Port Authority Six-Month Financial Results Summary
Financial results for the six-month period ended June 30, 2020, show a significant impact from COVID-19 on the Port Authority's operations. Operating revenues fell by 24% against budget, resulting in a loss of approximately $777 million. The agency anticipates further revenue losses totaling around $3 billion by March 2022. Operating savings of $200 million have been identified from the 2020 Budget. Net Operating Income (NOI) for January to June 2020 is lower than budget and prior year actuals. The second quarter results further contribute to the overall impact of the pandemic on the agency's financial performance.
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Six-Month Financial Results Through June 30, 2020 July 30, 2020
Disclaimer This presentation has been provided in connection with preparation of the Port Authority s condensed unaudited financial statements for the six-month period ended June 30, 2020 ( Unaudited Statements ). The Unaudited Statements were prepared in accordance with U.S. generally accepted accounting principles and should be read in conjunction with the Port Authority s audited financial statements for the year ended December 31, 2019, available on the Port Authority s website at panynj.gov. Some information provided in this presentation is forward-looking and requires the Port Authority to make current assessments of its future financial performance and position based on numerous assumptions, expectations and data which is currently available to us. There can be no assurance that the forward-looking statements will prove to be accurate in the future, especially when considered over the long run, as actual results and future events could differ materially from those anticipated when the statements were made. 2
Key Highlights Due to the prolonged nature and extent of the impact across all lines of business, operating financial results are the worst on record in recent history. 1. Dramatically reduced activity levels have impacted both the Port Authority and its tenants and vendors and have resulted in two financial impacts in particular: a) Gross Operating Revenues have fallen by 24% against 2020 budget ($681M); b) Aviation-related Passenger Facility Charges collected declined $96M. Combined, this results in app. $777M in lower revenues through June 30,2020, with additional losses against 2020 Budget expected through the balance of the year. 2. Since the full force of the COVID-19 crisis started in March, the Agency s revenue loss has averaged $240M per month. 3. Based on these results, together with the forward-looking forecasts, the Port Authority continues to project the loss in revenues for the 24-month period ending March 2022 to total app. $3B. 4. Staff have identified app. $200M in operating savings from the 2020 Budget, primarily as a result of lower activity. We continue to examine operating costs including potential incremental costs necessary to address COVID-19 operating protocols as activity increases. 3
YTD January to June NOI Net Operating Income (NOI) through June of $548M is significantly lower than Budget and prior year actuals as a result of the impacts of COVID-19 on Agency operations. 6-Month Period Ending June 30* 2020 Actual $2,160 (1,612) $ 548 (739) 2019 Actual $2,685 (1,626) $ 1,059 (694) Variance 20A v 19A (525) 2020 Budget $2,841 (1,692) $1,149 Variance 20A v 20B (681) ($ in millions) Gross Operating Revenues Operating Expenses Net Operating Income Depreciation & Amortization Sandy Insurance Proceeds Income from Operations CARES Act Proceeds All Other Non-Operating, Net Change in Net Position (14) (80) $ (511) (45) (172) $ (728) $ (601) - - - - - - - - - - - - - 172 $ (191) 199 (209) $ (201) $ 537 - 199 (127) $ (656) (82) $ 455 *Pursuant to GAAP accounting standards 4
