Item No. 9d_supp
.
Meeting Date: March 13, 2018

Port of Seattle
2017 Financial Performance Report

Portwide Financial Highlights
•

Total Operating Revenues were $630.4M, $10.1M above budget and $31.9M higher than
2016.

•

Excluding Aeronautical Revenues, which are based on cost recovery, other operating
revenues were $367.9M, $22.5M above budget and $13.7M higher than 2016.

•

NWSA Distributable Revenue was $54.9M, $8.2M over budget but $6.7M lower than
2016.

•

Total Operating Expenses were $371.3M, $13.3M under budget but $46.0M over 2016.

•

Net Operating Income before Depreciation was $259.1M, $23.5M above budget but
$14.1M lower than 2016.

•

Total capital spending was $324.5M, $283.2M or 46.6% below budget.

Strong financial performance results for the Port
2

Aviation Business Highlights
•
•

Passenger growth slowed in 2017, still up 2.7% over prior year, international passenger growth of 5.9%
New air service:
 Aeromexico started service to Mexico City in November 2017
 Air France announced new service to Paris, France beginning March 25, 2018

•

Cargo metric tons up 16% for year

•

Customer Service: achieved Airport Service Quality (ASQ) targets for 2017

•

Airport dining and retail program awarded lease group 3 in June 2017 and awarded lease group 4 in
February 2018

•
•

Sustainable Airport Master Plan - progressing towards preferred alternative
Capital program: proceeding with construction on major projects: IAF, NSAT, Baggage Optimization,
Concourse D Hardstand Terminal and Alternative Utility Facility.
Inter-local agreement executed with City of SeaTac
Airline lease agreement (SLOA) negotiations continued into early 2018, with agreement on key terms
reached in February 2018.

•
•

Major accomplishments on Aviation Division priorities
3

Aviation Financial Highlights
•

Cost per Enplanement (CPE) Forecast - $0.43 favorable to budget
•

•

Non-Aeronautical NOI - $14.6M higher than budget
•
•
•

•

Due to lower airline rate base costs and higher revenue sharing (driven by Non-Aero NOI
growth)

$1.8M incremental NOI - DMCBP phase II lump sum pre-paid frontage fee
$4.8M - all other incremental Non-Aero Revenue growth
$8.0M - all other incremental Non-Aero Expense savings

Spent $294 million, or 53% of capital budget
•
•

Primarily due to delays in start of construction on major projects such as International Arrivals
Facility and the Concourse D Hardstand Terminal.
Eight projects with largest variances accounted for 65% of underspending

Strong operating results; capital spending short of budget
4

Maritime Business Highlights
•

Cruise - Broke the million passenger mark for the first time in 2017. Grand reopening of Pier
66 Cruise Terminal with NCL. Successful launch of Port Valet Service.

•

Grain - Volumes 17% higher than expected.

•

Fishing & Commercial Operations - Continued to advance work on FT redevelopment.
USCGC Munro held its commissioning Ceremony at T91. Event was well attended by high
ranking officers and senators.

•

Recreational Boating - New liveaboard authorization agreement finalized with Shilshole
Liveaboard Association. Vessel Management System selected and contract signed.

•

MD Portfolio Management - Negotiated long-term ground lease for Duke's restaurant at
Shilshole Bay Marina. Maintained 97% occupancy.

•

Marine Maintenance - Leading the organization in small business utilization with 38.92% of
goods, services, and small works conducted by small businesses.

•

Storm Water Utility - Exceeded assessment goal by 11% and achieved 88% of
rehabilitation goal.

Maritime businesses setting milestones
5

Maritime Financial Highlights
Maritime - 2017 NOI $6.7M favorable to budget and $1.5M better than 2016
• Revenue favorable to budget by $2.4M and $3.4M higher than 2016. Higher
grain volumes, low vacancy rates, increased cruise passengers, and increased
tariffs are key drivers.
• Expenses favorable to budget by $4.3M from port-wide open headcount along
with delays in cruise initiatives and maintenance projects . Y/Y expenses up
$1.9M related to cruise port valet program, increased maintenance work, and
central services.
• Maritime spent 59% or $20.5M of capital budget.
Stormwater Utility -NOI $105K unfavorable to budget
• Revenue $30K favorable, expenses $134K unfavorable to budget.

First Y/Y NOI growth in Maritime Division history
6

EDD Business Highlights
Real Estate Development Finalized ground lease with Trammel Crow for development of Des Moines
Creek North property in Seatac. Broke ground on NERA development in Burien. Leased Tsubota to
support Tent Camp 5. Completed Salmon Bay Marina acquisition. Began design work for the
Fishermen's Terminal redevelopment.
Workforce Development - Supported development and passage of Priority Hire resolution. Placed
1500+ jobseekers into employment through Airport Jobs office. Implemented Maritime Youth
Collaborative initiative providing career exploration and learning opportunities for 400+ students.
Small Business Facilitated community engagement and supported development of new Diversity in
Contracting policy (passed 1/9/18). Conducted 35 training sessions on doing business with the Port
(797 attendees). Doubled pool of available MWBE businesses in our Port database
Portfolio Management properties at 98% occupancy at end of 2017, above target of 95%.
Tourism Developed new spotlight advertising program at airport. Administered tourism grant
program. Implemented marketing efforts that tout cruise and WA State tourism options.

2017 Initiatives Accomplished
7

EDD Financial Highlights
EDD - NOI $5.4M (42%) favorable to budget and $2.4M lower than 2016
• Revenue favorable to budget by $1,761K and $1,888K greater than 2016.
Conference and Event Center $1,190K favorable to budget, and $1,111K up from
2016 due to timing of construction at P66. Real Estate properties higher than
budget from low vacancy rates.
• Expenses favorable to budget by $3.7M from Workforce Development, Central
Services, and other initiatives. Y/Y expenses up $4.3M primarily due to increased
Corporate allocations, Maintenance, EDD Grants, and Conference and Event
Center.

• EDD spent 59% of capital budget.

Strong Occupancy & P66 Construction Dynamics
8

Central Services Business Highlights
•
•
•
•
•
•
•
•

The Port Commission took action on Climate Change and Sustainability.
The Port became the first U.S. port with 10-year goal to transition to sustainable aviation fuels.
The Port continued working with TSA on Enhanced Accessible Screening Program (EAPS) to
improve passenger throughput .
Discussed comprehensive data analytics strategy for WMBE program focusing on division level
goal setting and tracking, department spending reports, and roles and responsibilities.
Conducted events and tours to help build community awareness and support for the Port including
near-Port communities and throughout King County.
Continued working with stakeholders on Fishing Fleet Modernization priority and tourism.
Conducted outreach and signage program to support Alaskan Way/Pier 66 transportation
construction project.
27 projects were substantially completed or placed into closeout, including Bag Claim Wall
Panels, Central Terminal Wi-Fi Expansion, Air Cargo 4 Fence, Variable Frequency Drive Motor
Replacement.

Achieved a number of accomplishment in 2017
9

Central Services Financial Highlights
•

Operating expenses were $117.5M, $20.4M or 14.8% favorable to budget
mainly due to:



•

$10.0M in Payroll savings was largely due to delayed hiring, vacant positions, and project
delays.
$14.4M in Outside Services savings was mainly due to delayed spending on advanced
planning for SAMP, environmental review for SAMP, Environmental Grant Program, other
projects delay, and a large expense project being capitalized.
o Capital Development was $10.4M below budget.
o Environment & Sustainability was $4.9M below budget.

All departments were under budget, except:



Legal and Labor Relations - due to unanticipated legal expenses.
Portwide Contingency - mainly due to unbudgeted radio systems consultant contract.

Cost savings and project spending delays resulted in positive variance
10

Appendix
2017 Financial Performance Report

Portwide Financial Summary
$ in 000's
Aeronautical Revenues
Other Operating Revenues
Total Operating Revenues
Total Operating Expenses
NOI before Depreciation
Depreciation
NOI after Depreciation

•
•
•

2016
Actual
244,235
354,232
598,467
325,285
273,182
164,336
108,846

2017
Actual
262,451
367,917
630,368
371,317
259,051
165,021
94,030

Fav (UnFav)
Incr (Decr)
2017 Budget Variance Change from 2016
Budget
$
%
$
%
274,799 (12,348) -4.5%
18,216
7.5%
345,446 22,471
6.5%
13,685
3.9%
620,245 10,123
1.6%
31,901
5.3%
384,660 13,343
3.5%
46,032 14.2%
235,585 23,466 10.0%
(14,131) -5.2%
166,300
1,279
0.8%
685
0.4%
69,285 24,744 35.7%
(14,817) -13.6%

Total Operating Revenues were $630.4M, $10.1M or 1.6% above budget.
Total Operating Expenses were $371.3M, $13.3M or 3.5% below budget.
NOI before Depreciation was $259.1M, $23.5M or 10.0% above budget.

