Port of Seattle Presentation to the Western States Institutional Investors Conference Elizabeth Morrison, Director of Corporate Finance, Port of Seattle Revised June 22, 2017

Port of Seattle Overview 3 SeaTac Airport Update 9 TABLE OF CONTENTS Port of Seattle Overview 3 SeaTac Airport Update 9 Non-Airport Businesses 11 Port of Seattle Capital Plan and Funding 12 The 2015 financial information has been restated to reflect the Port’s new organization structure that took effect in 2016 and may not tie to the Port’s audited financial statements.  The 2016 information is based on actual performance as of December 31, 2016.  The information is provided as preliminary, subject to change, for illustrative purposes.

Port of Seattle – Independent Port Authority In A Growing Economy BUSINESSES STATUTORY TAXING AUTHORITY Port operates and manages Sea-Tac International Airport Port has a 50% interest in the Northwest Seaport Alliance (NWSA), a joint venture with the Port of Tacoma Other businesses include various Maritime and Economic Development Division (EDD) activities Port is authorized to levy property taxes within King County Maximum 2017 property tax levy: $99.0 million Actual 2017 property tax levy: $72.0 million Port’s tax levy represents 1.6% of total King County property tax levy In 2016, Seattle was the fastest growing big city According to the U.S. Census Bureau

Port of Seattle – Organizational Structure Changed in 2016 NWSA PORT OF SEATTLE COMMISSION INTERNAL AUDIT PORT OF TACOMA COMMISSION EXECUTIVE OFFICE Airport Maritime EDD Corporate

Port of Seattle – 2017 Initiatives AIRPORT INITIATIVES OTHER INITIATIVES Capital improvements to accommodate traffic growth Near-term projects include expansion of the North Satellite Terminal, construction of a new international arrivals facility and temporary hardstand facilities Longer-term development of an airport master plan Negotiations for a new or amended airline agreement Current agreement expires at the end of 2017 Key issues include gate allocation and costs “Plan B” is to continue current agreement month-to-month or rates and charges by resolution (adopted May, 2013 and currently suspended) Real Estate and Fishermen’s Terminal Strategic Plans to improve utilization of existing properties and identify future opportunities to support Port businesses Evaluation of ways to reduce greenhouse gas emissions

Port Benefits From Strong Local Economy KING COUNTY PER CAPITA INCOME KING COUNTY MULTIFAMILY BUILDING PERMITS

Revenue Bonds Secured by Pledge of Consolidated Port Revenue 2016 OPERATING REVENUE : $598 Million(1) TOTAL NON-AIRPORT=22% (NWSA + MARITIME + EDD & OTHER) TOTAL AIRPORT=78% (AERONAUTICAL(2) + NON-AERONAUTICAL) 2016 CAFR Aeronautical revenues are based on full recovery of aeronautical costs

Port of Seattle Financial Performance ($ Million) (1)   2017 2015 (2) 2016 Budget (1) Airport Aeronautical $ 226 $ 244 $ 275 Non-Aeronautical 197 221 227 Total Airport Revenue $ 423 $ 465 $ 501 Airport Operating Expenses (238) (261) (303) Airport NOI Before Depreciation $ 185 $ 204 $ 199 Non-Airport Port's Share of NWSA $ 61 $ 62 $ 47 Maritime 47 51 52 Economic Development & Other 21 20 Total Non-Airport Revenue $ 130 $ 133 $ 119 Non-Airport Expenses (74) (64) (82) Non-Airport NOI Before Depreciation $ 56 $ 69 $ 37 Total Port NOI Before Depreciation $ 241 $ 273 $ 236 Key Non-Operating Resources Tax Levy $ 73 $ 72 G.O. Bond Debt Service (30) (40) (37) Passenger Facility Charges 79 86 89 Customer Facility Charges 24 25 26 Airport expenses driven by growth and security enhancements NWSA revenue decline due to Terminal 5 vacancy and increase in operating expense (including depreciation) Non-Airport expense increasing to accommodate maintenance costs and the Port’s mission-driven initiatives Based on the 2017 budget Restated to reflect re-organization and formation of the NWSA

