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2005 Performance Report

ITEM NO . 6b Supp-1 DATE OF MEETING 2/28/06 . 2005 Performance Report. OS. February 28, 2006. Port Wide Financial Results. Port Wide Income Results. Port Wide 2005 Capital Spending. 2005 Performance Report Aviation Division. Aviation Business Highlights.

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2005 Performance Report

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  1. ITEM NO. 6b Supp-1 • DATE OFMEETING 2/28/06 2005 Performance Report OS February 28, 2006

  2. Port Wide Financial Results Port of Seattle Year End Results 2005

  3. Port Wide Income Results Port of Seattle Year End Results 2005

  4. Port Wide2005 Capital Spending Port of Seattle Year End Results 2005

  5. 2005Performance ReportAviation Division

  6. Aviation Business Highlights • Passenger level hit 29.3 million, +1.7% over 2004 • Landed weight down 3.6%; equals 88% of 2000 • Operations down 4.9%; equals 77% of 2000 • Load factor at 79.1% vs. 75% in 2004 • Non-aeronautical NOI +$18.3M vs. 2004 • Reduced Airline costs • Cost per enplanement (CPE) $11.10 vs. $11.45 in budget • Revenue sharing: $23.6 million, up $5.9 million over 2004 • Reduced forecasted 2009 CPE to $14.15 • Reached agreement on new 7-year airline agreement • Major project milestones: • Opened CTE • Third Runway Project on schedule and budget Port of Seattle Year End Results 2005

  7. Goals & Strategic Issues Progress • Develop and Maintain Community Support • Completed ILA negotiations with city of SeaTac • Modified 55-acre development agreement with city of SeaTac • Established ILA with City of Des Moines • Regular meetings of Highline Forum • Extraordinary NW Customer Experience • Opened Central Terminal • Enhanced international arrivals assistance • Relocated hourly parking in garage • Installed new airport directories Port of Seattle Year End Results 2005

  8. Goals & Strategic Issues Progress • High Density Development • Phase I Program on schedule; 79% completion • Refined Comprehensive Development Program and completed environmental process • Completed funding strategy for SR518 3rd lane • Established effective design and construction collaboration with Sound Transit • Restarted rental car facility project • Delays in completion of baggage systems • C-60 is 85% complete (goal was 100%) • C-1 is 49% complete (goal was 60%) Port of Seattle Year End Results 2005

  9. Goals & Strategic Issues Progress • High Performance Workplace • Implemented employee development initiative focused on enhanced job proficiency and succession preparation • Special assignment pilot completed • Development planning education completed • Diversity awareness milestones completed • Eliminated backlog of labor contract negotiations • Continued labor relations education series: • 9 labor relations sessions attended by 227 employees • 9 collective bargaining sessions attended by 127 • Workplace Safety: achieved lowest incident rate and lost work days since measurements began Port of Seattle Year End Results 2005

  10. Goals & Strategic Issues Progress • Maximize Financial Performance • Airline CPE - 3.1% under budget • Non-airline revenues per enplanement – exceeded budget by 6% • Opened new concessions in Central Terminal • Implemented new financing strategy: • New intermediate lien: • Lower debt service coverage • Structure facilitates PFC offset • Increased liquidity level Port of Seattle Year End Results 2005

  11. Enplanements 2000-2005 Port of Seattle Year End Results 2005

  12. Aviation Q4 Operating Results Port of Seattle Year End Results 2005

  13. Aviation Key Indicators Port of Seattle Year End Results 2005

  14. Aviation Expense Variance Drivers Port of Seattle Year End Results 2005

  15. Capital Spending 1999-2005$ in millions Port of Seattle Year End Results 2005

  16. Aviation Capital Budget Port of Seattle Year End Results 2005

  17. 2005Performance ReportSeaport Division

  18. Seaport DivisionOverview2002 - 2005

  19. Seaport in 2002 • NOI in 2002 was $13.2M • Container volume flat at 1.439M TEU’s (3 year avg annual growth rate negative (1.2)%) • Nearly 200 vacant acres • Consolidation in containers – SE harbor vacant • Car Shipper (DAS) and Hasbro departure • Rainier Cold Storage earthquake damage • Cruise 1 berth, 3 homeport ships and 245,000 passengers • Impacts of 9/11 and Nisqually earthquake • Set a goal of reaching $34M NOI by 2005 Port of Seattle Year End Results 2005