Strong financial performance for 2017
12

Portwide Operating Revenues Summary
$ in 000's

2016
Actual

2017
Actual

2017
Budget

Budget
Variance

Change
from 2016

Aeronautical Revenues
Public Parking
Rental Cars - Operations
Rental Cars - Operating CFC
Airport Dining and Retail
Employee Parking
Ground Transportation
Non-Aero Commercial Properties
Airport Utilities
Fishing & Commercial Vessels
Maritime Operations
Recreational Boating
Cruise
Grain
Maritime Industrial
Marina Office & Retail
Central Harbor Management
Conference & Event Centers
NWSA Distributable Revenue
Other
Total Operating Revenues (w/o Aero)

244,235
69,540
37,082
12,122
55,196
9,329
12,803
9,992
7,233
2,927
6,181
10,255
15,422
5,382
6,306
3,949
7,827
8,022
61,584
13,080
354,232

262,451
75,106
35,051
10,641
54,611
9,617
15,684
18,042
7,018
2,854
6,443
11,086
17,596
5,427
6,799
3,988
8,634
9,133
54,925
15,263
367,917

274,799
73,568
37,815
12,931
51,348
8,482
14,417
12,141
7,118
3,052
6,069
11,081
16,502
4,508
6,605
4,012
8,055
7,943
46,708
13,089
345,446

(12,348)
1,538
(2,764)
(2,290)
3,264
1,134
1,267
5,901
(101)
(198)
374
5
1,093
919
193
(24)
579
1,190
8,217
2,174
22,471

18,216
5,566
(2,031)
(1,481)
(584)
288
2,881
8,050
(215)
(73)
262
831
2,174
45
493
39
807
1,111
(6,659)
2,183
13,685

TOTAL

598,467

630,368

620,245

10,123

31,901

Record operating revenues in 2017
13

Portwide Operating Expense Summary
Fav (UnFav)
$ in 000's
Salaries & Benefits
Wages & Benefits
Payroll to Capital Projects
Equipment Expense
Supplies & Stock
Outside Services
Utilities
Travel & Other Employee Expenses
Promotional Expenses
Other Expenses
Charges to Capital Projects
TOTAL

2016
Actual
102,873
99,917
21,744
7,106
8,792
70,116
21,123
4,200
1,178
25,118
(36,880)
325,285

Incr (Decr)

2017
2017
Budget Variance Change from 2016
Actual Budget
$
%
$
%
112,837 125,263 12,426
9.9%
9,964
9.7%
108,041 112,647
4,606
4.1%
8,124
8.1%
25,708
27,327
1,618
5.9%
3,965
18.2%
11,118
7,438
(3,679) -49.5%
4,012
56.5%
10,238
8,040
(2,199) -27.3%
1,447
16.5%
83,603 101,106 17,503
17.3%
13,487
19.2%
23,529
21,752
(1,777)
-8.2%
2,406
11.4%
4,767
6,203
1,436
23.1%
567
13.5%
1,408
1,997
589
29.5%
230
19.5%
34,818
24,419 (10,399) -42.6%
9,700
38.6%
(44,750) (51,532)
(6,781)
13.2%
(7,870)
21.3%
371,317 384,660 13,343
3.5%
46,032
14.2%

•

•

•

•

Payroll expenses: $17.0M
below budget due to vacant
positions and delay in hiring.
Outside Services: $17.5M
favorable to budget due to
project delays, and cost
savings.
Other Expenses: $10.4M over
budget mainly due to a
$3.6M unbudgeted DBCBP
Phase II frontage fees and
$3.9M unbudgeted
Environmental Remediation
costs.
Charge to Capital: $6.8M less
than budget due to delay in
some capital projects.

Operating expenses were $13.3M or 3.5% below budget
14

Portwide Comprehensive Financial Summary
($ in 000's)
Re ve nue s
1. Operating Revenues
2. Tax Levy
3. PFCs
4. CFCs
5. Fuel Hydrant
6. Non-Capital Grants & Donations
7. Capital Contributions
8. Interest Income
Total
Expe nse s
1. O&M Expense
2. Depreciation
3. Revenue Bond Interest Expense
4. GO Bond Interest Expense
5. PFC Bond Interest Expense
6. Public Expense
7. Non-Op Environmental Expense
8. Other Non-Op Rev/Expense
Total
Special Item
Retro Adjustment to Net Position
Increase In Net Position

2016
Actual

2017
Actual

2017
Budge t

Fav (UnFav)
Budge t Variance
$
%

598,467
71,678
85,570
24,715
6,992
6,284
18,108
8,448
820,262

630,368
71,702
88,389
25,790
7,000
7,647
29,983
12,174
873,053

620,245
72,000
89,087
26,300
7,024
8,595
15,000
10,822
849,073

10,123
(298)
(698)
(511)
(24)
(947)
14,983
1,351
23,979

325,285
164,336
105,567
9,765
5,251
8,560
280
12,087
631,131
147,700
41,431

371,317
165,021
97,748
13,891
4,931
4,588
4,464
12,732
674,693
198,360

384,660
166,300
122,026
17,714
4,985
2,488
5,441
(257)
703,357
145,716

13,343
3.5%
1,279
0.8%
24,278
19.9%
3,823
21.6%
55
1.1%
(2,100)
-84.4%
977
18.0%
(12,990) 5050.8%
28,665
4.1%
0.0%
0.0%
52,644
36.1%

•
1.6%
-0.4%
-0.8%
-1.9%
-0.3%
-11.0%
99.9%
12.5%
2.8%

•

•

•

Capital Contributions:
$14.9M above budget mainly
due to contribution from NCL
for the Pier 66 Cruise
Terminal Improvement.
Interest Income: $1.4M
higher than budget mainly
due to higher funds balance.
Revenue Bond Interest
Expense: $24.3M favorable to
budget mainly due to savings
from revenue bond refinancing.
Other Non-Op Expense:
$13.0M higher than budget
mainly due to earlier assets
retirement resulted from new
project constructions at the
airport.

$198.4M increase in net position in 2017
15

Aviation Net Operating Income Comparison

Steady NOI growth for Aviation
16

Non-Aviation Net Operating Income Comparison

Declining operating revenues over the past 5 years
17

Capital Spending by Division
$ in 000's

2016
Actual

2017
Actual

2017
Budget

Aviation

153,889

294,497

554,717

260,220

46.9%

Maritime

5,744

20,489

34,518

14,029

40.6%

Economic Development

4,731

3,739

6,304

2,565

40.7%

Central Services & Other (note 1)

5,097

5,798

12,147

6,349

52.3%

169,461

324,523

607,686

283,163

46.6%

TOTAL

Budget Variance
$
%

Note:
(1) "Other" includes Street Vacation projects and Storm Water Utility (SWU) capital projects.

Capital spending was below budget due to project delays
18

Aviation Division
2017 Financial Performance Report

Airport Activity
2016

2017

% Change

Enplaned Passengers (000's)
Domestic
International
Total

20,385
2,411
22,796

20,862
2,554
23,416

2.3%
5.9%
2.7%

Operations

412,170

416,124

1.0%

2,323
26,107
28,431

23.0%
2.8%
4.2%

242,470
123,735
59,651
425,856

24.5%
8.2%
4.1%
16.2%

Landed Weight (In Millions of lbs.)
Cargo
1,888
All other
25,387
Total
27,276
Cargo - Metric Tons
Domestic freight
194,754
International freight
114,350
Mail
57,326
Total
366,430

Passenger Activity
Change
2017 Market
Airline
2016 v. 2017
Share
Alaska + Virgin
-0.1%
49.6%
Delta
11.1%
22.2%
Southwest
-9.4%
6.6%
United
5.3%
6.5%
American
-3.3%
5.6%
2017 Cargo - metric tons:
•

Strong growth in cargo volume from existing
domestic and international carriers.

•

2017 reflects first full year of activity for new
air services that commenced mid-2016:
o

New Domestic Freight services - Prime
Air/Amazon and DHL

o

New International Freight services -
AeroLogic and AirBridge.

