ITEM NO.:

7b_Supp

DATE OF
MEETING:

Aug 2, 2011

Q2 2011 Financial Performance
Port of Seattle

August 2, 2011

Q2 Operating Income Summary
2010 YTD
Actual

2011 YTD
Actual

2011 YTD 2011 Act vs. Bud
Budget
Var $ Var %

Aeronautical Revenues

100,452

107,521

108,578

(1,057)

-1.0%

Other Operating Revenues

129,326

135,759

139,076

(3,317)

-2.4%

Total Operating Revenues

229,778

243,280

247,655

(4,375)

-1.8%

Total Operating Expenses

117,553

125,507

143,509

18,002

12.5%

Income before Depreciation

112,225

117,773

104,145

13,628

13.1%

Depreciation

79,773

79,569

80,217

648

0.8%

Income after Depreciation

32,453

38,204

23,928

14,276

59.7%

$ in 000's

•
•
•
•

Aeronautical Revenues were $1.0M lower than budget but $7.1M higher than Q2 2010.
Other Operating Revenues were $3.3M below budget but $6.4M higher than Q2 2010.
Total Operating Expenses were $18.0M lower than budget but $8.0M higher than Q2 2010
(mainly due to capital policy change, Port Centennial/AAPA Convention, spending
requested by airlines, RCF, and deferred maintenance).
Income before Depreciation was $13.6M higher than budget and $5.6M higher than Q2
2010.
2

Q2 Major Revenue Variances
Major Revenues ($ in '000)
Aero Revenues
Seaport Security Grants

Bud Var.
(1,057)
(3,364)

Public Parking
Rental Cars
Concessions
Ground Transportation
Container
Seaport Industrial Properties
Cruise
Grain
Real Estate Third Party Mgmt
Other
Subtotal

(1,160)
(1,265)
885
234
973
(266)
203
244
(616)
814
47

TOTAL

(4,375)

•
•
•
•

Aero Revenues are based on cost
recovery - lower revenue means lower
CPE.
Lower Seaport Security Grants are offset
by lower related expenses, thus have no
impact on NOI.
Other Operating Revenues were $47K
above budget.
Public Parking and Rental Cars were
under budget, but they were $1M higher
and just $92K lower than Q2 2010,
respectively.

3

Q2 Major Expense Variances
Operating Expenses ($ in '000)

Actual/Budget
Var. $ Var. %

Salaries & Benefits

2,567

5.9%

Wages & Benefits

1,770

4.2%

Utilities

(562)

-5.2%

Outside Services

7,105

25.6%

Travel & Other Employee Exps

1,240

41.3%

510

72.5%

Pass-through Grant Expenses

3,375

98.8%

Other
Total

1,997
18,002

16.3%
12.5%

Promotional Expenses

•
•
•

All major accounts were under budget, except Utilities.
Payroll costs were $4.3M below budget .
Outside Services were $7.1M lower than budget mainly due to delay on some
projects (Terminal Realignment, Part 150, PeopleSoft Financials Upgrade, etc.)

4

Port-wide 2011 Year-End Forecast

•
•
•

$ in 000's

2010
Actual

2011
Forecast

2011
Budget

2011 Bud vs. Fcst
Var $ Var %

Aeronautical Revenues

198,329

214,181

217,200

(3,019)

-1.4%

Other Operating Revenues

272,161

281,449

283,436

(1,987)

-0.7%

Total Operating Revenues

470,490

495,630

500,636

(5,006)

-1.0%

Total Operating Expenses

253,464

278,547

285,844

7,297

2.6%

Income before Depreciation

217,026

217,083

214,792

2,291

1.1%

Depreciation

160,775

160,491

160,491

0

0.0%

Income after Depreciation

56,251

56,592

54,301

2,291

4.2%

Aeronautical Revenues are forecasting to be $3.0M lower than budget but $15.9M higher than
2010 due to higher in both capital costs and operating expenses.
Other Operating Revenues are forecasting to be $2.0M lower than budget (mainly due to $3.0M
unfavorable variance in Seaport Security Grants) but still $9.3M above 2010.
Total Operating Expenses are forecasting to be $7.3M below budget but $25.0M above 2010.

5

Comprehensive Summary
($ in '000)

Revenues
1. Aeronautical Revenues
2. Other Operating Revenues
3. Tax Levy
4. PFCs
5. CFCs
6. Non-Capital Contributions
7. Interest Income
8. Capital Contributions
Total
Expenses
1. O&M Expense
2. Depreciation
3. Revenue Bond Interest Expense
4. PFC Bond Interest Expense
5. GO Bond Interest Expense
6. Public Expense
7. Non-Op Environmental Expense
8. Misc. Non-Op Expense
Total
Change In Net Assets

•
•
•

2010 YTD 2011 YTD 2011 YTD
Actual
Actual
Budget
100,452
107,521
108,578
129,326
135,759
139,077
36,552
36,804
36,750
30,672
31,683
31,375
9,854
10,074
9,067
633
2,557
4,097
10,086
9,476
6,827
2,735
9,386
7,978
320,309
343,259
343,749

