Q1 2020 Financial Results 

As of March 31, 2020 

April 17, 2020 

Q1 2020 Financial Results 

Table of Contents

Financial Results ........................................................................................................................................... 2 

Scorecard ...................................................................................................................................................... 7 

Statement of Revenue and Expense ............................................................................................................ 8 

Trended Statement of Revenue and Expense ............................................................................................  9 

Commercial Team Report .......................................................................................................................... 10 

Statement of Net Position ......................................................................................................................... 12 

Summary of Cash Activities ....................................................................................................................... 13 

Statement of Equity ................................................................................................................................... 14 

Cash Distribution Report ............................................................................................................................ 15 

Aged Accounts Receivable ......................................................................................................................... 16 

Capital Spending ......................................................................................................................................... 17 

New, Amended and Terminated Leases .................................................................................................... 18 

Personal Services Contract Authorizations ............................................................................................... 19 

Membership Spending ............................................................................................................................... 20 

Liability Claim Payment Report ................................................................................................................. 21 

Operating Statistics .................................................................................................................................... 22 

Real Estate Broker Commissions ................................................................................................................. * 

*Real Estate Broker Commissions report omitted as there is nothing to report for 2020. 

Note: In January 2020, the Port implemented the new lease accounting standard, GASB 87, which requires that a portion of long-term lease revenues be classified as interest. The interest component is labeled “Lease Interest - GASB 87” on the statement of revenue and expense and it reduces operating revenues and increases interest for the same amount, resulting in no overall impact on net income. The estimated total annual amount of GASB 87 interest income that will be reclassified from revenue to non-operating interest income is $49.6 million in 2020.

The impact to the statement of net position is an increase in lease receivable and offsetting increase in deferred inflows by the amount equal to the net present value of future long-term lease payments or $1.21 billion. For year over year comparability, the statement of revenue expense was revised to report revenue and operating income before lease interest – GASB 87.

Executive Summary

Through the first quarter of 2020, NWSA net income of $21.4 million was $0.8 million more than budget and $4.5 million less than the prior year.

Compared with budget, operating income was right on budget, however there were significant variance in both revenues and expenses. On the revenue side, revenue from operations was $3.1 million less than budget, primarily due to lower breakbulk tonnage that impacted the Non-Container business and lower container volumes of 15% year over year (32 blank sailings YTD or approximately 15% of total container calls) that resulted in lower crane/strad and intermodal lift revenues in the Container business. These negative revenue variances were offset by positive expense variances as operations costs were below budget $1.9 million, which includes $0.9 million of lower operating costs in the NIM (rail volume down 30%), administration costs were down $1.1 million due to lower support service

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costs. Maintenance costs were down $0.7 million primarily due to timing on outsourced maintenance projects and environmental cost we below budget $0.3 million for timing.

Compared with the prior year, net income was down $4.5 million as operating revenues before lease interest – GASB 87 were down $6.9 million due to lower container and breakbulk volumes and lower lease revenues at T-46 and East Sitcum of $1.6 million and $0.9 million, respectively. As for expenses, lower operations expense of $4.5 million, primarily in the Container business offset higher depreciation expense of $1.2 million (primarily for Pier 4 improvements). Non-operating expense was up $0.9 million (for public expense related to the T5 improvements). See below for more details.

Balance Sheet and Cashflow- Total cash and investments were $56.9 million at the end of the first quarter, compared to $77.3 million at the beginning of the year. This decrease of $20.4 million is due to the return of the SSA deposit of $13.3 million, the distribution of accumulated interest and TIGER grant receipts, totaling $10.2 million, and timing variances of $7.9 million on cash contributions from and distributions to the homeports, and changes in the payables and receivables accounts. These were offset by the membership interest affirmation contribution of $11.0 million made by Port of Seattle in March that will be distributed to the homeports in April. Cashflows from operations were $32.6 million in the current year compared with $30.9 million in 2019.

The homeports contributed $46.9 million to fund NWSA capital improvements. This amount represents the capital spending for December 2019 of $14.1 million, and $32.8 million for the first two months of 2019. Capital construction projects are funded on a “pay as you go” basis on a one-month lag. Cash used for NWSA capital expenditures was $4.0 million; project spending in March that will be funded in April totaled $1.5 million.