SeaTac Airport Growth Continues in 2017 TOTAL ENPLANED PASSENGERS (MILLIONS) Enplanements grew by 37% from 2012- 2016 Enplanements increased by 8% in 2016 Strong local economy is the foundation of growth 69% of passengers begin or end their flight in Seattle Alaska and Delta are both growing and competing with each other

SeaTac is growing as an international gateway Growth in international flights has been particularly strong, with airlines now serving 22 international routes INTERNATIONAL ENPLANED PASSENGERS (MILLIONS) International enplanements grew 49% from 2012-2016 International enplanements increased 11% in 2016 New international hub created by Delta Foreign flag carriers adding service to Seattle

Non-Airport Businesses NWSA Port has 50% share All revenue to the Port is net of operating expenses (including depreciation) MARITME Includes cruise, grain export, and commercial and recreational marinas High expenses result in modest net income ECONOMIC DEVELOPMENT Includes commercial and industrial properties and supports the Port’s economic development mission Mission-driven programs result in negative net income but supported by the tax levy Norwegian “Bliss,” newest of fleet, to homeport in Seattle 2018

PORT OF SEATTLE CAPITAL PLAN AND FUNDING NWSA photo

$2,812 FIVE-YEAR CIP SPENDING ($ MILLION) Port’s $2.8 Billion Five-Year Capital Improvement Plan is Dominated by the Airport Of the Airport’s $2,401 million share of the CIP, nearly 46% is for the North Satellite Terminal and the International Arrivals Facility The Port’s 50% share of the NWSA CIP is $109.2 million Other projects include renewal and replacement of Maritime and real estate facilities, contingency, and pre-development of some vacant Port properties Approximately 30% of the CIP is prospective, early in the scoping and approval process Excludes potential capital investment associated with Sustainable Airport Master Plan, Real Estate Strategic Plan, and Port’s share of Terminal 5 modernization costs $2,812 FIVE-YEAR CIP SPENDING ($ MILLION)

Port’s Five-Year Funding Plan Includes New Debt The Port estimates funding $1,579 million of Airport projects with new debt Funds-on-hand above Port’s target balances plus net income from operations provide significant funding Tax levy funds certain Non-Airport projects in support of the Port’s economic development mission (assumes no change in tax levy during the funding period) Grants and Passenger Facility Charges contribute to capital funding 11% funding gap for Non-Airport projects: $34 million of Non-Airport CIP is unfunded and likely will be addressed with reduction in contingency or deferral of projects $2,778 TOTAL FUNDING PLAN ($ MILLION)

North Satellite Terminal Project Collaboration with Alaska Airlines Multiple projects to expand and improve the North Satellite Terminal Total program costs estimated at $538 million Estimated completion in 2021

International Arrivals Facility Need for new facility is driven by growth in international traffic, shift to inter-continental wide-bodies, and connections to domestic flights that create peak time constraints Total program estimated at $660 million Estimated completion in 2020

Sustainable Airport Master Plan: Long-term Plan to Accommodate Growth SeaTac PAX/acre is 10x DEN with limited expansion opportunities Need for more gate capacity and landside access SAMP feasibility review underway with FAA Project costs and timing are too preliminary to be included in the current CIP Options include sequencing and use of temporary hardstand terminal

2017 Finance Initiatives REVENUE BONDS Planned new-money issue to fund Airport capital spending Issuance timing likely Q3 2017 Monitoring refunding opportunities

Contact Information Elizabeth Morrison Director, Corporate Finance Port of Seattle 206-787-3115 morrison.e@portseattle.org Port’s website: www.portseattle.org NWSA website: www.nwseaportalliance.com All photos except where noted: Don Wilson

Appendix APPENDIX

All of the Airport’s Revenues Have Some Element of Cost Recovery or Guarantee AERONAUTICAL REVENUES Aeronautical revenues are derived from cost recovery formulas in the SLOA III lease Aeronautical cost recovery is based on operating and capital costs, which include debt service and amortized payments for cash-funded assets All aeronautical costs are allocated to a cost center Cost recovery model establishes a floor for aeronautical charges and effectively guarantees recovery of all airport costs Excess revenue sharing better aligns Airport to airline interests NON-AERONAUTICAL REVENUES Non-aeronautical revenues have no cost recovery, but instead have a back-up guarantee from the airlines Airport can charge airlines if airport-wide coverage drops below 1.25x