Item No. 9b supp . Meeting Date: September 11, 2018 Port of Seattle Q2 2018 Financial Performance Report 1 Portwide Financial Highlights • Q2 YTD Actual: o Operating Revenues $12.7M favorable to budget and $28.4M over 2017. o The Non-Aviation Revenues $4.3M favorable to budget and $2.5M over 2017. o Operating Expenses $17.3M favorable to budget and $17.5M above 2017 mainly due to more payroll and project-related expenses. o Net Operating Income before depreciation $30.1M favorable to budget and $10.9M over 2017. • Year-End Forecast: o Revenues $14.6M favorable, Expenses $3.2M favorable, and NOI $17.8M favorable to budget. o Total capital spending forecast to be $652.6M or 74.5% of the budget for 2018. Expect strong financial performance results for 2018 2 Portwide Net Operating Income Performance Both operating revenues and expenses growing gradually since 2008 3 Non-Aviation Net Operating Income Performance NOI for 2018 is forecasted to be relatively flat compared to 2008 4 Aviation Division Highlights • Activity: Passenger growth in Q2 tracking slightly higher than budgeted growth of 5% • Customer Service: below target through Q2 - Airport Service Quality scores below 2017 in all 6 categories. Improved Security checkpoint times. • Planning for future: Sustainable Airport Master Plan initiated environmental review in July • 2018 Financial Forecast: • Non-Aeronautical NOI $7.3 million above budget • Total Operating and Maintenance Expenses $1.4 million under budget • Passenger Airline Cost per Enplaned Passenger (CPE) $0.11 below revised budget (revised for change in revenue sharing under SLOA IV) • Capital spending of $594 million, below budget of $796 million Passenger growth driving financial result, creating customer service challenges 5 Airport Activity Passengers (in 000s) Growth rate 45,737 46,935 Int'l 50,000 Int'l 12.9% 30,000 37,498 7.7% Int'l 40,000 Int'l 42,341 49,308 49,308 Int'l 14% Int'l 60,000 12% 10% 8% 8.0% Year-to-date Q2: • Passengers +6.1% • Operations +5.0% • Landed weight +7.7% • Cargo metric tons +5.3% 6% 5.1% 20,000 2016 Domestic 2015 Domestic Domestic 2014 2.6% Domestic Domestic 4% Domestic 10,000 5.1% 2017 2018 Budget 2018 Forecast 0 2% 0% Passenger growth ahead of plan YTD, still anticipate 5% growth for year 6 Airline Cost Management (CPE) CPE Revenue Sharing ($000s) 12.00 45000 42,310 11.50 11.63 11.48 11.52 2018 Budget: • Adjusted for SLOA IV 40% revenue sharing 40000 37,395 CPE 11.00 29,436 30000 28,639 25000 10.52 10.50 10.12 17,034 20000 10.10 10.00 15000 Revenue Sharing (000s) 35000 31,908 2018 CPE Forecast: • Below budget due to increased non-airline revenues generating more revenue sharing 10000 9.50 5000 9.00 0 2014 2015 2016 2017 2018 Budget 2018 Forecast 2018 revenue sharing $3.3 million higher than budget anticipated with SLOA IV provision 7 Non-Aeronautical Performance Non-Aero NOI ($000s) Non-Aero Revenue per Enplanement 180,000 9.66 9.33 140,000 9.70 128,727 10.11 9.93 10.00 133,101 134,164 126,861 112,618 8.00 Forecast 120,000 100,386 100,000 6.00 80,000 4.00 40,000 20,000 YTD 60,000 YTD NOI (000s) 10.17 Rev Per Enplanement 160,000 12.00 YTD 2018 vs. 2017: • Revenues +5.4% • Expenses +7.8% • NOI +3.6% Revenue growth: • Rental car CFC • Public parking • ADR • GT 2.00 - - - 2014 2015 2016 2017 2018 Budget 2018 Forecast ADR, parking and TNCs driving positive revenue variance in 2018 forecast 8 Total Operating Expense Performance Total O&M Expense ($000s) O&M Expense per Enplanement 450,000 13.52 334,856 333,374 14.00 12.19 11.28 350,000 11.46 12.00 10.00 250,000 228,172 Forecast 261,226 238,140 200,000 8.00 6.00 150,000 YTD 4.00 100,000 YTD O&M Expense (000s) 299,114 300,000 50,000 - - - - 2014 2015 2016 2017 - O&M Expense per Enplanement 400,000 13.58 12.77 Q2 YTD: • $11.6M favorable 2018 Forecast: • $1.4M favorable (0.4%) 2018 unplanned costs absorbed: • Planning studies • Bag system testing • Pest management • Peak staffing support • Fire Dept. OT 2.00 - 2018 Budget 2018 Forecast 2018 savings/deferrals covering unplanned expenditures 9 Capital Spending 900,000 2018 Forecast: • IAF = $215M • NSAT = $132 M • Other = $249 M 796,200 800,000 700,000 Forecast 500,000 400,000 294,497 300,000 200,000 Major 2018 Variances: • IAF = - $109M • Automated Security Lane = -$15.6M • NSAT = -$9.0M 155,970 164,931 153,887 2014 2015 2016 YTD Capital Spending (000s) 593,941 600,000 100,000 - 2017 2018 Budget 2018 Forecast 2018 spending variances primarily due to delayed spending, not project savings 10 Maritime Business Highlights Cruise - Commissioners, Executive, Cruise, and Public Affairs staff participated in the successful inaugural event and first turnaround call of the Norwegian Bliss, May 30-June 02. The event garnered significant media attention. Recreational Boating - Successfully hosted the Clipper Around the World at Bell Harbor Marina in June. Fishing and Commercial Operations - Transitioned management of Salmon Bay Marina in June. Maritime Portfolio Management - Finalized a license with Ecco Wireless that will bring a new Wi-Fi network to Shilshole Bay Marina with faster speeds and better coverage over the whole site for all customers. Stormwater Utility - Obtained permit from US Army Corp of Engineers to proceed with T18 Outfall Renewal and Replacement project. Tracking to exceed the 75% assessment target. Fine tuning the businesses and advancing the Century Agenda 11 Maritime Financial Highlights Maritime - YTD Q2 2018 NOI is $4,145K favorable to budget and Net Operating Income ($77K) lower than 2017 $ in 000's Fishing & Operations • • • • • 2016 YTD 2017 YTD Actual Actual (1,563) (910) 2018 Year-to-Date Actual (1,139) Budget (1,643) Fav (UnFav) Incr (Decr) Budget Variance $ % Change from 2017 $ % 504 31% (230) -25% 748 799 987 34 953 2840% 187 23% YTD Q2 Revenue favorable to Recreational Boating Cruise 2,223 2,697 2,093 956 1,137 119% (604) -22% budget by $1,234K and Bulk 1,442 2,388 2,249 1,672 577 35% (139) -6% $1,732K greater than 2017 Maritime Portfolio 450 121 391 (314) 705 224% 270 223% driven by Recreational All Other (15) (478) (39) (308) 269 87% 438 92% Boating and Fishing & Total Maritime 3,285 4,618 4,541 396 4,145 1046% (77) -2% Operations. YTD Q2 Expenses favorable to budget by $2,911K and $1,809K higher than 2017. 2018 Operating profit forecast to exceed budget by $1.3M. 2018 Capital forecast to 70% of budget driven by restroom and paving projects at Shilshole Bay moving spend to 2019. Stormwater Utility forecast is tracking to budget. Maritime NOI forecast to exceed budget in 2018 12 EDD Business Highlights Real Estate Development In April Trammell Crow started construction at Des Moines Creek North property in SeaTac. Salmon Bay Marina acquisition closed in June. Design work at FT suspended pending final CIP resolution. Workforce Development Airport Career Pathways Convening - Discussion co-facilitated with airport employers convened by Airport Director Lance Lyttle to identify potential opportunities for developing career pathways training to drive opportunities for low-wage workers to increase skills and wages. Small Business Presented the Diversity in Contracting implementation plan to Commission on June 12th to address port wide goal setting, outreach, contracting, tracking, evaluation, and accountability. Portfolio Management Elevator modernization project for two passenger elevators and the service elevator at Pier 66 completed May 3, which was 3.5 weeks ahead of schedule. Tourism Port Commissioners authorized the Executive Director to execute all related contract agreements for the 26 awardees of the 2018 Tourism Marketing Support Program. Additionally launched the Spotlight Advertising Program application process at Sea-Tac Int'l Airport in June. Moving ahead on initiatives and navigating changing real estate market 13 EDD Financial Highlights EDD - YTD 2018 NOI $1,951K favorable to budget and $1,216K greater than 2017 • Revenue favorable to budget by $524K and $2,039K greater than 2017 driven by favorable volumes at the Conference and Event Centers. • Expenses favorable to budget by $1,428K, of which $1.3M is related to underspend on EDD initiatives such as Workforce Development and EDD Grants. Y/Y expenses up $823K primarily due to increased Conference and Event Center volumes and Maintenance, offset by timing of EDD Grants. • Full year NOI forecast to exceed budget by $1.2M. • EDD projects to spend 98% of capital budget. Growth in Conference and Event Center volumes 14 Central Services Business Highlights • • • • • The Port Commission approved $200,000 in grants for 26 tourism-related projects across the state of Washington. The Port Commission has appointed a panel of four experts to independently review costs and schedules associated with the new International Arrivals Facility (IAF) now under construction. Received U.S. Army Corps of Engineers leadership approval of the Seattle Harbor Deepening Project. Issued Intermediate Lien Revenue Bonds of $555,564,000 to finance or