Operating Income by Line of Business (excludes Lease Interest – GASB 87)

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Q1 2020 Financial Results 

Actual vs Budget

Container Business (Container Terminals and Intermodal)

Container business (containers and intermodal) revenues were down $1.9 million. This was mostly driven by intermodal volumes and crane/strad variable revenue being lower than expected, due to 19% less TEUs than expected. The first quarter of 2020 had a total of 32 blank sailings (Q1 2019 had 14 blank sailings), where a ship scheduled to call does not show. Operations expense was down $1.7 million mostly due to less direct labor at NIM (volume driven expense) and timing of crane removal at Husky. Maintenance expense was down $0.6 million due to timing of project spending (budgeted quarterly). This caused container business operating income to be $0.2 million higher than budget.

Operating revenues of $38.1 million were below budget $1.9 million. • Total intermodal lift revenue was down $1.6 million – NIM and PIM lift revenues were

down $1.7 million and $0.3 million, respectively (volumes down 30% and 25%,respectively); offset by PIM lift minimum guarantee $0.4 million higher than planned.

• Husky strad and crane rents were down $0.5 million driven by lower TEU’s than expected,down 17% at Husky.

• West Sitcum revenue up $0.1 million for the stormwater contribution.• Lot F revenue up $0.1 million for new lease.

Operating Expenses of $10.9 million were $2.1 million and 16% below budget. • Operations expense at Husky was down $1.2 million due to the timing of the removal of

cranes of $0.9 million and lower strad expenses $0.2 million.• Operations expense at NIM was down $0.6 million due to lower longshore labor of $0.4

million and lower strad expenses of $0.2 million.• Project spending down $0.8 million; $0.3 million at WUT for barrier and striping, $0.3 at T-

18 for stormwater utility upgrade and $0.1 million at T-46 for bulkhead rehabilitation.• Operations expense at East Sitcum up $0.3 million due to higher crane maintenance of $0.1

million and higher strad expenses of $0.1 million.

Non-Container Business (Autos and Breakbulk)

Operating Revenues of $4.2 million were $1.4 million and 25% below budget. • Breakbulk revenues were below budget $1.4 million as volumes were down 47%.• Auto volume units and revenues were on plan.

Operating Expenses of $2.7 million were $0.2 million and 8% below budget. • Depreciation expense was lower than planned by $0.2 million due to new assets being

placed into service.

Real Estate

Operating Revenues of $3.3 million were above budget $0.1 million and 4%.

Operating Expenses of $0.1 million were below budget $0.1 million and 50%.

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Q1 2020 Financial Results 

Other (not LOB-specific) Operating Expenses

• Commercial and Administrative expenses were below budget by $0.3 million, primarily dueto lower consulting costs.

• Infrastructure and other Administration expenses were below budget by $1.4 million asadministration costs were below plan $1.1 million due to lower homeport support serviceagreement allocations (driven by consulting services, IT data services andhardware/software maintenance spending below plan) and environmental costs belowbudget $0.3 million due to timing on project spending.

Year to Date vs. Prior Year

Container Business (Container Terminals and Intermodal)

Container business (containers and intermodal) revenue decreased $4.5 million over the prior year. This was mostly driven by March TEU volumes down 22% bringing the year to date decline to 15%. There were 19 blank sailings for the month of March and 32 blank sailings in 2020 versus 14 for the first quarter of the prior year, and lower revenue from the new leases at East Sitcum and T-46. Operations expense decreased $3.2 million as 2019 had costs for the removal of cranes at T-18 and T-46 and the Puget Soundkeeper lawsuit. This caused container business operating income to be $1.2 million lower than the prior year.

Operating Revenues of $38.1 million decreased $4.5 million and 10% versus the prior year. • Total intermodal lift revenue decreased $1.5 million – lift revenues down $1.4 million at

NIM and $0.3 million at PIM (volumes down 29% and 24%, respectively); offset by liftrevenues up $0.1 million at SIM and $0.1 million at HIM (volumes flat and up 18%,respectively).

• Land rent revenue decreased $1.4 million due to new leases at T-46 and East Sitcum(revenue down $1.6 million and $0.9 million, respectively).

