Metropolitan Transportation Authority Presentation to

Transcription

1 Metropolitan Transportation Authority Presentation to 2018 J.P. Morgan Public Finance Transportation & Utility Conference April 18, 2018* *This presentation is subject to the disclaimers on the following page and will be removed from the MTA Investor website on April 30, 2018

2 Disclaimer The information contained in this Investor Presentation has been prepared by MTA to provide, for the convenience of persons and entities which may in the future consider investing in MTA's bonds, a brief overview of MTA, its operations and capital programs and its currently outstanding credits. It is not intended to and should not be used as a basis for making any investment decisions. Any decision to invest in bonds issued under any of MTA's multiple credits should be made only on the basis of a review of the preliminary official statement and final official statement or other disclosure materials for the related bonds, which should be read in their entirety. Many statements contained in this Investor Presentation are forward looking statements rather than historical facts. Such statements are based on assumptions made by and information currently available to MTA. Because the forward looking statements are based on expectations about future events and economic performance, actual results may differ materially from those projected. The words "estimate", "projection", "plan", "forecast" or similar words are intended to identify such forward looking statements. 1

3 Who We Are, What We Do MTA s essential transportation network in NYC Metro Area MTA is the primary mass transportation provider in the New York City metropolitan area, covering over 5,000 square miles and serving a population of over 15.3 million MTA s Network includes: New York City Transit Manhattan and Bronx Surface Transit Operating Authority (MaBSTOA) MTA Bus Company Staten Island Railway Long Island Rail Road Metro North Railroad Bridges and Tunnels MTA serves the five boroughs of NYC and seven New York suburban counties, and provides service in northern NJ and southern CT System Facts: 2.7 billion annual ridership 8.6 million average weekday paid rides 2,952 bus route miles 2,080 subway and commuter rail track miles 741 stations (472 subway, 21 Staten Island, 124 LIRR, 124 Metro North) 7 bridges 2 tunnels 2

4 Essentiality Positive Impact for Metropolitan Area MTA s services are essential for the region providing critical access to work and education MTA operates the largest transit network in the United States and serves over onethird of the nation s transit riders Serves 4.3x more passengers than next largest U.S. system (Chicago) MTA s transportation network is the backbone of NY Metro Area $1.6 trillion economy In 2016, MTA New York City Transit subways carried 82% of all rail passengers entering and leaving the Manhattan Central Business District each day Superstorm Sandy demonstrated the MTA network is critical to keeping the NYC region functioning Vital connection for employees and employers MTA s network makes the region an attractive place to live by connecting residents with an enormous number of potential employers Makes the region an attractive place to do business by connecting employers with a large labor pool Low cost transport and flat fares allow equitable access to NYC s employment centers Provides access to numerous schools, colleges, and universities across the region, making education accessible and more affordable Sources: MTA; NYMTC Hub Bound Travel Data; US Bureau of Economic Analysis 3

5 Sustainable MTA MTA s sustainability initiatives and successes MTA has implemented energy efficiency projects in its facilities and along the right of way, and continues to identify new projects examples include: Fulton Center (first subway station to receive LEED rating LEED Silver); Mother Clara Hale bus depot in Harlem (LEED Gold); Corona Maintenance Shop in Queens; Metro North Railroad s office building at 525 North Broadway in North White Plains Installing sustainable, recycled, composite track ties in track projects Purchasing new subway cars and buses that are more energy efficient Employing commuter rail cars equipped with regenerative braking Harmon Shop project reducing energy consumption with insulated roof and increased natural lighting LIRR train washing facility reusing more than 70% of its water B&T facilities using alternative fuels, LED lights, green cleaning agents Focus on climate change and climate adaptation and resiliency MTA Wide Climate Adaptation Task Force (report published April 2017) Resiliency and adaption projects underway: Increasing pumping capacity; installing floodwalls; installing submersible drainage pumps; corrosionresistant duct banks and cabling Hardening substations and fan plants; elevating critical equipment; installing water resistant flood doors and barriers 4

6 Transit Avoided Carbon MTA s transportation network benefits the environment Carbon Emission Avoidance Each year, MTA s network helps avoid net ~17 million metric tons (MMT) of Greenhouse Gas (GHG) emissions, while emitting only ~2 MMT of GHG emissions An average MTA trip saves about 10.5 pounds of GHG emissions Every week, use of the MTA network removes approximately 45,000 cars from Central Business District MTA s network outperforms single occupancy vehicles, even including indirect emissions Sources: MTA; National Transit Database 5