refinance capital improvements to aviation facilities. Replaced the Port of Seattle website that is more focus on engaging our customers and provides infrastructure for organizational content updates. Achieved a number of accomplishments in Q2 2018 15 Central Services Financial Highlights • Q2 Actual: o Operating expenses $9.9M favorable to budget mainly due to some vacant positions and lower Outside Services expenses. o Operating expenses $3.4M higher than 2017 mainly due to higher payroll and more project-related expenses. • Year-End Forecast: o Operating expenses forecast to be $8.0M favorable to budget due primarily to savings from Payroll and Outside Services. o Operating expenses forecast to be $19.7M higher than 2017 due to higher payroll and more project-related expenses. Departments that have the most increase include:  Police: $4.9M  Capital Development: $3.7M  Environment & Sustainability: $3.5M Vacancies & delayed expenses led to favorable budget variances 16 Appendix Q2 2018 Financial Performance Report Portwide Financial Summary $ in 000's Aeronautical Revenues Airport Non-Aero Revenues Other Port Operating Revenues Total Operating Revenues Total Operating Expenses NOI before Depreciation Depreciation NOI after Depreciation • • • 2016 YTD 2017 YTD Actual Actual 117,765 127,780 100,336 112,761 61,322 61,548 279,422 302,088 147,874 174,104 131,549 127,984 82,277 81,860 49,271 46,124 2018 Year-to-Date Actual Budget 147,570 144,761 118,864 113,264 64,054 59,748 330,489 317,773 191,577 208,920 138,912 108,853 81,949 81,614 56,963 27,238 Fav (UnFav) Incr (Decr) Budget Variance Change from 2017 % $ % 2,809 1.9% 19,791 15.5% 5,601 4.9% 6,104 5.4% 4,306 7.2% 2,506 4.1% 12,716 4.0% 28,400 9.4% 17,343 8.3% 17,473 10.0% 30,059 27.6% 10,927 8.5% (335) -0.4% 89 0.1% 29,724 109.1% 10,838 23.5% Operating Revenues $12.7M favorable to budget and $28.4M higher than 2017. Operating Expenses $17.3M favorable to budget but $17.5M higher than 2017. NOI before Depreciation $30.1M favorable to budget and $10.9M higher than 2017. Strong financial performance for the Port 18 Non-Aviation Financial Summary $ in 000's NWSA Distributable Revenue Maritime Revenues EDD Revenues SWU & Other Total Operating Revenues Total Operating Expenses NOI before Depreciation Depreciation NOI after Depreciation 2016 YTD 2017 YTD Actual Actual 28,990 27,283 22,027 24,525 8,338 7,727 1,968 2,012 61,322 61,548 29,057 33,783 32,265 27,765 21,046 20,272 11,219 7,493 2018 Year-to-Date Actual Budget 25,844 23,323 26,257 25,023 9,765 9,242 2,187 2,160 64,054 59,748 38,141 43,868 25,913 15,880 19,988 20,176 5,925 (4,295) Fav (UnFav) Budget Variance $ % 2,521 10.8% 1,234 4.9% 524 5.7% 27 1.3% 4,306 7.2% 5,727 13.1% 10,032 63.2% 187 0.9% 10,220 -237.9% Incr (Decr) Change from 2017 $ % (1,439) 1,732 2,038 175 2,506 4,358 (1,852) (283) (1,569) -5.3% 7.1% 26.4% 8.7% 4.1% 12.9% -6.7% -1.4% -20.9% Strong financial performance for the Port 19 Portwide Operating Revenues Summary $ in 000's Aeronautical Revenues 2016 YTD Actual 2017 YTD Actual 117,765 Public Parking Rental Cars - Operations Rental Cars - Operating CFC ADR & Terminal Leased Space Ground Transportation Employee Parking Airport Commercial Properties Airport Utilities Cruise Recreational Boating Fishing & Operations Grain Maritime Portfolio Management Central Harbor Management Conference & Event Centers NWSA Distributable Revenue Other Total Operating Revenues (w/o Aero) 34,166 15,271 3,872 26,617 5,668 4,563 4,286 3,571 5,410 5,083 4,419 2,010 5,100 3,393 4,518 28,990 4,721 161,658 127,780 36,958 14,514 3,284 28,420 7,633 4,674 10,708 3,423 6,325 5,438 4,440 3,042 5,267 4,161 3,545 27,283 5,194 174,309 TOTAL 279,422 302,088 2018 Year-to-Date Actual Budget Fav (UnFav) Budget Variance $ 147,570 39,402 14,922 5,497 30,179 8,885 5,191 7,593 3,438 6,806 6,125 4,565 3,123 5,628 4,557 5,188 25,844 5,974 182,918 144,761 1.9% 19,791 15.5% 38,080 14,579 5,434 28,017 8,060 4,608 7,082 3,778 6,944 5,839 4,201 2,572 5,459 4,448 4,776 23,323 13,871 173,012 2,809 1,322 343 63 2,162 825 584 511 (340) (139) 286 364 551 169 109 412 2,521 (7,898) 9,906 3.5% 2.4% 1.2% 7.7% 10.2% 12.7% 7.2% -9.0% -2.0% 4.9% 8.7% 21.4% 3.1% 2.4% 8.6% 10.8% -56.9% 5.7% 2,444 408 2,213 1,759 1,252 517 (3,115) 14 481 687 125 81 361 396 1,644 (1,439) 780 8,610 6.6% 2.8% 67.4% 6.2% 16.4% 11.1% -29.1% 0.4% 7.6% 12.6% 2.8% 2.7% 6.9% 9.5% 46.4% -5.3% 15.0% 4.9% 330,489 317,773 12,716 4.0% 28,400 9.4% % Incr (Decr) Change from 2017 $ % Operating revenues exceeded budget 20 Portwide Operating Expense Summary $ 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 Fav (UnFav) Incr (Decr) 2016 YTD 2017 YTD 2018 Year-to-Date Budget Variance Change from 2017 Actual Actual Actual Budget $ % $ % 51,795 56,338 62,772 66,506 3,734 5.6% 6,434 11.4% 48,261 52,948 60,075 60,199 124 0.2% 7,127 13.5% 10,040 12,873 13,602 14,311 710 5.0% 728 5.7% 2,923 4,311 3,866 4,373 507 11.6% (445) -10.3% 3,454 4,616 4,633 4,336 (297) -6.9% 17 0.4% 25,663 32,969 38,460 53,117 14,657 27.6% 5,491 16.7% 10,510 11,911 13,453 12,844 (608) -4.7% 1,542 12.9% 1,879 2,338 2,303 3,482 1,179 33.9% (35) -1.5% 362 460 964 1,198 234 19.5% 504 109.4% 8,450 16,566 15,361 14,831 (530) -3.6% (1,205) -7.3% (15,463) (21,226) (23,911) (26,278) (2,366) 9.0% (2,685) 12.7% 147,874 174,104 191,577 208,920 17,343 8.3% 17,473 10.0% • • • Payroll expenses were $3.7M below budget due to vacant positions and hiring delay. Outside Services were $14.7M favorable to budget due to timing of spending, project delays, and some actual savings. Utilities Expense was $608K over budget mainly due to higher Surface Water Utility cost. Operating expenses were $17.3M below budget 21 Portwide Financial Summary - YE Forecast $ in 000's Aeronautical Revenues Airport Non-Aero Revenues Other Port Operating Revenues Total Operating Revenues Total Operating Expenses NOI before Depreciation Depreciation NOI after Depreciation • • • 2016 Actual 244,235 221,021 133,211 598,467 325,285 273,182 164,336 108,846 2017 Actual 264,114 236,803 131,114 632,031 372,982 259,049 165,021 94,028 2018 Forecast 305,005 250,728 129,376 685,109 419,666 265,443 163,309 102,133 2018 Budget 301,082 244,786 124,612 670,479 422,885 247,594 163,309 84,285 Fav (UnFav) Incr (Decr) Budget Variance Change from 2017 $ % $ % 3,923 1.3% 40,891 15.5% 5,942 2.4% 13,925 5.9% 4,764 3.8% (1,739) -1.3% 14,630 2.2% 53,078 8.4% 3,219 0.8% 46,684 12.5% 17,849 7.2% 6,394 2.5% 0.0% (1,712) -1.0% 17,849 21.2% 8,106 8.6% Operating Revenues forecast to be $14.6M favorable to budget in 2018. Operating Expenses forecast to be $3.2M favorable to budget in 2018. NOI before Depreciation forecast to be $17.8M above budget in 2018. Expect strong financial performance results in 2018 22 Capital Spending by Division $ in 000's 2018 YTD Actual 2018 Forecast Aviation Maritime 224,817 21,702 593,941 32,800 Economic Development 1,363 6,028 6,149 121 2.0% Corporate & Other (note 1) 1,887 19,826 26,779 6,953 26.0% 249,769 652,595 875,877 223,282 25.5% TOTAL 2018 Budget Variance Budget $ % 796,200 202,259 25.4% 46,749 13,949 29.8% Note: (1) "Other" includes Street Vacation projects and Storm Water Utility Small Capital projects. 2018 capital spending forecast to be $652.6M 23 Aviation Division Appendix Airport Activity YTD 2016 YTD 2017 YTD 2018 % Change from 2017 Passenger Activity Change 2018 Market Airline 2017 v. 2018 Share Alaska 2.7% 50.4% Delta 13.2% 22.4% United 12.1% 6.3% Southwest 4.8% 6.1% American 0.4% 5.0% Total Passengers (000's) Domestic International Total 19,249 2,257 21,506 19,666 2,484 22,150 20,897 2,611 23,508 6.3% 5.1% 6.1% Operations 197,152 199,610 210,722 5.6% Q2 2018: 843 12,044 12,886 1,025 12,416 13,441 1,147 13,328 14,475 12.0% 7.3% 7.7% 83,079 55,287 27,562 165,928 111,015 57,534 28,882 197,431 122,259 57,279 28,326 207,864 10.1% -0.4% -1.9% 5.3% Passengers - YTD passenger growth of 6.1% tracking well ahead of 2018 budget based on 5.0% growth. Landed Weight (In Millions of lbs.) Cargo All other Total Cargo - Metric Tons Domestic freight International freight Mail Total •Cargo - YOY strong growth in cargo driven by domestic ecommerce and express shipments. 2018 total passenger growth of 6.1% 25 Aviation Financial Summary Fav (UnFav) Budget Variance $ % 2017 Actual 2018 Forecast 247,811 267,690 305,005 301,082 3,923 1.3% 37,315 13.9% (3,576) (3,576) - - - 0.0% 3,576 -100.0% Aeronautical Revenues 244,235 264,114 305,005 301,082 3,923 1.3% 40,891 15.5% Non-Aeronautical Revenues 221,021 236,803 250,728 244,786 5,942 2.4% 13,925 5.9% Total Operating Revenues 465,256 500,916 555,733 545,867 9,865 1.8% 54,816 10.9% Total Operating Expense 261,226 299,114 333,374 334,856 1,482 0.4% 34,259 11.5% Net Operating Income 204,030 201,802 222,359 211,011 11,348 5.4% 20,557 10.2% Capital Expenditures 153,887 293,785 593,941 796,200 202,259 25.4% 300,156 102.2% 133,982 131,060 138,177 136,075 (2,102) -1.5% 7,117 5% $ in 000's Operating Revenues: Gross Aeronautical Revenues SLOA III Incentive Straight Line Adj Debt Service (2) (1) 2018 Budget Incr (Decr) Change from 2017 $ % 2016 Actual (1) Annual non-cash amortization of $17.9M lease incentive related to the 5 year SLOA III agreement which ended in 2017. (2) 2018 Budget debt service amount inadvertently understated by the $2.1M debt service exclusion adjustment which impacts Aero Rate Based Revenues only. Total 2018 Aeronautical debt service obligation is reflected in the 2018 Forecast column. 