2017 enplaned passenger growth of 2.7%
20

Aviation Financial Summary
2016
Actual

2017
Actual

2017
Budget

Fav (UnFav)
Budget Variance
$
%

Gross Aeronautical Revenues

247,811

266,027

278,375

(12,348)

-4.4%

18,216

7.4%

SLOA III Incentive Straight Line Adj

(3,576)

(3,576)

(3,576)

(0)

0.0%

(0)

0.0%

Aeronautical Revenues

244,235

262,451

274,799

(12,348)

-4.5%

18,216

7.5%

Non-Aeronautical Revenues

221,021

236,803

226,645

10,157

4.5%

15,781

7.1%

Total Operating Revenues

465,256

499,254

501,444

(2,191)

-0.4%

33,997

7.3%

Total Operating Expense

261,226

297,449

302,711

5,262

1.7%

36,223

13.9%

Net Operating Income

204,030

201,804

198,733

3,071

1.5%

(2,226)

-1.1%

$ in 000's
Operating Revenues:

Incr (Decr)
Change from 2016
$
%

2017 NOI $3.1M favorable to budget
21

Key Performance Measures
2016
Actual

2017
Actual

2017
Budget

Fav (UnFav)
Budget Vairance
$
%

Incr (Decr)
Change from 2016
$
%

Key Performance Metrics
Cost per Enplanement (CPE)
Non-Aeronautical NOI (in 000's)

10.10
128,833

10.45
133,108

10.88
118,521

0.43
14,587

4.0%
12.3%

0.35
4,275

3.4%
3.3%

Other Performance Metrics
O&M Cost per Enplanement
Non-Aero Revenue per Enplanement
Debt per Enplanement (in $)
Debt Service Coverage (After Rev Sharing)
Days cash on hand (10 months = 304 days)
Aeronautical Revenue Sharing ($ in 000's)

11.46
9.70
104
1.53
416
(37,395)

12.70
10.11
114
1.57
381
(42,313)

12.65
9.47
110
1.50
304
(33,093)

(0.05)
0.64
(4)
0.08
77
(9,219)

-0.4%
6.8%
-3.5%
5.1%
25.4%
-27.9%

1.24
0.42
10
0.04
(35)
4,917

10.9%
4.3%
9.4%
2.9%
-8.4%
13.2%

Activity (in 000's)
Enplanements

22,796

23,416

23,929

(513)

-2.1%

619

2.7%

2017 Results
Key Performance Metrics
•
Reduced CPE due to lower
airline rate base costs and
higher revenue sharing
(driven by Non-Aero NOI
growth)
•

Non-Aero NOI growth due
to DMCBP Phase II lump
sum ($1.8M NOI impact),
combined with other NonAero revenue growth and
significant Non-Aero
expense savings.

Both key measures positive: CPE below budget; Non-aero NOI above budget
22

Aviation Expense Summary
2016
Actual

2017
Actual

2017
Budget

Fav (UnFav)
Budget Variance
$
%

Incr (Decr)
Change from 2016
$
%

101,879
37,863
14,690
20,655
175,087

114,463
41,055
16,374
28,292
200,184

119,886
45,279
15,187
18,004
198,355

5,423
4,224
(1,187)
(10,289)
(1,829)

4.5%
9.3%
-7.8%
-57.1%
-0.9%

12,585
3,192
1,684
7,637
25,098

12.4%
8.4%
11.5%
37.0%
14.3%

4,463
129
4,592

7,147
2,856
10,003

3,775
3,775

(3,372)
(2,856)
(6,228)

-89.3%
N/A
-165.0%

2,684
2,727
5,411

60.1%
2114.7%
117.8%

Total Airport Expenses

179,679

210,187

202,130

(8,056)

-4.0%

30,508

17.0%

Police Costs
Capital Development
Other Central Services
Maritime/Economic Development
Total Charges from Other Divisions

18,183
9,319
50,099
3,946
81,547

17,652
14,701
51,004
3,904
87,262

19,173
22,378
54,673
4,356
100,581

1,521
7,677
3,669
452
13,318

7.9%
34.3%
6.7%
10.4%
13.2%

(531)
5,382
905
(41)
5,715

-2.9%
57.8%
1.8%
-1.1%
7.0%

Total Operating Expense

261,226

297,449

302,711

5,262

1.7%

36,223

13.9%

$ in 000's
Operating Expenses:
Payroll
Outside Services
Utilities
Other Airport Expenses
Total Airport Direct Charges
Environmental Remediation Liability
Capital to Expense
Total Exceptions

2017 Actuals to Budget
Unplanned expenses:
•
DMCBP Phase II pre-paid
frontage fee expense ($3.6M)
•
Snow removal ($1.4M)
•
Additional kiosks for FIS
processing ($0.6M)
•
Environmental Remediation
Liability ($3.4M) primarily IAF
soils
•
Capital to expense ($2.9M) -
primarily exit lane equipment
write-off
Offset by cost savings:
•
AVPMG savings due to Terminal
project delays partially offset by
lower charges to capital.
•
SAMP-related spending delays
($3.9)
•
Payroll savings - primarily due to
vacancies and hiring delays
($3.0M)
•
Year-end pension savings
adjustment ($2.4M)

Unplanned expenses absorbed by cost savings
23

Aeronautical Business
$ in 000's

2016
Actual

2017
Actual

2017
Budget

Fav (UnFav)
Budget Variance
$
%

Incr (Decr)
Change from 2016
$
%

Revenues:
Movement Area
Apron Area
Terminal Rents
Federal Inspection Services (FIS)
Total Rate Base Revenues

94,725
14,028
155,852
11,227
275,832

108,638
16,771
155,431
16,951
297,791

109,845
15,957
163,565
12,437
301,803

(1,206)
814
(8,134)
4,514
(4,012)

-1.1%
5.1%
-5.0%
36.3%
-1.3%

13,913
2,743
(421)
5,724
21,958

14.7%
19.6%
-0.3%
51.0%
8.0%

Commercial Area
Subtotal before Revenue Sharing

9,379
285,211

10,574
308,365

9,665
311,468

909
(3,103)

9.4%
-1.0%

1,195
23,154

12.7%
8.1%

Revenue Sharing
Other Prior Year Revenues
Gross Aeronautical Revenues

(37,395) (42,313) (33,093)
(5)
(26)
247,811 266,027 278,375

(9,219)
(26)
(12,348)

27.9%
N/A
-4.4%

(4,917)
(20)
18,216

13.2%
384.0%
7.4%

Total Aeronautical Expenses

169,037

193,755

194,385

630

0.3%

24,717

14.6%

Net Operating Income

78,774

72,272

83,990

(11,718)

-14.0%

(6,501)

-8.3%

Debt Service
Net Cash Flow

(89,997)
(11,224)

(86,564)
(14,292)

(88,740)
(4,750)

2,176
(9,542)

2.5%
-200.9%

3,433
(3,068)

3.8%
-27.3%

2017 Actuals to Budget
Revenue - $12.3M unfavorable
•
Rate based revenue $4.0M lower-
due to savings from project delays
and lower debt service, partially
offset by higher environmental
remediation costs associated with
new IAF project.
•
Commercial Area revenue $0.9
higher - due to higher RON parking
activity.
•
Revenue sharing $9.2M higher due
to Non-Aero NOI growth
Expenses - $0.6M favorable
•
AVPMG terminal projects delayed
•
Payroll savings - due to vacancies
& hiring delays
•
SAMP related spending delayed
•
Partially offset by unplanned cost
for additional kiosks for FIS
processing ($0.8M), IAF project
contaminated soils ($3.0M), and
exit lane equipment write-off
($1.9M).

Lower rate based costs and higher revenue sharing
24

Aero Cost Drivers
$ in 000's
(1)

O&M
Debt Service Gross
Debt Service PFC Offset
Amortization
Space Vacancy
TSA Operating Grant and Other
Rate Base Revenues
Commercial area
Total Aero Revenues

2016

2017

2017

Actual

Actual

Budget

165,427
190,523
118,641
113,832
(32,831) (33,057)
28,215
29,654
(2,638)
(2,264)
(982)
(897)
275,832 297,791
9,379
10,574
285,211 308,365

Fav (UnFav)
Budget Variance
$

%

190,645
(123) -0.1%
117,336
(3,504) -3.0%
(33,099)
42 -0.1%
29,637
18 0.1%
(1,486)
(778) 52.4%
(1,230)
334 -27.1%
301,803 (4,012) -1.3%
9,665
909 9.4%
311,468 (3,103) -1.0%

O&M, Debt Service Gross, and Amortization do not include commercial area costs or the international incentive expenses

Incr (Decr)
'Change from
2016
$
%
25,096 15.2%
(4,809) -4.1%
(226) 0.7%
1,439 5.1%
374 -14.2%
85 -8.7%
21,958 8.0%
1,195 12.7%
23,154 8.1%

2017 Actuals to Budget
O&M Expenses - $351K lower
•
AVPMG terminal projects
delayed
•
Payroll savings - due to
vacancies & hiring delays
•
SAMP related spending
delayed
•
These savings are largely
offset by unplanned cost
for additional kiosks for
FIS processing ($0.8M),
IAF project contaminated
soils ($3.0M), and exit
lane equipment write-off
($1.9M)
Debt Service - $3.5M lower due
to increased application of
capitalized interest, savings from
Variable Rate Bond interest,
higher debt service exclusion,
and savings from commercial
paper interest.