7 30+ Year Record of Fiscal Stability and System Resiliency Sound financial operations and management initiatives successfully mitigate stress events and downturns Management and governance structure, policies and procedures have supported stable financial operations through stress scenarios Early 1990 s and 2000 s recessions September 11 Terrorist Attack Global Financial Crisis of 2008 Superstorm Sandy and other weather related events Labor Actions (e.g. TWU Local 100 strike, December 2005) Liquidity and conservative fiscal approach protect financial operations General reserve funded annually equal to 1% of cash budget $350 million JP Morgan line of credit for O&M (untapped, available) Insurance provides business interruption coverage On going and innovative initiatives enhance MTA s fiscal stability and flexibility Cost cutting/efficiency improvements Fuel hedging for budget stability Independent, disciplined and transparent fare and toll increases Supplemental capital markets reinsurance program through MetroCat Re Ltd (catastrophe bonds) 6

8 MTA 2018 Adopted Budget Where the dollars come from where the dollars go Revenues by Source $15,793 $ in millions Expenses by Category $16,040 State & Local Subsidies $1,224 8% BTL Adjustments for Subsidies $319 2% Debt Service $2,573 16% Dedicated Taxes $5,377 34% Farebox Revenue $6,277 40% Non Labor $3,603 22% Payroll $5,285 32% Other Revenue $673 4% Toll Revenue $1,923 12% Other Labor $462 3% Pension $1,340 8% Health & Welfare $1,983 12% Overtime $794 5% Notes: 1) Totals may not add due to rounding 2) Operating expenses with debt service excludes non cash liability adjustments for depreciation, OPEB obligation, and environmental remediation; MTA Capital Construction is not included as its budget contains reimbursable expenses only 3) In the Expenses by Category chart, the below the line adjustments ( $257 million) are reductions to non labor expenses, which reduce the category of Non Labor from $3,860 million to $3,603 million. These adjustments are below the line because they are not yet allocated to Agencies 7

9 Adopted Budget and February Financial Plan Summary of MTA Consolidated Statement of Operations by Category ($ in millions) 2016 Actual 2017 Final Estimate 2018 Adopted Budget Projected 2019 Projected 2020 Projected 2021 Operating Revenue: Fares, Tolls and Other Revenues 8,608 8,744 8,873 8,930 9,011 9,026 Dedicated Taxes and State/Local Subsidies 6,666 6,469 6,601 6,817 6,983 7,206 Total Operating Revenue 15,274 15,213 15,474 15,747 15,994 16,232 Expenses: Labor Expenses 9,238 9,441 9,864 10,262 10,620 10,981 Non Labor and Other Expenses 3,168 3,467 3,651 3,594 3,723 3,860 Expense Adjustments (including General Reserve) Debt Service (excludes Service Contract Bonds) 2,459 2,507 2,573 2,785 2,995 3,162 Total Operating Expenses with Debt Service 14,912 15,467 16,297 16,857 17,565 18,235 Net Surplus/Deficit After Subsidies and Debt Service 362 (254) (822) (1,110) (1,571) (2,003) Conversion to Cash Basis (594) (21) Cash Balance Before Prior Year Carryover (232) (174) (685) (915) (1,508) (2,024) Adjustments ,101 1,422 Prior year Carryover Net Cash Balance (403) (602) Notes: 1) Total operating expenses with debt service excludes non cash liability adjustments for depreciation, OPEB obligation, and environmental remediation 2) Adjustments are below the line adjustments affecting revenue and expense totals that have not yet been allocated to Agencies 3) Numbers may not total due to rounding 8

10 Aggressive Savings Targets Annually recurring savings targets are added in Financial Plans $2,500 $ in billions 2017 November Plan $2, November Plan 2015 November Plan 2014 November Plan $1, November Plan 2012 November Plan Achieved Savings $1,000 $500 $0 9

11 Labor and Pensions Making strides in labor agreements and improving funding ratios for MTA s sponsored pension plans Effective January 16, 2017, MTA New York City Transit and MaBSTOA entered into a 28 month labor contract agreement extension with TWU Local 100 This agreement, which has been ratified by the TWU membership and approved by the MTA Board, has an expiration date of May 15, 2019 Additional costs from agreement already incorporated into Adopted Budget and Financial Plan Other smaller unions traditionally follow the TWU pattern LIRR settled with all of its unions, following TWU pattern MNR has settled with six of its unions; negotiations ongoing with remainder Financial Plan included projected wage base consistent with LIRR s pattern Funding Ratios for MTA Sponsored Pension Plans (as of January 1, 2017) MTA Defined Benefit Pension Plan 71.8% MaBSTOA Pension Plan 72.3% LIRR Additional Pension Plan 50.9% 10

12 Adopted Budget and February Financial Plan Challenges going forward Secure full funding for the Subway Action Plan Secure new sustainable funding for operations and capital Implement biennial fare and toll increases of approximately 4% in 2019 and 2021 Achieve cost reduction targets Enhance customer experience and fund continued investments in maintenance and operations Respond to general economic conditions (e.g. declining real estate revenues) Respond to potentially higher interest rates than forecasted 11