• Crane and strad revenue decreased $1.3 million; East Sitcum down $0.7 million for PortsAmerica lease that no longer has variable rate revenue and Husky down $0.6 million asTEUs were down 20%.

Operating Expenses of $10.9 million decreased $3.2 million and 23% from the prior year. • Operations expense at T-18 decreased $2.3 million as 2019 had expense for the removal of

cranes.• Operations expense at T-46 decreased $1.0 million as 2019 had expenses for the removal of

cranes ($0.8 million) and reserve for litigation costs related to the Soundkeeper lawsuit($0.4 million).

• Operations expense at NIM decreased $0.8 million due to lower volumes.• Depreciation expense increased by $1.2 million, primarily due to the improvements at P4,

West Sitcum and T-46.

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Q1 2020 Financial Results 

Non-Container Business (Autos and Breakbulk)

Operating Revenues of $4.2 million were $2.5 million less than the prior year. • Breakbulk revenues were down $2.3 million as volumes decreased by 42%.• Auto revenues were down $0.2 million as volumes were down 2.4%.

Operating Expenses of $2.7 million were down $0.4 million compared with the prior year. • Longshore expenses were down $0.6 million due to the decrease in breakbulk, $0.5 million

of it at P7.• Depreciation costs increased $0.1 million over prior year due to new asset additions.

Real Estate

Operating Revenues of $3.3 million were up $0.1 million and 2%. • Dockage, wharfage and service charges at the T18 bulk facility were comparable to prior year.

Petroleum volumes were up 38% and molasses volumes were down 5%.• Rent revenue was up $0.1 million at T25 due to the new lease with UPS and escalations.

Operating Expenses of $0.1 million were comparable with the prior year

Other (not LOB-specific) Operating Expenses

• Commercial Administration expenses of $2.8 million increased by $0.3 million, primarily forincreased maintenance costs in the North Harbor.

• Infrastructure and other Administration expenses were flat compared with the prior year asthere were several offsetting variances, but no individually significant items of note.

NOTE: An objective of operating statements would be to associate and reflect periodic depreciation expense with the relatedrevenue 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.

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Q1 2020 Financial Results 

NW Seaport Alliance ScorecardMarch 31, 2020

CARGO VOLUME

JOB CREATION

FINANCIAL RETURNS

ENVIRONMENTAL STEWARDSHIP2019 2020 2020

Results Actuals Target

Water Quality (Improve Source Control)

195 Acres Zero Acres 65 Acres

Air Quality (Reduce Greenhouse Gas Emissions)

15% Terminals; Executed Fuel

Efficiency Plans

15% Terminals;

Executed Fuel Efficiency

Plans

36% Container Terminals

Executed Fuel Efficiency

Plans

2019 2020 YTD 2020Total Actuals Budget

Containers (TEUs)International 3.1 M 0.6 M 3.3 MDomestic 0.7 M 0.2 M 0.7 MBreak Bulk (Metric Tons) 246 K 63 K 306 K

Autos (Units) 156 K 41 K 160 K

2019 Total

2020 YTD Actuals

2020 Target

ILWU Hours 4.7 M 1.0 M 4.7 M

$ in millions 2019 Total 2020 YTDActuals

2020 YTD Budget

Operating Income$105.8 $25.6 $97.6 (Before GASB 87 Adjustment

& Depreciation)

Return on assets 7.1% 5.9% 5.8%

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2020

BUDGET ACTUAL VARIANCE VAR %

2019

ACTUAL VARIANCE

Operating Revenue 48,807 45,660 (3,147) -6% 52,521 (6,861)Lease Interest - GASB 87 (12,095) (13,114) (1,019) -8% - (13,114)

Total Operating Revenue 36,712 32,546 (4,166) -11% 52,521 (19,975)

Operations 11,537 9,632 1,906 17% 14,151 4,520Maintenance 4,775 4,053 722 15% 4,315 262Administration 5,862 4,787 1,075 18% 4,841 53Security 1,397 1,336 61 4% 1,152 (183)Depreciation 3,645 3,555 91 2% 2,266 (1,289)Environmental 616 290 326 53% 378 87