Aero rate base revenues based on cost recovery formulas
25

Aero Revenue Sharing
$ in 000's
Aero Revenues (incl' commercial)
Non-Aeronautical Revenues
Total O&M Expenses
Net Operating Income
ADF Interest Income
Security Checkpoint TSA Grant
Misc. Non-Operating Expenses
CFC Excess
Available for Debt Service
[a]

Actual
Actual
Budget
$
%
285,211
308,365
311,468
(3,103) -1.0%
221,021
236,803
226,645
10,157 4.5%
(261,226) (297,449)
(302,711)
5,262 -1.7%
245,006 247,718 235,403
12,316 5.2%
3,725
4,242
3,299
943 28.6%
916
1,039
1,230
(192) -15.6%
(2,481)
(1,799)
(838)
(961) 114.7%
(4,899)
(2,750)
(5,561)
2,812 -50.6%
242,267 248,450 233,532
14,918 6.4%

Incr (Decr)
'Change from
2016
$
%
23,154 8.1%
15,781 7.1%
(36,223) 13.9%
2,712 1.1%
516 13.9%
123 13.4%
682 -27.5%
2,149 -43.9%
6,183 2.6%

Debt Service
Debt Service x 1.25

133,982
167,477

131,060
163,825

133,876
167,345

(2,817) -2.1%
(3,521) -2.1%

(2,922) -2.2%
(3,652) -2.2%

Available for revenue sharing [c]=[a]-[b]

74,790

84,625

66,187

18,438

27.9%

9,835

13.2%

Revenue Sharing

37,395

42,313

33,093

9,219

27.9%

4,917

13.2%

2016

[b]

[d]=[c]*0.5

2017

2017

Fav (UnFav)
Budget Variance

Increased revenue sharing drives reduction in CPE
26

Non-Aeronautical Business
Fav (UnFav)
2016

2017

2017

Actual

Actual

Budget

$

%

Incr (Decr)
Change from
2016
$
%

37,082
12,122
69,540
12,803
56,348
9,992
7,233
9,329
3,028
3,545

35,051
10,641
75,106
15,684
58,980
18,042
7,018
9,617
5,041
1,624

37,815
12,931
73,568
14,417
55,635
12,141
7,118
8,482
2,729
1,807

(2,764)
(2,290)
1,538
1,267
3,345
5,901
(101)
1,134
2,311
(184)

-7.3%
-17.7%
2.1%
8.8%
6.0%
48.6%
-1.4%
13.4%
84.7%
-10.2%

(2,031)
(1,481)
5,566
2,881
2,633
8,050
(215)
288
2,013
(1,921)

-5.5%
-12.2%
8.0%
22.5%
4.7%
80.6%
-3.0%
3.1%
66.5%
-54.2%

Total Non-Aero Revenues

221,021

236,803

226,645

10,157

4.5%

15,781

7.1%

Total Non-Aero Expenses

92,189

103,695

108,124

4,429

4.1%

11,506

12.5%

Net Operating Income
Less: CFC (Surplus) / Deficit

128,833 133,108 118,521 14,587
(4,899)
(2,750)
(5,561)
2,812

12.3%
50.6%

4,275
2,149

3.3%
43.9%

Adjusted Non-Aero NOI
Debt Service

123,934 130,358 112,960 17,398
(43,984) (44,495) (45,136)
641

15.4%
1.4%

6,425
(511)

5.2%
-1.2%

Net Cash Flow

79,949

26.6%

5,914

7.4%

$ in 000's
Non-Aero Revenues
Rental Cars - Operations
Rental Cars - Operating CFC
Public Parking
Ground Transportation
Airport Dining & Retail/Terminal Leased Space
Commercial Properties
Utilities
Employee Parking
Clubs and Lounges
Other

85,863

67,824

Budget Variance

18,039

2017 Actuals to Budget
Revenue - $10.2M favorable
•
Rental Car - continues to be challenged, both
concession fee and CFC collections declined in
2017.
•
Parking - 2017 tariff rate increase, partially
offset by City of SeaTac parking tax increase.
•
Ground Transportation - overall growth, despite
major shifts between GT operator categories
•
Airport Dining & Retail performance is steady
despite impact of transitions to new leases.
•
Commercial Properties - DMCBP Phase II lump
sum payment ($5.4M)
•
Employee Parking - demand driven growth
•
Clubs & Lounges - demand driven growth
Expenses - $4.4M favorable
•
Savings from other Divisions include delays for
ADR tenant buildouts and other Terminal projects.
•
Unplanned Aviation expenses absorbed in 2017:
-
DMCBP - Phase II frontage fee ($3.6M)
Light rail electric cart service ($0.2M).
-
RCF curbside assistance ($0.3M)
-
Honey bucket service increased ($0.3M)

Non-Aero NOI $14.6M higher than budget
27

Public Parking Performance
Public Parking - Revenue Detail
$ in 000's

2016
Actual

2017
Actual

2017
Budget

Fav / (UnFav)
Incr / (Decr)
2018 2017 Budget Variance Change from 2016
Budget
$
%
$
%

Parking Garage Revenue to Port
Gross Sales - Parking Garage
less - WA Sales Tax
less - SeaTac Parking Tax
Revenue to Port - General Parking

74,301
(6,081)
(4,212)
64,008

82,362
(6,818)
(6,563)
68,981

n/a
n/a
n/a
67,996

n/a
n/a
n/a
71,997

n/a
n/a
n/a
986

n/a
n/a
n/a
1.4%

8,061
(737)
(2,350)
4,973

10.8%
12.1%
55.8%
7.8%

Other Garage Revenue
Passport Parking Program
Total Parking Garage Revenue

2,749
66,758

2,990
71,971

2,837
70,833

3,356
75,353

153
1,139-

5.4%
1.6%

240
5,213-

8.7%
7.8%

2,751
32

3,109
25

2,716
19

3,200
19

393
6

14.5%
33.6%

358
(6)

13.0%
-20.0%

69,540

75,106

73,568

78,572

1,538

2.1%

5,566

8.0%

2016
Actual
1,646
496
181
2,323

2017
Actual
1,540
499
184
2,224

2017
Budget
n/a
n/a
n/a
n/a

Fav / (UnFav)
Incr / (Decr)
2018 2017 Budget Variance Change from 2016
Budget
#
%
#
%
n/a
n/a
n/a
(105)
-6.4%
n/a
n/a
n/a
3
0.7%
n/a
n/a
n/a
3
1.5%
n/a
n/a
n/a
(99)
-4.3%

Other Parking Revenue
Concession Rent - Doug Fox off-site parking
All Other Parking Revenue
Total Parking Revenue
Parking Transactions by duration
in 000's
Parking < 1 day
Parking 1-4 days
Parking 4+ days
Total Parking Transactions

Key message:

Parking - strong performance outpaces
growth in enplanements. 2017 increase
to the parking tariff rate, partially offset
by City of SeaTac parking tax increase.

2017 Actuals vs. 2016 Actuals
Revenue - $5.6M favorable
•
General Parking revenue $5.0M favorable:
o

o

•
•

$7.3M favorable due net impact of
rate increase in parking tariff and
growth in parking transactions
longer than 1 day, partially offset
by decrease in parking
transactions less than 1 day and
incremental sales tax.
($2.4M) unfavorable due to
increase in SeaTac Parking Tax.

Passport Parking Program $0.2M favorable due to growth
in card sales.
Concession Rent (Doug Fox offsite parking) - $0.4M favorable
due to increased activity.

Parking tariff rate increase more than offsets SeaTac parking tax increase
28

Rental Car Performance
Rental Car - Revenue Detail
2016
Actual

$ in 000's

2017
Actual

2017
Budget

2018
Budget
31,508

Fav / (UnFav)
2017 Budget Variance
$
%

Incr / (Decr)
Change from 2016
$
%

Key message:
Rental Car revenue continues to be impacted by
availability of transportation alternatives (light rail ,
TNCs, car-sharing, etc.)