13 Commitment to Capital Investment Over $125 billion invested in MTA transportation network since 1982 $35 Total Per Capital Program $ in billions $32.5 $30 $25 $23.7 $24.1 $20 $15 $15.3 $16.7 $17.1 $10 $5 $ Note: The Capital Program funding level does not include approximately $7.9 billion for projects related to Superstorm Sandy (federal funding) 12

14 Strategic Capital Program Planning and Execution 20 Year needs assessment provides long term planning; 5 year capital programs prioritize projects Since 1982, MTA focuses capital investment to stabilize, renew, enhance, and expand the system 20 Year Needs Assessment defines MTA s long term goals and objectives to: Preserve and maintain the system in a state of good repair Provide for the region s future travel needs based on projected economic and demographic growth and changes Establishes the foundation for MTA s near term, 5 year capital programs Every five years, capital programs prioritize projects identified in the 20 Year Needs assessment Program is first approved by the MTA Board Capital programs are then submitted by October 1 to the Capital Program Review Board (CPRB) for approval or rejection, in accordance with NY PAL 1269 B and 1259 C 20 Year Needs Priority Areas (Assessment published October 2013) Prevent capacity and reliability backslide, maintain State of Good Repair/Normal Replacement Complete projects addressing longstanding problems Possible strategies to address current trends and support future growth: Overcome subway capacity obstacles Optimize the transit, commuter rail, and bus network Create a 21st Century transit system Develop a resilient MTA network 13

15 Approved Capital Program Renew, enhance, expand Renew $22.7 Building Blocks of the Capital Program $ in billions Enhance $2.7 Expand $7.1 Renew: MTA s 1st priority is to protect the safety, reliability, and quality of existing service Replace trains, buses, subway cars and renew track, signals, yards, depots, bridges, and stations Enhance: Service improvements to make daily customer experience better Improvements such as Help Points, ADA accessibility, and next train arrival information Expand: Increasing the reach of the MTA Transportation Network and access to the system Projects such as Second Avenue Subway helps ease crowding, accommodate and create growth, and deliver more extensive and resilient service 14

16 Major Capital Program Investment Objectives Renew, Enhance, Expand Complete the installation of Positive Train Control Congressionally mandated safety initiative for Commuter Railroads Expand Select Bus Service Improve reliability and speed along routes, designed to work with other MTA assets and in conjunction with NYC Department of Transportation Introduce new contactless tap and go fare payment technology Will work with smartphones and across MTA s entire network; allow customers to use single smart card or smartphone across all modes; reduce labor costs and improve loading times (vendor contract awarded in 2017) Design and begin construction on Phase 2 of the Second Avenue Subway Ease congestion and improve mobility on Manhattan s East Side Begin Penn Access Provide a new Metro North Railroad (New Haven Line) link directly into Penn Station, providing system resiliency via a west side alternative terminus for more than 275,000 daily customers Complete the LIRR Double Track project Improve service and reliability by adding a second track to the LIRR s Ronkonkoma Branch (approximately 11 miles) Improve communications to customers Provide real time train information by completing the installation of Help Points in each of the subway stations Open Road Tolling Fully implemented on all Bridges and Tunnels facilities as of September

17 Approved Capital Program Renew, Enhance, Expand Funding by Agency Funding Sources Program Elements ($ mm) % of Total Core Capital Program New York City Transit $16, % Long Island Rail Road 2, % Metro North Railroad 2, % MTA Bus % MTA Interagency % Core Subtotal $22, % Program Funding Plan ($ mm) % of Total Federal Formula, Flexible and Misc $6, % Federal Core Capacity % Federal New Starts % MTA Bonds 7, % Pay as you go Capital (PAYGO) 2, % State of New York 8, % City of New York 2, % Network Expansion Projects (Second Ave Subway, East Side Access) 7, % Asset Sales/Leases % Other MTA Sources % Total CPRB Program $29, % Total CPRB Program $29, % Bridges and Tunnels 2, % Bridges and Tunnels Bonds ($2.36 b) & PAYGO ($574 m) 2, % Total Capital Program $32, % Total Capital Program $32, % Notes: 1) MTA Capital Program , approved by the MTA Board on May 24, 2017 and the CPRB on July 31, ) Numbers may not total due to rounding 16

