7% International Arrivals Facility (2) 40,439 68,439 86,500 18,061 20.9% NSAT Renovation (3) 55,058 84,602 96,408 11,806 12.2% Concourse A Duty Free (4) 2 34 2,461 2,427 98.6% Concourse A Expansion (5) 69 7,639 5,215 (2,424) -46.5% SAMP Near Term Planning (6) 322 2,692 5,025 2,333 46.4% Terminal Security Enhancements (7) 175 1,276 3,479 2,203 63.3% RCF Security Improvements (8) 196 2,802 4,934 2,131 43.2% 2021-25 AFLD Pvmnt (9) 6,990 27,542 29,560 2,017 6.8% Concourse C New Power Center (10) 3,668 4,919 2,961 (1,958) -66.1% Air Cargo Rd Safety (11) 448 2,080 3,972 1,892 47.6% SSAT HVAC (12) 4,830 9,725 11,505 1,780 15.5% All Other 45,431 165,437 195,060 29,624 15.2% Subtotal 200,138 482,797 533,180 50,383 9.4% CIP Cashflow Mgmt Reserve - (26,177) (41,978) (15,801) 37.6% Total Spending 200,138 456,620 491,202 34,582 7.0% 1. Accelerated schedule for Temp Maintenance Shop. 2. The ped walkway continues to slide to the right and is likely going to complete late 2021, possibly 2022. Additionally, in the IAF building, issues with systems, smoke control and commissioning have caused delays to the IAF building. 3. Variance due to $4.0M less Construction (Contract/OFCI/Sales Tax); $1M less Permit costs (delayed); and $1M slipped payment for seating. 4. 2021 baseline was set prior to IC increase from $25,180,000 to $33,366,000. 5. 2021 baseline was set previous to Notebook approval (03/05/21), whereas the project budget went from $60M to 71.4M. 6. Continued scoping and analysis extended to gain better information deferring spending. 7. Cash flow based upon previous procurement that was cancelled, revised cash flow per anticipated DB schedule. 8. Construction bid came lower than estimates. 9. Bid result for 2021 Pavement project came lower than Engineer's Estimate. 10. Construction accelerated by 6 months. 11. Cash flow reflects returned bid savings and extended construction schedule. 12. Returned $5M savings in Q1 and design delays have caused underspending. 17 III. MARITIME DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/21 III. MARITIME DIVISION FINANCIAL SUMMARY Fav (UnFav) Incr (Decr) 2019 2020 2021 2021 Fcst vs. Budget Change from 2020 Variance $ in 000's Actual Actual Forecast B udg e t $ % $ % Total Revenues 59,289 42,111 46,656 45,280 1,377 3% 4,545 11% Total Operating Expenses 48,644 50,228 49,023 50,243 1,220 2% (1,205) -2% Net Operating Income 10,644 (8,117) (2,367) (4,963) 2,597 52% 5,750 71% Capital Expenditures 7,887 19,698 21,701 26,195 4,494 17% 2,003 10% 2021 Forecast vs. 2021 Budget Operating Revenues are $1.4M higher than budget driven by higher volumes at the Grain Terminal. Operating Expenses forecasted $1.1M lower than budget from a change in maintenance allocation, open FTEs. Net Operating Income Planned $2.6M favorable to budget. Capital Spending forecasted at 83% of $26.2M budget. 2021 Forecast vs. 2020 Actuals Operating Revenues expected $4.5M higher than 2020 due to higher grain volumes and resumption of cruise business. Operating Expenses forecasted $1.2M lower than 2020 actual driven by lower support service costs, partially offset by increased central services from allocation changes and a favorable pension adjustment in 2020. Net Operating Income forecasted $5.7M above 2020 actual. Net Operating Income before Depreciation by Business Fav (UnFav) Incr (Decr) 2020 YTD 2021 YTD 2021 YTD Actual vs. Budget Change from 2020 Variance $ in 000's Actual Actual B udg e t $ % $ % Ship Canal Fishing & Operations (513) (945) (1,105) 160 14% (432) -84% Elliott Bay Fishing & Commercial Operations (266) (257) (967) 710 73% 10 NA Recreational Boating 1,094 558 295 263 -89% (536) -49% Cruis e (5,555) (5,190) (1,536) (3,654) -238% 365 -7% Gra in 1,348 2,798 1,683 1,115 -66% 1,450 108% Maritime Portfolio 71 123 (880) 1,003 114% 53 75% All Other (151) (162) (329) 167 51% (11) -7% Total Maritime (3,973) (3,075) (2,839) (236) -8% 898 23% 18 III. MARITIME DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/21 A. BUSINESS EVENTS Recreational Boating Bell Harbor Marina hosted the return of Classic Weekend, an annual public event sponsored by the Classic Yacht Association with a full marina buyout. In addition, agreements were completed with Parasail Seattle and Seattle's Tall Ship tour operations at the marina. Elliott Bay Fishing and Commercial Operations - Maximized pier utilization while helping coordinate the transition of the cruise berths