2018 Forecasted NOI $11.3M favorable to budget 26 Key Performance Measures 2018 Forecast vs. 2018 Budget Fav (UnFav) Budget Vairance $ % Incr (Decr) Change from 2017 $ % 2016 Actual 2017 Actual 2018 Forecast 2018 Budget Key Performance Metrics Cost per Enplanement (CPE) Non-Aeronautical NOI (in 000's) 10.10 128,727 10.52 133,101 11.52 134,164 11.35 126,861 (0.17) 7,303 -1.5% 5.8% 0.99 1,063 9.4% 0.8% Other Performance Metrics O&M Cost per Enplanement Non-Aero Revenue per Enplanement Debt per Enplanement (in $) Debt Service Coverage Days cash on hand (10 months = 304 days) Aeronautical Revenue Sharing ($ in 000's) 11.46 12.77 9.70 10.11 104 114 1.53 1.57 416 379 (37,395) (42,311) 13.52 10.17 126 1.60 307 (31,908) 13.58 9.93 116 1.51 304 (35,799) 0.06 0.24 (10) 0.09 3 3,891 0.4% 2.4% -8.9% 5.8% 1.0% 10.9% 0.75 0.06 12 0.02 (72) 10,403 5.9% 0.6% 10.4% 1.5% -19.0% 24.6% Activity (in 000's) Enplanements 22,796 24,654 24,654 - 0.0% 1,238 5.3% 23,416 Key Performance Metrics CPE: • CPE - Impacted by SLOA IV reduction in Revenue Sharing to 40%. 2018 Budget assumed 50% Revenue Sharing • 2018 Forecast CPE is favorable to Adjusted Budget CPE of $11.63 •Non-Aero NOI: • Non-Aero NOI growth due to both higher Non-Aero Revenue and lower Operating Expenses primarily due to schedule delays Other Performance Metrics: • Aero Revenue Sharing - Forecast reflects 40% Revenue Sharing per SLOA IV, Budget assumed 50% Revenue Sharing Positive: Non-aero NOI above budget. CPE below adjusted budget. 27 Aviation Expense YTD Summary $ in 000's Operating Expenses: Payroll Outside Services Utilities Other Airport Expenses Total Airport Direct Charges Environmental Remediation Liability Capital to Expense Total Exceptions 2018 Year-to-Date Actual Budget Fav (UnFav) Incr (Decr) Budget Variance Change from 2017 $ % $ % 2016 YTD Actual 2017 YTD Actual 49,708 15,736 7,358 9,132 81,934 55,798 17,203 8,389 13,680 95,070 63,139 21,015 9,589 9,788 103,530 64,511 24,978 9,072 9,920 108,481 1,372 3,963 (516) 132 4,951 2.1% 15.9% -5.7% 1.3% 4.6% 7,341 3,812 1,200 (3,892) 8,460 13.2% 22.2% 14.3% -28.5% 8.9% 33 33 2,714 24 2,738 4,484 8 4,492 2,980 2,980 (1,504) (8) (1,512) -50.5% N/A -50.7% 1,770 65.2% (16) 1,753 -66.8% 64.0% Total Airport Expenses 81,968 97,809 108,021 111,461 3,439 3.1% 10,212 10.4% Police Costs Capital Development Other Central Services Maritime/Economic Development Total Charges from Other Divisions 8,943 3,358 22,723 1,826 36,849 9,146 6,486 25,000 1,879 42,512 10,659 6,072 26,714 1,970 45,414 11,070 11,422 28,414 2,685 53,591 411 5,351 1,700 715 8,177 3.7% 46.8% 6.0% 26.6% 15.3% 16.5% 2,902 -6.4% 6.9% 4.8% 6.8% Total Operating Expense 118,817 140,321 153,436 165,052 11,617 7.0% 13,115 9.3% Net Operating Income 99,283 100,219 112,999 92,972 20,026 21.5% 12,780 12.8% 1,513 (415) 1,714 91 2018 YTD Actuals to YTD 2018 Budget Cost Savings (Favorable): • Payroll -Vacancies and hiring delays • Outside Services - planning project and program delays • Charges from other divisions - • CDD savings - delays in AVPMG projects for terminal and ADR Unplanned Expenses (Unfavorable): • Utilities -Higher Surface water costs, including IWTP Overflow Event • ERL - IAF soil contamination & NSAT Asbestos Unplanned expenses absorbed by cost savings 28 Aviation Expense YE Summary 2016 Actual 2017 Actual 2018 Forecast 2018 Budget Fav (UnFav) Budget Variance $ % Incr (Decr) Change from 2017 $ % 2018 Forecast to 2018 Budget 94,559 31,636 14,667 21,934 162,797 114,463 41,055 16,374 28,292 200,184 130,809 55,002 17,927 21,940 225,677 132,156 52,532 17,320 19,776 221,784 1,347 (2,469) (607) (2,165) (3,893) 1.0% -4.7% -3.5% -10.9% -1.8% 16,346 13,947 1,553 (6,352) 25,493 14.3% 34.0% 9.5% -22.5% 12.7% - 8,812 2,856 11,668 4,851 367 5,218 4,030 4,030 (821) (367) (1,188) -20.4% 0.0% -29.5% (3,961) -44.9% • Unfavorable in Outside Services and other Airport Expenses offset by cost savings from other divisions - Capital Development and other Central Services (2,489) (6,450) -87.1% -55.3% Total Airport Expenses 162,797 211,852 230,896 225,814 (5,082) -2.3% 19,044 9.0% Police Costs Capital Development Other Central Services Maritime/Economic Development Total Charges from Other Divisions 18,183 9,319 58,617 12,310 98,429 17,652 14,701 51,004 3,904 87,262 22,174 17,936 57,032 5,336 102,478 22,174 23,092 58,265 5,511 109,042 5,156 1,233 175 6,564 0.0% 22.3% 2.1% 3.2% 6.0% 4,522 3,235 6,028 1,431 25.6% 15,216 22.0% 11.8% 36.7% 17.4% Total Operating Expense 261,226 299,114 333,374 334,856 1,482 0.4% 34,259 11.5% Net Operating Income 204,030 201,802 222,359 211,011 11,348 5.4% 20,557 10.2% $ in 000's Operating Expenses: Payroll Outside Services Utilities Other Airport Expenses Total Airport Direct Charges Environmental Remediation Liability Capital to Expense Total Exceptions Unplanned expenses absorbed by cost savings 29 Aeronautical Business YTD 2016 YTD 2017 YTD 2018 Year-to-Date Fav (UnFav) Incr (Decr) Budget Variance Change from 2017 $ in 000's Actual Actual Actual Budget $ % Revenues: Movement Area Apron Area Terminal Rents Federal Inspection Services (FIS) Total Rate Base Revenues 45,551 6,088 75,640 5,174 132,453 50,849 7,636 78,051 6,708 143,243 59,656 8,209 83,956 6,641 158,462 59,421 7,654 84,140 6,470 157,684 235 555 (183) 171 778 0.4% 8,806 7.2% 573 -0.2% 5,906 2.6% (67) 0.5% 15,219 17.3% 7.5% 7.6% -1.0% 10.6% Commercial Area Subtotal before Revenue Sharing 4,479 136,932 4,959 148,202 5,072 163,534 4,976 162,660 97 874 1.9% 114 0.5% 15,332 2.3% Revenue Sharing Total Aeronautical Revenues (17,379) 119,553 (18,635) 129,567 (15,964) 147,570 (17,899) 144,761 1,935 2,809 10.8% 2,671 1.9% 18,003 13.9% Total Aeronautical Expenses 76,280 91,209 100,511 106,450 5,939 5.6% 9,302 10.2% Net Operating Income 43,272 38,358 47,059 38,311 8,749 22.8% 8,701 22.7% $ % 10.3% 14.3% 2018 YTD Actuals to YTD 2018 Budget Revenue - $2.8M favorable • Rate based revenue $0.8M higher- Due to unplanned costs of customer service peak staffing initiative , partially offset by lower than budgeted AVPMG terminal projects costs (flight corridor delays & SSAT scope change) • Commercial Area revenue $0.1 higher - Due to higher RON parking activity. • Revenue sharing $1.9M lower - Due to reduction of revenue sharing percentage from 50% to 40%, based on SLOA IV provisions Expenses - $5.9M favorable • Payroll savings - Primarily due to vacancies and hiring delays • AVPMG savings due to Terminal project delays partially offset by lower charges to capital Higher Aeronautical revenues due to lower revenue sharing percentage 30 Aeronautical Business YE Fav (UnFav) Budget Variance 2016 2017 2018 2018 $ in 000's Actual Actual Forecast Budget $ % 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 18,612 299,452 125,275 16,023 171,260 14,143 326,701 125,422 15,979 171,854 13,413 326,668 (147) 44 (594) 730 33 Commercial Area Subtotal before Revenue Sharing 9,379 285,211 10,574 310,026 10,212 336,913 10,212 336,880 33 Incr (Decr) Change from 2017 $ % -0.1% 0.3% -0.3% 5.4% 0.0% 16,637 (748) 15,830 (4,469) 27,249 15.3% -4.5% 10.2% -24.0% 9.1% 0.0% 0.0% (362) 26,887 -3.4% 8.7% Revenue Sharing (37,395) (42,311) (31,908) (35,799) 3,891 10.9% 10,403 24.6% Other Prior Year Revenues Total Aeronautical Revenues (5) 247,811 (26) 267,690 305,005 301,082 3,923 0.0% 1.3% 26 37,315 100.0% Total Aeronautical Expenses 168,932 195,414 216,810 216,931 121 0.1% 21,397 10.9% Net Operating Income 78,879 72,276 88,195 84,151 4,044 4.8% 15,919 22.0% Debt Service (1) Net Cash Flow (89,130) (10,251) (86,564) (14,288) (92,425) (4,230) (90,323) (6,173) (2,102) 1,943 -2.3% 31.5% (5,861) 10,058 70.4% 13.9% -6.8% 2018 Forecast to Budget Revenue - $3.9M favorable • Rate based revenue $33K higher- Due to unplanned cost of customer service peak staffing initiative , partially offset by lower than budgeted AVPMG terminal projects costs (flight corridor delays & SSAT scope change) • Revenue sharing $3.9M - Lower due to reduction of revenue sharing percentage from 50% to 40%, based on SLOA IV provisions Expenses - $0.1M favorable • Unplanned costs of customer service peak staffing initiative, are largely offset by lower than budgeted AVPMG terminal projects costs (flight corridor delays & SSAT scope change) and payroll savings due to vacancies and hiring delays (1) Debt service is forecasted/budgeted on an annual basis only. Thus, quarterly data is not available. Higher Aeronautical revenues due to lower revenue sharing percentage 31 Aero Cost Drivers $ in 000's 2016 Actual 2017 Actual 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 