  20. Lease of Vacant Acres2003-2005 • T46 – Completed TTI/Hanjin Expansion 18 acres • T30 – 2 berth cruise facility 25 acres • T25/28 – Redevelop into container facility for SSAT 32 Acres • T25 – SCS Refrigerated Services, LLC 15 Acres • T106 – Container storage yard for SSAT 15 Acres • T5 – Use of option area by Eagle Marine 19 Acres (month to month) • T91 – Carnitech facility 2 Acres • T115 – 30 Year Lease with Northland (property was occupied by other tenants prior to this transaction) Port of Seattle Year End Results 2005

  21. Seaport 2002-2005 • 2005 container volume at 2.088M TEU’s (3 year avg annual growth rate of 13.2%) • Leased 126 Acres to maritime and industrial tenants • Cruise 3 berths, 8 homeport ships and 687,000 passengers Port of Seattle Year End Results 2005

  22. Seaport 2002-2005 • Carried out key transportation and environmental initiatives • Reduced expenses • Staff reduced from 217 to 169 not including warehouse • NOI in 2005 is $40.4M: 18.8% above goal and 3 times 2002 NOI Port of Seattle Year End Results 2005

  23. 2005 Performance Report POS

  24. Seaport Business Goals Provide Compelling Value and Asset Utilization • TEU’s: Up 17.6% over 2004 to 2.088 million. Full inbound up 19.2% and full outbound up 22.1%. • Grain: Up 30% over 2004 to 5.0 million metric tons. • Cruise:169 calls and 687,000 passengers. Port of Seattle Year End Results 2005

  25. Seaport Business Goals Provide Compelling Value and Asset Utilization • Vacant Property: 14 additional acres leased. • Occupancy Rates:commercial property at 91% occupancy, below target of 96% but above market average of 81%. Industrial buildings and warehouses occupancy 91%, market 96%. • Marina Occupancy:two of five marinas exceeded occupancy targets: SBM 93% vs. goal 90%; FT 89% vs. goal 85%; HIM 98% vs. goal 99%; BHM 80% vs. goal 90%; MIC 73% vs. goal 80%. Port of Seattle Year End Results 2005

  26. Seaport Community Goals • Relationships: 36 speaking engagements. No regulatory violations. Air emissions inventory 12/06. • Regional Transportation: Viaduct south end design better accommodating T-46 access. 519 discussions restarted. East Marginal Way work on track: design progressing, offers made to property owners, detailed MOA with City in progress. • Security: 98% of the tasks identified in 2004 have been completed. Projects on track. • High Performance: 48% of performance reviews completed one week prior to anniversary date, 61% completed by anniversary date. Safety index at 98.6% as of Q3. Port of Seattle Year End Results 2005

  27. Seaport Division Operating Results

  28. Seaport Division Key Variances Revenue Detail ($’s in Millions)

  29. Seaport Division Key Variances Expense Detail ($’s in Millions)

  30. Seaport Business Groups NOI Before Depreciation ($’s in Millions) Port of Seattle Year End Results 2005

  31. Seaport Capital 2005$’s in Millions Port of Seattle Year End Results 2005

  32. Seaport Capital Projects 2005 Spending was 122% of the approved budget for the year. Projects not in Plan of Finance were authorized by Commission: • Terminal 25 development for Matson $15 million. • Terminal 91 Berth C&D and utility upgrade planning $8 million. Shilshole Bay Marina spending was $13 million in excess of Approved Budget. Approved Budget was not adjusted to reflect shorter project time frame. Actual spending in line with Plan of Finance. Projects less than Approved Budget due to delays: • Terminal 5 Admin Building delayed due to weather $2.6 million. • Terminal 115 Dock Reconstruction was delayed due to permitting issues $5 million. • Security due to delays on Round II projects for Tacoma and Everett, $4.3 million below budget. Port of Seattle Year End Results 2005

  33. Seaport Recent Results • NOI $40.4M exceeding $34M NOI target and triple 2002 NOI. • 17.6% Container growth in 2005. • 22% growth in Cruise passengers in 2005. • Grain volumes up 30% over 2004. • Aggressive capital project milestones met. • Commercial building occupancy at 92%. • Received Envirostar awards at 3 Marinas and Maintenance. Port of Seattle Year End Results 2005