RCF Concession Revenue to Port

33,465

31,352

34,106

(2,754)

-8.1%

(2,113)

-6.3%

Gross Sales by Operators (in 000's)
Total Transactions
O&D Enplanements
Average Ticket
Average Length of Stay
Transactions/O&D Enplanements

310,877
1,410,122
15,820,506
$220.46
4.35
8.91%

313,630
1,387,593
16,226,998
$226.02
4.33
8.55%

331,476
1,513,532
16,678,433
$219.01
4.32
9.07%

328,124
(17,846)
1,443,335 (125,939)
17,060,569 (451,435)
$227.34
$7.02
4.36
0.01
8.46%
-0.52%

-5.4%
-8.3%
-2.7%
3.2%
0.1%
-5.8%

2,753
(22,529)
406,492
$5.56
(0.02)
-0.36%

0.9%
-1.6%
2.6%
2.5%
-0.5%
-4.1%

CFC Revenue Summary
Total Transaction Days
CFC Rate per Transaction Day
Total CFC Revenue Earned

6,128,538
$6.00
36,837

6,002,520
$6.00
36,430

6,538,457
$6.00
39,231

o

(21,715)
(3,000)
(24,715)

(22,790)
(3,000)
(25,790)

(23,300)
(3,000)
(26,300)

-8.2% (126,018)
0.0%
$0.00
-7.1%
(407)
-2.2%
(1,074)
0.0%
4.3%
(1,074)

-2.1%
0.0%
-1.1%

Reserve for debt service and CP interest:
Reserve for CP principal payment:
Debt Service Reserve Requirement

6,287,242 (535,937)
$6.00
$0.00
37,723
(2,800)
(22,161)
511
(22,161)
511

-4.9%
0.0%
-4.3%

o

Residual - CFC Operating Revenue:

12,122

10,641

12,931

15,563

-17.7%

-12.2%

(2,290)

(1,481)

2017 Actuals vs. 2016 Actuals
•
Concession revenue decreased by 6.3% in 2017,
due to decline in (2) out of (3) key indicators.
o

•

CFC Operating Revenue decreased by 12.2% in
2017.
o

Rental Car - Revenue Summary
2016
Actual

$ in 000's

2017
Actual

2017
Budget

2018
Budget

Fav / (UnFav)
2017 Budget Variance
$
%

Incr / (Decr)
Change from 2016
$
%

RCF Concession Revenue to Port
Residual - CFC Operating Revenue:
Land Rent/Space Rent/Other

33,465
12,122
3,617

31,352
10,641
3,699

34,106
12,931
3,709

31,508
15,563
3,786

(2,754)
(2,290)
(10)

-8.1%
-17.7%
-0.3%

(2,113)
(1,481)
82

-6.3%
-12.2%
2.3%

Total Rental Cars Oper Revenue

49,203

45,691

50,746

50,857

(5,054)

-10.0%

(3,512)

-7.1%

22,796,118

23,415,582

23,928,886

24,654,002

(513,304)

-2.1%

619,464

2.7%

Total Enplanements

4.1% decline in Transactions per O&D
enplanement demonstrates passenger
preference shifting to other modes of
transportation.
1.6% decline in Total Transactions due to
decline in Transactions per O&D enplanement
percentage, which exceeded year-over-year
growth in O&D enplanements.
Partially offset by 2.5% increase in Average
Ticket price.

o

$0.4M decrease due to lower Transaction
Days in 2017 is driven by declines in both
Total Transactions and Average Length of
Stay.
Since CFC Operating Revenue is a residual of
Total CFC Revenue Earned less debt service
costs, $1.1M of the decrease is due to higher
debt service costs in 2017. Commercial Paper
balance related to the Rental Car Facility
construction was paid in full in 2017.

Rental Car activity has slowed due to transportation alternatives
29

Ground Transportation
Revenue to Port
$ in 000's
Ground Transportation Revenues
Transportation Network Companies
On Demand Taxis
On Demand Limos
Belled In Taxis (Annual Permit)
Pre-Arranged Limos (Annual Permit)
All other Operators (cost recovery)
Other Misc Revenues
Total GT Revenue

2016
Actual

2017
Actual

2017
Budget

2018
Budget

3,222
5,045
869
159
496
2,735
275
12,801

6,940
5,199
858
45
626
1,713
306
15,686

3,929
6,399
884
376
919
1,698
214
14,417

8,122
4,591
855
108
603
2,392
214
16,884

2016
Actual

2017
Actual

2017
Budget

2018
Budget

602
827
74
195
369
1,315
3,383

1,277
759
72
56
337
1,279
3,780

786
903
78
243
382
1,297
3,689

1,354
771
71
52
325
1,289
3,861

Trip Activity
in 000's
Ground Transportation Trips
Transportation Network Companies
On Demand Taxis
On Demand Limos
Belled In Taxis (Annual Permit)
Pre-Arranged Limos (Annual Permit)
All other Operators (cost recovery)
Total GT Trip Activity

Fav / (UnFav)

Incr / (Decr)

2017 Budget Variance

Change from 2016

$

%

$

%

3,011
(1,200)
(26)
(331)
(293)
15
92
1,269

76.6%
-18.7%
-3.0%
-88.0%
-31.8%
0.9%
42.8%
8.8%

3,718
154
(11)
(114)
130
(1,022)
30
2,885

115.4%
3.1%
-1.3%
-71.7%
26.2%
-37.4%
11.0%
22.5%

Fav / (UnFav)

Incr / (Decr)

2017 Budget Variance

Change from 2016

$

%

$

%

491
(144)
(7)
(187)
(45)
(18)
90

62.5%
-15.9%
-8.4%
-76.9%
-11.8%
-1.4%
2.5%

674
(68)
(3)
(139)
(31)
(36)
397

111.9%
-8.2%
-3.8%
-71.3%
-8.5%
-2.8%
11.7%

Key message:
Significant changes in customer preferred ground transportation
alternatives are reflected in both revenue and trip activity between GT
operator categories.
GT Revenue compared to prior year:
•
TNC revenue in 2017 reflects full year of operations, dramatic
increase in trip volume, and rate increase (to $6/trip) effective
Nov 1, 2017. TNC operations commenced on March 31, 2016, and
revenue in 2016 included activation fees ($210K).
•
Taxi revenue relatively flat compared to 2016 is the net result of
very different operating conditions. Per trip fee significantly
higher in 2017 ($7/trip through Sept 2017, then reduced to $6/trip
effective Oct 1, 2017), partially offset by 8.2% decline in taxi trip
volume.
•
Significant decline in Belled-in permit sales was a known risk
factor in the 2017 Budget. Significant number of flat rate vehicles
previously in this category migrated to ESFH fleet.
•
Lower revenue from all other cost recovery operators primarily
due to reduced 2017 rates which incorporated 2015 overpayment
by certain operator categories.
GT Trip Activity compared to prior year:
•
TNC volume continued to build in 2017, driven by strong customer
demand.
•
On Demand Taxis trips and On Demand Limo trips reflects the
different operating conditions in 2017 which include a full year of
TNC activity.
•
Dramatic decline in annual permit sales and associated trips from
Belled-in Taxis partially due to migration of some flat rate
vehicles to ESFH fleet in late 2016, and changing GT operating
environment.
•
Moderate decline in Pre-arranged Limousines sales was a known
risk factor in the 2017 Budget, reflects changing GT operating
environment.

TNC growth drives 2017 Trip Activity up 11.7% over 2016
30

Airport Dining & Retail and Leased Space
Airport Dining & Retail and
Non-Airline Terminal Leased Space
(in 000's)
Revenue
Food & Beverage
Retail
Duty Free
Advertising
Space Rental - ADR tenant storage/office
Space Rental - Non-Airline Terminal Leased Space
All Other Revenue
Total ADR & Terminal Leased Space Revenue

2016
Actual

2017
Actual

2017
Budget

Fav / (UnFav)
Budget Variance
$
%

21,314
13,496
6,265
6,725
1,143
4,092
4,216
57,252

21,579
13,989
6,912
6,662
1,292
4,364
4,182
58,980

21,240
13,195
6,080
5,572
909
4,287
4,352
55,635

340
793
832
1,090
384
76
(169)
3,345

1.6%
6.0%
13.7%
19.6%
42.2%
1.8%
-3.9%
6.0%

Incr / (Decr)
change from 2016
$
%
265
493
646
(63)
149
272
(34)
1,728

1.2%
3.7%
10.3%
-0.9%
13.0%
6.6%
-0.8%
3.0%

Key message:
Steady performance in Airport Dining & Retail despite
impact of transitions to new leases. Revenue and
demand for Non-Airline Terminal Lease Space
continues to be stable .
2017 Actuals vs. Budget
Revenue - $3.3M favorable
•
Food & Beverage - $0.3M favorable steady
growth during year with significant units
transitioning to new leases.
•
Retail - $0.8M favorable growth outpaces
enplanements, as new retail operators come
online.
•
Duty Free - $0.8M favorable strong growth
despite ongoing challenge of mismatch
between international departure gates and
Duty Free store locations. Negative impact of
China restrictions on Duty Free purchases is
trending less than previously expected.
•
Advertising - $1.1M favorable reflects strong
sales under new lease agreement.
•
Space Rent - $0.4M favorable primarily due
to rate adjustment for ADR tenant
office/storage to align with current terminal
lease rates.