18 MTA Debt Overview $37.2 billion Debt Outstanding on Core Credits (as of 4/14/2018) TBTA General $7, % Debt by Credit TBTA Sub $1, % $ in millions Variable Rate $2,268 Synthetic Fixed 6.1% Rate $2, % Debt by Type (1) Bond Anticipation Notes (BANs) $1, % Term Rate $ % Transportation Revenue $23, % Fixed Rate $30, % Dedicated Tax Fund $5, % Notes: 1) Debt Outstanding reflects the $146.5 million draw dated 9/20/2016 on the Railroad Rehabilitation and Improvement Financing Program loan (RRIF Loan)/TRB Series 2015X 2) Debt by Credit chart incorporates BANs into their respective credits 3) Term Rate bonds have a fixed rate for a defined period (until the mandatory tender date) and do not have a fixed rate for the entire life of the bonds 4) Excludes $34.5 million State Service Contract Bonds, $277.7 million Special Obligation Bonds, and $1.057 billion Hudson Rail Yards Trust Obligations 5) Numbers may not total due to rounding 17

19 3,000 2,750 2,500 2,250 2,000 1,750 1,500 1,250 1, $ Millions Debt Service on Outstanding Bonds by Credit Stated Debt Service as of 4/14/2018 TRB DTF TBTA Sen TBTA Sub 18

20 Transportation Revenue Bond Flow of Funds Flow of funds provides robust debt service coverage MTA Transportation Revenue Credit 2018 Adopted Budget ($ in Millions) Gross Transit and Commuter Operating Revenue $6,607 TBTA Surplus $636 DTF Excess $238 MMTOA Receipts Excess $1,686 State and Local Operating Subsidies (including for MTA Bus) $874 Payroll Mobility Tax and Aid Trust Account Receipts $2,074 Real Estate Taxes (Urban and MRT Excess) $552 Other (including Station Maintenance Funds) $531 Pledged Revenues $13, x Debt Service Coverage Gross Pledge Lien TRB Budgeted Debt Service ($1,522) Available for Operating Expenses Notes: 1) Does not reflect Non Pledged Revenues (such as concession revenue at Penn Station and Grand Central Terminal) 2) Based on MTA 2018 Adopted Budget and February Financial Plan ) Totals may not add due to rounding 19

21 MTA and TBTA Credit Ratings Strong ratings reflect core mission and financial discipline Transportation Revenue Bonds Strengths include MTA as dominant regional mass transit provider, overall sound financial management, diversified revenue base, and gross revenue pledge Dedicated Tax Fund Bonds Strengths include diverse mix of dedicated taxes levied either statewide or in the MTA district, long record of state support, and ample coverage TBTA General and Subordinate Resolution Bonds Strengths include TBTA facilities providing critical transportation links for the region, strong historical financial performance and solid debt service coverage levels Credit Moody s S&P Fitch KBRA Transportation Revenue A1 Stable A+ Negative* AA- Stable AA+ Dedicated Tax Fund NAF** AA Stable AA Stable NAF** TBTA General Resolution Aa3 Stable AA- Stable AA- Stable AA Stable TBTA Subordinate Resolution A1 Stable A+ Stable A+ Stable AA- Stable Notes: *On March 12, 2018, S&P downgraded MTA s Transportation Revenue Bonds from AA to A+ with a negative outlook under its Mass Transit Enterprise Ratings criteria **NAF = Not applied for 20

22 Financing Approaches Utilizing BANs for ability to match assets and debt liability; green bonds to expand and diversify investor base BAN Program BAN transactions typically ranging from $500 million to $1 billion in size Sold via competitive method of sale Minimum bid size of $25 million, with increments of $5 million, to facilitate wider participation Bids awarded based on lowest true interest cost Low cost short term financing Better able to match assets and related debt liability once bonds are issued Green Bonds (Climate Bond Certified) MTA s inaugural 2016 issuance of green bonds was first Climate Bond Certification in the U.S. Certified under the Climate Bonds Initiative s (CBI) Climate Bonds Standards using the Low Carbon Transport criteria The Low Carbon Transport criteria establishes the transportation projects that are applicable for certification; projects are determined eligible if they are compatible with an emission trajectory that limits global temperature rise to 2 C $11.3 billion of projects identified from the Capital Program that conform to the CBI s Low Carbon Transport criteria; value level against which bonds are issued $4 billion in MTA TRB and DTF green bonds issued in 2017; total issued thus far $5.4 billion 21

23 2018 Financing Quarterly Calendar* ($ in millions) Purpose Q1 Q2 Q3 Q4 Total New Money and BAN $1,324 $600 $676 $2,600 Takeout (1) Remarketing (2) , ,367 Refunding (3) Total $1,737 $190 $2,186 $1,428 $5,541 *All information in the 2018 Financing Quarterly Calendar is preliminary and subject to change Notes: 1) Bond issuance for approved Capital Programs, including the Capital Program; new money obligations may be issued as bonds or BANs 2) FRNs and VRDBs with mandatory put dates or liquidity facility expiration dates in ) Fixed rate TRB and TBTA bonds callable in November

24 MTA Investor Contact Available as a direct resource for any questions For more information: Investor Contact: Marcia Tannian Deputy Director, Finance (212) mtannian@mtahq.org Connect: