Our results        2007 financial performance better than budget

In 2007, due to a record year at Seattle-Tacoma International Airport and reduced expenses throughout the organization, the Port of Seattle’s net operating income before depreciation for the year was $219.3 million—13.7% higher than the amount budgeted for the year.

The Aviation Division accounted for nearly $175.9 million of the Port’s operating income before depreciation.* This is mainly the result of more than 31.2 million passengers being served by Seattle-Tacoma International Airport in 2007, a year-over-year increase of about 4.4%. Airport concessions were also a factor, as we continue to rank among the top airport concessions programs in the U.S. in terms of passenger dollars spent. Additional revenue was created from Sea-Tac Airport parking, due to higher numbers of weekly, passport, and corporate premier parking customers.

At the Seaport, the nearly two million TEUs (twenty-foot equivalent units) handled at our cargo facilities also contributed to a strong year of income for the Port, augmented by a record 780,593 cruise passengers, an increase of 3.9% over the previous year.

And while 2008 container volumes are down along much of the West Coast—due to a decrease in imports resulting from the weak dollar and soft economy—much of our Seaport revenue is based on long-term leases, so this should not have a significant impact on our financial picture.

The Port of Seattle’s financial performance remains strong at mid-year 2008. Some risks include a change in how environmental expenses will be recognized, which could lead to higher accounting charges. The combination of a weaker economy and high fuel prices may also create challenges heading into 2009. Imports may become more expensive as shipping costs increase, and falling home prices and tight credit further damage consumer confidence. In addition, airlines may continue to respond to fuel concerns with higher fares and, in some cases, a reduced number of flights. However, the Port of Seattle is well positioned to weather these challenges and continue to deliver on our financial goals.

* By federal regulation, all income earned by the Airport must be reinvested there.

 
Statements of Revenues, Expenses, and Changes in Net Asset (in millions)
 
  2007 2006 2005
Operating revenues $ 461.1 $ 448.5 $ 416.5
Operating expenses 241.8 223.6 226.2
 
Operating income before depreciation 219.3 224.9 190.3
Depreciation 141.6 140.2 129.8
 
Operating income 77.7 84.7 60.5
Nonoperating income - net 127.8 116.3 99.1
 
Incease in net assets 205.5 201.0 159.6
Net assets - beginning of year 2,284.5 2,083.5 1,923.9
 
Net assets - end of year $ 2,490.0 $ 2,284.5 $ 2,083.5
 
 
 
A Summary of Nonoperating Income - net (in millions)
 
  2007 2006 2005
NONOPERATING INCOME (EXPENSE):
Ad valorem tax levy revenue $ 68.6 $ 62.7 $ 62.4
Passenger facility charges revenue and related interest income 63.1 59.1 56.5
Customer facility charges revenue and related interest income 22.6 17.2  
Grants and donations 94.9 127.5 109.7
Investment income - net 57.2 28.9 14.6
Revenue and capital appreciation bond interest expense (113.0) (101.5) (85.5)
Passenger facility charges revenue bond interest expense (11.8) (12.3) (12.6)
General obligationbond interest expense - net (15.6) (15.8) (12.6)
Public expense (8.6) (11.0) (4.4)
Other expense - net (29.6) (38.5) (29.0)
Total $ 127.8 $ 116.3 $ 99.1


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