Steady growth in ADR during lease transitions
31

Commercial Properties
Non-Aero Commercial Properties
Org Basis (in 000's)
DMCBP Revenue
Option Area Rent
Phase I - Base Rent & In-lieu Fees
Phase II - Base Rent
Phase II - In-lieu Fees
Phase III - Base Rent & In-lieu Fees
DMCBP Owner's Liaison Reimb
Subtotal - DMCBP Revenue

2016 YTD 2017 YTD 2017 YTD
Actual
Actual
Budget

Fav / (UnFav)
Budget Variance
$
%

Incr / (Decr)
change from 2016
$
%

29
143
17
99
288

913
29
5,434
555
6,931

832
29
522
200
1,583

81
(0)
5,434
33
(200)
5,348

6.3%
-100.0%
337.9%

6,643 2309.7%

Other Commercial Properties Revenue
In-flight Kitchen Revenue
NERA 3 Grant Revenue
All other Commercial Properties revenue
Subtotal - Other Commercial Properties Revenue

7,025
908
1,773
9,705

7,827
1,402
1,882
11,112

7,255
1,620
1,683
10,558

572
(218)
199
553

7.9%
-13.4%
11.8%
5.2%

802
495
110
1,407

11.4%
54.5%
6.2%
14.5%

Total Commercial Properties Revenue

9,992

18,042

12,141

5,901

48.6%

8,050

80.6%

270
270

3,578
454
4,032

546
546

(3,578)
92
(3,486)

-638.6%

3,578
n/a
184
68.0%
3,762 1392.2%

Other Commercial Properties Expenses
NERA 3 Grant expenses
All other Non-Aero Commercial Properties expenses
Subtotal - Other Commercial Properties Expenses

987
435
1,422

1,598
298
1,896

1,800
340
2,140

202
42
(244)

11.2%
12.4%
-11.4%

611
(137)
474

61.9%
-31.6%
33.3%

Total Commercial Properties Expense

1,692

5,928

2,686

(3,242)

-120.7%

4,236

250.3%

NOI before Allocations

8,300

12,114

9,455

2,659

28.1%

3,814

46.0%

DMCBP Expenses
Phase II prepaid frontage fee amort.
All other DMCBP expenses
Subtotal - DMCBP Expenses

9.7%
0.0%

(29)
770
12
5,434
456

-100.0%
539.7%
70.6%
n/a
460.9%

Key message:
Strong growth in land rent from new development. NERA 3 FAA grant
nearing completion. In-flight Kitchen revenue growth outpaces
enplanement growth.
2017 Actuals to 2016 Actuals
Revenue - $8.1M increase
•
DMCBP Phase II - $5.4M increase due to lump sum in-lieu
revenue earned in Q1 2017 (budget expected payment in 2016)
•
New leases executed in 2017 for NERA 2 & NERA 3 sites, under
construction during 2017.
•
In-flight Kitchen - $0.8M increase primarily due to increased
demand from Alaska and Delta
•
NERA 3 Grant Reimbursement revenue - $0.5M increase driven
by increase in project spending. Grant project will be
completed in mid-2018.
Expenses - $3.8M increase
•
DMCBP Phase II - $3.6M increase due to lump sum expense
for amortization of pre-paid frontage fees
•
NERA 3 Grant project spending - $0.6M increase in grant
project spending, as the project nears completion. Grant
project will be completed in mid-2018.
NOI Impact from DMCBP Phase II
•
$5.4M lump sum in-lieu revenue earned in Q1 2017 (expected
in 2016)
•
($3.6M) lump sum expense for pre-paid frontage fees
•
$1.8M incremental NOI

$1.8M NOI impact from DMCBP Phase II lump sum in-lieu of fee
32

2017 Capital Expenditures
$ in 000's
Description
International Arrivals Fac-IAF (1)
Concourse D Hardstand Holdroom (2)
Add'l Baggage Makeup Space IAF (3)
Checked Bag Recap/Optimization (4)
Alternate Utility Facility (5)
NS NSAT Renov NSTS Lobbies (6)
N. Terminals Utilities Upgrade (7)
Additional STS Cars (8)
GSE Electrical Chrg Stations (9)
Service Tunnel Renewal/Replace (10)
Concourse B Roof Replacement (11)
Fuel System Modifications (12)
SSAT Infrastructure HVAC (13)
Concessions Infrastructure (14)
Concourse B Gate Reconfigure (15)
All Other
Total Spending

2017
Actual
100,198
7,149
1,938
14,444
14,635
57,149
1,218
635
3,359
1,716
7,456
613
2,183
7,215
74,589
294,497

2017
Budget
202,598
22,163
13,475
24,256
23,998
64,285
7,996
6,525
5,390
8,000
5,995
11,600
4,748
4,800
9,819
139,069
554,717

Budget Variance
$
%
102,400 50.5%
15,014 67.7%
11,537 85.6%
9,812 40.5%
9,364 39.0%
7,136 11.1%
6,779 84.8%
6,525 100.0%
4,755 88.2%
4,641 58.0%
4,279 71.4%
4,144 35.7%
4,134 87.1%
2,617 54.5%
2,604 26.5%
64,480 46.4%
260,220
46.9%

(1)

Design-Build contractor delayed start of major construction due
to lag in obtaining permits and subsequent delay in starting
foundation work.
(2) Phasing plan from Design-Build contractor was different than
what was originally forecasted by the project team.
(3) See Note 1.
(4) Delays in contracting efforts and issuance of notice to proceed
(NTP).
(5) Contractor has been submitting invoices slower than
anticipated.
(6) Delays to the start of construction due to negotiation of
maximum allowance construction cost (MACC) agreement,
market conditions, and scope changes.
(7) Half of the Early Works portion of the project was cancelled due
to operational concerns from airlines.
(8) Spending deferred to 2018 to evaluate the impact of passenger
growth and capacity loads on existing STS trains.
(9) Delays in design due to coordination efforts with airlines, IAF,
SSAT Renovation, and Concourse B Gate Additions projects.
(10) Irregular bid (higher than engineer's estimate) caused a delay
in the start of the project.
(11) Labor market conditions and subsequent weather changes
delayed the construction work into 2018.
(12) Returned approximately $4M in savings in 2017 due to
favorable bids and unused construction contingency.
(13) Design related to HVAC structural support was delayed.

2017 spending was 53% of budget
33

SAMP Overview
Description
$ in 000's
SAMP Completion & Transition to Env Review
Adv Planning IDIQ - Master Plan
Environmental Review - Master Plan
SAMP Utilities Master Plan
Total SAMP-related Spending

•
•
•

2016
Actual
1,591
0
208
0
1,799

Fav (Unfav)
Inc (Decr)
2017
2017
2017 Budget Variance Change from 2016
Actual Budget
$
%
$
%
1,335
500
(835) -167.0%
(256) -16.1%
1,141
3,500
2,359
67.4%
1,141
n/a
169
2,300
2,131
92.7%
(39) -18.8%
276
500
224
44.8%
276
n/a
2,921
6,800
3,879
57.0%
1,122 62.4%

The budget assumed the Sustainable Aviation Master Plan would transition to
environmental review in early 2017.
Delays in completing SAMP delayed the intended spending on environmental review
and advance planning on the SAMP projects
Environmental review is now anticipated to start in Q2 2018.

Positive variance reflects deferred spending rather than savings
34

Maritime Division
2017 Financial Performance Report

Maritime 2017 Financial Summary
Fav (UnFav)
Budget Variance
$
%
2,354
5%
0
NA
2,354
5%

Incr (Decr)
Change from 2016
$
%
3,374
7%
0
NA
3,374
7%

2016
Actual
50,810
0
50,810

2017
Actual
54,183
0
54,183

2017
Budget
51,830
0
51,830

M aritime Expenses (excl M aint)
M aintenance Expenses
P69 Facilities Expenses
Other ED Expenses
Environmental & Sustainability
Police Expenses
Captial Development Expenses
Other Central Service Expenses
Envir Remed Liability

10,722
9,900
299
3,488
1,358
3,921
1,010
9,454
115

11,548
10,420
301
3,871
1,125
3,756
748
10,007
389

12,791
11,439
343
4,262
1,701
3,867
1,177
10,924
0

1,243
1,019
42
391
576
111
429
917
(389)

10%
9%
12%
9%
34%
3%
36%
8%
NA

825
520
2
383
(233)
(165)
(263)
553
273

8%
5%
1%
11%
-17%
-4%
-26%
6%
237%

Total Expenses

40,268

42,164

46,502

4,339

9%

1,896

5%

NOI Before Depreciation
Depreciation

10,542
17,351

12,020
17,410

5,327
16,672

6,692
(737)

126%
-4%

1,478
59

14%
0%

NOI After Depreciation

(6,809)

(5,390)

(11,345)

5,955

52%

1,419

21%

$ in 000's
Operating Revenue
Security Grants
Total Revenues

Budget Variance
•
Grain and Cruise driving
favorable to budget
revenue.
•
Operating expenses below
budget driven by
maintenance & payroll
savings.
Variance from 2016
•
Revenue growth seen in
Cruise (14%), Rec Boating
(8%), Maritime Portfolio
Management (5%), and
Fishing & Operations
(2%).
•
Expense growth driven by
Central Services, EDD,
Maintenance, and Cruise.