Actual/Budget
Var. $
Var. %
(1,057)
-1.0%
(3,318)
-2.4%
54
0.1%
308
1.0%
1,007
11.1%
(1,540)
-37.6%
2,649
38.8%
1,408
17.6%
(490)
-0.1%

117,553
79,773
66,213
5,249
8,835
15,851
18,907
509
312,890

125,507
79,569
64,160
3,379
8,033
5,289
1,190
2,657
289,785

143,509
80,217
73,664
5,205
7,079
8,278
3,100
1,260
322,312

18,002
648
9,504
1,826
(954)
2,988
1,910
(1,397)
32,528

12.5%
0.8%
12.9%
35.1%
-13.5%
36.1%
61.6%
-110.8%
10.1%

7,419

53,475

21,436

32,038

149.5%

Explanations
Cost recovery
Seaport Security Grants
Higher ticket sales
Higher transaction days
Difference in timing
Higher fund balance
Earlier LOI drawdown

See slide #4 for details
Lower variable rates
Savings in refunded bonds
Issued $30M new GO bond
Projects delay
Projects delay
Asset inventory write-offs

Total Revenues were $490K below budget but $23.4M higher than Q2 2010.
Total Expenses were $32.5M less than budget and $23.1M below Q2 2010.
Change in Net Assets were $32.0M above budget and $46.1M higher than Q2 2010.
6

Total Port 2011 Capital Spending

Division

2011
Forecast

2011 Budget Plan of
Budget Variance Finance

($ in millions)

Aviation
Seaport
Real Estate
Corporate & CDD
Total

•
•

185.6
27.7
14.1
9.7
237.1

223.7
34.0
16.3
12.9
286.9

38.2
6.3
2.2
3.2
49.8

231.4
29.5
15.4
12.1
288.3

Capital spending for each division is expected to come in below budget in 2011.
Total capital spending is forecasting to be $237.1M for 2011, $49.8M lower than
budget.

7

Aviation Division
Financial Performance
Q2 2011

Aviation Business Highlights
• Airline activity:
- June YTD enplanements up 4.9% from 2010
- 2011 enplanements are forecast to grow 3.5% from 2010

• Operating Expenses:
- Total O&M expenses are 9.1% below budget YTD
- Forecasting savings of $3.0M

• Non-airline NOI:
- YTD Revenues up 6.4% over 2010, but down 1.5% vs. budget
- Forecasting positive NOI vs. Budget at year-end

• Airline Costs:
- Forecasting airline cost per enplanement (CPE) of $12.20 vs.
budget of $12.76

9

Activity
Landed Weight vs. Prior Year
5%

10%
6.10%
3.44%

5%

6.54%

3.91%

3.72%

5.27%

Growth Rate

Growth Rate

Enplanements vs. Prior Year

4%

3.62%

3.91%

3.11%
2.63%

3%
2%
1%

1.11%

0%
Jan

0%
Jan

Figures in 000's

Enplanements
Landed Weight

•

•

Feb

Mar

Apr

2010
YTD
7,322
9,404

May

Feb

Mar

Apr

May

1.53%

Jun

Jun

2011
YTD
7,678
9,648

%
Variance
4.9%
2.6%

2010
Actual
15,773
19,786

2011
%
Forecast Variance
16,325
3.5%
20,089
1.5%

International enplaned passengers saw greater year-over-year growth
(8.3% vs. Q2 2010) than domestic enplanements (4.9% vs. Q1 2010).
There was an overall growth of 2.6% in landed weight from compared to
YTD 2010.

10

YTD Operating Revenue
2009 YTD
Actual

2010 YTD
Actual

2011 YTD
Actual

2011 YTD
Budget

Revenues
Landing Fees
Terminal Rental
Other Aero Revenues
Total Aeronautical

27,917
65,517
6,353
99,787

26,815
66,595
7,043
100,452

29,388
70,921
7,213
107,521

30,600
70,643
7,336
108,578

(1,212)
278
(123)
(1,057)

-4.0%
0.4%
-1.7%
-1.0%

Public Parking
Rental Cars
Concessions
Other Non-airline
Total Non-Aeronautical

25,626
16,250
16,410
10,420
68,706

24,149
14,083
16,235
10,268
64,734

25,160
13,991
16,910
12,801
68,862

26,320
15,255
16,025
12,308
69,908

(1,160)
(1,265)
885
494
(1,046)

-4.4%
-8.3%
5.5%
4.0%
-1.5%

Other

4,177

4,234

4,217

4,177

40

1.0%

172,669

169,421

180,600

182,663

(2,063)

-1.1%

$ in 000's

Total Revenues

•
•
•
•

Actual/Budget
Var $
Var %

Landing Fee and Terminal Rent revenues are less than budgeted due to seasonality
differences from budget.
Public Parking: 1.3% growth in long-term (1+ day) transactions 2011 YTD through
June compared to prior year. YTD budget assumed 5.6% growth from 2010 projected
transactions.
Rental Cars: May YTD transactions were 5.8% higher than prior year, but industry
revenues are down. Transaction days are up 7.3% from 2010.
Concessions: Improved concession sales per enplaned passenger and higher
enplanements.
11

