FY2018 Second Quarter Financial Update

Transcription

1 Finance and Committee Information Item III-A February 8, 2018 Second Quarter Financial Update 4 of 52

2 Washington Metropolitan Area Transit Authority Board Action/Information Summary Action Information MEAD Number: Resolution: Yes No TITLE: Second Quarter Financial Update PRESENTATION SUMMARY: Staff will present a summary of operating and capital results through the second quarter of. PURPOSE: Management will update the Finance and Committee on the operating and capital budget results and highlight key challenges and major accomplishments of the second quarter. DESCRIPTION: Key Highlights: Operating revenues through the second quarter of were $410 million or $10 million below budget, driven largely by lower bus ridership and revenue. Rail ridership continues to stabilize, but bus ridership declines compared to prior year continue as well. Operating expenses totaled $876 million, or $31 million below budget. The favorability was primarily driven by savings in salaries and wages due to vacancies, which were $24 million below budget, and by lower spending on services contracts, which were $22 million below budget. Operating subsidy through Q2 was $21 million favorable to budget; full year operating subsidy forecast is $5 million favorable. $505 million of capital investments were made through Q2. Full year capital investment is forecasted between $1.1 and $1.2 billion, compared to a budget of $1.25 billion. Background and History: Operating The $1.8 billion operating expense budget is funded by $845 million of passenger fares and non-fare revenue (i.e. advertising, etc.) and $980 million of operating subsidy from Metro s funding jurisdictions. The operating budget represents a $135 million 5 of 52

3 increase in jurisdictional subsidy contributions from the level of FY2016 and FY2017 (operating subsidy remained at $845 million both years). Capital Metro s capital budget of $1.25 billion includes funding to repair, rehabilitate, and replace Metro's capital assets, including vehicles, stations, track and structures, power, yards and garages and business support. Discussion: Operating revenues through the second quarter of were $410 million, or $10 million below budget, while operating expenses totaled $876 million ($31 million below budget). The net operating position was $21 million favorable through the second quarter. The favorability in operating expenses was primarily driven by savings in salaries and wages due to vacancies, which were $24 million below budget, and by lower spending on services contracts, which were $22 million below budget. The operating revenue unfavorability to budget is primarily attributable to a continuing decline in bus ridership and revenue versus prior year, as well as lower than forecasted average bus fares. While bus revenue was two percent lower than last year, it was 13 percent below budget through the second quarter. Ridership continues to face challenges stemming from the fare increases, perceived service quality, growth in alternative transportation options, low gasoline prices, and telecommuting. Operating Revenue Total WMATA revenue was $410 million through the second quarter, below budget by $10 million or two percent. Metrorail passenger revenue of $266 million was $2 million below budget but was five percent higher than prior year, extending for a second quarter a degree of stability in rail ridership and revenue. Metrobus passenger revenue of $64 million was $10 million below budget for the quarter (or 13 percent), representing a decline of $1.6 million (two percent) from last year. MetroAccess passenger revenue was three percent below budget, while ridership was three percent below budget and two percent below prior year. Parking revenue was on budget through December and up three percent compared to the first two quarters of last year. Total Non-Passenger revenue, including Reimbursables, was six percent favorable to budget and grew eleven percent compared to prior year. Total transit ridership on all modes through the second quarter was 145 million trips, a decrease of 4.2 million trips or three percent compared to prior year. While MetroBus ridership was projected to decline in, Metrorail and MetroAccess ridership were projected to increase slightly in. Actual ridership was below budget for all modes through the second quarter and total ridership for all modes was below budgeted trips by 4.4 million or three percent. Capital Improvement Program 6 of 52

