Investor Relations Presentation. Fall 2017

Transcription

1 Investor Relations Presentation Fall 2017

2 PRESENTATION OUTLINE I. Executive Summary II. Overview of MARTA III. Security Structure IV. Operations and Financials V. Recent Initiatives VI. Debt Profile VII. Questions 1

3 EXECUTIVE SUMMARY 2

4 EXECUTIVE SUMMARY Transformation benefits continue Five consecutive years with operating surplus and strong tax collections New Developments Elimination of the 1 st and 2 nd Lien Trust Indentures All bondholders have 1 st Lien parity on pledged tax receipts Momentum building for expansion One-half percent sales tax increase referendum passed in the City of Atlanta with 72% support in November 2016 Significant growth in support for public transit Atlanta Regional Business Leaders and Community Positive State of Georgia Bipartisan Government Actions Relocation of Large Corporate Business Headquarters and Operations Centers in close proximity to MARTA Rail Lines 3

5 EXECUTIVE SUMMARY Transformation benefits continue Credit Highlights City of Atlanta ½ % Sales Tax increase adds more pledged revenue to bondholders All three major credit rating agencies have upgraded the City of Atlanta's general obligation debt to the highest levels in more than two decades S&P's raised to AA+ - Moody's to Aa1- Fitch to AA+ Legislative changes have enhanced revenue and flexibility Two state grants (SRTA ) totaling $31.7M 4

6 OVERVIEW OF MARTA 5

7 GOVERNANCE Experienced oversight and governance THE METROPOLITAN ATLANTA RAPID TRANSIT OVERVIEW COMMITTEE (MARTOC) Joint (House/Senate) committee, comprised of 12 legislators BOARD OF DIRECTORS Chairman Robert L. Ashe III Thirteen voting members representing Clayton, DeKalb and Fulton Counties, the City of Atlanta and a Governor Appointee City of Atlanta (3) DeKalb County (4) Governor (1) Fulton County (3) Clayton County (2) Two ex-officio members appointed by the State of Georgia GDOT (non-voting) (1) GRTA (non-voting) (1) 6

8 GOVERNANCE Executive Management Name Title Joined MARTA Elizabeth O Neill Interim General Manager/ Chief Executive Officer 1995 Robert Troup Deputy General Manager 2017 Rich Krisak Chief Operating Officer 2008 Gordon L. Hutchinson Chief Financial Officer 2013 Goldie Taylor Chief Communications Officer 2017 Rukiya Thomas Chief of Staff

9 CORE MARTA SERVICE LEVEL MARTA has a broad area of service and provides essential transportation to a growing economic base Heavy Rail 38 rail stations and 48 miles of double track 338 rail cars and 23.1 million car miles of service. 9 th largest U.S. Rail Transit System in passenger trips. Bus 101 Fixed Bus Routes 571 buses operating 29.8 million miles of service 425 CNG buses and 140 diesel buses Mobility 211 mobility vans operating 8.8 million miles of service 8

10 SECURITY STRUCTURE 9

11 TAX DISTRIBUTION Bondholders benefit from a broad & balanced sales tax base 1% Sales Tax collected from Clayton, DeKalb and Fulton Counties and 1.5% Sales Tax collected from City of Atlanta* Vehicle TAVT received from Clayton, DeKalb and Fulton Counties Broad and balanced - low reliance on volatile sectors Utility Other Services 3% Manufacturing 5% 6% Accommodations 6% Auto Other Retail 12% Misc Service 13% Wholesale 8% Home Furnishing 9% 2% Construction Food/bars 23% General Merch 12% 1% Source: Georgia Department of Revenue, June 2017 * City Sales Tax rate increased ½% to 1.5% March

12 TAX COLLECTIONS Increasing tax receipts MARTA Tax Revenue $650 $600 Millions $550 $500 $450 $400 $350 Actual Forecast $300 $250 $200 1/1/2013 1/1/2014 1/1/2015 1/1/2016 1/1/2017 1/1/2018 1/1/2019 1/1/2020 1/1/2021 1/1/2022 Tax revenue inclusive of Sales Tax and Vehicle TAVT Forecast growth in Sales Tax provided by Georgia State University Economic Forecasting Center March 2017 Clayton County tax receipts began in March 2015 City of Atlanta ½ % Sales Tax rate increase began in March

13 FLOW OF FUNDS Bondholders receive priority payment Georgia Department of Revenue 1.5% Sales Tax collected in the City of Atlanta 1% Sales Tax collected Dekalb, Fulton and Clayton Counties Ad Valorem TAVT collected in Dekalb, Fulton and Clayton Counties Trustee Monthly transfer directly to Trustee All debt service requirements met Operations MARTA Pay Go Capital Cash Reserves 12

14 LEGAL COVENANTS AND FINANCIAL POLICIES Covenants & policies safeguard bondholder payments Additional Bonds Test 2.0x Historical Coverage 2.0x Maximum Aggregate Debt Service Coverage Board policy - annual debt service/sales tax ratio cannot exceed 45% Internal policy - variable rate debt limited to 20% of total debt State s validation process requires justification for additional bonds 13

15 OPERATIONS AND FINANCIALS 14

16 CORE BUSINESS STRONG Increasing Customer Satisfaction Satisfied and very satisfied MARTA patrons increased over the past three years to 79.7% Dissatisfaction has declined steadily for the past five years 15