Total Operating Expense 27,833 23,653 4,180 15% 27,103 3,450

Operating Income 8,879 8,894 15 0% 25,419 (16,525)Memo Line: Op. Income excluding GASB 87 20,974 22,008 1,034 5% 25,419 (3,411)

Lease Interest Revenue - GASB 87 12,076 13,114 1,038 9% - 13,114Interest Income 409 333 (76) -18% 416 (83)Market Value Adjustment - 86 86 0% 162 (76)Interest Expense (76) (31) 45 60% - (31)Grant Income 510 19 (491) -96% - 19Misc. Non Op Income/(Expense) (1,142) (963) 179 16% (21) (942)Other Non Operating (6) (5) 1 11% (4) (1)

Non-Operating Revenue & (Expense) 11,771 12,554 783 7% 554 12,001

Net Income 20,650 21,448 798 4% 25,973 (4,524)

NORTHWEST SEAPORT ALLIANCE

Statement of Revenue and Expense

Year to Date Budget vs Actual

North & South Harbor

March 31, 2020

(Dollars in Thousands)

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Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20

Operating Revenue 18,172 16,079 15,874 14,522 16,015 15,058 16,663 14,893 17,102 16,294 15,672 14,926 15,063

Revenue Before GASB 87 Adjustment 18,172 16,079 15,874 14,522 16,015 15,058 16,663 14,893 17,102 16,294 15,672 14,926 15,063

Lease Interest - GASB 87 - - - - - - - - - - (5,282) (4,459) (3,372)

Total Operating Revenue 18,172 16,079 15,874 14,522 16,015 15,058 16,663 14,893 17,102 16,294 10,390 10,467 11,690

Operations 7,598 3,559 3,280 3,248 3,300 3,837 3,696 3,416 3,103 3,436 3,217 3,057 3,358Maintenance 1,491 1,438 1,379 1,252 1,668 1,235 1,391 1,667 1,514 2,600 1,137 1,463 1,453Administration 1,777 1,826 1,664 1,712 1,599 1,546 1,621 1,723 1,747 1,404 1,552 1,536 1,699Security 394 424 503 425 410 411 387 413 370 278 502 411 423Depreciation 773 771 769 1,512 598 957 1,129 1,083 1,092 1,096 1,144 1,222 1,188Environmental 113 86 167 96 85 87 106 107 87 89 63 128 99

Total Operating Expense 12,145 8,104 7,761 8,245 7,662 8,073 8,331 8,408 7,913 8,903 7,616 7,817 8,220

Operating Income 6,027 7,975 8,113 6,277 8,354 6,985 8,333 6,485 9,189 7,392 2,774 2,649 3,470Memo Line: Op. Income excluding GASB 87 6,027 7,975 8,113 6,277 8,354 6,985 8,333 6,485 9,189 7,392 8,056 7,109 6,843

Lease Interest - GASB 87 - - - - - - - - - - 5,282 4,459 3,372Interest Income 94 114 173 152 123 131 121 140 120 117 116 107 110Market Value Adjustment 121 10 135 22 14 79 (15) 12 (13) (2) 29 75 (17)Interest Expense - - - - - - - - - - - (23) (8)Grant Income - 478 767 - 840 (4) 544 - 254 989 - - 19Misc. Non Op Income/(Expense) 35 (65) - (232) (37) (3) (2) (1,207) (1,011) (1,861) 252 (244) (976)

Non-Operating Revenue & (Expense) 251 538 1,076 (58) 940 204 647 (1,055) (650) (757) 5,679 4,374 2,501

Net Income/(Loss) 6,278 8,513 9,189 6,219 9,294 7,189 8,980 5,430 8,538 6,634 8,453 7,024 5,971

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Current Year 3/31/2019

ASSETSCURRENT ASSETS

Cash $5,579 $17,543Investments, at fair value 51,297 74,373Net Trade A/R 8,056 11,745Grants Receivable 1,020 0Prepayments and other current assets 1,130 2,293Related Party Receivable - JV 2,512 435

Total Current Assets 69,594 106,389

NON-CURRENT ASSETSCapital Assets 225,844 145,049Construction in Process 136,208 103,687