4 Metro invested $505 million in its capital program through the first two quarters, compared to a budget of $578 million. Full year capital investment is forecasted between $1.1 and $1.2 billion, compared to a budget forecast of $1,250 million. Q2 capital program performance by category is summarized below. Railcar Metro invested $222.3 million in the Railcar category through Q2. Highlights for the quarter include: 52 new 7000 series railcars accepted - a total of 472 new railcars accepted through December 2017 On-going rehabilitation of railcar lifts at West Falls Church and Shady Grove Service & Inspection Shop Forecast reflects delay in procurement of spare parts Rail Systems Metro invested $42.4 million in Rail Systems through Q2. Highlights include: Cell service live for the segment between Benning Road and Addison Road First two milestone reviews conducted for radio equipment Final shipment of Track Inspector location awareness equipment delivered installation underway Track & Structures Metro invested $57.5 million in Track & Structures through Q2. Highlights include: 12,227 crossties replaced 10,977 Direct fixation fasteners renewed 3,573 insulators renewed 6 Switches rehabilitated 4.7 miles of running rail renewed 20 miles of track tamped 448 joints eliminated Stations & Passenger Facilities Metro invested $75.9 million in Stations & Passenger Facilities through Q2. Highlights include: Ceiling lights complete at Arlington Cemetery, Crystal City, Foggy Bottom, and Smithsonian; L Enfant to be completed Q4 Seven escalators and five elevators replaced/rehabilitated in Q2 AC room rehabilitation compete at Minnesota Avenue Procurement underway for emergency swing gates Forecast reflects a reduction for work completed in prior year originally planned to be completed in Bus & Paratransit Metro invested $77.1 million in the Bus & Paratransit through Q2. Highlights include: 25 Metrobus rehabilitations complete Bus pilot vehicle delivered; testing underway Installation of security cameras on 230 buses underway to be completed May 2018 Andrews Federal Center Garage interior slab complete; mechanical, electrical, plumbing and interior finishing to be complete Q4 Forecast reflects delay in the delivery of buses due to changes in emissions 7 of 52

5 regulations Business Support Metro invested $29.6 million through Q2 in the Business Support program. Highlights include: WiFi access complete at 31 stations System testing and training materials complete for Metro Time Keeping project Requirements report completed for the Enterprise Learning Management System Forecast includes updates to several support projects schedules, e.g.: storage tank replacement project change in procurement vehicle FUNDING IMPACT: Information item only - no funding impact. TIMELINE: Previous Actions Anticipated actions after presentation November First Quarter Update March Approval of FY2019 May Third Quarter Update September Year-End Financial Update RECOMMENDATION: No action required -- information item only. 8 of 52

6 Washington Metropolitan Area Transit Authority Second Quarter Financial Update Finance and Committee February 8, of 52

7 Q2 Financial Results Operating revenue $410 million, $10 million below budget, primarily due to lower ridership and revenue Operating expense $876 million, $31 million favorable to budget, primarily due to vacant positions and lower spending on services Operating Net position $21 million favorable through Q2 Capital investment $505 million; year-end forecast is $ billion 2 10 of 52

8 Net Operating Position & Forecast ($ in millions) Q2 Favorable (Unfavorable) Year End Favorable (Unfavorable) Actual $ % Forecast $ % Revenue $ 410 $ 420 ($10) (2%) $ 821 $ 845 ($24) (3%) Expense $ 876 $ % $ 1,796 $1, % Net Subsidy $ 466 $ % $ 975 $ % Cost Recovery 47% 46% 46% 46% (trips in millions) Q2 Actual Q2 Favorable / (Unfavorable) Forecast Favorable / (Unfavorable) Rail (2) (3) Bus (2) (4) MetroAccess (0) (0) Total Ridership (4) (7) 3 11 of 52

9 Q2 Operating Revenue Results Q2 YTD Actual Q2 YTD Favorable/ (Unfavorable) ($ in millions) Passenger Revenue Metrorail $265.9 $268.0 ($2.1) Metrobus (9.9) MetroAccess (0.2) Parking D.C. Schools/Other Passenger Total Passenger Revenue $364.3 $376.4 ($12.1) Advertising Other Revenue (0.1) Reimbursables Total Non-Passenger Revenue $45.6 $43.2 $2.4 TOTAL REVENUE $410.0 $419.6 ($9.7) 4 12 of 52

10 Q2 Operating Expense Results ($ in millions) Q2 YTD Actual Q2 YTD Favorable/ (Unfavorable) Salary/Wages Benefits (10.0) Overtime Total Personnel Expense $637.4 $651.9 $14.6 Services Materials & Supplies (8.3) Fuel (Gas/Diesel/CNG) Utilities & Propulsion Insurance/Other (0.9) Capital Allocation (18.9) (24.9) (6.0) Total Non-Personnel Expense $238.6 $254.8 $16.2 TOTAL EXPENSES $876.0 $906.7 $ of 52

11 Capital Investment Forecast Range $1.1-$1.2B YTD Actuals $504.8M 6 14 of 52

12 Q2 Capital Performance Investment Category ($ in millions) Actual Forecast Over/(Under) Current Railcar $222.3 $260.1 $478.7 $508.6 ($29.9) Rail Systems Track & Structures Stations & Pass. Facilities (32.2) Bus & Paratransit (18.0) Business Support (10.6) TOTAL $504.8 $578.2 $1,178.0 $1,250.0 ($72.0) 7 15 of 52