to CTA for cruise ship lay berth use. Cruise Completed terminal upgrades inclusive of touchless restroom facilities, COVID signage, health barriers, water bottle filling stations, and air filtration improvements. Stormwater Utility Terminal 25 oil/water separator was installed in the truck parking area B. KEY PERFORMANCE METRICS Grain Volume Metric Tons in 000's Cruise Passengers in 000's 19 III. MARITIME DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/21 C. OPERATING RESULTS Fav (UnFav) Incr (Decr) 2019 YTD 2020 YTD 2021 YTD 2021 YTD Actual vs. Budget Change from 2020 Variance $ in 000's Actual Actual Actual B udg e t $ % $ % Ship Canal Fishing & Operations 2,004 2,182 2,134 2,146 (12) -1% (49) -2% Elliott Bay Fishing & Commercial Operations 3,067 2,908 2,635 2,262 373 16% (274) -9% Recreational Boating 6,228 6,211 6,330 6,406 (77) -1% 119 2% Cruis e 8,473 133 61 4,466 (4,405) -99% (72) -54% Gra in 2,567 2,005 3,433 2,556 876 34% 1,427 71% Maritime Portfolio Management 5,019 4,884 4,914 5,039 (125) -2% 30 1% Other 10 15 1 0 1 NA (13) -91% Total Revenue 27,368 18,338 19,507 22,875 (3,368) -15% 1,169 6% Expenses Maritime (Excl. Maint) 5,745 6,869 7,031 7,801 770 10% 162 2% Economic Development 2,369 2,325 2,135 3,015 880 29% (190) -8% Total Direct 8,114 9,194 9,166 10,816 1,649 15% (28) 0% Maintenance Expenses 5,521 4,879 5,093 6,006 913 15% 215 4% Envir Services & Planning 1,055 1,226 785 1,070 285 27% (442) -36% Seaport Finance & Cost Recovery 509 457 513 490 (23) -5% 56 12% Seaport Project Management 130 188 193 160 (33) -21% 5 2% Total Support Services 7,214 6,751 6,584 7,725 1,141 15% (167) -2% IT 1,320 1,393 1,335 1,410 75 5% (58) -4% Police Expenses 1,988 1,569 1,477 1,647 170 10% (92) -6% External Relations 751 615 571 683 113 16% (44) -7% Other Central Services 2,789 2,652 3,277 3,311 34 1% 625 24% Aviation Division / Other 135 137 170 121 (49) -40% 33 24% Total Central Services / Other 6,982 6,367 6,830 7,173 343 5% 464 7% Total Expense 22,310 22,311 22,581 25,714 3,134 12% 270 1% NOI Before Depreciation 5,058 (3,973) (3,074) (2,839) (235) -8% 899 23% Depreciation 8,911 8,781 8,881 8,088 (793) -10% 100 1% NOI After Depreciation (3,853) (12,754) (11,955) (10,928) (1,027) -9% 799 6% 2021 YTD Actuals vs. 2021 YTD Budget Operating Revenues were $3,368K lower than budget driven by: 1) Elliott Bay Fishing & Operations $373K higher due to Ballard Locks closure and improved pier utilization at T91. 2) Cruise $4,405K lower due to timing of lease invoice to NCL, and phasing of sailings. 3) Grain $876K higher from 55% increase in annual volumes. 4) Maritime Portfolio Management $125K lower from vacancy at Maritime Industrial Center. 5) All other variances add up to $87K lower. Operating Expenses were $3,134K lower than budget: 1) Direct Expenses were $1,649K lower than budget Rec Boating $75K higher than budget due to COVID-19 expenses. Ship Canal Fishing and Operations $16K lower from reversal of bad debt expense. Elliot Bay Fishing and Commercial $310K below due to lower utilities expenses. Cruise $532K under from lower outside services and utilities. Maritime Security $38K lower than budget due to timing of cruise sailings. Maritime Marketing $105K below budget from event cancellations. Portfolio Management $850K favorable from lower utility expense and timing of tenant improvements. Environmental remediation was $68K unfavorable to budget. Divisional contingency open headcount vacancy factor created a $109K unfavorable variance All other Direct Expenses net to $100K over budget. 20 III. MARITIME DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/21 2) Total Support Services were $1,141K favorable to budget. Maintenance $913K favorable due to reduced wage expenses and favorable allocation change. Environmental Services and Planning were $285K lower than budget due to open position and outside services timing. 3) Total Central Services / Other were $343K favorable to budget. Net Operating Income was $235K unfavorable to budget. 