165,427 192,188 118,641 113,832 (32,831) (33,057) 28,215 29,654 (2,638) (2,264) (982) (901) 275,832 299,452 9,379 10,574 285,211 310,026 2018 Forecast 2018 Budget 210,685 120,555 (33,015) 32,373 (2,638) (1,259) 326,701 10,212 336,913 210,433 120,555 (33,015) 32,373 (2,650) (1,028) 326,668 10,212 336,880 Fav (UnFav) Budget Variance $ 252 12 (231) 33 33 Incr (Decr) Change from 2017 % $ % 0.1% 0.0% 0.0% 0.0% -0.4% 22.4% 0.0% 0.0% 0.0% 18,498 6,723 42 2,719 (374) (358) 27,249 (362) 26,887 9.6% 5.9% -0.1% 9.2% 16.5% 39.8% 9.1% -3.4% 8.7% 2018 Forecast to 2018 Budget • O&M -Unplanned cost of customer service peak staffing initiative, partially offset by lower than budgeted AVPMG terminal projects costs (flight corridor delays & SSAT scope change) and payroll savings - due to vacancies & hiring delays Aero rate base revenues based on cost recovery formulas 32 Aero Revenue Sharing 2016 2017 2018 2018 $ in 000's Actual Actual Forecast Budget Aero Revenues (incl' commercial) 285,211 310,026 336,913 336,880 Non-Aeronautical Revenues 221,021 236,803 250,728 244,786 Total O&M Expenses (261,226) (299,114) (333,374) (334,612) Net Operating Income 245,006 247,714 254,267 247,054 ADF Interest Income 3,725 4,242 4,127 4,127 Security Checkpoint TSA Grant 916 1,039 1,028 1,028 Misc. Non-Operating Expenses (2,481) (1,799) (750) (750) CFC Excess (4,899) (2,750) (6,182) (7,142) Available for Debt Service [a]242,267 248,446 252,491 244,318 Debt Service Debt Service x 1.25 Fav (UnFav) Budget Variance $ Incr (Decr) Change from 2017 33 5,942 1,238 7,213 960 8,173 % 0.0% 2.4% -0.4% 2.9% 0.0% 0.0% 0.0% -13.4% 3.3% $ 26,887 13,925 (34,259) 6,553 (115) (10) 1,050 (3,432) 4,046 % 8.7% 5.9% 11.5% 2.6% -2.7% -1.0% -58.3% 124.8% 1.6% 133,982 [b]1 67,477 131,060 163,825 138,177 172,721 138,177 172,721 - 0.0% 0.0% 7,117 8,896 5.4% 5.4% Available for revenue sharing [c]=[a]-[b] 74,790 84,621 79,770 71,597 8,173 11.4% (4,851) -5.7% (1) [d]=[c]*0.5 37,395 42,310 31,908 35,799 (3,891) -10.9% (10,402) -24.6% Revenue Sharing Lower revenue sharing % drives increase in CPE 33 Non-Aeronautical Business YTD $ in 000's Non-Aero Revenues Rental Cars - Operations Rental Cars - Operating CFC Public Parking Ground Transportation Airport Dining & Retail & Leased Space Commercial Properties Utilities Employee Parking Clubs and Lounges Other Total Non-Aero Revenues Total Non-Aero Expenses Net Operating Income 2016 YTD Actual 2017 YTD Actual 2018 Year-to-Date Actual Budget Fav (UnFav) Budget Variance $ % 15,271 3,872 34,166 5,668 27,118 4,286 3,571 4,563 1,378 443 100,336 42,537 14,514 3,284 36,958 7,633 28,420 10,708 3,423 4,674 2,173 973 112,761 49,111 14,922 5,497 39,402 8,885 30,179 7,593 3,438 5,191 2,773 983 118,864 52,925 14,579 5,434 38,080 8,060 28,017 7,082 3,778 4,608 2,694 932 113,264 58,602 343 63 1,322 825 2,162 511 (340) 584 79 51 5,601 57,799 63,649 65,940 54,662 Incr (Decr) Change from 2017 $ % 2.4% 1.2% 3.5% 10.2% 7.7% 7.2% -9.0% 12.7% 2.9% 5.5% 4.9% 408 2,213 2,444 1,252 1,759 (3,115) 14 517 599 10 6,104 2.8% 67.4% 6.6% 16.4% 6.2% -29.1% 0.4% 11.1% 27.6% 1.1% 5.4% 5,677 9.7% 3,813 7.8% 11,278 20.6% 2,290 3.6% 2018 YTD Actuals to YTD 2018 Budget Revenue • Airport Dining & Retail - Convenience retail capturing sales during Central Terminal closure • Public Parking - driven by higher transactions • Employee Parking - demand driven growth Expenses • Savings from other Divisions delays for ADR tenant buildouts and other Terminal projects. • Payroll savings - vacancies and hiring delays YTD NOI growth due to both higher revenues and deferred expenses 34 Non-Aeronautical Business YE Fav (UnFav) Budget Variance $ % Incr (Decr) Change from 2017 $ % 2016 Actual 2017 Actual 2018 Forecast 2018 Budget 37,082 12,122 69,540 12,803 58,405 9,992 7,233 9,329 3,028 1,487 221,021 92,294 35,051 10,641 75,106 15,684 58,980 18,042 7,018 9,617 5,041 1,624 236,803 103,702 35,084 14,653 80,046 18,401 61,980 15,236 7,317 10,214 5,830 1,966 250,728 116,564 35,294 15,563 78,572 16,884 59,087 14,706 7,556 9,457 5,630 2,036 244,786 117,925 (210) (910) 1,474 1,517 2,893 529 (239) 757 200 (70) 5,942 -0.6% -5.8% 1.9% 9.0% 4.9% 3.6% -3.2% 8.0% 3.6% -3.4% 2.4% 33 4,012 4,940 2,717 3,000 (2,807) 300 597 790 343 13,925 0.1% 37.7% 6.6% 17.3% 5.1% -15.6% 4.3% 6.2% 15.7% 21.1% 5.9% 1,362 1.2% 12,861 12.4% Net Operating Income 128,727 133,101 134,164 126,861 7,303 5.8% 1,063 0.8% Less: CFC (Surplus) / Deficit (1) Adjusted Non-Aero NOI (4,899) 123,828 (2,750) 130,351 (6,182) 127,982 (7,142) 119,719 960 8,263 13.4% 6.9% (3,432) -124.8% (2,369) -1.8% Debt Service (1) Net Cash Flow (43,984) 79,844 (44,495) 85,856 (45,752) 82,230 (45,752) 73,967 8,263 0.0% 11.2% (1,257) (3,625) $ in 000's Non-Aero Revenues Rental Cars - Operations Rental Cars - Operating CFC Public Parking Ground Transportation Airport Dining & Retail & Leased Space Commercial Properties Utilities Employee Parking Clubs and Lounges Other Total Non-Aero Revenues Total Non-Aero Expenses -2.8% -4.2% 2018 Forecast to 2018 Budget Revenue - • Airport Dining & Retail - Strong performance in both food & beverage and retail sales despite transitions to new leases, and increased revenue from Advertising • Ground Transportation -Increased TNC activity • Public Parking - Driven by higher transactions Expenses • Savings from other Divisions Delays for ADR tenant buildouts and other Terminal projects • Payroll savings - Vacancies and hiring delays • Unplanned expenses absorbed by above savings include peak staffing support, Landside honey bucket service, and lower payroll charges to capital (1) CFC excess and Debt service are forecasted/budgeted on an annual basis only. Thus, quarterly data is not available. $7.3M NOI growth due to both higher revenues and deferred expenses 35 Public Parking Performance YTD Public Parking - Revenue Detail $ in 000's Parking Garage Revenue to Port Gross Sales - Parking Garage less - WA Sales Tax less - SeaTac Parking Tax Revenue to Port - General Parking Other Garage Revenue Passport Parking Program Total Parking Garage Revenue Other Parking Revenue Concession Rent - Doug Fox off-site parking All Other Parking Revenue Total Parking Revenue 2018 YTD Actual Budget Incr / (Decr) Change from 2017 $ % 2017 YTD Actual 36,497 (2,991) (2,018) 31,487 40,214 (3,317) (2,927) 33,970 43,276 (3,624) (3,411) 36,241 40,931 (3,476) (2,691) 34,764 2,345 (148) (720) 1,477 6% 4% 27% 4% 3,062 (307) (484) 2,271 7.6% 9.3% 16.5% 6.7% 1,349 32,836 1,459 35,429 1,532 37,773 1,654 36,418 (122) 1,354 -7% 4% 73 2,344 5.0% 6.6% 1,315 16 1,518 11 1,613 16 1,652 9 (39) 6 -2% 67% 95 5 6.3% 44.2% 34,166 36,958 39,402 38,080 1,322 3.5% 2,444 6.6% 2016 YTD Actual 746 252 90 1,087 2017 YTD Actual 747 257 93 1,098 Parking Transactions by duration in 000's Parking < 1 day Parking 1-4 days Parking 4+ days Total Parking Transactions Fav / (UnFav) Budget Variance $ % 2016 YTD Actual 2018 YTD Actual Budget 736 768 268 236 99 87 1,104 871 Key message: •Parking revenue growth primarily driven by rate increase. Overall growth in parking transactions is slower than growth in O&D enplanements. Fav / (UnFav) Incr / (Decr) Budget Variance Change from 2017 # % # % (32) -4.1% (11) -1.4% 32 13.4% 11 4.1% 12 14.2% 6 6.9% 233 26.8% 6 0.6% Slower growth in parking transactions reflects increasing transportation alternatives 36 Public Parking Performance YE Public Parking - Revenue Detail $ in 000's Parking Garage Revenue to Port Gross Sales - Parking Garage less - WA Sales Tax less - SeaTac Parking Tax Revenue to Port - General Parking Other Garage Revenue Passport Parking Program Total Parking Garage Revenue Other Parking Revenue Concession Rent - Doug Fox off-site parking All Other Parking Revenue Total Parking Revenue 2017 Actual 2018 Forecast 74,301 (6,081) (4,212) 64,008 82,362 (6,818) (6,563) 68,981 88,226 (7,359) (7,274) 73,593 87,112 (7,200) (7,196) 71,997 1,114 (160) (78) 1,596 1% 2% 1% 2% 5,864 (541) (711) 4,612 7.1% 7.9% 10.8% 6.7% 2,749 66,758 2,990 71,971 3,233 76,827 3,356 75,353 (122) 1,474 -4% 2% 244 4,855 8.1% 6.7% 2,751 32 3,109 25 3,200 19 3,200 19 - 0% 0% 91 (6) 2.9% -25.1% 69,540 75,106 80,046 78,572 1,474 1.9% 4,940 6.6% 2016 Actual 1,646 496 181 2,323 2017 Actual 1,623 499 184 2,307 2018 Forecast 1,625 528 201 2,354 Parking Transactions by duration in 000's Parking < 1 day Parking 1-4 days Parking 4+ days Total Parking Transactions 2018 Budget Fav / (UnFav) Incr / (Decr) Budget Variance Change from 2017 $ % $ % 2016 Actual Fav / (UnFav) Incr / (Decr) 2018 Budget Variance Change from 2017 Budget # % # % 1,639 (14) -0.8% 2 0.1% 504 24 4.7% 29 5.7% 186 15 8.2% 17 9.3% 2,329 25 1.1% 47 2.0% Key message: Parking revenue growth primarily driven by rate increase. Overall growth in parking transactions is slower than growth in O&D enplanements. 