YTD Operating Expense & NOI
2009 YTD
Actual

2010 YTD
Actual

2011 YTD
Actual

2011 YTD
Budget

Revenues
Aeronautical
Non-Aeronautical
Other

99,787
68,706
4,177

100,452
64,734
4,234

107,521
68,862
4,217

108,578
69,908
4,177

(1,057)
(1,046)
40

-1.0%
-1.5%
1.0%

Revenues

172,669

169,421

180,600

182,663

(2,063)

-1.1%

Expenses
Salaries & Benefits
Outside Services
Utilities
Supplies & Stock
Other
Total Airport Expenses

39,428
8,688
6,784
2,135
1,212
58,248

37,952
9,062
5,832
1,772
3,277
57,895

38,822
11,185
7,294
2,444
4,079
63,824

40,345
13,786
6,756
2,056
5,022
67,965

1,523
2,601
(538)
(389)
942
4,141

3.8%
18.9%
-8.0%
-18.9%
18.8%
6.1%

Corporate
Police Costs
Capital Development/Other Expenses
Total Operating Expenses (excl. Env Liab)

14,291
6,445
2,114
81,098

15,196
6,811
2,837
82,738

15,307
7,885
3,155
90,171

16,836
8,221
5,500
98,522

1,530
336
2,345
8,351

9.1%
4.1%
42.6%
8.5%

Environmental Remediation

-

1,278

(210)

392

602

153.6%

Total Operating Expenses

81,098

84,016

89,961

98,914

8,953

9.1%

Net Operating Income

91,572

85,405

90,638

83,748

6,890

8.2%

$ in 000's

Actual/Budget
Var $
Var %

12

June YTD Variances
Account Category

June YTD
Var ($ in
000's)

Utilities
Supplies & Stock

Variance Explanations
Vacant FTEs (LEAN, $130K unemployment, ADM $48K, FIS
ADM, Planning $100K, Assistant Fire Chief $48K, F&B $23k,
Env $32K, Maint $112K, Rental Car $42K, F&I $15K,
Concession Manager $28K, salaries and benefits to capital
689 projects $76K
Firefighters OPEB $142K, Public Parking $76K, Employee
Parking $121K, classroom proctor, wages & benefits to capital
834 projects $258K
Increased expenses in surface water sewage due to longer
(538) winter
(339) De-icer

Outside services
Registration, travel & training
Promotional Expenses
Advertising
Environmental Remediation Liab
Business & Occupation taxes
Misc exp: RCF & div contingency
Overhead allocations
Capital Projects Overhead
Other
Total Variance

Terminal realignment late start $500K, LEAN consultant $158K,
Biz Dev $125K (28th Ave, Doug Fox), parking program & ESP
2,602 $137K, SMS $200K, lounge exp $121K, Part 150 $330K
468 Training & development contingency not utilized $310K
203 Joint airline marketing program for new intl air service $125K
348 Delay of advertisments for tenant marketing fund
602 Reduced remediation liability for Delta Sky Club
(248) Negative variance due to incorrect budgeted rate
667 RCF activation $127K, div contingency $540K
(113) Building dept under charge capital overhead to projects
(336) Less overhead charged to capital projects than anticipated
(97)
4,742

Exempt & Non-exempt payroll
and benefits

Wages and benefits

13

Aviation Division Forecast
$ in 000's

2009
Actual

2010
Actual

2011
Forecast

2011
Budget

Forecast/Budget
Var $
Var %

Total Operating Revenues

328,241

342,173

367,438

370,517

(3,079)

-0.8%

Operating Expenses
Salaries, Benefits & Wages
Outside Services
Utilities
VSP, HR10 & Unemployment Savings
OPEB Reversal
Environmental Remediation Liability
Other Expenses
Baseline Airport Expenses
Corporate Expenses
Police Expenses
Capital Development/Other Expenses

80,804
21,509
13,209
1,196
(4,016)
1,991
8,183
122,877
31,181
14,461
6,135

76,036
22,519
11,381
3,271
13,275
126,481
32,558
14,317
7,785

81,431
26,007
12,669
452
16,561
137,119
33,317
16,382
11,096

82,363
26,758
12,576
1,771
16,107
139,575
34,043
16,389
10,944

932
751
(93)
1,319
(454)
2,455
726
7
(152)

1.1%
2.8%
-0.7%
n/a
n/a
74.5%
-2.8%
1.8%
2.1%
0.0%
-1.4%

Total Operating Expenses

174,654

181,142

197,915

200,951

3,036

1.5%

Net Operating Income

153,587

161,031

169,523

169,567

(43)