2021 YTD Actuals vs. 2020 YTD Actuals Operating Revenues were $1.2M higher than 2020 due to increased volumes at the Grain terminal. Operating Expenses were $270K higher than 2020 actual driven by higher central service allocation, offset by lower utilities and Environmental services allocation. Net Operating Income was $899K better than 2020 actual. Fav (UnFav) Incr (Decr) 2019 2020 2021 2021 Fcst vs. Budget Change from 2020 Variance $ in 000's Actual Actual Forecast B udg e t $ % $ % Ship Canal Fishing & Operations 3,929 4,704 4,123 4,135 (12) 0% (581) -12% Elliott Bay Fishing & Commercial Operations 6,095 5,752 4,882 4,509 373 8% (870) -15% Recreational Boating 12,484 12,611 12,838 12,915 (77) -1% 227 2% Cruis e 22,410 3,824 9,000 8,558 442 5% 5,176 135% Gra in 4,266 5,142 5,779 4,903 876 18% 637 12% Maritime Portfolio Management 10,108 10,074 10,034 10,259 (225) -2% (40) 0% Other (3) 4 0 0 0 NA (4) -100% Total Revenue 59,289 42,111 46,656 45,280 1,377 3% 4,545 11% Expenses Maritime (Excl. Maint) 13,789 16,256 15,439 15,539 100 1% (817) -5% Economic Development 4,987 4,511 5,115 5,365 250 5% 604 13% Total Direct 18,776 20,767 20,554 20,904 350 2% (213) -1% Maintenance Expenses 12,186 12,029 11,095 11,595 500 4% (934) -8% Envir Services & Planning 2,250 2,739 1,940 2,140 200 9% (798) -29% Seaport Finance & Cost Recovery 835 937 977 977 0 0% 40 4% Seaport Project Management 175 1,061 416 316 (100) -32% (644) -61% Total Support Services 15,446 16,765 14,428 15,028 600 4% (2,337) -14% IT 2,685 2,719 2,838 2,853 15 1% 120 4% Police Expenses 4,086 2,865 3,059 3,118 59 2% 193 7% External Relations 1,564 1,200 1,013 1,347 334 25% (187) -16% Other Central Services 5,810 5,596 6,887 6,749 (138) -2% 1,291 23% Aviation Division / Other 278 315 243 243 0 0% (72) -23% Total Central Services / Other 14,423 12,695 14,041 14,311 270 2% 1,345 11% Total Expense 48,644 50,228 49,023 50,243 1,220 2% (1,205) -2% NOI Before Depreciation 10,644 (8,117) (2,367) (4,963) 2,597 52% 5,750 71% Depreciation 17,627 17,624 16,899 16,899 0 0% (725) -4% NOI After Depreciation (6,982) (25,741) (19,266) (21,862) 2,597 12% 6,475 25% 2021 Forecast vs. 2021 Budget Operating Revenues are forecasted $1,377K higher than budget: 1) Grain $876K higher year to date. 2) Cruise $442K higher based on current schedule at 50% occupancy. 3) Elliot Bay Fishing & Operations is $373K higher due to better pier utilization at T91. Operating Expenses forecasted $1.2MK favorable to budget from change in maintenance allocations, lower payroll, and reduced external relations expenses. Net Operating Income Planned $2.6M favorable to budget. 21 III. MARITIME DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/21 2021 Forecast vs. 2020 Actuals Operating Revenues expected $4.5M higher than 2020 with partial resumption of Cruise, higher Grain volumes, offset by 2020 revenue benefitting from the lengthy closure of the Ballard Locks. Operating Expenses forecasted $1.2M lower than 2020 actual driven primarily by favorable Maintenance, Seaport Project Management, and Environmental allocations, less capital to expense, offset by unfavorable central services allocations from 2020 one-time pension adjustment. Net Operating Income forecasted $5.8M better than 2020 actual. D. CAPITAL RESULTS 2021 YTD 2021 2021 Budget Variance $ in 000's Actual Fore cas t Budge t $ % T117 Restoration 2,050 8,180 8,809 629 7% T91 Northwest Fender 384 6,160 7,761 1,601 21% MD Small Projects 415 1,711 3,383 1,672 49% MD Fleet 199 3,342 3,201 (141) -4% FT Maritime Innovation Center 135 604 1,475 871 59% T91 Berth 6&8 Redev 361 1,134 1,025 (109) -11% P91 Pass Term Upgrade COV 7 230 1,000 770 77% P66 Shore Power 149 443 765 322 42% SBM Restrms/Service Bldgs Rep 316 367 665 298 45% FT Gateway Building 176 438 600 162 27% All Other Projects 867 (908) (2,489) (1,581) 64% Total Maritime 5,059 21,701 26,195 4,494 17% Comments on Key Projects T91 Northwest Fender Construction bid well under Engineer's Estimate. Have reduced forecast accordingly. FT Maritime Innovation Center Budget increase due to unexpected increased Design costs, and new scope (risk mitigation measures), but also due to the escalation adjustment triggered by wage inflation projected for 2022 and expected skilled labor shortages announced in late March 2021. Design progress towards 90% delayed due to need for Commission authorization to amend NTE amount on Service Agreement and additional funding to complete design and permitting phase. MD Small Projects - Several projects deferred to 2022 per the sponsor's request. 