2018 Forecast vs. 2017 Actuals • Revenue - Forecasted increase compared to prior year, primarily due to tariff rate increase in effect full year 2018 (rate increase effective April 2017). • Transactions - Increase in expected total parking transactions reflects slower growth than the growth in O&D enplanements, and reflects impact of increasing number of transportation alternatives available to passengers. Slower growth in parking transactions reflects increasing transportation alternatives 37 Rental Car Performance YTD Rental Car - Revenue Detail 2014 YTD 2015 YTD 2016 YTD 2017 YTD 2018 YTD 2018 YTD Actual Actual Actual Actual Actual Budget $ in 000's Fav / (UnFav) Budget Variance $ % Incr / (Decr) Change from 2017 $ % RCF Concession Revenue to Port 11,441 11,985 13,474 12,673 13,025 12,681 352 2.8% 8,589 73.8% 6,339 9,731 69.8% 6,792 10,668 69.4% 7,404 11,008 70.3% 7,739 11,688 70.3% 8,217 11,564 69.2% 8,003 344123 0.01 214 2.7% Total Enplanements O&D % O&D Enplanements 1.1% 1.6% 2.7% 680 0.00 478 6.2% 0.0% 6.2% Gross Sales by Operators Total Transactions Average Ticket Average Length of Stay Transactions/O&D Enplanements 114,211 587 $194.64 4.08 9.26% 124,690 631 $197.45 4.10 9.30% 129,324 655 $197.52 4.10 8.84% 127,258 648 $196.27 4.13 8.38% 134,430 657 $204.47 4.16 8.00% 126,808 629 $201.53 4.37 7.86% 7,622 28 $2.94 (0.22) 0.14% 6.0% 4.5% 1.5% -4.9% 1.8% 7,172 9 $8.21 0.03 -0.38% 5.6% 1.4% 4.2% 0.01 -4.5% CFC Revenue Summary Total Transaction Days CFC Rate per Transaction Day Total CFC Revenue Earned 2,395 $6.00 14,228 2,589 $6.00 15,373 2,683 $6.00 16,276 2,677 $6.00 16,436 2,734 $6.00 16,499 2,752 $6.00 16,514 (18) $0.00 (16) -0.7% 0.0% -0.1% 57 $0.00 63 2.1% 0.0% 0.4% Reserve for debt service and CP interest: (9,058) Reserve for CP principal payment: (1,250) Debt Service Reserve Requirement (10,308) (10,547) (1,250) (11,797) (11,154) (1,250) (12,404) (11,902) (1,250) (13,152) (11,001) (11,001) (11,080) (11,080) 79 79 -0.7% 0.0% -0.7% 900 1,250 2,150 -7.6% -100.0% -16.4% 3,576 3,872 3,284 5,497 5,434 63 1.2% 2,213 67.4% Residual - CFC Operating Revenue: 3,921 Rental Car - Revenue Summary 2014 YTD 2015 YTD 2016 YTD 2017 YTD 2018 YTD 2018 YTD Actual Actual Actual Actual Actual Budget $ in 000's RCF Concession Revenue to Port Residual - CFC Operating Revenue: Land Rent/Space Rent/Other Fav / (UnFav) Budget Variance $ % Key message: •Rental Car revenue continues to be impacted by availability of other transportation alternatives (TNCs, car-sharing, light rail, etc.) Incr / (Decr) Change from 2017 $ % 11,441 3,921 1,749 11,985 3,576 1,771 13,474 3,872 1,797 12,673 3,284 1,841 13,025 5,497 1,898 12,681 5,434 1,898 344 63 (1) 2.7% 1.2% 0.0% 352 2,213 57 2.8% 67.4% 3.1% Total Rental Cars Operating Revenue 17,111 17,332 19,143 17,798 20,420 20,013 407 2.0% 2,622 14.7% Rental Car activity impacted by increasing transportation alternatives 38 Rental Car Performance YE Rental Car - Revenue Detail Fav / (UnFav) Incr / (Decr) Budget Variance Change from 2017 # and $ in 000's 2014 Actual 2015 Actual 2016 Actual 2017 Actual 2018 Forecast 2018 Budget RCF Concession Revenue to Port 30,662 33,465 33,465 31,352 31,299 31,508 (210) -0.7% Total Enplanements O&D % O&D Enplanements 18,717 73.8% 13,813 21,109 69.8% 14,734 22,796 69.4% 15,821 23,416 70.3% 16,461 24,654 70.3% 17,332 24,654 69.2% 17,061 1.1% 271 Gross Sales by Operators Total Transactions Average Ticket Average Length of Stay Transactions/O&D Enplanements 281,884 1,289 $218.64 4.31 8.15% 302,372 1,390 $217.51 4.34 9.44% 310,987 1,411 $220.42 4.34 8.92% 313,654 1,388 $226.03 4.37 8.43% 312,987 1,395 $224.33 4.38 8.05% CFC Revenue Summary Total Transaction Days CFC Rate per Transaction Day Total CFC Revenue Earned 5,554 $6.00 33,554 6,039 $6.00 36,206 6,129 $6.00 36,830 6,067 $6.00 36,261 Reserve for debt service and CP interest: Reserve for CP principal payment: Debt Service Reserve Requirement (19,946) (19,946) (20,543) (3,000) (23,543) (21,708) (3,000) (24,708) Residual - CFC Operating Revenue: 13,608 12,663 2016 Actual RCF Concession Revenue to Port Residual - CFC Operating Revenue: Land Rent/Space Rent/Other Total Rental Cars Oper Revenue % $ % (53) -0.2% 0.0% 1.6% 1.6% 1,238 871 5.3% 0.0% 5.3% 315,083 1,437 $219.22 4.37 8.42% (2,097) -0.7% (42) -2.9% 0 2.3% 0 0.1% (0) -4.4% (667) 8 ($1.70) 0.01 -0.38% -0.2% 0.5% -0.8% 0.1% -4.5% 6,109 $6.00 36,655 6,287 $6.00 37,723 (178) -2.8% - 0.0% (1,068) -2.8% 42 $0.00 394 0.7% 0.0% 1.1% (22,621) (3,000) (25,621) (22,003) (22,003) (22,161) (22,161) (158) -0.7% - 0.0% 158 -0.7% (618) -2.7% (3,000) -100.0% (3,618) -14.1% 12,122 10,641 14,653 15,563 (910) -5.8% 4,012 2016 Actual 2016 Actual 2017 Actual 2018 Forecast 2018 Budget 30,662 13,608 3,541 33,465 12,663 3,189 33,465 12,122 3,617 31,352 10,641 3,699 31,299 14,653 3,786 31,508 15,563 3,786 (210) -0.7% (910) -5.8% - 0.0% (53) 4,012 86 -0.2% 37.7% 2.3% 47,812 49,317 49,203 45,691 49,737 50,857 (1,120) -2.2% 4,046 8.9% Rental Car - Revenue Summary # and $ in 000's $ 37.7% Fav / (UnFav) Incr / (Decr) Budget Variance Change from 2017 $ % $ % Key message: Rental Car revenue continues to be impacted by availability of other transportation alternatives (TNCs, car-sharing, light rail, etc.) 2018 Forecast vs. 2017 Actuals Rental Car Concession revenue - Forecast relatively flat to prior year. Concession Revenue is impacted by (3) key indicators: • Expected decline in Transactions per O&D Enplanement reflects trend in passenger preference shifting to other transportation options • Total Transactions expected to grow at a slower rate than the growth in enplanements • Average ticket price is a function of rental car pricing and customer demand, and can vary significantly. The 2018 Budget and the 2018 Forecast assumes an average ticket price slightly below 2017 actuals. This metric will be monitored and adjusted in the 2018 forecast, as needed • CFC Operating Revenue - Forecasted to increase due to increase in Transaction Days forecasted for 2018 and lower debt service in 2018, primarily driven by final payment on outstanding Commercial Paper balance ($3.0M) paid last year Rental Car activity impacted by increasing transportation alternatives 39 Ground Transportation YTD 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) Courtesy Cars (cost recovery) All other Operators (cost recovery) Other Misc Revenues Total GT Revenue 2016 YTD 2017 YTD 2018 YTD Actual Actual Actual Budget 907 2,449 414 159 276 995 323 145 5,668 3,181 2,631 405 43 360 687 203 123 7,633 4,749 2,160 403 33 361 798 172 210 8,885 3,676 2,294 438 69 300 945 232 107 8,060 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) Courtesy Cars (cost recovery) All other Operators (cost recovery) Total GT Trip Activity 2016 YTD 2017 YTD 2018 YTD Actual Actual Actual Budget 149 438 39 120 186 590 47 1,569 573 379 36 37 165 587 40 1,818 784 363 35 9 168 580 30 1,969 613 382 36 33 161 597 31 1,854 Fav / (UnFav) Incr / (Decr) Budget Variance Change from 2017 $ % $ % 1,073 (134) (35) (36) 61 (146) (60) 103 825 29.2% -5.8% -8.0% -52.0% 20.4% -15.5% -25.9% 96.4% 10.2% 1,568 (471) (2) (10) 1 111 (32) 87 1,252 49.3% -17.9% -0.5% -23.0% 0.3% 16.1% -15.5% 70.5% 16.4% Fav / (UnFav) Incr / (Decr) Budget Variance Change from 2017 # % # % 171 (19) (1) (24) 7 (17) (1) 115 27.9% -5.0% -2.9% -72.3% 4.1% -2.8% -4.3% 6.2% 210 (16) (1) (28) 3 (7) (10) 151 36.6% -4.3% -2.9% -75.0% 2.1% -1.2% -25.1% 8.3% Key message: Significant changes in customer preferred ground transportation alternatives are reflected in both revenue and trip activity between GT operator categories. TNC growth expected to continue to outpace enplanement growth 40 Ground Transportation YE 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) Courtesy Cars (cost recovery) All other Operators (cost recovery) Other Misc Revenues Total GT Revenue 2016 Actual 2017 Actual 2018 Forecast 2018 Budget 3,222 5,045 869 159 496 2,039 696 278 12,803 6,940 5,199 858 45 626 1,319 394 303 15,684 10,080 4,307 849 35 628 1,763 411 328 18,401 8,122 4,591 855 108 603 1,909 483 214 16,884 2016 Actual 2017 Actual 602 827 74 195 369 1,197 95 3,360 1,277 750 72 56 337 1,175 79 3,746 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) Courtesy Cars (cost recovery) All other Operators (cost recovery) Total GT Trip Activity 2018 Forecast Budget 1,680 718 69 14 344 1,118 59 4,002 1,354 765 71 52 325 1,211 78 3,856 Fav / (UnFav) Incr / (Decr) Budget Variance Change from 2017 $ % $ % 1,958 (283) (5) (73) 25 (146) (72) 114 1,517 24.1% -6.2% -0.6% -67.9% 4.1% -7.6% -14.9% 53.3% 9.0% 3,140 (892) (8) (10) 2 444 17 25 2,717 45.3% -17.2% -1.0% -23.0% 0.3% 33.6% 4.4% 8.1% 17.3% Key message: Significant changes in customer preferred ground transportation alternatives are reflected in both revenue and trip activity between GT operator categories. 