Unfilled positions and project delays driving lower costs
36

Maritime Capital 2017
$ in 000's
Cruise Terminal Tenant Improv
P91 South End Fender
FT Net Shed 3,4,5 &6 Roof Rpl
Small Projects
Contingency Renewal & Replace.
SBM Restrms/Service Bldgs Rep
Maritime Fleet Replacement
T91 Building C-173 Roof Overl
T91 P91W Slope Stabilization
FT Re Development Phase I
T91 Camel Replacements
All Other
Total Maritime

2017
Actual
13,545
153
1,711
1,392
0
663
584
969
152
640
30
650
20,489

2017
Budget
15,228
3,347
2,837
2,685
2,000
1,694
1,586
1,321
650
580
0
2,590
34,518

Budget Variance
$

%

1,683
3,194
1,126
1,293
2,000
1,031
1,002
352
498
(60)
(30)
1,940
14,029

11%
95%
40%
48%
100%
61%
63%
27%
78%
90%
100%
75%
41%

Cruise Tenant Improvement:
Gangway design and fabrication
delayed until 2018.
Shilshole Bay Marina Restroom
and Services Building
Replacement: Construction
delayed to summer 2018.
P91 South Fender: Permitting and
other delays. Work to begin Jan
2018.

Maritime Division spent 59% of Capital Budget
37

Maritime Business Financials Part 1
$ in 000's

2016
Actual

2017
Actual

2017
Budget

Fav (UnFav)
2017 Bud Var
$
%

Incr (Decr)
Change from 2016
$
%

Cruise
Revenue
Expense
NOI Before Depreciation
Depreciation Expense
NOI After Depreciation

15,422
7,096
8,326
5,244
3,082

17,596
8,997
8,599
5,924
2,675

16,502
10,784
5,718
5,214
504

1,094
1,787
2,881
(710)
2,171

7%
17%
50%
-14%
431%

2,174
1,901
273
680
(407)

14%
27%
3%
13%
-13%

Rec Boating
Revenue
Expense
NOI Before Depreciation
Depreciation Expense
NOI After Depreciation

10,255
9,239
1,016
3,401
(2,385)

11,086
9,780
1,306
3,122
(1,816)

11,081
10,439
642
3,097
(2,455)

5
659
664
(25)
639

0%
6%
103%
-1%
26%

831
541
290
(279)
569

8%
6%
29%
-8%
24%

Maritime Portfolio
Revenue
Expense
NOI Before Depreciation
Depreciation Expense
NOI After Depreciation

10,255
10,006
249
2,653
(2,404)

10,787
10,620
167
2,681
(2,514)

10,618
11,768
(1,150)
2,645
(3,795)

169
1,148
1,317
(36)
1,281

2%
10%
115%
-1%
34%

532
614
(82)
28
(110)

5%
6%
-33%
1%
-5%

Fishing & Operations
Revenue
Expense
NOI Before Depreciation
Depreciation Expense
NOI After Depreciation

9,108
12,257
(3,149)
5,518
(8,667)

9,297
10,748
(1,451)
5,119
(6,570)

9,121
11,455
(2,334)
5,149
(7,483)

176
707
883
30
913

2%
6%
38%
1%
12%

189
(1,509)
1,698
(399)
2,097

2%
-12%
54%
-7%
24%

NOI Growth in Recreational Boating and Fishing & Operations
38

Maritime Business Financials Part 2
$ in 000's

Fav (UnFav)
2017 Bud Var
$
%

Incr (Decr)
Change from 2016
$
%

2016
Actual

2017
Actual

2017
Budget

Bulk/Grain Terminal
Revenue
Expense
NOI Before Depreciation
Depreciation Expense
NOI After Depreciation

5,382
1,167
4,215
535
3,680

5,427
1,397
4,030
558
3,472

4,508
1,573
2,935
561
2,374

919
176
1,095
3
1,098

20%
11%
37%
1%
46%

45
230
(185)
23
(208)

1%
20%
-4%
4%
-6%

Other
Revenue
Expense
NOI Before Depreciation
Depreciation Expense
NOI After Depreciation

388
503
(115)
0
(115)

(9)
621
(630)
6
(636)

0
483
(483)
6
(489)

(9)
(138)
(147)
0
(147)

NA
-29%
-30%
0%
-30%

(397)
118
(515)
6
(521)

-102%
23%
-448%

Total Maritime
Revenue
Expense
NOI Before Depreciation
Depreciation Expense
NOI After Depreciation

50,810
40,268
10,542
17,351
(6,809)

54,183
42,164
12,019
17,410
(5,391)

51,830
46,502
5,328
16,672
(11,344)

2,353
4,338
6,691
(738)
5,953

5%
9%
126%
-4%
52%

3,373
1,896
1,477
59
1,418

7%
5%
14%
0%
21%

-453%

NOI increase while absorbing Habitat line of business
39

Stormwater Utility 2017 Financial Summary
$ in 000's

2016

2017

2017

Actual

Actual

Budget

3,421

3,426

Fav (UnFav)

Incr (Decr)

Budget Variance

Change from 2016

$

%

$

%

StormWater Utility
NWSA

3,401

(5)

0%

20

1%

Tenants Revenue

276

470

419

51

12%

194

70%

Non-tenants Revenue

1,074

1,094

1,110

(16)

-1%

21

2%

Total Revenues

4,751

4,985

4,955

30

1%

234

5%

SWU Direct

540

912

1,056

144

14%

372

69%

Maintenance Expenses

1,032

2,380

2,260

(120)

-5%

1,348

131%

Other Maritime Expenses

-

6

-

(6)

NA

6

NA

EDD Expenses

0

20

32

12

37%

20

8516%

Environmental & Sustainability

99

375

168

(207)

-123%

276

279%

Police Expenses

-

0

-

(0)

NA

0

NA

Capital Development Expenses

28

41

59

18

31%

12

44%

10

393

418

25

6%

383

3692%

Total Expenses

1,710

4,127

3,993

(134)

-3%

2,417

141%

NOI Before Depreciation

3,041

858

963

(105)

-11%

(2,183)

-72%

879

1,008

967

(41)

-4%

129

15%

2,161

(151)

(4)

(146)

3385%

(2,312)

-107%

Other Central Service Expenses

Depreciation
NOI After Depreciation

•
•

Revenue: $30K favorable
Expenses: ($134K) unfavorable

 The original budget for
consultant services was split
between the SWU and municipal
stormwater work (MS4 Tenant
work) at 48.20% SWU and
51.8% municipal stormwater
permit. However, the actual
costs were all charged to the
SWU.

Stormwater infrastructure work ahead of schedule
40

Economic Development Division
2017 Financial Performance Report

EDD 2017 Financial Summary
2016
Actual
7,881
8,022
15,903

2017
Actual
8,658
9,133
17,791

2017
Budget
8,088
7,943
16,030

Conf & Event Centers
P69 Facilities Expenses
Small Business
Workforce Development
Tourism
RE Dev & Planning
EDD Grants
EconDev Expenses Other
M aintenance Expenses
M aritime Expenses (Excl M aint)
Environmental & Sustainability
CDD Expenses
Police Expenses
Central Services
Envir Remed Liability

3,526
6,932
180
21
522
1,093
595
20
628
2,787
31
62
250
157
4,331
0

3,879
7,639
206
64
850
1,234
214
751
773
3,666
52
260
387
51
5,370
0

4,220
7,935
234
161
1,999
1,285
303
960
1,354
3,592
64
451
439
173
5,899
0

Fav (UnFav)
Incr (Decr)
Budget Variance Change from 2016
$
%
$
%
571
7%
777
10%
1,190
15%
1,111
14%
1,761
11%
1,888 NA 12%
341
8%
353
10%
296
4%
707
10%
29
12%
26
14%
96
60%
43
204%
1,148
57%
329
63%
51
4%
141
13%
89
29%
(381)
-64%
209
22%
731
3703%
581
43%
145
23%
(74)
-2%
879
32%
11
18%
21
66%
191
42%
198
323%
52
12%
137
55%
122
70%
(106)
-67%
529
9%
1,039
24%
(0)
NA
0
NA