0.0%

14

Forecast Savings
YE
June YTD Forecast
Variance Variance
Org Node
$ in 000's $ in 000's
3700 Aeronautical
1,345
1,925
3400 Landside
835
174
3500 Business Dev
531
94
3905 Utilities
(461)
(93)
4100 Director's Office
169
131
4150 AV Contingency
391
4170 Training Contingency
132
4400 Fire Dept
279
42
4530 Planning
507
(182)
4540 AV F&B
44
25
4560 F&I
32
12
4561 Sign Shop
(15)
(69)
4570 Building Dept
108
(11)
4572 Airport Office Bldg
(19)
(46)
4580 Environmental
362
178
4590 AV Maint
(129)
(826)
4600 Community Dev
98
34
4800 Security
124
(59)
4998 Environmental Remed.
602
1,319
4999 AV Cap to Exp
(193)
(193)
Total
4,742
2,455

Savings:
Payroll
Terminal realignment
LEAN consultant
Concession: delay of RFPs
Environ: Delay in planting & supplies
Environmental Remediation - delay of projects
Other
Overspending:
More de-icer used due to weather
Elevator/escalator increased coverage
Kone contract increase
Website, signage
Terminal Dev Strategy/realignment
B&O taxes
Capital to Expense, prior year litigated claim
Utility surface water

in 000's
1,523
1,913
43
385
92
1,319
151
5,426
368
291
550
259
344
500
193
466
2,971

Total Savings

2,455

Potential risk:
Unbudgeted SLOA Security Deposits

1,291
1,291

15

Aeronautical Business
$ in 000's

2009
Actual

2010
Actual

2011
Forecast

2011
Budget

Forecast/Budget
Var $
Var %

Revenues requirement:
Capital Costs

72,013

82,083

85,554

87,111

(1,557)

-1.8%

Operating Costs net Non-Aero

118,456

122,985

135,793

137,195

(1,401)

-1.0%

190,469

205,067

221,348

224,305

(2,958)

-1.3%

FIS Offset

(5,250)

(7,000)

(7,000)

(7,000)

-

0.0%

Other Offsets

(16,441)

(14,825)

(14,882)

(14,821)

(61)

0.4%

Net Revenue Requirement

168,778

183,243

199,466

202,485

(3,019)

-1.5%

Other Aero Revenues

13,757

15,087

14,715

14,715

-

0.0%

182,534

198,329

214,181

217,200

(3,019)

-1.4%

Less: Non-passenger Airline Costs

12,074

14,885

15,066

15,066

-

0.0%

Net Passenger Airline Costs

170,460

183,444

199,114

202,133

(3,019)

-1.5%

2009

2010

2011

2011

Forecast/Budget

Actual

Actual

Forecast

Budget

Var $

Total Costs

Total Aero Revenues

Var %

Cost Per Enplanement:
Capital Costs / Enpl

4.61

5.20

5.24

5.50

(0.26)

-4.7%

Operating Costs / Enpl

7.59

7.80

8.32

8.66

(0.34)

-3.9%

Offsets

(1.39)

(1.38)

(1.34)

(1.38)

0.04

-2.7%

Other Aero Revenues

0.88

0.96

0.90

0.93

(0.03)

-2.9%

Non-passenger Airline Costs

(0.77)

(0.94)

(0.92)

(0.95)

0.03

-2.9%

10.92

11.63

12.20

12.76

(0.56)

-4.4%

Passenger Airline CPE

16

Non Aeronautical Business
$ in 000's
Revenues:
Public Parking
Rental Cars
Concessions
Other

•
•

•

2009
Actual

2010
Actual

2011
Forecast

2011
Budget

Forecast/Budget
Var $
Var %

49,689
33,320
33,473
20,865

49,416
30,309
33,765
21,929

51,542
32,178
34,366
26,818

52,847
33,833
32,640
25,644

(1,305)
(1,655)
1,726
1,174

-2.5%
-4.9%
5.3%
4.6%

Total Revenues

137,348

135,418

144,904

144,965

(60)

0.0%

Operating Expense

55,916

54,743

63,025

64,397

1,372

2.1%

Share of terminal O&M
Less utility internal billing
Net Operating & Maint
Net Operating Income

17,011
(16,738)
56,189
81,159

16,935
(14,464)
57,215
78,203

17,467
(18,370)
62,122
82,782

17,729
(18,370)
63,756
81,209

262
1,634
1,573

1.5%
0.0%
2.6%
1.9%

Public Parking: Positive trends seen in long term transactions over the past
six months.
Rental Cars: Forecast assumes 3% less of 2010 average ticket price of
$216 vs. budgeted average price of $226.
Concessions: Forecast is better than expected due to primary concessions
sales; forecast SPE of $10.24 vs. budgeted SPE of $10.12

17

Net Cash Flow: NOI After Debt Service & Interest Income

$ in 000's
Aeronautical
Net Operating Income (NOI)
Debt Service
NOI After Debt Service

2009
Actual

2010
Actual

2011
Forecast

2011
Budget

Forecast/Budget
Var $
Var %

65,915
68,767
(2,851)

74,402
73,080
1,323

77,105
75,143
1,961

78,661
76,700
1,961

(1,557)
1,557
(0)