13 Railcar Investment by Program ($ in millions) Actual Forecast Over/(Under) Current Acquisition $149.0 $173.5 $326.1 $346.7 ($20.6) Maintenance/ Overhaul (6.2) Maintenance Facilities (3.1) Total $222.3 $260.1 $478.7 $508.6 ($29.9) Q2 Accomplishments 52 new 7000 series railcars in service - total of 472 new railcars accepted through December 2017 On-going rehabilitation of railcar lifts at West Falls Church and Shady Grove Service & Inspection Shop Forecast reflects delay in procurement of spare parts 8 16 of 52

14 Rail Systems Investment by Program ($ in millions) Actual Forecast Over/(Under) Current Propulsion $17.5 $15.5 $40.6 $39.5 $1.1 Signals & Communications Total $42.4 $49.9 $141.4 $122.8 $18.6 Q2 Accomplishments Cell service live for the segment between Benning Road and Addison Road First two milestone reviews conducted for radio equipment Final shipment of Track Inspector location awareness equipment delivered installation underway 9 17 of 52

15 Track & Structures Investment by Program ($ in millions) Actual Forecast Over/(Under) Current Fixed Rail $39.5 $52.7 $77.3 $90.7 ($13.4) Structures Total $57.5 $58.5 $126.7 $126.6 $0.1 Accomplishments through Q2 12,227 crossties replaced 10,977 Direct fixation fasteners renewed 3,573 insulators renewed 6 Switches rehabilitated 4.7 miles of running rail renewed 20 miles of track tamped 448 joints eliminated 7,285 ln. ft. of water intrusion mitigation completed of 52

16 Stations & Passenger Facilities Investment by Program ($ in millions) Platforms & Structures Actual Forecast Over/(Under) Current $39.2 $42.3 $71.3 $91.0 ($19.7) Vertical Transp (6.3) Station Systems (6.2) Total $75.9 $78.9 $151.0 $183.2 ($32.2) Q2 Accomplishments Ceiling lights complete at Arlington Cemetery, Crystal City, Foggy Bottom, and Smithsonian; L Enfant to be completed Q4 Seven escalators and five elevators replaced/rehabilitated in Q2 AC room rehabilitation compete at Minnesota Avenue Procurement underway for emergency swing gates Forecast reflects a reduction for work completed in prior year originally planned to be completed in of 52

17 Bus & Paratransit Investment by Program ($ in millions) Bus and Paratransit Acquisition Actual Forecast Over/(Under) Current $3.7 $54.0 $56.3 $77.8 ($21.5) Bus Maint./Overhaul (5.6) Bus Maint. Facilities Bus Passenger Facilities (3.6) Total $77.1 $94.6 $188.9 $206.9 ($18.0) Q2 Accomplishments 25 Metrobus rehabilitations complete Bus pilot vehicle delivered; testing underway Installation of security cameras on 230 buses underway to be complete May 2018 Andrews Federal Center Garage interior slab complete; mechanical, electrical, plumbing and interior finishing to be complete Q4 Forecast reflects delay in the delivery of buses due to changes in emissions regulations of 52

18 Business Support Investment by Program ($ in millions) Actual Forecast Over/(Under) Current IT $23.1 $27.7 $73.8 $74.9 ($1.1) MTPD (0.2) Support Equip./Services (9.3) Total $29.6 $36.2 $91.3 $101.9 ($10.6) Q2 Accomplishments WiFi access complete at 31 stations System testing and training materials complete for Metro Time Keeping project Requirements report completed for the Enterprise Learning Management System Forecast includes updates to several support projects schedules, e.g.: storage tank replacement project change in procurement vehicle of 52

19 Appendix: Ridership (trips in Thousands) Q2 Q2 FY2017 Q2 Variance vs. Actual Actual Prior Year Metrorail 41,159 42,100 42, % -0.9% Metrobus 30,183 27,738 28, % -4.1% MetroAccess % -3.0% System Total 71,929 70,422 72, % -2.2% YTD FY2017 Variance vs. Actual Actual Prior Year Metrorail 86,075 87,033 88, % -2.1% Metrobus 62,133 56,955 59, % -4.1% MetroAccess 1,187 1,167 1, % -3.5% System Total 149, , , % -2.9% of 52

20 Appendix: Ridership of 52

21 Appendix: 7000 Series Railcar Acquisition Program K vehicles accepted as of 12/31 As of the end of June, ALL 1000/4000 series railcars were removed from service Series Railcars # Accepted 472 # Remaining 276 Total 748 Railcars Removed from Service # Removed of Total Total Total Estimated Project Cost Life to Date Expenses $1,709 $978 Remaining Cost to Complete $731 $ in millions of 52