  34. Seaport Division Overview Excluding Security Grants ($’s in Millions)

  35. 2005 Performance Report POS

  36. 2005 Fourth QuarterPerformance Report Economic Development Division

  37. Economic Development DivisionToday’s Presentation Introduction Business Goals, Progress & Highlights for: • Real Estate Development • Regional Transportation • Economic, Business and Trade Development 2005 Operating Results 2005 Capital Program & Results Port of Seattle Year End Results 2005

  38. Real Estate Development2005 Business Goals • Advance the planning and development of certain assets the Port currently owns (e.g. North Bay) • Identify and respond to new opportunities and projects • Seek to establish a center of expertise within the Port for real estate planning and development Create regional economic vitality through three real estate-related initiatives: Port of Seattle Year End Results 2005

  39. Real Estate DevelopmentProgress & Business Highlights • North Bay Project • Selected preferred development alternative • Published final Environmental Impact Statement • Integrated planning with Pier 91 improvements • Continued outreach to community • Acquired Tsubota Steel site Port of Seattle Year End Results 2005

  40. Real Estate DevelopmentProgress & Business Highlights Central Waterfront Concept Plan • Participated in Waterfront Partners Group Colman Dock Expansion • Monitored planning efforts by WSDOT and City of Seattle • Appraising Pier 48 Waterfront Streetcar Extension • Completed joint feasibility study Port of Seattle Year End Results 2005

  41. Regional Transportation2005 Business Goals Be a Catalyst for Regional Transportation Solutions • Ensure access to existing and future Port facilities • Enhance freight mobility • Promote regional economic competitiveness Port of Seattle Year End Results 2005

  42. Regional TransportationProgress & Business Highlights • Project Planning & Activities: • Viaduct/Seawall Replacement • SR518 • East Marginal Way, South Downtown Rail Corridor/SR519 • Magnolia Bridge, Mercer Corridor • Defeat of I-912 maintained state funding • Developed federal and state 2006 legislative strategies Port of Seattle Year End Results 2005

  43. Economic, Business & Trade DevelopmentBusiness Goals Create regional economic vitality by proactively seeking international and regional trade related opportunities • Regional Economic Development • International Trade & Business Development • New Business Opportunities Port of Seattle Year End Results 2005

  44. Economic, Business & Trade DevelopmentProgress & Business Highlights Regional Economic Development • Formulation and implementation of Prosperity Partnership’s “Regional Economic Development Strategies for Central Puget Sound” • Action Strategy Groups International Trade and Business Development • Port Asia Offices (Japan, South Korea, Shanghai, Hong Kong and Singapore) • Strategy for identifying trade leads and Foreign Direct Investment leads, and • Transportation and Logistics intelligence gathering and interpretation • China Initiative Port of Seattle Year End Results 2005

  45. Economic, Business & Trade DevelopmentProgress & Business Highlights Developing New Business Opportunities • Inland Northwest Project • Cruise business MOU with Shanghai Int’l Ports Group • Foreign Manufacturing Company site selection Port of Seattle Year End Results 2005

  46. Economic Development Division OperatingResults Port of Seattle Year End Results 2005

  47. Capital Program 2005 SR 518 ("Gov't Expense" Project) North BayTsubotaTotal R.E.Reg. Trans. 2005 Plan of Finance 1.5 0.0 1.5 2005 Approved Budget 1.8 0.0 1.8 2005 Actuals2.56.18.6 Variance (0.7) (6.1) (6.8) Authorization 7.3 6.1 13.4 5.0 2005 Spending 2.5 6.1 8.6 1.7 Previous Spending4.00.04.00.0 Total Spending 6.5 6.1 12.6 1.7 Remaining Budget 0.8 0.0 0.8 3.3 Port of Seattle Year End Results 2005

  48. 2005 Performance ReportCorporate Professional & Technical Services

  49. Corporate Highlights • Corporate performance for the year 2005 was $3.7 million or 6.3% unfavorable compared to the approved budget. • $1.9 million for ICT restructuring & Systems Remediation • $1.9 million in environmental reserves • Commission meetings accessible via web-site • Environmental Services reached agreement on air emissions inventory • ICT completed restructuring Port of Seattle Year End Results 2005

  50. Corporate Indicators • Workers Compensation costs decreased 19% • 1019 employees participated in learning calendar classes • Processed 7,256 employment applications compared to 5,155 for 2004, up 40% • Electrical consumption decreased by 11% • Saved $6,684,763 PV (9.97%) on bond Refunding Port of Seattle Year End Results 2005

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