Performance Update JP Morgan Transportation & Utility Investor - - PowerPoint PPT Presentation

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Performance Update JP Morgan Transportation & Utility Investor - - PowerPoint PPT Presentation

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Performance Update JP Morgan Transportation & Utility Investor Forum April 18-19, 2018 Participants and Resources 2 E-470 Public Highway Authority Jason Myers Finance Director Jaime Heitman Controller Email: investorrelations@e-470.com

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JP Morgan Transportation & Utility Investor Forum April 18-19, 2018

Performance Update

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SLIDE 2

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E-470 Public Highway Authority

Jason Myers

Finance Director

Jaime Heitman

Controller

Stifel – Municipal Advisor

Michael Lund

Director

Participants and Resources

Email: investorrelations@e-470.com Website: www.e-470.com/Pages/AboutUs/Investor-Relations.aspx

Disclaimer & Disclosures: The information set forth in this report is provided for convenience and is not provided in connection with an offer to buy or sell any securities. The information is provided as of the date of the report. Material changes may have occurred with respect to the information since that date, and the Authority has not undertaken to update or revise the information if such changes occur. Accordingly, the report must not be considered current as of the day you access it.

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Authority Overview

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47 centerline miles on eastern perimeter of Denver Metro Area

Serves DIA and commuting customers

Board of Directors – 8 voting members, 8 non- voting members

Political subdivision of the State

1991 – First five miles opened, one of the first toll roads to implement open road tolling (ExpressToll)

2003 – Final section was opened, completing the 47 mile semi-circle

2009 – Discontinued cash collection in the lanes, introduced License Plate Toll (LPT)

2014 to present – Back Office and Customer Services for new CO Managed Lane facilities

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SLIDE 4

Authority Update

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2017 Accomplishments

 Annual certification – asset conditions deemed “excellent”  Clean financial statement audit  Debt Service coverage at 2.12 vs. budget of 1.75  Highest traffic year in history; Highest toll revenues ever recorded  Successful remarketing in March of $138 million of variable rate debt  Master Capital Plan completion  Toll Rate Study completion; new toll rate policy adopted  Continued to be a successful toll integrator & back office provider for

State of Colorado

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SLIDE 5

Master Capital Plan Study

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Board approved in December 2017; available on website

  • Level of Service Study-Maintain “C”
  • Roadway widening
  • Interchange improvements &

additions

  • Continued maintenance

improvements

  • Paving, lighting, signing, safety, etc.
  • Accommodate growth along corridor
  • Growth projected to double by 2040
  • Identify and implement mobility

solutions – stay ahead of demand

  • Capture capital, infrastructure,

replacement needs between 2018- 2040

  • Authority is evaluating the timing

and project plans for these costs

  • Intent to cash fund capital projects
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SLIDE 6

Toll Methods

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 ExpressToll  ExpressToll customers prepay their accounts  Transponder in vehicle  1.6 million transponders in the marketplace  Branding and technology used on all Colorado facilities  74% of E-470 2017 toll revenue was ExpressToll  97% Collection Rate  License Plate Toll (LPT)  Front and rear image taken of license plate(s)  Registered owner of vehicle receives a monthly bill  LPT customers pay a premium over ExpressToll  Branding and technology used on E-470 and CDOT facilities  86% collection rate of billable tolls in 2017

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SLIDE 7

New Toll Rate Schedule

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  • Previous Toll Rate Policy (2011 to 2017)
  • Annual incremental increases equaling $0.25 every 3 years for

ExpressToll rates

  • LPT had a 25% premium over ExpressToll
  • New Toll Rate Structure (2018 to 2020)
  • Board approved in November 2017; summary report on website
  • Structure chosen to try and:
  • Promote ExpressToll account conversions from LPT
  • Reward our large customer base (ExpressToll)
  • Enhance toll revenue
  • Provide more flexibility in the future to maneuver toll rates for future needs
  • Three-Year Schedule (Subject to annual board approval)
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SLIDE 8

Historical Transaction Trends

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4% Growth in 2017 Transactions over 2016 109% of Budgeted Transactions in 2017 99% of 2017 Projected Transactions*

* 2017 Projections are based on the 2017 CDM Smith Bring Down Letter 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000 6,500 7,000 7,500 8,000 8,500 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Thousands