Total cost 362,052 248,736

Less: Accumulated Depreciation 24,280 11,286

Capital Assets, Net 337,772 237,450Lease Receivable - GASB 87 1,209,696 2,494

Total Non-Current Assets 1,209,696 2,494

Total Assets $1,617,062 $346,333

Deferred Outflows of ResourcesPension Deferred Outflow 1,488 1,652

Total Assets and Deferred Outflows $1,618,550 $347,985

LIABILITIES AND EQUITYCURRENT LIABILITIES

Accounts Payable and accrued liabilities $9,732 $12,002Related Party Payable - JV 2,846 3,100Payroll and Benefits Liabilities 1,447 1,376

Total Current Liabilities 14,025 16,478

NON-CURRENT LIABILITIESRent Deposits 1,346 14,589Net Pension Liability 2,316 3,059Other Noncurrent Liabilities 7,289 3,805

Total Non-Current Liabilities 10,951 21,453

Total Liabilities 24,976 37,931

Deferred Inflows of ResourcesLease Deferred Inflows - GASB 87 1,209,696 0Pension Deferred Inflow 1,395 1,258

Total Equity 382,483 308,796

Total Liabilities, Deferred Inflows & Equity $1,618,550 $347,985

NORTHWEST SEAPORT ALLIANCEStatement of Net Position

North & South HarborMarch 31, 2020

(Dollars in Thousands)

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NORTHWEST SEAPORT ALLIANCESummary of Cash Activities

March 31, 2020(Dollars in Thousands)

2020 2019

Operating Income 8,896$ 25,419$

Less: Non-cash income/expense itemsDepreciation 3,435 2,267 APL revenue earned (2,250) (2,250)

Cash earned in the current year 10,081 25,436

AdjustmentsCollection of APL lease term fee billed in prior year 2,250 2,250 Return of SSA Deposit (13,321) - Increases/decreases in payables and receivables 7,135 3,203

Net cash provided by operating activites 6,145 30,889

Cash received from Homeports - Operating Fund 11,000 - Current year distributions (46,510) (31,220) Timing on current year distributions 20,690 17,140 Prior Year distributions (28,498) (7,580)

Net cash provided by non-capital & related financing activities (43,318) (21,660)

Cash received from Homeports for Capital Construction Fund 46,871 19,823 Cash received from federal grants (1,000) 3,156 Acquisition and construction of capital assets (net) (42,653) (18,304) Net cash provided/(used) from Capital & Financing Activities 3,218 4,675

GASB 87 Lease Interest 13,114 - *Cash (to)from investments 25,337 (6,622) Net cash from/(to) investments 38,451 (6,622)

Total Increase(Decrease) in Cash 4,496 7,282

Plus: Beginning Cash Balance 1,083 10,261

Ending Cash & Investments 5,579$ 17,543$

*2019 Lease Interest is in Operating Income

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The Northwest Seaport AllianceStatement of Managing Members' Equity

March 31, 2020(dollars in thousands)

Description 12/31/2019 2020 ChangesEnding Balance

3/31/2020Working capital 51,000$ 11,000$ 62,000$ Capital contruction 297,197 32,817 330,014 Non-cash CWIP 16,792 - 16,792

Total Contributions 364,989$ 43,817$ 408,806$

Net income from JV 440,851$ 21,448$ 462,299$ Cash distributions (452,574) (36,048) (488,622)

End Balance $ 353,266 $ 29,217 $ 382,483

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Northwest Seaport Alliance Managing Members Cash Distribution Report

March 31, 2020

The cash distributions per Article IV of the Charter are shared 50/50 by each homeport. Homeports will receive 50% of the $20,690,000 or $10,345,000 each. In April 2019 the Managing Members accepted and the Port of Seattle approved interest affirmation payments of up to $32 million and the distribution thereof. In March 2020 the first payment was received in the amount of $11 million and is included in March’s distributable cash amount.

Distribution Date* Fiscal Month/Yr Amount

YTD Distributions

4/24/20 March 2020 $20,690,000 $46,510,000

*Distribution date is approximate, actual cash transfer date is determined by NWSA Treasurer and istypically 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 aspracticable after each Calculation Period. Prior to executing any distribution, the CEO shall provide a report ofplanned distributions to Managing Members.”

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