Q Financial Results. As of September 30, 2017

Transcription

1 Q3 Financial Results As of October 19,

2 Executive Summary Revenue through the third quarter of was $149.0 million and operating expense was $62.6 million, resulting in operating income of $86.4 million, which was $19.5 million and 29% above budget. Net Income of $86.8 million was $19.4 million above budget and equivalent with the prior year. The net income of $86.8 million will be split 50/50 and each homeport recorded income from the NWSA Joint Venture through the third quarter of $43.4 million (rounded). Note: Net income does not include depreciation on licensed assets. See comment at the end of this narrative for further explanation. OPERATING RESULTS YTD (Dollars in Thousands) CURRENT YEAR TO DATE PRIOR YEAR VARIANCE VARIANCE DESCRIPTION BUDGET ACTUAL FAV/(UNFAV) % ACTUAL FAV/(UNFAV) % Revenue $ 141,720 $ 149,022 $ 7,302 5% $ 144,001 $ 5,021 3% Operating Expense 74,844 62,624 12,220 16% 57,742 (4,882) 8% Operating Income 66,876 86,398 19,522 29% 86, % Interest Income (Expense) Interest Income % % Net Interest Income % % Non Operating Income/(Expense) (4) (219) (215) 5373% (17) (202) 1188% Grant Income (167) 84% 33 0% Net Income $ 67,468 $ 86,824 $ 19,356 29% $ 86,852 $ (28) 0% Revenue by Line of Business YTD 9/30/ (Dollars in Thousands) YEAR TO DATE PRIOR YEAR FAV/ FAV/ BUDGET ACTUAL (UNFAV) % ACTUAL (UNFAV) % Container $ 119,588 $ 124,698 $ 5,109 4% $ 120,391 $ 4,306 4% Non Container 13,506 15,756 2,249 17% 14, % Real Estate 8,626 8,569 (57) 1% 8,721 (152) 2% TOTAL $ 141,720 $ 149,022 $ 7,302 5% $ 144,001 $ 5,021 3%

3 Q3 Financial Results Year to Date vs Budget Operating revenue of $149.0 million was $7.3 million and 5% above budget. Container revenue (Container Terminals and Intermodal) of $124.7 million was $5.1 million above budget primarily due to APM s early termination of $5.7 million, offset by revenue down $0.6 million at WUT due to the termination of the Lot F lease and the Grand Alliance departure. Non Container revenue of $15.8 million was $2.2 million above budget as Breakbulk revenues were up $2.5 million, primarily due to unbudgeted military shipments, offset by Auto line of business revenues below budget $0.2 million as volumes were below budget by 13%. Real Estate revenue of $8.6 million was consistent with budget as there was no significant unplanned leasing activity. Operating Expense of $62.6 million was $12.2 million and 16% below budget. Operations expense was below budget $5.6 million, including $4.5 million for timing of crane removal and the USACE East Waterway dredging study in the North Harbor, wages and benefits costs down $0.9 million for vacant positions, and several smaller variances in multiple areas totaling $0.4 million. These positive variances are offset by volume related operating expenses up $0.2 million. Maintenance costs were below budget $1.4 million primarily due to timing on outsourced maintenance projects of $3.0 million, offset by crane and strad maintenance up $1.4 million and other facility and equipment maintenance up $0.2 million. Administration costs were below budget $3.5 million as service agreement charges from homeports were below plan primarily due to lower consulting costs in Planning and lower data services in IT. Environmental expense was below budget $1.3 million for timing on air quality projects. This resulted in operating income of $86.4 million compared to budgeted operating income of $66.8 million, an increase of $19.5 million, or 29%. Grant Income was $0.2 million below budget as anticipated grant project spending was delayed. Non Operating Expense was $0.2 million above budget due to damage claims and prior period expenses. Net income through the third quarter was $86.8 million and $19.4 million over budget as a result of the items explained above. The homeports recorded income from joint venture of $43.4 million (rounded), which was $9.6 million and 29% over budget.