2018 2017 2016 2015 2014 2013 2012

2016 Transactions: 79,975,235 2017 Transactions: 83,175,170 2018 YTD Transactions: 12,017,484

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SLIDE 9

Annual Transactions & Revenue

2009 to 2017

2017 vs. 2016 Toll Revenues - 111% 2017 vs. Budgeted Toll Revenues - 111% 2017 vs. Projected* Toll Revenues – 103%

2009 2010 2011 2012 2013 2014 2015 2016 2017 Traffic Volume 47,972,713 51,297,941 52,080,386 53,965,816 58,402,732 66,365,038 74,609,047 79,975,235 83,175,170 Toll Revenue $89,487,115 $94,309,891 $107,722,486 $116,744,889 $129,181,918 $150,404,512 $173,039,512 $192,810,649 $213,765,649

  • 25

50 75 100 125 150 175 200 225

Millions

Nine Year Growth in Toll Revenues - 139% Nine Year Growth in Transactions – 73%

* 2017 Projections are based on the 2017 CDM Smith Bring Down Letter

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2017 Operating Budget Results

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(Unaudited)

2017 Actual 2017 Budget % Budget Revenue Toll Revenue (net) $213,765,649 $192,081,000 111% Other Revenue (net) 35,800,144 28,372,000 126% Total Revenues 249,565,793 220,453,000 113% Total Operating Expenses Less: VRF Bonds Debt Service (46,165,326) (1,066,228) (51,786,750) 89% NET REVENUES $202,334,239 168,666,250 120%

  • Sr. Bonds Debt Service

95,246,810 96,380,350 99% Debt Service Coverage 2.12 1.75

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SLIDE 11

Debt Service Coverage

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Authority DS Coverage Requirement – 1.30 (per bond resolutions)

2012 2013 2014 2015 2016 2017 Net Revenue $108,844,386 $120,716,683 $142,592,354 $162,110,926 $185,449,484 $202,334,239 Senior Debt Service $74,737,478 $81,657,745 $83,630,014 $91,119,525 $97,231,865 $95,246,810 Debt Service Coverage 1.46 1.48 1.71 1.78 1.91 2.12 1 1.2 1.4 1.6 1.8 2 2.2

  • $15,000,000

$10,000,000 $35,000,000 $60,000,000 $85,000,000 $110,000,000 $135,000,000 $160,000,000 $185,000,000 $210,000,000

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2018 Operating Budget

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February YTD Actual YTD 2018 Budget % Budget Total 2018 Budget Revenue Toll Revenue (net) $31,314,719 $29,139,008 107% $222,618,000 Other Revenue (net) 6,296,048 5,530,249 114% 28,969,000 Total Revenues 37,610,767 34,669,257 108% 251,587,000 Total Operating Expenses (7,352,582) (9,790,736) 75% (54,745,700) NET REVENUES $30,258,185 24,878,521 122% 196,841,300

Less: VRF Bonds Aggregate Debt Service Due

(244,125)

  • Sr. Bonds Debt Service

(16,954,726) (16,947,433) 100% (101,684,600) Debt Service Coverage 1.94

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SLIDE 13

Capital Budget

2017 Results and 2018 Budget

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(Unaudited)

Total 2017 Actual Total 2017 Budget 2018 Budget

Renewal & Replacement

Roadway Maintenance $ 4,132,814 5,446,500 3,181,500 Facility Maintenance & Other R&R 3,227,257 6,370,357 3,215,500 Software & Hardware Upgrades 8,739,879 12,131,843 11,303,000

Construction Projects and Other

Interchange Improvements 27,010 1,000,000 12,450,000 Road Widening – Parker to Quincy 49,946,105 49,825,000 1,200,000 Road Widening – Quincy to I-70 Design 2,000,000 Pavement Resurfacing 10,060,000 Other Capital Projects/Requirements 243,396 4,290,800 4,850,800

Total Capital Projects $66,316,461 $79,064,500 $48,260,800

* All R&R and Construction funding is from the Capital Improvements Fund; no bond proceeds are used to increase the Authority’s outstanding debt

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SLIDE 14

Fund Balances

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12/31/2015 12/31/2016 12/31/2017 Reserves & Restricted Accounts* Senior Debt Service Reserve** 127,467,000 125,132,000 123,161,000 Operating Reserve 8,326,000 8,810,000 8,855,000 Tower-Pena Ramp Financing Account 3,207,000 3,207,000 3,207,000 VRF Bonds Restricted Account 3,055,000 583,000