2018 Forecast vs. 2017 Actuals # % # % GT Revenue forecast compared to prior year: • TNC revenue forecast in 2018 reflects continued shift in customer preference and the impact of the rate increase (to $6/trip) effective for the full year • Taxi revenue forecasted to decline partially due to rate decrease (to $6/trip) effective all year in 2018, compared to $7/trip in effect for the first 9 months of 2017 • Courtesy car revenue increase reflects rate correction in 2018 Budget 326 (47) (1) (38) 19 (93) (20) 147 24.1% -6.2% -1.9% -73.1% 5.9% -7.6% -25.0% 3.8% 403 (33) (2) (42) 7 (57) (20) 256 31.5% -4.3% -2.9% -75.0% 2.1% -4.8% -25.4% 6.8% GT Trip Activity forecast compared to prior year: • TNC trip volume expected to continue to grow at a rate faster than the growth in enplaned passengers, driven by strong customer demand • Taxi trips expected to grow at a slower rate than the growth in enplaned passengers • Declines in other operator categories reflects the changing GT operating environment Fav / (UnFav) Incr / (Decr) Budget Variance Change from 2017 TNC growth expected to continue to outpace enplanement growth 41 Airport Dining & Retail and Leased Space YTD Airport Airport Dining Dining & & Retail Retail and and Terminal Terminal Leased Leased Space Space Org Org Basis Basis (in (in 000's) 000's) ADR ADR Revenue Revenue 2014 2014 YTD YTD Actual Actual 2015 2015 YTD YTD Actual Actual 2016 2016 YTD YTD Actual Actual 2017 2017 YTD YTD Actual Actual 2018 2018 YTD YTD Actual Actual 2018 2018 Fav Fav // (Unfav) (Unfav) Budget Budget Variance Variance YTD YTD Budget Budget $$ % % Food Food & & Beverage Beverage 11 6,941 6,941 7,906 7,906 9,367 9,367 10,453 10,453 10,626 10,626 10,219 10,219 407 407 4.0% 4.0% 172 172 1.6% 1.6% Retail Retail11 4,874 4,874 5,605 5,605 6,050 6,050 6,213 6,213 7,819 7,819 6,520 6,520 1,300 1,300 19.9% 19.9% 1,606 1,606 25.8% 25.8% Duty Duty Free Free11 3,412 3,412 3,651 3,651 3,382 3,382 3,518 3,518 3,742 3,742 3,702 3,702 39 39 1.1% 1.1% 224 224 6.4% 6.4% Personal PersonalServices Services 11 1,470 1,470 1,619 1,619 1,919 1,919 1,869 1,869 1,830 1,830 1,813 1,813 17 17 0.9% 0.9% (40) (40) -2.1% -2.1% Advertising Advertising 2,735 2,735 2,788 2,788 3,296 3,296 3,412 3,412 2,920 2,920 2,782 2,782 138 138 5.0% 5.0% (492) (492) -14.4% -14.4% Space Space Rental Rental-- Terminal Terminal 1,646 1,646 2,021 2,021 2,254 2,254 2,735 2,735 3,046 3,046 2,832 2,832 214 214 7.6% 7.6% 311 311 237 237 21,315 21,315 237 237 23,827 23,827 263 263 26,529 26,529 219 219 28,420 28,420 196 196 30,179 30,179 150 150 28,017 28,017 46 46 2,162 2,162 30.9% 30.9% (22) (22) -10.2% -10.2% 7.7% 7.7% 1,759 1,759 6.2% 6.2% 1,862 1,862 19,453 19,453 2,569 2,569 21,258 21,258 2,241 2,241 24,288 24,288 1,962 1,962 26,458 26,458 2,768 2,768 27,411 27,411 2,423 2,423 25,594 25,594 (345) (345) 1,817 1,817 -14.2% -14.2% 7.1% 7.1% 806 806 953 953 41.1% 41.1% 3.6% 3.6% Sales Sales per per Enplanement Enplanement SPE SPE -- Food Food & & Beverage Beverage SPE SPE -- Retail RetailSales Sales SPE SPE -- Duty Duty Free Free SPE SPE -- Personal PersonalServices Services SPE SPE -- Total Total ADR ADR $6.46 $6.46 $4.03 $4.03 $1.13 $1.13 $1.20 $1.20 $12.82 $12.82 $6.53 $6.53 $3.96 $3.96 $1.04 $1.04 $1.12 $1.12 $12.65 $12.65 $7.17 $7.17 $3.70 $3.70 $0.88 $0.88 $1.01 $1.01 $12.76 $12.76 $7.36 $7.36 $3.99 $3.99 $0.92 $0.92 $0.99 $0.99 $13.25 $13.25 $7.17 $7.17 $4.36 $4.36 $0.89 $0.89 $0.95 $0.95 $13.37 $13.37 $6.96 $6.96 $3.91 $3.91 $0.98 $0.98 $0.94 $0.94 $12.79 $12.79 $0.21 $0.21 $0.45 $0.45 ($0.09) ($0.09) $0.01 $0.01 $0.58 $0.58 3.0% 3.0% ($0.20) ($0.20) 11.4% 11.4% $0.37 $0.37 -8.9% -8.9% ($0.03) ($0.03) 1.0% 1.0% ($0.04) ($0.04) 4.5% 4.5% $0.11 $0.11 -2.7% -2.7% 9.3% 9.3% -2.8% -2.8% -3.8% -3.8% 0.8% 0.8% Concession Concession Revenue Revenue 11 per per Enplanement Enplanement $1.94 $1.94 $1.93 $1.93 $1.94 $1.94 $2.00 $2.00 $2.05 $2.05 $1.92 $1.92 $0.13 $0.13 6.8% 6.8% $0.05 $0.05 2.6% 2.6% All Allother other revenue revenue Total Total ADR ADR Revenue Revenue Expenses Expenses ADR ADR & & Terminal TerminalLeased Leased Space Space Income Income from from Operations Operations Incr Incr// (Decr) (Decr) from from 2017 2017 $$ % % 11.4% 11.4% Revenue Revenue -- •• Food Food && Beverage Beverage -- slightly slightly stronger stronger than than prior prior year year despite despite significant significant unit unit closures closures for for lease lease transition. transition. Newly Newly opened opened units units outperforming outperforming Year Year 11 projections. projections. Increased Increased volume volume in in most most existing existing units units to to respond respond to to passenger passenger demands. demands. •• Retail Retail -- increase increase reflects reflects strong strong sales sales include include increased increased grab'n'go grab'n'go (food) (food) offerings. offerings. Retail Retailunits units not not impacted impacted by by lease lease transitions transitions in in 2018. 2018. •• Duty Duty Free Free -- steady steady growth growth from from growth growth in in international international enplanements. enplanements. •• Advertising Advertising -- strong strong demand demand continues, continues, offset offset by by lower lower percentage percentage rent rent in in new new agreement. agreement. •• Space Space Rent Rent -- primarily primarily due due to to increased increased concession concession fees feesfrom from Alclear Alclear sales sales growth. growth. (1) (1)Concession ConcessionRevenue Revenueisiscomposed composedof ofrevenue revenuefrom fromconcession concessionagreements agreementsfor forthe thesales salesof ofFood Food& &Beverage, Beverage,Retail, Retail,Duty Duty Free, Free,and andPersonal PersonalServices Servicesonly. only. Sales lost from Food & Beverage being picked up in convenience retail 42 Airport Dining & Retail and Leased Space YE Airport Dining & Retail and Terminal Leased Space Org Basis (in 000's) ADR Revenue 2014 Actual 2015 Actual 2016 Actual 2017 2018 2018 Actual Forecast Budget Food & Beverage 1 15,223 17,427 21,314 21,579 21,700 21,700 - 0.0% 120 0.6% Retail 1 11,213 12,127 13,496 13,989 16,044 14,344 1,700 11.9% 2,055 14.7% Duty Free 1 6,664 6,769 6,265 6,912 7,251 7,251 - 0.0% 339 4.9% Personal Services 1 3,201 3,548 3,657 3,728 3,809 3,809 - 0.0% 81 2.2% Advertising 5,815 6,460 6,725 6,662 6,680 6,021 658 10.9% 17 0.3% Space Rental - Terminal 3,483 4,629 5,190 5,641 6,121 5,664 457 8.1% 480 8.5% 476 46,076 477 51,437 605 57,252 469 58,980 377 61,980 300 59,087 77 2,893 25.7% (92) 4.9% 3,000 -19.6% 5.1% 1,862 44,214 2,569 48,868 2,241 55,010 1,962 57,018 2,768 59,212 2,423 56,664 (345) 2,548 -14.2% 806 4.5% 2,194 41.1% 3.8% Sales per Enplanement SPE - Food & Beverage SPE - Retail Sales SPE - Duty Free SPE - Personal Services SPE - Total ADR $6.46 $4.10 $1.12 $1.16 $12.84 $6.48 $3.92 $0.96 $1.08 $12.45 $7.23 $3.86 $0.89 $1.00 $12.98 $7.18 $4.04 $0.91 $0.95 $13.08 $6.93 $4.16 $0.90 $0.93 $12.92 $6.93 $4.03 $0.90 $0.93 $12.79 $0.00 $0.13 $0.00 $0.00 $0.13 0.0% ($0.25) 3.2% $0.13 0.0% ($0.01) 0.0% ($0.03) 1.0% ($0.16) -3.5% 3.1% -1.0% -3.0% -1.3% Concession Revenue 1 per Enplanement $1.94 $1.89 $1.96 $1.97 $1.98 $1.91 $0.07 3.6% $0.01 0.3% All other revenue Total ADR Revenue Expenses ADR & Terminal Leased Space Income from Operations Fav / (Unfav) Budget Variance $ % Incr / (Decr) from 2017 $ % 2018 Forecast vs. 2017 Actuals Revenue - • Food & Beverage - holding steady to prior year despite significant unit closures for lease transition. Newly opened units outperforming Year 1 projections. Increased volume in most existing units to respond to passenger demands. • Retail - increase reflects strong sales include increased grab'n'go (food) offerings. Retail units not impacted by lease transitions in 2018. • Duty Free - steady growth from growth in international enplanements . • Advertising - holding steady to prior year, reflects strong demand offset by lower percentage rent in new agreement. • Other Revenue - decrease due to temporary reduction in janitorial reimbursement revenue related to food & beverage unit closures for lease transition. (1) Concession Revenue is composed of revenue from concession agreements for the sales of Food & Beverage, Retail, Duty Free, and Personal Services only. Sales lost from Food & Beverage being picked up in convenience retail 43 2018 Capital Expenditures $ in 000's Description (1) International Arrivals Facility ASL Conversion at Checkpoints (2) (3) NS NSAT Renov NSTS Lobbies (4) N. Terminals Utilities Upgrade Add'l Baggage Makeup Space IAF (5) (6) Terminal Security Enhancements (7) SSAT Infrastructure HVAC 2018 Taxiway Improvement Proj Concourse D Hardstand Holdroom Alternate Utility Facility Checked Bag Recap/Optimization All Other Total Spending 2018 YTD Actual 75,176 725 58,656 213 1,234 189 128 8,988 15,159 17,169 16,009 31,171 224,817 2018 Forecast 215,298 1,175 131,716 413 10,520 2,189 1,218 37,378 28,433 18,263 38,009 109,330 593,941 2018 Budget 324,221 16,800 140,738 8,200 15,998 5,925 4,910 36,250 27,986 18,350 38,000 158,822 796,200 Budget Variance $ % 108,923 33.6% 15,625 93.0% 9,022 6.4% 7,787 95.0% 5,478 34.2% 3,736 63.1% 3,692 75.2% (1,128) -3.1% (447) -1.6% 87 0.5% (9) 0.0% 49,492 31.2% 202,259 25.4% (1) Delays in design-build progress, consultant billings/purchases for construction and project/construction management services. (2) $8.7M of capital budget deemed to be public expense as