4 Q3 Financial Results Year to Date vs. Prior Year Operating Revenue was up $5.0 million compared to the prior year. Container revenue was up $4.3 million versus the prior year as revenue was up $5.7 million at APM for an early lease termination, crane and strad revenues were up $2.1 million at Husky (hours up 44% and 22%, respectively) and revenue sharing down $1.3 million; offset by T5 revenues were down $4.1 million due to Foss lease termination in February, crane and strad revenues were down $903k (hours down 21% and 18% respectively) and intermodal revenues down $627k (volumes down 10%). Non Container revenue was up $0.9 million compared to the prior year as the Auto business was down $0.5 million due to decreased volumes and breakbulk revenues were $1.4 million due to military moves. Real Estate/Bulk revenue of $8.6 million was consistent with the prior year. Operating Expense was up $4.9 million compared to the prior year. Operations expenses were up $1.2 million primarily due to revenue related operating expenses up $0.7 million, consulting services up $0.3 million and wages and benefits up $0.2 million. Maintenance costs up were $1.9 million over the prior year for increased crane and strad repairs and paving in various locations. Depreciation expense was up $1.3 million over the prior year for assets placed into service in 2016/. Administrative expenses were up $0.8 million as legal and consulting costs were up $0.7 million and wages and benefits were up $0.2 million. Environmental expense was down $0.5 million versus the prior year due to environmental expense related to dredging of $0.9 in the North Harbor in 2016, offset by environmental project spending up $0.4 compared with the prior year. This resulted in operating income of $86.4 million compared to prior year operating income of $86.3 million, an increase of $0.1 million. Interest Income of $0.6 million was consistent with the prior year. Net income through the second quarter of $86.8 million was also equivalent to the prior year as a result of the items explained above. The homeports recorded income from joint venture of $43.4 million, which was consistent with the prior year. Balance Sheet and Cashflow Cashflow from operations of $76.6 million was $3.1 million more than the prior year due to offsetting timing variances on cash receipts from customers and reimbursements to homeports.

5 Q3 Financial Results Cash used for NWSA capital expenditures for the year was $58.0 million, most of which funded the Pier 4 redevelopment project. The NWSA has received $100.8 million for capital improvements from the home ports for capital construction from inception through Sept 30,. The cash and investment balance was $76.4 million at, compared to $90.8 million at the beginning of the year. The decrease in cash of $14.4 million is due to timing of cash distributions to the homeports. In January, $20.9 million was disbursed to the homeports for the December 2016 earning and offsets September s cash distributions of $7.1 million which will be disbursed next month, for a net decrease in cash of $14.8 million. NOTE: An objective of operating statements would be to associate and reflect periodic depreciation expense with the related revenue generation, when calculating the Net Income earned by the NWSA (and subsequently distributed to the homeports). In accordance with the NWSA Charter, capital assets of the homeports existing at the start of the Alliance remain with the homeports. Thus, the depreciation expense for these capital assets, now licensed to the NWSA and relevant toward generating NWSA revenues, is not reflected in the NWSA Statement of Revenue and Expenses. Rather, the depreciation expense is recorded in the respective homeports financial statements. Capital assets completed by the NWSA since the start of the Alliance and the related depreciation expense, however, are reflected in the NWSA operating statements

6 NW Seaport Alliance Scorecard CARGO VOLUME Containers Int l/domestic TEUs JOB CREATION YTD Actuals Target 2.8 M 3.5 M Break Bulk (Tons) 155 K 183 K Autos (Units) 169 K 253 K YTD Actuals Target ILWU Hours 3.3 M 4.5 M FINANCIAL RETURNS $ in millions Operating Income (Before Deprecation) YTD Actuals YTD Budget ENVIRONMENTAL STEWARDSHIP Target $86.4 $66.9 $93.4 Return on assets 8.4% 7.1% 7.1% Water Quality (Improve Source Control) Air Quality (Reduce Diesel Particulate Emissions) (Reduce Greenhouse Gas Emissions) Actuals 92 Acres (86 Acres T 46, 6 Acres South Harbor) 49% Trucks 2007 Engines or Newer 15% Terminals Executed Fuel Efficiency Plans Target 53 Acres 40% Trucks 2007 Engines or Newer 36% Container Terminals Executed Fuel Efficiency Plans

7 NORTHWEST SEAPORT ALLIANCE Statement of Revenue and Expense Year to Date Budget vs Actual North & South Harbor (Dollars in Thousands) Current Year To Date Prior Year To Date BUDGET ACTUAL VARIANCE VAR % ACTUAL VARIANCE Revenue $141,720 $149,022 $7,302 5% $144,001 $5,021 Operating Expenses 74,844 62,624 12,220 16% 57,742 (4,882) Operating Income 66,876 86,398 19,522 29% 86, Interest Income (Expense) Interest Income % 610 (82) Market Value Adjustment % 0 83 Net Interest Income % Non-Operating Income/(Expense) (4) (219) (215) -5375% (17) (202) Grant income (167) -84% 0 33 Net Income $67,468 $86,823 $19,355 29% $86,852 ($29)