Second Quarter (Q2) NOI Second quarter results are driving the YTD underrun, entirely due to the impacts of COVID- 19 on agency operations beginning in March and accelerating in the following months. Q2 (Three months ending June 30) 2020 Actual $ 840 (788) $ 52 (375) 2019 Actual $1,393 (823) $ 570 (353) Variance 20A v 19A $ (553) 2020 Budget $1,469 (840) $629 Variance 20A v 20B (629) ($ in millions) Gross Operating Revenues Operating Expenses Net Operating Income Depreciation & Amortization Sandy Insurance Proceeds Income from Operations CARES Act Proceeds All Other Non-Operating, Net Change in Net Position (35) (52) $ (518) (22) (172) $ (712) 199 (155) $ (668) $ (577) - - - - - - - - - - - - - 172 $ (323) 199 (193) $ (317) $ 389 - (38) $ 351 *Pursuant to GAAP accounting standards 5
Q2 Gross Operating Revenues $(525)M YOY decrease through June, driven by a $(553)M YOY Q2 decrease attributable to COVID-19 related reductions. Q2 2020 Actual Q2 2019 Actual $1,393M* Ending June 30 Q2 2020 Budget $1,469M* Three Months Primary Variances Primary Variances A v A / A v B ($186)M / ($230)M ($186)M / ($230)M TOLLS & FARES $36 $1,400 $35 $100 $103 $1,200 $320 $319 $ in millions $1,000 $840M* ($159)M / ($160)M ($159)M / ($160)M AVIATION FEES $24 $800 $37 $470 $436 $160 $600 ($129)M / ($163)M ($129)M / ($163)M RENTALS $307 $400 $525 ($66)M / ($63)M ($66)M / ($63)M PARKING & OTHER $481 $200 $295 $- Q2 2020 A Q2 2019 A Q2 2020 B Tolls & Fares Rentals Aviation Fees Parking & Other Utilities *Special Project Bonds are included in the total 6
YTD June Activity: Aviation & PATH Aviation and PATH have seen the steepest decline in activity volumes as a result of COVID-19, and appear to be on a gradual road to recovery. PATH Ridership 2020 Activity Aviation Passenger 2020 Activity Q1 & Q2 YOY Activity Variance 7,000 12,000 6,000 10,000 5,000 8,000 in thousands 4,000 6,000 3,000 4,000 2,000 2,000 1,000 - - Jan Feb Mar Apr May Jun Jan Feb Mar Apr May Jun -56% YTD -60% YTD -96% -91% -15% -16% -100% -90% -80% -70% -60% Q2 YOY Var -50% -40% -30% -20% -10% 0% -100% -90% -80% -70% -60% Q2 YOY Var -50% -40% -30% -20% -10% 0% Q1 YOY Var Q1 YOY Var 7
YTD June Activity: TBT & Port TB&T and Port activity volumes have been more resilient throughout the pandemic, with TB&T leading the recovery. TB&T Vehicle 2020 Activity Port Container Throughput 2020 Activity 640 9,500 620 8,500 600 580 in thousands 7,500 560 6,500 540 520 5,500 500 4,500 480 3,500 460 Jan Feb Mar Apr May Jun Jan Feb Mar Apr May Jun -26% YTD -43% -8% YTD -11% -6% -2% -100% -90% -80% -70% -60% Q2 YOY Var -50% -40% -30% -20% -10% 0% -100% -90% -80% -70% -60% Q2 YOY Var -50% -40% -30% -20% -10% 0% Q1 YOY Var Q1 YOY Var 8
Q2 Operating Expenses $(14)M YOY decrease through June, driven by a $(35)M decrease in Q2 as a result of COVID-19 expense reductions. 6/30/2020 Actual 6/30/2019 Actual $788M* Three Months Ending June 30 Budget $840M* $823M* Primary Variances Primary Variances A v A / A v B $800 $40 $46 $33 $67 $80 $79 $100 ($33)M / ($56)M ($33)M / ($56)M CONTRACT SERVICES $94 $100 $600 $ in millions $262 $239 $206 ($7)M / ($13)M ($7)M / ($13)M UTILITIES $400 ($3)M / ($10)M ($3)M / ($10)M MATERIALS & EQUIPMENT $200 $352 $352 $348 $- Q2 2020 A Q2 2019 A Q2 2020 B Employee Compensation Contract Services Rents-PILOTs Materials & Equipment Utilities *Interest on Special Project Bonds is included in the total 9
Cash Flow & Liquidity at June 30, 2020 We continue to monitor and manage our cash flow and liquidity; in July we successfully accessed the financial markets to boost our liquidity and capital funds. Cash & Investments: $3.1B $464M cash flow from Operations, a YOY decrease of $490M due to the impacts of COVID- 19 on activity and rent Capital Funds & CP Available: $375M Capital Funds total app. $281M, with an additional app. $94M of Commercial Paper (CP) availability Days Cash on Hand: 47 Days* *Excludes the General Reserve Fund, Capital Fund, and PFCs 10
Bonds & Other Obligations at June 30, 2020 Totals $24.0B, which is an increase of $52M compared to year-end 2019* $47 0% $1,022 4% $77 1% $70 0% $655 3% Increase due to an increase of Commercial Paper issuances to support the capital program Partially offset by the scheduled retirement of consolidated bonds and notes $22,117 92% $ in millions* Consolidated Bonds Var Rate Master Notes MOTBY Obligation Commercial Paper Regional Development Fund Goethals Financing Arrangement * Excludes Special Project Bonds, Tower 4 Liberty Bonds, and unamortized premium/(discount); financing obligations shown at par value 11