22 IV. ECONOMIC DEVELOPMENT DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/21 IV. ECONOMIC DEVELOPMENT DIVISION FINANCIAL SUMMARY Fav (UnFav) Incr (Decr) 2019 2020 2021 2021 Fcst vs. Budget Change from 2020 Variance $ in 000's Actual Actual Forecast B udg e t $ % $ % Total Revenues 21,151 9,470 12,048 13,348 (1,300) -10% 2,578 27% Total Operating Expenses 27,155 20,611 20,605 21,413 808 4% (6) 0% Net Operating Income (6,004) (11,141) (8,557) (8,065) (492) -6% 2,584 -23% Capital Expenditures 3,121 9,314 4,000 5,647 1,647 29% (5,314) -57% 2021 Forecast vs. 2021 Budget Operating Revenues forecasted to $1.3M unfavorable to budget due to lower volumes at the Conference & Event Center related COVID-19 cancellations and variable revenue at parking facilities. Operating Expenses $808K favorable to budget due to variable cost impact of conference cancellations, delayed hiring, and Washington Tourism Alliance expenses moving to 2022, offset by change in Maintenance allocation. Net Operating Income forecasted at $492K below budget. Capital spending forecasted to 71% of $5.6M budget. 2021 Forecast vs. 2020 Actuals Operating Revenues forecasted to $2.6M above 2020 due to favorable 2nd half outlook at the Conference & Event Center. Operating Expenses $6K lower than 2020 with higher Washington Tourism Alliance expenses, offset by favorable Central Services costs. Net Operating Income forecasted $2.6M better than 2020 actual. Net Operating Income before Depreciation by Business Fav (UnFav) Incr (Decr) 2020 YTD 2021 YTD 2021 YTD Actual vs. Budget Change from 2020 Variance $ in 000's Actual Actual B udg e t $ % $ % Portfolio Management (1,057) (1,804) (1,152) (652) -57% (747) -71% Conference & Event Centers (2,420) (2,130) (1,843) (287) -16% 289 12% Tourism (385) (379) (557) 178 32% 6 1% EDD Grants 27 (88) (85) (3) -3% (115) -420% Env Grants/Remed Liab/ERC (300) (2) (386) 384 99% 298 99% Total Econ Dev (4,134) (4,403) (4,023) (380) -9% (269) -7% 23 IV. ECONOMIC DEVELOPMENT DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/21 A. BUSINESS EVENTS Diversity in Contracting Selected twelve new participants for new PortGen accelerator program. Partnered with Sound Transit and WSDOT to provide disadvantaged business enterprises with technical training. Economic Development and Innovation Staff is administering 25 Economic Development Partnership grants with participating cities. Supporting second Maritime Blue Innovation Accelerator. Portfolio Management Maintained 95% occupancy across real estate portfolio despite ongoing COVID-19 pandemic challenges. Real Estate Development Executed ground lease at T-106. Tourism Earned media resulting from international office activities YTD: $525K. Created webinars in collaboration with U.S. Commercial Service, Visit USA Committees, CLIA, tour operators and travel trade publications to broadcast Washington tourism opportunities. B. KEY PERFORMANCE METRICS Building Occupancy by Location: 24 IV. ECONOMIC DEVELOPMENT DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/21 C. OPERATING RESULTS Fav (UnFav) Incr (Decr) 2019 YTD 2020 YTD 2021 YTD 2021 YTD Actual vs. Budget Change from 2020 Variance $ in 000's Actual Actual Actual B udg e t $ % $ % Revenue 4,421 4,119 3,669 4,042 (373) -9% (450) -11% Conf & Event Centers 5,963 1,240 420 1,329 (909) -68% (819) -66% Total Revenue 10,384 5,359 4,089 5,371 (1,282) -24% (1,270) -24% Expenses Portfolio Management 1,922 1,583 1,643 1,687 44 3% 60 4% Conf & Event Centers 4,833 2,378 1,271 1,890 618 33% (1,107) -47% P69 Facilities Expenses 92 119 90 114 24 21% (29) -24% RE Dev & Planning 48 91 94 76 (17) -23% 3 3% EconDev Expenses Other 352 488 298 398 100 25% (190) -39% Maintenance Expenses 1,563 1,170 1,792 1,282 (509) -40% 621 53% Maritime Expenses (Excl Maint) 106 229 490 528 38 7% 261 114% Total EDD & Maritime Expenses 8,916 6,058 5,678 5,976 298 5% (381) -6% Diversity in Contracting 99 50 48 70 23 32% (2) -5% Tourism 526 374 380 982 602 61% 6 1% EDD Grants (4) (27) 87 75 (12) -17% 115 -420% Total EDD Initiatives 621 397 515 1,127 612 54% 118 30% Environmental & Sustainability 173 101 13 15 3 17% (88) -87% Police Expenses 101 108 99 111 12 10% (9) -8% Other Central Services 2,819 2,760 2,093 2,100 8 0% (667) -24% Aviation Division 53 69 95 64 (31) -48% 26 38% Total Central Services & Aviation 3,147 3,037 2,300 2,291 (9) 0% (738) -24% Envir Remed Liability 0 0 0 0 0 NA 0 NA Total Expense 12,684 9,493 8,493 9,394 902 10% (1,000) -11% NOI Before Depreciation (2,300) (4,134) (4,403) (4,023) (380) -9% (269) -7% Depreciation 1,833 1,774 1,919 1,517 (402) -26% 145 8% NOI After Depreciation (4,133) (5,908) (6,322) (5,540) (782) -14% (414) -7% 2021 YTD Actuals vs. 2021 YTD Budget Operating revenue were $1,282K unfavorable to budget due primarily to lower than anticipated Conference and Event Center volumes as a result of the on-going COVID-19 restrictions on meetings and events. Operating Expenses were $902K favorable to budget: 1) Conference and Event Center $618K favorable from lower activity as a result of the on-going COVID-19 restrictions on meetings and events. 