  • Subtotal Reserves Accounts

142,055,000 137,732,000 135,223,000 Unrestricted Accounts Rainy Day Reserve Account 10,380,000 10,483,000 10,548,000 Senior Bonds Defeasance Account 22,467,000 32,279,000 57,462,000 Capital Improvements Fund Accounts 127,413,000 144,234,000 151,822,000 Subtotal Unrestricted Accounts 160,260,000 186,996,000 219,832,000 Total Fund Balances

302,315,000 324,728,000 355,055,000

* Does not include balances within the Trust Revenue, Sr. Debt Service or VRF Debt Service Funds ** Includes $25.0 million surety policy from MBIA/NPFG Note: All balances are rounded

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SLIDE 15

Toll Roads:

E-470

Northwest Parkway

Express Lanes:

US 36 (Phase I and II)

I-25 (Central & North Segment II)

I-70 (MEXL)

Express Lanes (In Progress):

I-25 North Segment III (2019)

C-470 (2019)

Express Lanes (TBD by HPTE):

I-25 North Segment 7 & 8 (2020?)

I-70 Central (2022?)

ExpressToll Services Provided:

Back Office/Customer Service/Billing

Toll Integration/Installation Services

All back office and toll integration costs incurred on behalf

  • f others are 100% recovered by the Authority per the

Tolling Services Agreements (TSA)

COLORADO TOLL FACILITIES

Interoperability in Colorado

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Current Debt Structure

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  • 20,000,000

40,000,000 60,000,000 80,000,000 100,000,000 120,000,000 140,000,000 160,000,000

Actual Debt Service 1997B 200B 2004A 2004B 2006B 2007A-1 2007B-1 2007C-1 Series 2007D-1 Series 2010A Series 2010C Series 2015A Series 2017A Series 2017B Debt Service (as of 2000 OS) Debt Service (as of 2011A OS)

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Outstanding Debt Composition

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Variable Rate*, 18.3% Fixed Rate, 81.7%

Fixed vs. Variable Rate Debt

Callable, 46.0% Non‐ Callable, 54.0%

Callable vs. Non‐Callable

* Variable Rate Bonds are hedged with Swap.

  • Currently is $1.5 Billion in outstanding bond debt
  • Total matured bond payoff amount is $2.7 Billion
  • 2018 Debt Service - $101.7 million
  • 2019 Debt Service - $109.2 million
  • Scheduled to be paid off in 2041
  • Two outstanding interest rate swaps
  • Swaps and Debt are both 67% of LIBOR based

Current outstanding swaps: FV at 12/ 31/ 17

JPM $69.3 million LIBOR original swap (2007) $ (21,771,102) MS-1 $69.3 million LIBOR original swap (2007) (21,772,209) Total swap fair value (net) $ (43,543,311)

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Future Bond Financing Activities

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Series Par ($ Millions) 67% LIBOR Spread Put Date Optional Redemption Date 2017A $72.6M 0.90% 9/1/2019 3/1/2019 2017B $66.1M 1.05% 9/1/2021 3/1/2021

  • Principal and Notional Maturities in

2026 and 2036-2039

  • Will evaluate market conditions with

each put and redemption date

  • Plan to start the process for the

2017A bonds in late 2018

  • No bond insurance on either bond

series

Call Year Principal Callable Series 2019 $ 72,565,000 2017A 2020 $ 152,360,810 2004B & 2010C 2021 $ 66,075,000 2017B 2026 $ 56,932,723 2006B

Upcoming Callable Debt 2019 to 2026: Variable Rate Summary: 2020 Call Opportunity:

  • Callable on September 1, 2020
  • Authority plans to achieve its goal of level debt service as part of financing plan
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Summary and Future Outlook

 Continued strong traffic and corridor growth  Consistently exceeding debt service coverage requirement of

1.30

 Strong cash position  Continuing proactive debt management – meeting goals  Consistent and proactive management team  Continued Board support  New Toll rate structure  Future Capital Program (Master Capital Plan)  Evaluate the integration with Interoperable Regional HUBs  Continue to support future tolling projects and back office

services in Colorado with our tolling partners

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