17 OPERATING PERFORMANCE Strong operating performance Operating Performance (Millions) Revenue Expenses FY13 FY14 FY15 FY16 FY17 Positive trajectory of operational performance since FY13 16

18 RESERVE BALANCES Reserve positions will continue to grow $ in Millions Reserve Balances Fiscal Year Non Dedicated Reserves Dedicated Reserves 17

19 2017 RESERVE BALANCE Reserve position by liquidity Reserve Balances $ in Millions Fiscal Year Non Dedicated City of Atlanta Clayton County Other Dedicated 18

20 COST - SAVING MEASURES MARTA continues to implement cost-saving measures Bond refundings from 2015 to 2017 resulted in $111.7M in NPV debt service savings KPI improvement plans reviewed with Executive Management Improved asset/inventory management internal controls Streamlined Contracts and Procurement Process Enhanced parking controls Fare Evasion program 19

21 LIQUIDITY Liquidity and market access protects financial operations Strong reserves to address unanticipated needs Past record of access through capital financing programs in declining economic cycles Current investor profile of 84 bondholders with an average investment of $8.7 million Operational reporting and analysis provides flexibility to adjust operations 20

22 FUTURE FUNDING NEEDS Five year Capital plan is manageable and affordable FY18 FY19 FY20 FY21 FY22 Totals Capital Improvement Program * ,761.2 Financing Sources Sales Tax ** ,253.4 Federal Funds Other Revenue Net Debt Issue <Refund> Total Sources of Funds ,771.4 Debt Issuance ,180.0 Debt Repayments and Interest Net Debt Issuance <Refund> * Focus of program is safety, regulatory and state of good repair ** Sales Tax adjusted for FY17 carryover of $107M 21

23 RECENT INITIATIVES 22

24 ELIMINATION OF FIRST AND SECOND INDENTURE All Bondholders on the same parity All bondholders have 1st lien on pledged tax receipts 1st Indenture Bonds of $43.4M fully defeased 2nd Indenture Bonds refunded in 3 rd Indenture 23

25 REVIEW OF REFUNDING OPPORTUNITY Series 2012A Partial Refunding MARTA currently evaluating partial refunding of Series 2012A 24

26 DEBT PROFILE 25

27 DEBT PROFILE ($ thousands) Series Principal Outstanding (thousands) Fixed Rate Debt Call Date Final Maturity (July 1) Interest Rates Series Principal Outstanding (thousands) Variable Rate Debt Call Date Final Maturity (July 1) Spread to 70% of 1M Libor 2005A $ 83,685 Non-callable % 2017B $ 180,800 Any Interest Date bps 2007A 145,725 Make Whole % Total Third $ 180, A 311,075 7/1/ % % 2012B 11,830 Non-callable % % Total Variable $ 180, A 15,355 Non-callable % % 2014A 286,700 7/1/ % % 2015A 87,015 7/1/ % Variable Rate 2015B 88,485 7/1/ % % 180, % 2015C 93,085 7/1/ % 2016A 80,260 Non-callable % 2016B 242,985 7/1/ % 2017A 100,815 Non-callable % % 2017C 263,545 7/1/ % % Total Third $ 1,810,560 Total Fixed $ 1,810,560 Fixed Rate 1,810, % 26

28 DEBT SERVICE PROFILE ($ Millions as of 7/1 each year) A descending DS profile provides capacity for future capital needs Millions Note: Chart assumes a $100 million borrowing in FY2018 Principal Interest 27

29 DEBT PRINCIPAL OUTSTANDING Debt level remains stable FY 13 FY 14 FY 15 FY 16 FY 17 FY 2018 (Projected) *FY2018 Projected Outstanding Debt includes the $100 million issued in FY

30 HISTORICAL DEBT SERVICE COVERAGE Historically Strong Debt Service Coverage Ratio 3.60 Historical Annual Debt Service Coverage For Years 2013 to

31 DEBT SERVICE COVERAGE Improving Debt Service coverage ratios 3.70 Maximum Annual Debt Service Coverage For Years 2018 to

32 OVERALL MARTA CUSTOMER SATISFACTION Positive five year trend of Customer Satisfaction 90.0% 80.0% 70.0% 72.9% 70.5% 74.0% 78.1% 79.7% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 14.3% 12.2% 10.1% 7.5% 7.0% 0.0% FY13 FY14 FY15 FY16 FY17 Very Satisfied or Satisfied Very Dissatisfied or Dissatisfied 31

33 MARTA S CREDIT CHARACTERISTICS ARE OF THE HIGHEST QUALITY MARTA is an important component of a growing, vibrant community Economic Very strong and diverse greater Atlanta economic base that continues to grow due to a favorable business environment with superior mass transit Recent expansion has been driven by large-scale investments by leading US companies, which should reduce cyclical fluctuations in economic performance Revenue Base Very broad sales tax pledge that includes Atlanta (AA+*), Fulton County (AA+*), DeKalb County and Clayton County, as well as TAVT receipts (*upgraded in March and July 2016, respectively) Very strong recent trends with both pledged sales taxes and fare revenues well-above prerecessionary highs Increasing fare box recovery reduces reliance on sales tax revenues for operations Debt Service Coverage Very strong 3.40x coverage in FY17 Legal Protections Additional bonds test strengthened to 2.0x maximum annual debt service Leverage further constrained by policy limiting debt service to 45% of sales tax receipts Very strong liquidity with operating reserves equal to over 5.0x the statutory minimum 32

34 Questions 33