2) Maintenance Expenses $509K unfavorable due to change in Maintenance allocation methodology. 3) EDD Initiatives $612K favorable due to timing of spending related to COVID-19. 4) All other expenses net to $181K below budget. Net Operating Income was $380K below budget. 2021 YTD Actuals vs. 2020 YTD Actuals Operating Revenues were $1,270K lower than 2020 actual Operating Expenses were $1,000K lower than 2020 actual: 1) Conference and Event Centers $1,107K lower than 2020 due to variable costs associated with lower Conference and Event Center volumes as a result of the on-going COVID-19 restrictions on meetings and events. 2) Maintenance Expenses $621K higher than 2020 due to change in Maintenance allocation methodology. 3) Central Services $738K lower than 2020. 4) All other Expenses net to $224K higher than 2020. Net Operating Income was $269K below 2020 actual. 25 IV. ECONOMIC DEVELOPMENT DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/21 Fav (UnFav) Incr (Decr) 2019 2020 2021 2021 Fcst vs. Budget Change from 2020 Variance $ in 000's Actual Actual Forecast B udg e t $ % $ % Revenue 8,912 7,808 7,913 8,313 (400) -5% 105 1% Conf & Event Centers 12,239 1,662 4,135 5,035 (900) -18% 2,473 149% Total Revenue 21,151 9,470 12,048 13,348 (1,300) -10% 2,578 27% Expenses Portfolio Management 3,732 3,073 3,301 3,401 100 3% 227 7% Conf & Event Centers 10,218 4,440 4,420 4,920 500 10% (19) 0% P69 Facilities Expenses 215 232 177 222 45 20% (56) -24% RE Dev & Planning 136 209 154 154 0 0% (55) -26% EconDev Expenses Other 930 938 695 835 140 17% (243) -26% Maintenance Expenses 3,145 3,042 3,037 2,537 (500) -20% (5) 0% Maritime Expenses (Excl Maint) 1,070 1,035 1,060 1,060 0 0% 24 2% Total EDD & Maritime Expenses 19,448 12,969 12,843 13,128 285 2% (127) -1% Diversity in Contracting 152 103 122 142 20 14% 19 19% Tourism 1,337 954 2,181 2,481 300 12% 1,227 129% EDD Grants 785 778 1,060 1,060 0 0% 282 36% Total EDD Initiatives 2,274 1,834 3,363 3,683 320 9% 1,528 83% Environmental & Sustainability 24 44 23 31 8 26% (21) -48% Police Expenses 61 64 205 209 4 2% 142 223% Other Central Services 5,234 5,539 4,051 4,242 191 5% (1,488) -27% Aviation Division 114 161 120 120 0 0% (41) -25% Total Central Services & Aviation 5,433 5,808 4,400 4,603 203 4% (1,408) -24% Envir Remed Liability 0 0 0 0 0 NA 0 NA Total Expense 27,155 20,611 20,605 21,413 808 4% (6) 0% NOI Before Depreciation (6,004) (11,141) (8,557) (8,065) (492) -6% 2,584 23% Depreciation 3,647 3,611 3,216 3,216 0 0% (395) -11% NOI After Depreciation (9,651) (14,753) (11,773) (11,281) (492) -4% 2,980 20% 2021 Forecast vs. 2021 Budget Operating Revenues forecasted to $1.3M unfavorable to budget due to lower volumes at the Conference & Event Center related COVID-19 cancellations and variable revenue at parking facilities. Operating Expenses $808K favorable to budget due to variable cost impact of conference cancellations, delayed hiring, and Washington Tourism Alliance expenses moving to 2022, offset by change in Maintenance allocation. Net Operating Income forecasted at $492K below budget. Capital spending forecasted to 82% of $5.6M budget. 2021 Forecast vs. 2020 Actuals Operating Revenues forecasted to be $2.6M above 2020 due to favorable 2nd half outlook at the Conference & Event Center. Operating Expenses $6K lower than 2020 with higher Washington Tourism Alliance expenses, offset by favorable Central Services costs. Net Operating Income forecasted $2.6M better than 2020 actual. 26 IV. ECONOMIC DEVELOPMENT DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/21 D. CAPITAL RESULTS 2021 YTD 2021 2021 Budget Variance Actual Fore cas t Budge t $ % $ in 000's BHICC Interior Modernization 276 854 1,990 1,136 57% P69 Underdock Utility Rpl 105 153 1,028 875 85% CW Bridge Elev Modernization 48 893 943 50 5% WTC HVAC Replacement 59 984 848 (136) -16% T91 Uplands Dev Phase 1 311 493 800 307 38% P66 Roof Upgrades 90 544 544 0 0% EDD Small Projects 34 390 522 132 25% Tenant Improvements -Capital 0 58 289 231 80% EDD Technology Projects 0 250 250 0 0% P66 HVAC Systems Upgrade 0 0 185 185 100% All Other Projects 50 (619) (1,752) (1,133) 65% Total Economic Development 973 4,000 5,647 1,647 29% Comments on Key Projects BHICC Modernization Approved annual 2021 budget is erroneously showing expense portion and is showing it twice. P69 Under Dock Utility Replacement City of Seattle permitting approval process is taking a lot longer and the Corps permit is expected to take longer. T -91 Upland Development Decrease in projected spending for 2021 due to the need to procure new Service Agreement for Professional Design Services, after terminating contract with former design consultant. Design can resume after the new contract is executed, in Q4 2021. 27 V. CENTRAL SERVICES DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/21 V. CENTRAL SERVICES DIVISION FINANCIAL SUMMARY Fav (UnFav) Incr (Decr) 2019 YTD 2020 YTD 2021 YTD 2021 YTD Actual vs. Budget Change from 2020 Variance $ in 000's Actual Actual Actual Budge t $ % $ % Total Operating Revenues 331 1,629 1,982 90 1,892 2091.5% 353 21.7% Core Central Support Services 36,723 39,102 39,964 41,863 1,899 4.5% 863 2.2% P olic e 13,997 14,819 13,769 14,959 1,190 8.0% (1,050) -7.1% Engineering/PCS 5,164 4,773 4,575 4,551 (24) -0.5% (198) -4.2% Total Operating Expenses 55,884 58,694 58,309 61,373 3,064 5.0% (385) -0.7% 2021 YTD Actuals vs. 2021 YTD Budget Operating Revenues favorable due primarily to Police forfeiture seizures of $1.9M. Operating Expenses $3.1M favorable to budget mainly due to staffing vacancies, projects spending delays, and delayed Outside Services costs. 2021 YTD Actuals vs. 2020 YTD Actuals Operating Revenues $353K above 2020 mainly due to higher Police forfeiture seizures in 2021. Operating Expenses $385K lower than 2020 mainly due to lower Outside Services offset by less charges to Capital Projects. A. BUSINESS EVENTS The Port conducted twelve community, business, industry and government listening sessions to gather feedback on how the Port can contribute to an equitable recovery. Port leaders joined Governor Jay Inslee and other Washington State leaders for the Climate Bill Signing which includes the Clean Fuel Standard. The Port's vaccine clinic at SEA administered over 7,800 doses of the COVID vaccine. External Relations held a community engagement on the redevelopment of Fishermen's Terminal and several Terminal 5 outreach presentations. External Relations hosted a three-part series of public Industry Insights webinars on status of cargo, aviation, cruise and commercial fishing operations and a webinar to inform hospitality/tourism partners on 2021 operations, health and safety protocols and environmental stewardship. External Relations hosted Restart of Cruise webinar with Visit Seattle and cruise lines to inform hospitality/tourism partners on 2021 operations, health and safety protocols and environmental stewardship The Information Security Department partnered with the Port's Strategic Planning division to deliver a Portwide broadcast disruption summit. ICT completed 7 projects which include: (1) Audit Management System Upgrade- project extended the life of the current audit management tool; (2) Airport Breach/Duress System Upgrade- new system is expected to accommodate growth in breach/duress alarm needs over the next five to ten years. Port of Seattle Police Department, in partnership with Seattle Police Department and multiple involved stakeholders, responded to a protest at Terminal 18 to prevent a ship from unloading its cargo. The Port competed issuance of Revenue bonds to fund Airport projects and refund existing bonds for $72 million present value savings. The Port released the Annual Financial Report for 2020 in May. Accounting Financial Reporting (AFR) received clean audit for the Port 2020 financial statement. 28 V. CENTRAL SERVICES DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/21 B. KEY PERFORMANCE METRICS Century Agenda Strategic Objectives 2019 2020 2021 Responsibly Invest in the Economic Growth of the Region and all its Communities A. Job seekers placed in jobs at SEA Airport through the Employment Center 417 366 560 B. Number of SEA Airport tenants supported in finding employees N/A 56 59 C. Employment Center training completions N/A 230 99 D. K-12 Career Connected Learning: WFD engagement with teachers/faculty 450 1,800 0 E. Community members entering employment in construction, maritime and 38 0 30 environmental sustainability F. Residents engaged from near-port communities to create awareness and N/A N/A 150 access to family-wage careers in port-related industries G. Number of Job Openings created 358 233 124 H. Job applications received 7,309 3,703 5,825 I. Number of job interviews conducted 1,045 451 640 J. Number of new employees hired 234 155 140 K. Number of interns 137 47 109 L. Number of Veteran Fellows 5 0 2 M. Number of employees participating in Tuition Reimbursement 30 27 36 Become a Model for Equity, Diversity and Inclusion A. Employee participation in Caucusing (Black Lives Matter and Caucusing N/A N/A 41 for Change) B. Employee participation in EDI Port Reads book club N/A N/A 109 C. Port employees and supervisors completing required racial equity N/A N/A 449 orientations/trainings. Be a Highly Effective Public Agency A. Corporate costs as a % of Total Operating Expenses 25.3% 29.0% 29.1% B. Investment portfolio earnings versus the benchmark (the Bank of America 2.16%/ 1.98%/ 1.23%/ Merrill Lynch 1-3 Year US Treasury & Agency Index) 1.8% 0.18% 0.25% C. Comply with Public Disclosure Act and respond in a timely manner 285 248 305 D. Litigation and Claim Reserves $2.5M $2.0M $1.4M E. Claims/Injury Damages Reserves $435K $127K $256K F. Percent of annual audit work plan completed each year 100% 100% 100% G. Employee Development Class Attendees/Structured Learning 509 1847 490 H. Total Recordable Incident Rate (previous Occupational Injury Rate) 4.75 2.93 5.84 I. Lost Work Day Rate (previously Days Away Severity Rate) 15.08 46.43 57.47 J. Respond to Public Disclosure Requests 285 248 305 K. Customer Survey for Police Service Excellent or Above Average 83% 83% 100% 29 V. CENTRAL SERVICES DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/21 C. OPERATING RESULTS Financial Summary (Year-End Forecast) Fav (UnFav) Incr (Decr) 2019 2020 2021 2021 Budget Variance Change from 2020 $ in 000's Notes Actual Actual Fore cas t Budge t $ % $ % Total Revenues 1,282 2,512 2,117 181 1,936 1070.3% (395) -15.7% Executive 2,018 2,263 2,468 2,285 (184) -8.0% 206 9.1% Commission 2,022 1,755 2,189 2,169 (20) -0.9% 434 24.7% Legal 4,987 6,290 6,236 3,919 (2,317) -59.1% (54) -0.9% External Relations 7,760 7,481 8,061 9,878 1,817 18.4% 579 7.7% Equity Diversity and Inclusion 2,337 4,676 5,792 3,743 (2,048) -54.7% 1,115 23.8% Human Resources 9,187 8,380 10,470 11,385 915 8.0% 2,091 24.9% Labor Relations 1,230 1,286 1,353 1,346 (7) -0.5% 66 5.2% Internal Audit 1,450 1,540 1,655 1,637 (18) -1.1% 115 7.5% Accounting & Financial Reporting Services 7,341 8,165 8,722 8,724 2 0.0% 556 6.8% Information & Communication Technology 23,014 24,732 24,427 24,427 () 0.0% (304) -1.2% Information Security 1,203 1,656 1,770 1,913 143 7.5% 114 6.9% Finance & Budget 2,037 2,177 2,306 2,292 (14) -0.6% 129 5.9% Business Intelligence 1,302 1,181 1,426 1,523 97 6.4% 244 20.7% Risk Services 3,137 3,349 3,862 3,939 77 2.0% 513 15.3% Office of Strategic Initiatives 1,448 934 930 1,059 129 12.2% (4) -0.4% Central Procurement Office 4,452 4,280 5,161 5,532 372 6.7% 880 20.6% Contingency 39 (190) (1,002) (1,502) (500) 33.3% (812) 427.2% Core Central Support Services 74,966 79,956 85,826 84,270 (1,557) -1.8% 5,870 7.3% P olic e 27,793 27,538 27,793 28,317 524 1.9% 255 0.9% Total Before Cap Dev & Environment 102,759 107,494 113,619 112,587 (1,032) -0.9% 6,125 5.7% Capital Development Engineering 5,696 4,959 5,721 5,580 (141) -2.5% 763 15.4% Port Construction Services 4,341 4,138 3,798 3,619 (179) -5.0% (339) -8.2% Sub-Total 10,038 9,096 9,519 9,199 (321) -3.5% 423 4.7% Environment & Sustainability Environment & Sustainability 976 692 1,267 1,408 142 10.1% 575 83.1% Sub-Total 976 692 1,267 1,408 142 10.1% 575 83.1% Industrial Development Corporation 1 - - - - 0.0% - 0.0% Capital to Expense 117 193 - - - 0.0% (193) -100.0% Total Expenses 113,891 117,476 124,405 123,194 (1,211) -1.0% 6,929 5.9% 30 V. CENTRAL SERVICES DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/21 2021 Forecast vs. 2021 Budget Operating Expenses for 2021 are $1.2M over Approved Budget due primarily to: o Executive unfavorable variance of ($184K) due to higher Payroll of ($125K) and Outside Services ($58K). o Commission unfavorable variance of ($20K) due to increased Payroll of 1 FTE ($46K) offset by planned lower Travel of $26K. o Legal unfavorable variance of ($2.3M) is due to higher than budgeted Outside Services ($2.2) and Payroll ($68K). o External Relations favorable variance of $1.8M primarily due to reduced Outside Services of $1.6M, Payroll of $75K, Travel of $56K, General Expenses of $51K, and Promo Expenses of $41K. o Equity, Diversity and Inclusion unfavorable variance of $2M due to $2M added for Opportunity Youth Initiative for Workforce Development. o Human Resources favorable variance of $915K primarily due to lower Payroll of $562K, Equipment of $50K, and General Expenses (Employee Commuter Benefits) of $288K. o Labor Relations unfavorable variance of ($7K) due to higher Payroll of ($14K) offset by lower Travel of $4K, and Equipment of $3K. o Internal Audit unfavorable variance of ($18K) due to higher Payroll from job refresh. o Accounting and Financial Reporting Services favorable variance of $2K from savings in Supplies and Stock. o Information & Communication Technology plans to be on target. o Information Security favorable variance of $143K primarily due to lower Outside Services of $134K. o Corporate Finance & Budget unfavorable by ($13K) due to higher Worker's Comp. o Business Intelligence favorable variance of $97K due to lower Payroll. o Risk Services favorable variance of $77K due to lower Payroll of $70K and Outside Services of $7K. o Office of Strategic Initiative favorable variance of $129K is primarily due to lower Payroll. o Central Procurement Office favorable variance of $372K primarily due to higher than planned charges to Capital Projects of $186K, lower Payroll of $110K, General Expenses of $61K, and Supplies & Stock of $50K offset by higher Equipment of ($48K). o Police $524K favorable variance primarily due to lower Payroll of $457K, Outside Services of $167K, Travel of $65K, Supplies of $52K, and Equipment of $24K offset by higher costs for General Expenses of ($240K). o Engineering unfavorable variance of ($141K) due to lower charges to Capital Projects of ($1.1M) and General Expenses of ($180K) offset by lower Payroll of $628K, Outside Services of $260K, and Property Rentals of $225K. o PCS unfavorable variance of ($179K) primarily due to lower charges to Capital Projects of ($732K) and unplanned Worker's Compensation of ($86K) which were offset by lower Outside Services of $386K, Payroll of $95K, Supplies of $100K, and Equipment of $44K. o Environment & Sustainability Admin favorable variance of $142K due to delayed Outside Services of $170K offset by higher Payroll of ($27K). o Contingency unfavorable variance of ($500K). Adjusted forecast for Vacancy Factor actuals and approved mid-year unbudgeted new FTEs. 31 V. CENTRAL SERVICES DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/21 2021 Forecast vs. 2020 Actuals Operating Expenses for 2021 are forecasted to be $6.9M higher than 2020 actuals mainly due to: o Core Central Support Services $6.3M higher than 2020 primarily due to higher payroll in 2021 due to planned new hires, full year salaries of people hired in 2020, and Pension True-up in 2020 of ($4.5M). o Police $255K above 2020 due to the following: There were several vacancies in 2020 that are planned to be filled in 2021, 2020 had much lower overtime due to cancellation of Cruise season, and Pension True-up in 2020 of ($2.5M). o Capital Development $423K higher than 2020 primarily due to higher payroll due to 2021 new hires, full year salaries of people hired in 2020, higher planned Outside Services, and Pension True-up in 2020 of ($1.5M). o Environment & Sustainability $637K higher than 2020 due to planned increases to Outside Services to support key initiatives and Pension True-up in 2020 of ($25K). D. CAPITAL RESULTS 2021 2021 2021 Budget Variance YTD Year-End Budget $ % $ in 000's Actual Fore cas t Infrastructure - Small Cap 413 1,866 1,911 45 2.4% Services Tech - Small Cap 543 1,226 1,226 0 0.0% Radio System Upgrade 2,062 2,455 2,955 500 16.9% Office Wi-Fi Refresh 4 1,351 1,350 (1) -0.1% Phone System Upgrade 112 840 840 0 0.0% Environmental MIS projects 2 599 600 1 0.2% CDD Fleet Replacement 170 803 1,123 320 28.5% Corporate Fleet Replacement 0 685 685 0 0.0% Other (note 1) 235 1,824 1,968 144 7.3% Subtotal 3,541 11,649 12,658 1,009 8.0% CIP Cashflow Adjustment 0 (3,000) (3,000) 0 0.0% TOTAL 3,541 8,649 9,658 1,009 10.4% Note: (1) "Other" includes remaining ICT projects and small capital projects/acquisitions. 32
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