Total Expense

21,135

25,397

29,069

3,672

13%

4,262

20%

NOI Before Depreciation
Depreciation
NOI After Depreciation

(5,232)
3,682
(8,914)

(7,606)
3,863
(11,469)

(13,039)
3,854
(16,893)

5,433
(9)
5,424

42%
0%
32%

(2,374)
181
(2,555)

45%
5%
29%

$ in 000's
Central Harbor Properties
Conf & Events Centers
Total Revenue

Central Harbor Properties

Strong Occupancy and Management of Expenses
42

Contribution to Maritime Division
$ in 000's
Portfolio M anagement
Conference & Event Centers
Tourism
Workforce Development
Small Business
EDD Grants
Env Grants/Remed Liab/ERC
Total Econ Dev

2016
Actual
(3,925)
538
(1,117)
(517)
(2)
(20)
(188)
(5,232)

2017
Actual
(5,236)
762
(1,265)
(1,113)
(2)
(751)
(1)
(7,606)

2017
Budget
(7,551)
(848)
(1,312)
(2,269)
(100)
(960)
0
(13,039)

Fav (UnFav)
Incr (Decr)
2017 Bud Var
Change from 2016
$
%
$
%
2,316
31%
(1,310)
-33%
1,609
190%
224
-42%
47
4%
(148)
-13%
1,156
51%
(596)
-115%
98
98%
1
NA
209
22%
(731)
NA
(1)
187
-99%
5,433
42%
(2,374)
-45%

EDD makes significant contribution to Maritime Division
43

EDD Capital 2017
$ in 000's

2017
Actual

2017
Budget

Budget Variance
$
%

Econ Dev

3,739

6,304

2,565

41%

Planned Capital Projects Moved Forward
44

Central Services
2017 Financial Performance Report

Central Services Expense by Category
2017
Actual

2017
Budget

Fav (UnFav)
Budget Variance
$
%

$ in 000's

2016
Actual

Salaries & Benefits
Wages & Benefits
Payroll to Capital Projects
Equipment Expense
Supplies & Stock
Outside Services
Travel & Other Employee Exps
Insurance Expense
Litigated Injuries & Damages
Other
Charge to Capital
Total

64,454
69,448
77,349
7,901
21,943
20,517
22,649
2,132
19,060
21,859
22,786
927
1,918
3,109
2,572
(537)
1,276
1,446
1,375
(71)
28,565
34,053
48,418
14,365
2,491
2,568
3,816
1,247
2,349
2,223
2,500
277
279
435
(435)
2,545
2,152
2,834
683
(33,708) (40,299) (46,357) (6,057)
111,172 117,511 137,942 20,431

10.2%
9.4%
4.1%
-20.9%
-5.2%
29.7%
32.7%
11.1%
0.0%
24.1%
13.1%
14.8%

Incr (Decr)
Change from 2016
$
%
4,994
(1,426)
2,798
1,191
170
5,489
78
(125)
156
(394)
6,591
6,339

7.7%
-6.5%
14.7%
62.1%
13.3%
19.2%
3.1%
-5.3%
55.7%
-15.5%
19.6%
5.7%

•

•

•

Payroll: $10.0M below
budget due to delay
hiring, vacant
positions, and project
delays.
Outside Services:
$14.4M favorable to
budget mainly due to
delay in environmental
review for SAMP, ACE
Fund and Energy &
Sustainability Fund
spending, and other
project delays.
Charge to Capital:
$6.1M less than budget
due to delay of some
capital projects.

Expenses were lower than budget due to project delays and hiring delays
46

Financial Summary by Dept.
Fav (UnFav)
Budget Variance
$
%

Incr (De cr)
Change from 2016
$
%

2016
Actual

2017
Actual

2017
Budget

Total Revenues

1,186

68

367

(299)

-81.4%

(1,118)

-94.2%

Executive
Commission
Legal
Public Affairs
Human Resources
Labor Relations
Internal Audit
Office of Strategic Initiatives
Security and Preparedness
Contingency
Finance
Accounting & Financial Reporting Services
Information & Communication Technology
Finance & Budget
Finance & Budget
Aviation Finance & Budget
Maritime Finance & Budget
Business Intelligence
Risk Services
Sub-Total

2,185
1,569
3,365
6,033
7,001
1,268
1,455
8,356
1,420
369

1,287
1,685
3,741
7,112
8,418
1,678
1,603
5,743
1,754
381

1,944
1,830
3,288
7,847
9,035
1,313
1,770
6,264
2,065
250

657
145
(453)
735
618
(365)
167
521
310
(131)

33.8%
7.9%
-13.8%
9.4%
6.8%
-27.8%
9.4%
8.3%
15.0%
-52.4%

(898)
116
376
1,079
1,417
410
148
(2,614)
335
12

-41.1%
7.4%
11.2%
17.9%
20.2%
32.3%
10.2%
-31.3%
23.6%
3.3%

6,550
20,158
4,810
1,647
1,950
1,212
1,004
3,202
35,725

6,751
21,633
4,998
1,871
1,897
1,229
1,211
3,077
37,670

7,763
22,420
5,873
2,181
2,184
1,508
1,458
3,470
40,985

1,013
787
875
309
287
279
247
393
3,315

13.0%
3.5%
14.9%
14.2%
13.1%
18.5%
17.0%
11.3%
8.1%

201
1,475
188
224
(53)
17
207
(125)
1,945

3.1%
7.3%
3.9%
13.6%
-2.7%
1.4%
20.6%
-3.9%
5.4%

Core Support Services

68,745

71,071

76,591

5,519

7.2%

2,326

3.4%

Police

23,045

22,095

23,884

1,789

7.5%

(950)

-4.1%

Total Before Cap Dev & Environment

91,790

93,166

100,475

7,309

7.3%

1,376

1.5%

$ in 000's

Notes

•

•

•

Legal: $453K
unfavorable to
budget due to
unanticipated legal
expenses.
Labor Relations:
$365K unfavorable
to budget due to
unanticipated legal
expenses.
Contingency: $131K
unfavorable mainly
due to the
unbudgeted radio
systems consultant
contract.

Most departments had favorable variances
47

Financial Summary by Dept. - Cont.
$ in 000's

Notes

Capital Development
Engineering
Port Construction Services
Aviation PMG
Seaport PMG
Capital Development Admin
Sub-Total
Environment & Sustainability
Aviation Environmental Program Group
Maritime Environmental & Planning
Noise Programs
Environment & Sustainability Admin
Sub-Total
Total Expenses

2016
Actual

2017
Actual

2017
Budget

Fav (UnFav)
Budget Variance
$
%

4,493
3,488
2,823
999
416
12,218

5,284
3,709
6,942
1,007
428
17,370

7,092
4,079
13,005
912
447
25,535

1,808
370
6,063
(95)
19
8,165

25.5%
9.1%
46.6%
-10.4%
4.3%
32.0%

791
221
4,119
9
12
5,152

17.6%
6.3%
145.9%
0.9%
2.9%
42.2%

3,745
2,098
722
148
6,712

3,779
2,157
670
368
6,975

6,301
2,385
723
2,523
11,932

2,522
228
53
2,154
4,958

40.0%
9.6%
7.4%
85.4%
41.5%

34
59
(52)
221
262

0.9%
2.8%
-7.2%
149.7%
3.9%

111,172

117,511

137,942

20,431

14.8%

6,339

5.7%

Incr (Decr)
Change from 2016
$
%

Operating expenses were $20.4M favorable to budget
48

Central Services Capital Spending
$ in 000's
Infrastructure - Small Cap
Services Tech - Small Cap
Enterprise GIS - Small Cap
Constr Doc Mgmt Sys Repl.
Maximo Upgrade
Project Cost Mgmt System
Remote Data Business Continuity
POS Website Redevelopment
Supplier Database System
Corporate Firewall
Cap Dev Fleet Replacement
Cap Dev Small Cap
Other (note 1)
TOTAL

2017
Actual
966
577
32
403
186
220
171
717
41
578
282
168
447
4,788

2017
Budget
1,581
1,150
400
427
371
900
480
796
700
800
589
340
789
9,323

Budget Variance
$
%
615
38.9%
573
49.8%
368
92.0%
24
5.6%
185
49.9%
680
75.6%
309
64.4%
79
9.9%
659
94.1%
222
27.8%
307
52.1%
172
50.6%
342
43.3%
4,535
48.6%

Note:
(1) "Other" includes remaining ICT projects, Central Services fleet replacement
and small capital acquistion.

Capital Spending was 4.8M or 51.4% of budget
49