8 NORTHWEST SEAPORT ALLIANCE Statement of Net Position (Dollars in Thousands) Current Year 9/30/2016 ASSETS Cash $7,603 $10,124 Investments 68,821 72,257 Total Cash & Investments 76,424 82,381 Net Trade A/R 19,360 22,279 Other Receivables 2, Total Current Assets 98, ,533 Capital Assets 23,975 1,093 Work in Progress 106,097 41,778 Less Accumulated Depreciation 2, Capital Assets, Net 127,959 42,621 Other Deferred Assets 3,130 3,553 Total Other Long-term Assets 3,130 3,553 Total Assets $229,328 $151,707 LIABILITIES AND EQUITY Accrued Payables $2,559 $2,329 Related Party Payables - JV 7,247 5,297 Payroll and Benefits Liabilities 1,345 1,333 Other Accrued Liabilities 11,561 24,599 Total Current Liabilities 22,712 33,558 Deferred Rents Rent Deposits 13,571 1,261 Other Long-term Liabilities 0 54 Total Long Term Liabilities 13,571 1,544 Total Liabilities 36,283 35,102 Total Equity 193, ,605 Total Liabilities & Equity $229,328 $151,707

9 NORTHWEST SEAPORT ALLIANCE Statement of Cash Flows (Dollars in Thousands) Current Year Prior Year Month YTD Month YTD CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 16,153 $ 142,445 $ 12,616 $ 124,669 Cash held for customer deposits (58) (84) Cash paid to suppliers longshore labor, employees (6,991) (47,587) (1,773) (24,147) Cash paid to Homeports (for operations and support services) (2,041) (18,149) (4,532) (27,871) Net cash provided by operating activities 7,063 76,625 6,323 73,548 CASH FLOWS FROM NON CAPITAL & RELATED FINANCING ACTIVITIES Cash received from Homeports Operating Fund 51,000 Cash received from Homeports for balance sheet items transferred to NWSA 16,480 Cash distributions to homeports (14,250) (90,450) (10,150) (66,344) Net cash provided by non capital & related financing activities (14,250) (90,450) (10,150) 1,136 CASH FLOWS FROM CAPITAL & FINANCING ACTIVITIES Cash received from Homeports Capital Construction Fund 5,360 60,239 27,000 Cash received from federal and state grants Acquisition and construction of capital assets (net) (5,314) (61,436) (4,316) (19,916) Net cash provided/(used) from Capital & Financing Activities 70 (1,160) (4,316) 7,084 CASH FLOWS FROM INVESTMENTS Cash used to purchase investments 18 (15,972) (47,346) (163,192) Proceeds from sales and maturities of investments 2,956 16,197 52,710 90,935 Cash received for interest on investments Net cash from/(to) investments 3, ,433 (71,644) NET INCREASE/(DECREASE) IN CASH & CASH EQUIVALENTS (3,937) (14,214) (2,710) 10,124 CASH & CASH EQUIVALENTS BEGINNING OF MONTH / YEAR 11,540 21,818 12,834 CASH & CASH EQUIVALENTS END $ 7,603 $ 7,603 $ 10,124 $ 10,124

10 The Northwest Seaport Alliance Statement of Managing Members' Equity (dollars in thousands) Description Beginning Balance 12/31/2016 Changes Ending Balance 06/30/ Working capital $ 51,000 $ $ 51,000 Capital contruction 56,141 44, ,795 Non cash CWIP 16,792 16,792 Total Contributions $ 123,933 $ 44,654 $ 168,587 Net income from JV $ 123,168 $ 86,824 $ 209,991 Cash distributions (115,964) (69,570) (185,534) End Balance $ 131,137 $ 61,908 $ 193,044

11 Northwest Seaport Alliance Managing Members Cash Distribution Report The cash distributions per Article IV of the Charter are shared 50/50 by each homeport. Homeports will receive 50% of the $7,130,000 or $3,565,000 each. Distribution YTD Date* Fiscal Month/Yr Amount Distributions 10/20/17 September $7,130,000 $76,700,000 *Distribution date is approximate, actual cash transfer date is determined by NWSA Treasurer and is estimated to be one week prior to month end. Note: This report is per Article IV cash distributions, reserves and member bond obligations, section 4.1(a) The PDA through the CEO will make distributions of all Distributable Cash to the Managing Members as soon as practicable after each Calculation Period. Prior to executing any distribution, the CEO shall provide a report of planned distributions to Managing Members.