-2.0%
2.0%
0.0%

81,159
39,241
41,917

78,203
41,752
36,451

82,782
41,808
40,974

81,209
42,469
38,739

1,573
661
2,235

1.9%
1.6%
5.8%

Fuel Hydrant Revenue

8,359

8,426

8,353

8,353

-

0.0%

Total Aviation
NOI
Debt Service
NOI After Debt Service

155,433
108,008
47,425

161,031
114,831
46,200

168,240
116,951
51,288

168,223
119,169
49,054

17
2,218
2,235

0.0%
1.9%
4.6%

8,853
(7,845)
48,433

6,297
(7,912)
44,585

5,916
(7,839)
49,366

4,167
(7,839)
45,382

1,749
3,983

42.0%
0.0%
8.8%

Non-Aeronautical
Net Operating Income (NOI)
Debt Service
NOI After Debt Service

Add ADF Interest Income
Less Non-Cash Fuel Hydrant Revenue
Net Cash Flow after D/S & Interest Inc.

18

Capital Spending
2011
YTD Actual

2011
Forecast

Rental Car Facility Construction

46,336

78,092

97,488

19,396

19.9%

98,616

Central Plant Preconditioned Air

5,078

15,078

20,000

4,922

24.6%

8,000

Airfield Pavement Replacement

236

4,611

10,500

5,889

56.1%

10,500

Parking System Replacement

311

7,573

9,137

1,564

17.1%

8,994

Terminal Escalators Modernization

419

7,419

8,955

1,536

17.2%

10,000

South Satellite Delta Sky Club Expansion

408

8,739

5,250

(3,489)

-66.5%

5,038

Aircraft RON Parking USPS Site

117

467

5,050

4,583

90.8%

5,661

All Other

11,164

63,581

67,366

3,785

5.6%

84,599

Total

64,069

185,560

223,746

38,186

17.1%

231,408

$ in 000's

1.
2.
•
•
•
•
•

2011
Budget

Forecast/Budget
Var ($)
Var (%)

Plan of
Finance

Off-site Road Improvements and Bus Maintenance Facility contractors had slow start. Soft costs are
also running below forecast. Unused contingency funds have been pushed out.
The contractor has gotten off to a slower start than had been forecasted. Project completion date is
not expected to be impacted.
Amount originally budgeted was not needed for the scope of the 2011 pavement replacement.
A portion of the project was shifted from 4th quarter 2011 to the 1st quarter of 2012 to avoid rolling out
a new system during the holiday season.
Projected cash flows were based on a higher construction estimate relative to actual bid.
Additional budget was authorized by Commission to reimburse Delta due to increased Port scope.
RON Parking @ USPS: Hazardous materials evaluation has pushed the project start to later in the
year with completion in 2012.

19

Seaport Division
Performance Report
Q2 2011

Seaport Business Goals
• TEU volume was 1,008K, approximately level to Q2 YTD
2010. Full inbound TEU's were down 8.8% and full
outbound up 10.6%.

• Grain volume at 2.8 million metric tons down 2% from
2010 and 10% over 2011 Q2 YTD budget.
• Cruise passengers through Q2 are 16% favorable to
budget.
• North Harbor Island Mooring Dolphins were ready for
occupancy on April 1st and are 50% leased.

21

Seaport Organizational Goals
Environmental Stewardship
• 67% of frequent calls meeting Northwest Ports Clean Air
Standards target.
• Environmental Awards
- AAPA - Stakeholder Awareness, Education and
Involvement Award for T117. Comprehensive
Environmental Management Award for implementation
of NWPCA strategy.
- Puget Sound Regional Council - 2011 VISION 2040
Award for NWPCA strategy.
Regional Transportation - Closely engaged in mobility
management for south harbor road construction projects
and detour routes.
22

Seaport Q2 YTD Operating Results
In $ Thousands
Operating Revenue

2010 YTD 2011 YTD 2011 YTD
Actual
Actual
Budget

2011 Bud Var
$
%

44,508

47,330

46,014

1,315

3%

Security Grants

682

51

3,415

(3,364)

-99%

Total Revenue

45,190

47,380

49,429

(2,049)

-4%

Direct Expenses

9,250

10,593

12,513

1,920

15%

Security Grant Expense

710

61

3,451

3,390

98%

Envir Remediation Liability Exp

855

(18)

250

268

107%

Divisional Allocations

1,210

673

1,246

573

46%

Corporate Allocations

6,198

7,025

7,976

951

12%

Total Expense

18,223

18,335

25,436

7,101

28%

Net Operating Incom e (NOI)

26,967

29,045

23,993

5,053

21%

23

Seaport Division Key Variances
Revenue Detail ($'s in Thousands)
Q2 YTD Business Unit

Variance to Budget
Better (Worse)

Containers

$973

Grain

$244

Industrial Properties

($266)

Cruise

$203

Docks

$161

Security Grants

($3,364)

Total

($2,049)

24

Seaport Division Key Variances
Expense Detail ($'s in Thousands)
Q2 YTD Expenses

Variance to Budget
Better (Worse)

Security Grant Expense

$3,390

Outside Services

$1,259

Corporate

$875

Overhead Allocations

$521

Envir Remediation Liability Exp

$268

All Other

$788

Total Expense

$7,101

25

Seaport Business Groups
NOI Before Depreciation ($'s in Millions)
Q2 YTD
Actual NOI

Variance to Budget
Better (Worse)

Containers

$23.3

$2.7

Grain

$2.5

$ .5

Sea Industrial Properties

$2.7

$.6

Cruise

$1.4

$.6

Docks

($ .5)

$.1

Security

($ .4)

$.2

Envir Grants/Liability Exp

$ .0

$ .3

Total Seaport

$29.0

$5.1
26

Seaport Full Year Operating Forecast
$'s 000

2010
Actual

2011
Forecast

2011
Budget

2011 Bud Var
$
%

Operating Revenue

96,060

95,772

94,972

800

1%

Security Grants

1,791

423

3,415

(2,992)

-88%

Total Revenue

97,850

96,195

98,387

(2,192)

-2%

Direct Expenses

20,780

25,293

24,081

(1,212)

-5%

Security Grant Expense

1,983

459

3,451

2,992

87%

Envir Remediation Liability Exp

1,170

500

500

0

0%

Divisional Allocations

2,354

1,461

2,511

1,050

42%

Corporate Allocations

13,033

16,285

16,565

280

2%

Total Expense

39,321

43,997

47,108

3,110

7%

Net Operating Incom e (NOI)

58,530

52,198

51,280

918

2%

27

Seaport Capital 2011
Estimated
Actual

Approved
Budget

Variance
to
Budget

Est. Act.
as % of
App. Bud

Plan of
Finance

$27.7

$34.0

$6.3

81%

$29.5

28

Real Estate Division
Performance Report
Q2 2011

Real Estate 2nd Quarter Key Events
• Full Year Net Operating Income forecasted to exceed
budget.
• FT NW dock fender replacement and MIC sheet pile
replacement projects complete, FT south wall
replacement project delayed to Q3.
• Results of RFP issued for Tsubota Steel site in February.
No proposals accepted.

30

Real Estate 2nd Quarter Key Events
• Eastside Rail Corridor - Continuing to develop
streamlined procedures and standard to handle volume
of incoming requests.
• Marine Maintenance - Continuation of Deferred
Maintenance reduction program.

31

Real Estate Business Goals
Provide Compelling Value and Asset Utilization
• Occupancy Rates: Commercial property at 90%
occupancy, at target and above 2011 Q2 Seattle market
average of 84%.
• Activity at Bell Harbor International Conference Center
below Budget.
• FT/Marina Occupancy: Fishermen's Terminal and
Maritime Industrial Center at 81% YTD occupancy,
below target of 86%. Recreational Marinas at 94%,
above target of 93%.
32

Real Estate Division Qtr 2 Operating Results
In $ Thousands

2010 YTD 2011 YTD 2011 YTD
Actual
Actual
Budget

2011 Bud Var
$
%

Operating Revenue

14,857

14,667

15,133

(467)

-3.1%

Total Revenue

14,857

14,667

15,133

(467)

-3.1%

Direct Expenses

13,861

14,477

16,803

2,326

14%

(0)

0

0

0

NA

Divisional Allocations

(1,733)

(1,225)

(1,865)

(641)

-34%

Corporate Allocations

2,579

2,968

3,315

347

10%

Total Expense

14,706

16,220

18,253

2,033

11%

151

(1,553)

(3,119)

1,566

50%

Envir Remediation Liability

Net Operating Incom e (NOI)

33

Real Estate Division Q2 Key Variances
Revenue Detail ($'s in Thousands)
2011 Year to Date
Business Unit

Variance to Budget
Better (Worse)

Recreational Boating

$61

Fishing & Commercial

($83)

Commercial Properties

$67

Third Party Management

($616)

RE Development & Planning

$78

Eastside Rail

($9)

Facilities/Maintenance

$35

Total

($467)

34

Real Estate Division Q2 Key Variances
Expense Detail ($'s in Thousands)
2011 Year to Date
Expense

Variance to Budget
Better (Worse)

Maintenance

1,309

Third Party Management

$610

Corporate

$369

Outside Services

$297

Litigated Damages

($778)

All Other

$226

Total Expense

$2,033

35

Real Estate Business Groups
NOI Before Depreciation ($'s in Thousands)
Q2 YTD
Actual NOI

Variance to Budget
Better (Worse)

Recreational Boating

$914

$570

Fishing & Commercial

($1,037)

$251

Commercial & Third Party

($147)

$1,114

RE Development & Planning

($330)

$260

Eastside Rail

($944)

($619)

($9)

( $9)

($1,553)

$1,566

Envir Grant/Remed Liability
Total Real Estate

36

Real Estate Division Full Year Forecast
In $ Thousands

2010
Actual

2011
Forecast

2011
Budget

Operating Revenue

29,820

30,795

30,707

88

0%

Total Revenue

29,820

30,795

30,707

88

0%

Direct Expenses

29,503

31,765

33,221

1,456

4%

(2)

0

0

0

NA

Divisional Allocations

(3,485)

(2,375)

(3,787)

(1,412)

-37%

Corporate Allocations

5,481

6,550

6,645

95

1%

Total Expense

31,499

35,940

36,079

139

0%

Net Operating Incom e (NOI)

(1,678)

(5,145)

(5,372)

227

4%

Envir Remediation Liability

2011 Bud Var
$
%

37

Real Estate Capital 2011
Estimated
Actual

Approved
Budget

Variance
to
Budget

Est. Act.
as % of
App. Bud

Plan of
Finance

$14.1

$16.3

$2.2

86%

$15.4

38

Capital Development Division
Performance Report
Q2 2011

Capital Development Division
Q2 2011 Business Events
•

•
•
•

•

•

•

Construction has started on the following projects - airfield pavement/slot drains
replacement near south satellite, FIS booths, PC air.
Construction complete & facility in use - C1-C88 baggage system, new security
checkpoint.
On March 31, 2011, the expanded P-Card program was implemented.
CPO Service Agreement Section kicked off compliance reviews and is in process of
reviewing 8 contracts.
PCS projects include the installation of the FIS Primary Inspection Booths at the south
satellite, T-91 Waterline & Paving, Noise Remedy Mitigation, and Gate B3 Loading
Bridge.
Projects in construction: Terminal 91 Waterline, Terminal 86 Tower Strengthening,
Maritime Industrial Center central seawall, Fishermen's Terminal Phase 4 South Wall,
East Marginal Way Grade Separation.
Continued underdock inspections at Terminal 18 and 46 and began Terminal18 Pile
Caps Pilot Project design.
40

CDD Dashboard

01762668

Capital Development Division Key Indicators
CDD Construction Soft Costs %
100%
90%

21%

20%

19%

19%

19%

79%

80%

81%

81%

81%

Q4 2009 - Q3
2010

Q1 2010 - Q4
2010

Q2 2010 - Q1
2011

Q3 2010 - Q2
2011

Q3 2008 - Q2
2011
(36 month
average)

80%
70%
60%
50%
Total Soft Costs
40%

Total Construction Costs

30%
20%

10%
0%

42

Capital Development Division
Key Indicators

Cost Growth During Construction

43

Capital Development Division
Key Indicators continued

Information not reported in the
initial Commission Authorization for
these projects.

Design Schedule Growth
Project
2nd Quarter 2011
Emergency Concrete Panel Replacement Project
T-18 North Harbor Island Mooring Dolphins
Terminal 5 Maintenance Dredging

Initial Commission
Authorized Start
of Design
N/A - Emergency
11-Aug-09
9-Sep-08

Planned Construction Actual Construction
Contract Award
Contract Award
(Execution)
(Execution)
N/A - Emergency
*
*

16-Feb-11
3-Nov-10
4-Oct-10

Design
Schedule
Growth
N/A
*
*

* Information not reported in the initial Commission Authorization for all projects

44

Capital Development Division
Key Indicators continued

Construction Schedule Growth
Actual Construction
Contract Award
(Execution)

Planned Substantial
Completion of
Construction

Actual Substantial
Completion of
Construction

Construction
Schedule Growth

2nd Quarter 2011
Emergency Concrete Panel Replacement
Project
T-18 North Harbor Island Mooring Dolphins

16-Feb-11

3-Mar-11

21-Feb-11

-66.7%

3-Nov-10

31-Mar-11

25-Mar-11

-4.1%

Terminal 5 Maintenance Dredging

4-Oct-10

15-Feb-11

15-Feb-11

0.0%

Project

45

CDD Key Indicators continued
Procurement Schedule:
Total Time RFS to Execution (Avg # Days)
2010

Q2 2011

• Goods & Services

81 days

69 days

• Major Public Works

62 days

84 days

• Small Works

56 days

50 days

• Service Agreements

256 days

214 days

46

Capital Development Division
Gross Operating Results
2011 Bud
2010 YTD 2011 YTD
$ in 000's

Year-End Projections
Varianc
Budget Forecast e

Actual

Actual

Budget

$

%

-

76

-

76

0.0%

-

-

-

197

171

181

10

5.4%

359

359

-

Engineering
Port Construction Services
Central Procurement Office
Aviation Project Management
Seaport Project Management

4,716
3,448
1,572
2,338
1,219

5,479
2,947
1,598
2,561
983

7,694
3,778
2,189
4,324
1,258

2,215
831
591
1,763
275

28.8%
22.0%
27.0%
40.8%
21.9%

15,225
7,554
4,394
8,637
2,493

13,103
7,236
4,403
8,637
2,371

2,122
318
(9)
122

Total Before Charges to Capital Projects

13,490

13,739

19,424

5,685

29.3%

38,662

36,108

2,554

Total Revenues
EXPENSES BEFORE CHARGES TO CAPITAL PROJECTS
Capital Development Administration

Notes

Var.

47

Capital Development Division
Key Variances to Net Budget
Q2 2011 Expenses

Variance to Budget

YTD Var. F/(UNF)

$ in 000's

Better (Worse)

%

Salaries and Benefits

1,852

13.1%

Outside Services

1,935

48.1%

Travel and Other

166

64.3%

Telecommunications

17

25.2%

Property Rentals

3

7.5%

General Expenses

43

165.0%

All Other

873

191.1%

Charges to Capital Projects

(2,797)

22.9%

Total

2,888

40.0%
48

Corporate
Performance Report
Q2 2011

Corporate Key Events for Q2
• Held several centennial celebration events: Centennial Video Contest,
Centennial Park Dedication, Centennial "Get to Know Your Port by Bike",
Beach Access Opening Centennial Community Celebration, and
Centennial Display at STIA.
• Set preliminary goal of increasing jobs related to the Port by 100K over
25 years.
• Finished building the Port's new website and began content migration for
the third quarter deployment.
• Offered Ethics Survey to all Port employees.
• Installed TeamMate as the internal audit management system.
• Received the Distinguished Budget Presentation Award for 2011 from
GFOA.

50

Corporate Key Metrics for Q2
•
•
•
•
•
•
•
•
•

Responded to 144 public disclosure requests.
30 employees participating in REALeadership Program.
Created 132 job openings and received 6,210 job applications.
Provided orientation to 23 new employees.
Completed 42 individual job evaluations.
Completed 10 internal audits.
Handled 30 litigation and claims.
Received 27,246 calls for Police services.
1,215 small businesses registered on the roster (an increase of 93 from
Q2 2010).

51

Corporate Q2 Operating Results
$ in 000's
Total Revenues
Executive
Commission
Legal
Risk Services
Health & Safety Services
External Affairs
Human Resources & Development
Labor Relations
Information & Communications Technology
Finance & Budget
Accounting & Financial Reporting Services
Internal Audit
Office of Social Responsibility
Police
Contingency
Total Expenses

•
•

2010 YTD
Actual
309
697
404
1,603
1,259
499
2,644
1,741
294
8,696
729
2,946
494
576
9,204
17
31,802

2011 YTD
Actual Budget
620
430
694
336
1,529
1,249
542
2,990
2,271
515
8,951
707
2,789
507
531
10,535
48
34,195

793
465
1,667
1,383
574
3,395
2,709
462
9,170
762
3,293
621
835
10,760
350
37,240

2011 Bud Var.
$
%
190
44.1%
99
129
138
134
32
404
439
(53)
219
54
504
114
305
225
302
3,045

12.4%
27.8%
8.3%
9.7%
5.6%
11.9%
16.2%
-11.6%
2.4%
7.1%
15.3%
18.3%
36.5%
2.1%
86.3%
8.2%

All Corporate departments were under budget, except Labor Relations.
Total Expenses were $3.0M below budget but $2.4M higher than Q2 2010 mainly due
to Port Centennial/AAPA Convention, filling the vacant positions in HR&D, higher ICT
costs, and filling vacant positions and contractual increase in Police Dept.
52

Corp Q2 Major Expense Variances
Operating Expenses ($ in '000)
Salaries & Benefits

648

3.7%

Wages & Benefits

219

2.3%

Payroll to Capital Projects

273

18.4%

Outside Services

773

14.0%

Travel & Other Employee Exps

443

31.2%

Promotional Expenses

223

76.8%

Miscellaneous Expense

494

86.8%

Other

402

15.5%

(432)
3,045

26.3%
12.7%

Charges to Capital Projects
Total
•
•

Actual/Budget
Var. $ Var. %

Total payroll costs were $1.1M under budget.
Miscellaneous Expenses include all expenses in the Contingency.

53

Corporate Year End Forecast
$ in 000's
Total Revenues
Executive
Commission
Legal
Risk Services
Health & Safety Services
External Affairs
Human Resources & Development
Labor Relations
Information & Communications Technology
Finance & Budget
Accounting & Financial Reporting Services
Internal Audit
Office of Social Responsibility
Police
Contingency
Total Expenses

•
•

2010
Year-End Projections
Actual Forecast Budget Variance
610

1,202

1,025

1,356
831
3,475
2,618
1,001
5,553
4,107
675
18,765
1,455
5,939
990
1,280
19,273
21
67,391

1,460
862
3,055
2,722
1,124
6,795
5,063
922
19,511
1,483
6,415
1,204
1,560
21,443
350
73,969

1,500
931
2,906
2,789
1,129
7,012
5,285
922
19,511
1,493
6,596
1,215
1,567
21,452
700
75,008

Explanations

177 Unbudgeted police grants
40
70 Travel and other savings
(149) Due to several litigations
67 Savings from property insurance costs
5
217 Vacant positions and other savings
222 Vacant positions and credit from state
11
181 Vacant positions and bank rebate
11
6
9
350 Do not anticipate to use all
1,039

Total Revenues are forecasting to be $177K higher than budget.
Total Expenses are forecasting to be $1.0M lower than budget.
54