the equipment will be transferred to TSA. 1 of 3 lanes have been installed; remaining lanes pushed out to Q4 2018 - Q2 2019. (3) Actual projected billings as provided by contractor have been less than anticipated. (4) Early works construction cancelled and combined with main construction phase due to better coordination with adjacent projects. (5) Delays in construction due to changes in sequencing of work by contractor. (6) Favorable bids for Phase I (shatter proof windows) will result in less spending in 2018. (7) Bid bust has resulted in one year delay of project. Project was re-scoped and design is currently in progress. Forecasting to spend 74.6% of budget 44 SAMP Overview YTD Summary $ 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 YTD 2017 YTD 2018 Year-to-Date Actual Actual Actual Budget 105 100 161 250 1,296 1,250 47 125 105 147 1,457 1,625 Annual Forecast $ 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 1,591 208 1,799 Fav (Unfav) Inc (Decr) 2018 Budget Variance Change from 2017 $ % $ % 89 35.7% 61 57.8% (46) -3.7% 1,296 N/A N/A (47) N/A 125 100.0% N/A 168 10.4% 1,310 1247.4% Year-End Projection Inc (Decr) Fav (Unfav) 2017 2018 2018 2018 Budget Variance Change from 2017 Actual Forecast Budget $ % $ % 1,335 500 500 0.0% (835) -52.5% 1,141 3,250 2,500 (750) -30.0% 2,109 N/A 169 1,000 1,700 700 41.2% 831 399.5% 276 500 500 0.0% 224 N/A 2,921 5,250 5,200 (50) -1.0% 2,329 129.5% Accelerated pace in advance planning offsets timing delay in Environmental Review 45 Maritime Division Appendix Maritime 2018 Financial Summary $ in 000's Fishing & Operations Recreational Boating Cruise Bulk Maritime Portfolio Management Other Total Revenue Expenses Fishing & Operations Rec Boating Cruise Other Maritime Maintenance Expenses Portfolio Management Other ED Expenses Total Maritime & EDD expenses Enviromental & Sustainability CDD Expenses Police Expenses Other Central Services Aviation Division Total Central Services & Aviation Envir Remed Liability Total Expense NOI Before Depreciation Depreciation NOI After Depreciation 2016 YTD 2017 YTD Actual Actual 4,419 4,440 5,083 5,438 5,410 6,325 2,010 3,042 5,100 5,267 5 14 22,027 24,525 2,206 1,524 954 373 4,716 1,679 166 11,617 303 522 1,925 4,309 66 7,124 48 18,789 3,237 8,655 (5,418) 2,305 1,852 558 585 4,740 1,770 353 12,162 598 419 1,889 4,401 67 7,374 371 19,907 4,618 8,442 (3,824) 2018 Year-to-Date Actual Budget 4,565 4,201 6,125 5,839 6,806 6,944 3,123 2,572 5,628 5,459 11 9 26,257 25,023 Fav (UnFav) Budget Variance $ % 364 9% 286 5% (139) -2% 551 21% 169 3% 2 28% 1,234 5% 2,461 1,989 1,135 266 5,576 2,031 320 13,778 519 437 2,169 4,842 70 8,037 (99) 21,716 4,541 8,823 (4,281) (63) 297 851 388 66 160 141 1,840 479 193 (68) 377 (9) 972 99 2,911 4,145 45 4,190 2,399 2,285 1,987 655 5,642 2,191 460 15,618 998 630 2,101 5,219 61 9,009 0 24,627 396 8,868 (8,471) -3% 13% 43% 59% 1% 7% 31% 12% 48% 31% -3% 7% -15% 11% NA 12% 1046% 1% -49% Incr (Decr) Change from 2017 $ % 125 3% 687 13% 481 8% 81 3% 361 7% (3) -23% 1,732 7% 156 137 577 (318) 836 261 (33) 1,616 (79) 18 280 441 2 662 (469) 1,809 (77) 381 (458) 7% 7% 103% -54% 18% 15% -9% 13% -13% 4% 15% 10% 3% 9% -127% 9% -2% 5% 12% Focus on revenue growth and expense management. 47 Maritime 2018 Financial Forecast $ in 000's Fishing & Operations Recreational Boating Cruise Bulk Maritime Portfolio Management Other Total Revenue Expenses Fishing & Operations Rec Boating Cruise Other Maritime Maintenance Expenses Portfolio Management Other ED Expenses Total Maritime & EDD expenses Enviromental & Sustainability CDD Expenses Police Expenses Other Central Services Aviation Division Total Central Services & Aviation Envir Remed Liability Total Expense NOI Before Depreciation Depreciation NOI After Depreciation 2016 Actual 9,108 10,255 15,422 5,382 10,255 388 50,810 2017 Actual 9,297 11,086 17,596 5,427 10,787 (9) 54,183 2018 Forecast 8,748 12,446 18,150 5,163 10,769 17 55,293 2018 Budget 8,388 12,166 18,150 5,163 11,169 17 55,053 4,308 3,164 2,600 666 9,900 3,367 420 24,425 1,358 1,010 3,921 9,315 139 15,743 115 40,283 10,526 17,351 (6,824) 4,599 3,813 2,674 462 10,420 3,507 665 26,140 1,125 748 3,756 9,869 138 15,635 389 42,164 12,020 17,410 (5,390) 4,641 4,595 4,448 1,399 11,261 3,550 833 30,726 1,994 1,030 4,209 10,428 123 17,784 0 48,510 6,783 17,868 (11,086) 4,641 4,595 4,748 1,399 11,261 3,750 833 31,226 2,168 1,212 4,209 10,641 123 18,352 0 49,578 5,475 17,868 (12,394) Fav (UnFav) Budget Variance $ % 360 4% 280 2% 0 0% 0 0% (400) -4% 0 0% 240 0% 0 0 300 0 0 200 0 500 173 182 0 213 0 568 0 1,068 1,308 0 1,308 0% 0% 6% 0% 0% 5% 0% 2% 8% 15% 0% 2% 0% 3% NA 2% 24% 0% -11% Incr (Decr) Change from 2017 $ % (550) -6% 1,361 12% 554 3% (263) -5% (18) 0% 26 -297% 1,109 2% 42 782 1,774 937 840 43 168 4,586 869 282 453 559 (15) 2,149 (389) 6,347 (5,237) 459 (5,696) 1% 20% 66% 203% 8% 1% 25% 18% 77% 38% 12% 6% -11% 14% -100% 15% -44% 3% 106% Uncertainty in 2nd half grain volumes and WSDOT lease at Terminal 106 48 Maritime 2018 YTD by Business Part 1 YTD Actual 2016 YTD Actual 2017 YTD Actual 2018 YTD Budget 2018 Bud Var Fav(UnFav) $ % Chg fr Prior Year Incr/(Decr) $ % Total Year Budget 2018 Cruise Revenue Expense NOI Before Depreciation Depreciation Expense NOI After Depreciation 5,410 3,187 2,223 2,619 (396) 6,325 3,628 2,697 2,627 70 6,806 4,712 2,094 3,201 (1,107) 6,944 5,988 956 3,234 (2,278) (138) 1,276 1,138 33 1,171 -2.0% 21.3% 119.0% 1.0% 51.4% 481 7.6% 1,084 29.9% (603) -22.4% 574 21.9% (1,177) -1681.4% 18,150 12,817 5,333 6,498 (1,165) Rec Boating Revenue Expense NOI Before Depreciation Depreciation Expense NOI After Depreciation 5,083 4,335 748 1,710 (962) 5,438 4,639 799 1,592 (793) 6,125 5,139 986 1,459 (473) 5,839 5,805 34 1,462 (1,428) 286 666 952 3 955 4.9% 11.5% 2800.0% 0.2% 66.9% 687 500 187 (133) 320 12.6% 10.8% 23.4% -8.4% 40.4% 12,166 11,661 505 2,957 (2,452) Maritime Portfolio Revenue Expense NOI Before Depreciation Depreciation Expense NOI After Depreciation 5,100 4,650 450 1,316 (866) 5,267 5,146 121 1,335 (1,214) 5,628 5,237 391 1,361 (970) 5,459 5,773 (314) 1,306 (1,620) 169 536 705 (55) 650 3.1% 9.3% 224.5% -4.2% 40.1% 361 91 270 26 244 6.9% 1.8% 223.1% 1.9% 20.1% 11,169 10,891 278 2,610 (2,332) Fishing & Operations Revenue Expense NOI Before Depreciation Depreciation Expense NOI After Depreciation 4,419 5,983 (1,564) 2,743 (4,307) 4,440 5,350 (910) 2,606 (3,516) 4,565 5,704 (1,139) 2,497 (3,636) 4,201 5,844 (1,643) 2,562 (4,205) 364 140 504 65 569 8.7% 2.4% 30.7% 2.5% 13.5% 125 354 (229) (109) (120) 2.8% 6.6% -25.2% -4.2% -3.4% 8,388 11,687 (3,299) 5,195 (8,494) $ in 000's Major Maritime Businesses tracking favorable to budget 49 Maritime 2018 YTD by Business Part 2 YTD Actual 2016 YTD Actual 2017 YTD Actual 2018 YTD Budget 2018 Bud Var Fav(UnFav) $ % Bulk/Grain Terminal Revenue Expense NOI Before Depreciation Depreciation Expense NOI After Depreciation 2,010 568 1,442 269 1,173 3,042 653 2,389 279 2,110 3,123 874 2,249 298 1,951 2,572 900 1,672 304 1,368 551 26 577 6 583 21% 3% 35% 2% 43% 81 221 (140) 19 (159) 2.7% 33.8% -5.9% 6.8% -7.5% 5,163 1,839 3,324 608 2,716 Other Revenue Expense NOI Before Depreciation Depreciation Expense NOI After Depreciation 5 53 (48) 0 (48) 14 492 (478) 3 (481) 11 50 (39) 7 (46) 9 317 (308) 0 (308) 2 267 269 (7) 262 22% 84% 87% NA 85% (3) (442) 439 4 435 -21.4% -89.8% 91.8% 133.3% 90.4% 17 683 (666) 0 (666) Total Maritime Revenue Expense NOI Before Depreciation Depreciation Expense NOI After Depreciation 22,027 18,775 3,252 8,655 (5,403) 24,525 19,907 4,618 8,442 (3,824) 26,257 21,716 4,541 8,823 (4,282) 25,023 24,627 396 8,868 (8,472) 1,234 2,911 4,145 45 4,190 5% 12% 1047% 1% 49% 1,732 1,809 (77) 381 (458) 7.1% 9.1% -1.7% 4.5% -12.0% 55,053 49,578 5,475 17,868 (12,393) $ in 000's Chg fr Prior Year Incr/(Decr) $ % Total Year Budget 2018 Grain Revenue ahead of budget and 2017 50 Stormwater Utility YTD Results 2017 YTD $ in 000's Actual 2018 YTD Actual Budget Fav (UnFav) Incr (Decr) Budget Variance Change from 2016 $ % $ % StormWater Utility NWSA 1,706 1,862 1,846 16 1% 156 9% Tenants Revenue 213 235 251 (16) -6% 22 11% Non-tenants Revenue 564 609 570 39 7% 45 8% Total Revenues 2,483 2,707 2,667 40 2% 223 9% SWU Direct 267 394 713 319 45% 128 48% Maintenance Expenses 48% 1,129 1,672 1,711 39 2% 542 Other Maritime Expenses - - - - NA - NA EDD Expenses 10 4 9 5 55% (6) -58% Environmental & Sustainability 261 103 112 9 8% (158) -61% - - - - NA - NA -47% Police Expenses Capital Development Expenses 31 16 27 11 40% (15) Other Central Service Expenses 184 334 352 18 5% 149 81% 1,881 2,523 2,924 401 14% 641 34% NOI Before Depreciation 602 184 (257) 441 -172% (418) -69% Depreciation 498 548 603 55 9% 51 10% NOI After Depreciation 104 (364) (860) 496 -58% (468) -449% Total Expenses Stormwater Utility tracking to budget for 2018 51 Maritime Capital 2018 SBM restrooms and paving delayed due to bidding and permit schedule 52 Economic Development Division Appendix EDD 2018 Financial Summary $ in 000's Revenue Conf & Event Centers Total Revenue Expenses Portfolio Management Conf & Event Centers P69 Facilities Expenses RE Dev & Planning EconDev Expenses Other Maintenance Expenses Maritime Expenses (Excl Maint) Total EDD & Maritime Expenses Small Business Workforce Development Tourism EDD Grants Total EDD Initiatives Environmental & Sustainability CDD Expenses Police Expenses Other Central Services Aviation Division Total Central Services & Aviation Envir Remed Liability Total Expense NOI Before Depreciation Depreciation NOI After Depreciation 2016 YTD 2017 YTD Actual Actual 1,777 2,020 1,895 1,107 3,672 3,127 636 1,721 41 173 148 573 8 3,300 4 (9) 193 0 188 11 88 39 922 24 1,084 0 4,572 (900) 934 (1,835) 899 1,653 50 57 208 666 9 3,542 12 95 232 12 351 53 91 39 1,244 27 1,455 0 5,347 (2,220) 927 (3,147) 2018 Year-to-Date Actual Budget 2,167 2,147 2,330 2,177 4,497 4,324 Fav (UnFav) Budget Variance $ % 20 1% 153 7% 173 4% 1,016 2,033 53 38 163 850 34 4,188 20 86 239 6 351 46 57 41 1,273 28 1,445 0 5,984 (1,487) 998 (2,485) 14 76 7 10 126 (85) 36 183 18 317 76 (6) 406 37 28 (2) 146 4 212 0 801 974 40 1,014 1,030 2,109 60 48 289 765 70 4,372 38 403 315 0 756 83 84 39 1,419 31 1,657 0 6,785 (2,461) 1,038 (3,499) 1% 4% 12% 20% 43% -11% 52% 4% 48% 79% 24% NA 54% 45% 33% -6% 10% 11% 13% NA 12% -40% 4% -29% Incr (Decr) Change from 2017 $ % 147 7% 1,223 110% 1,370 44% 117 380 3 (18) (45) 185 25 647 8 (10) 8 (6) (0) (7) (34) 2 29 1 (10) 0 637 733 71 662 13% 23% 6% -32% -21% 28% 260% 18% 67% -10% 3% -51% 0% -14% -37% 4% 2% 2% -1% NA 12% -33% 8% -21% Strong Occupancy and Management of Expenses 54 EDD 2018 Financial Summary $ in 000's Revenue Conf & Event Centers Total Revenue Expenses Portfolio Management Conf & Event Centers P69 Facilities Expenses RE Dev & Planning EconDev Expenses Other Maintenance Expenses Maritime Expenses (Excl Maint) Total EDD & Maritime Expenses Small Business Workforce Development Tourism EDD Grants Total EDD Initiatives Environmental & Sustainability CDD Expenses Police Expenses Other Central Services Aviation Division Total Central Services & Aviation Envir Remed Liability Total Expense NOI Before Depreciation Depreciation NOI After Depreciation 2016 YTD 2017 YTD Actual Actual 3,818 4,182 4,518 3,545 8,337 7,727 1,536 3,665 81 211 321 1,248 14 7,076 9 150 420 0 579 9 113 81 1,907 51 2,161 0 9,816 (1,479) 1,881 (3,360) 2,050 3,660 96 120 383 1,483 25 7,817 26 228 514 427 1,195 130 200 85 2,576 56 3,046 0 12,058 (4,331) 1,860 (6,191) 2018 Year-to-Date Actual Budget 4,577 4,465 5,188 4,776 9,765 9,242 1,952 4,306 114 74 473 1,996 76 8,992 37 228 620 28 912 121 139 81 2,576 59 2,976 0 12,880 (3,115) 1,999 (5,114) 1,901 4,258 171 107 584 1,528 161 8,710 74 941 750 480 2,244 188 172 79 2,852 63 3,354 0 14,308 (5,067) 2,084 (7,150) Fav (UnFav) Budget Variance $ % 112 3% 412 9% 524 6% (51) (48) 57 32 111 (468) 85 (282) 37 713 130 452 1,332 67 33 (2) 276 4 378 0 1,428 1,951 84 2,036 -3% -1% 33% 30% 19% -31% 53% -3% 50% 76% 17% 94% 59% 36% 19% -3% 10% 7% 11% NA 10% -39% 4% -28% Incr (Decr) Change from 2017 $ % 395 9% 1,644 46% 2,039 26% (98) 646 18 (46) 90 513 52 1,175 10 (1) 106 (399) (283) (8) (61) (3) (0) 3 (70) 0 823 1,216 139 1,077 -5% 18% 19% -38% 23% 35% 210% 15% 39% 0% 21% -93% -24% -7% -31% -4% 0% 6% -2% NA 7% -28% 7% -17% Strong Occupancy and Management of Expenses 55 EDD 2018 Financial Forecast $ in 000's Revenue Conf & Event Centers Total Revenue Expenses Portfolio Management Conf & Event Centers P69 Facilities Expenses RE Dev & Planning EconDev Expenses Other Maintenance Expenses Maritime Expenses (Excl Maint) Total EDD & Maritime Expenses Small Business Workforce Development Tourism EDD Grants Total EDD Initiatives Environmental & Sustainability CDD Expenses Police Expenses Other Central Services Aviation Division Total Central Services & Aviation Envir Remed Liability Total Expense NOI Before Depreciation Depreciation NOI After Depreciation 2016 Actual 7,881 8,022 15,903 2017 Actual 8,658 9,133 17,791 2018 Forecast 9,097 9,949 19,046 2018 Budget 8,985 9,537 18,522 Fav (UnFav) Budget Variance $ % 112 1% 412 4% 524 3% 3,084 6,932 180 1,037 628 2,787 31 14,679 21 522 1,093 20 1,656 62 250 157 4,223 107 4,800 0 21,135 (5,232) 3,682 (8,914) 3,879 7,639 206 214 773 3,666 52 16,429 64 850 1,234 751 2,900 260 387 51 5,257 113 6,068 0 25,397 (7,606) 3,863 (11,469) 3,778 8,465 289 211 1,227 3,276 344 17,591 140 1,292 1,460 960 3,852 363 264 156 5,700 127 6,611 0 28,055 (9,008) 4,156 (13,164) 3,778 8,465 289 211 1,227 3,055 344 17,370 140 1,992 1,460 960 4,552 398 329 158 5,816 127 6,829 0 28,751 (10,229) 4,156 (14,385) 0 0 0 0 0 (221) 0 (221) 0 700 0 0 700 35 65 2 116 0 218 0 697 1,221 0 1,221 0% 0% 0% 0% 0% -7% 0% -1% 0% 35% 0% 0% 15% 9% 20% 1% 2% 0% 3% NA 2% -12% 0% -8% Incr (Decr) Change from 2017 $ % 439 5% 816 9% 1,255 7% (101) 827 84 (3) 454 (390) 292 1,163 76 442 225 209 952 103 (123) 105 443 15 542 0 2,657 (1,402) 293 (1,695) -3% 11% 41% -1% 59% -11% 557% 7% 118% 52% 18% 28% 33% 40% -32% 205% 8% 13% 9% NA 10% 18% 8% 15% Higher conference center volumes and tight expense management 56 EDD Capital 2018 $ in 000's P66 Elevator 2,3,4 Upgrades RE: Contingency Renew.&Replace BHICC Interior Modernization Small Projects Tenant Improvements -Capital P69 Solar Panel System T-102 Outdoor Lighting T91 Upland PreDevelopment CW Elevator Modernization All Other projects Total Economic Development 2018 YTD Actual 2018 Forecast 2018 Budget 956 0 100 59 23 39 19 11 0 156 1,229 1,000 900 525 897 482 209 150 100 536 1,363 6,028 Budget Variance $ % 1,175 1,000 710 516 532 502 437 425 325 527 (54) 0 (190) (9) (365) 20 228 275 225 (9) 0 -5% 0% -27% -2% -69% 4% 52% 65% 69% -2% NA 6,149 121 2% Tenant improvement capital offset by project delays 57 Central Services Appendix Central Services Expense by Category $ in 000's 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 Fav (UnFav) Incr (Decr) 2016 YTD 2017 YTD 2018 Year-to-Date Budget Variance Change from 2017 Actual Actual Actual Budget $ % $ % 32,923 34,654 38,558 40,526 1,968 4.9% 3,904 11.3% 10,695 10,679 12,360 13,170 810 6.1% 1,682 15.7% 8,610 11,207 10,897 11,455 558 4.9% (311) -2.8% 750 1,230 1,193 1,548 356 23.0% (38) -3.1% 429 493 589 689 100 14.5% 97 19.6% 8,650 13,311 14,340 21,393 7,053 33.0% 1,029 7.7% 1,106 1,188 1,199 1,962 763 38.9% 11 1.0% 1,192 1,167 1,079 1,160 81 7.0% (88) -7.5% 223 838 (82) 82 0.0% (920) -109.8% 90 1,633 1,160 1,564 404 25.9% (473) -29.0% (13,712) (19,219) (20,757) (23,027) (2,271) 9.9% 1,537 8.0% 50,956 57,181 60,536 70,441 9,904 14.1% 3,356 5.9% • • • Payroll savings due to delay hiring and vacancies. Outside Services favorable budget variance mainly came from lower spending and project delays. Charge to Capital was lower than budget due to delay of some capital projects. Most of the budget savings came from payroll and outside services 59 Financial Summary for Central Services Year-to-Date Actual $ in 000's Total Operating Revenues Core Central Support Services Police Capital Development Environment & Sustainability Total Operating Expenses 2016 YTD 2017 YTD Actual Actual Fav (UnFav) Incr (Decr) 2018 Year-to-Date Budget Variance Change from 2017 Actual Budget $ % $ % 75 82 81 56 25 45.0% 31,594 11,312 4,747 3,303 50,956 34,692 11,378 7,763 3,347 57,181 36,661 13,188 7,733 2,954 60,536 39,178 13,511 13,075 4,676 70,441 2,517 323 5,342 1,722 9,904 6.4% 2.4% 40.9% 36.8% 14.1% (1) -1.2% 1,969 5.7% 1,810 15.9% (30) -0.4% (393) -11.8% 3,356 5.9% Operating expenses $9.9M favorable to budget through Q2 60 Financial Summary for Central Services Year-End Forecast $ in 000's Total Operating Revenues 2016 Actual 1,330 2017 Actual 68 2018 Forecast 182 Fav (UnFav) Incr (Decr) Budget Variance Change from 2017 2018 Budget $ % $ % 182 0.0% 113 166.0% Core Central Support Services Police Capital Development Environment & Sustainability Total Operating Expenses 69,196 23,045 12,218 8,824 113,284 71,071 22,095 17,370 6,975 117,511 78,720 26,955 21,058 10,486 137,218 80,367 27,065 26,289 11,504 145,225 1,647 110 5,231 1,019 8,008 2.0% 0.4% 19.9% 8.9% 5.5% 7,648 4,860 3,688 3,511 19,707 10.8% 22.0% 21.2% 50.3% 16.8% Operating expenses forecast to be $8.0M favorable to budget for the year 61 Central Services Capital Spending $ in 000's Infrastructure - Small Cap Services Tech - Small Cap Project Cost Mgmt System Supplier Database System Corporate Firewall PeopleSoft Financials Upgrade Radio System Upgrade Police Records Mgmt System CDD Fleet Replacement Corporate Fleet Replacement Other (note 1) TOTAL 2018 YTD Actual 210 110 221 137 26 566 7 0 172 45 129 1,623 2018 Forecast 1,500 1,150 600 487 922 1,866 7,800 200 1,040 1,180 929 17,674 2018 Budget 1,500 1,150 600 450 922 3,100 12,000 700 1,210 1,180 1,526 24,338 Budget Variance $ % 0 0.0% 0 0.0% 0 0.0% (37) -8.2% 0 0.0% 1,234 39.8% 4,200 35.0% 500 71.4% 170 14.0% 0 0.0% 597 39.1% 6,664 27.4% Note: (1) "Other" includes remaining ICT projects and small capital projects/acquistions. 2018 capital spending forecast to be 72.6% of budget 62