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Anderson

Brightline Ridership Number-Crunching and Analysis

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Is real estate income accounted any where or is that a separate item?

 

This is just for Brightline revenue from ridership (and maybe stations?). Real estate is a separate LLC. The bonds were sold only for the passenger rail service, specifically the south segment between Miami and WPB. Any real estate revenue might be hard to come by as each building might have a different LLC for its development.

Edited by Brian_tampa

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Ok, let's take another swing at this now that we have actual numbers in front of us:

Ridership has been indicated at 106,090 (versus the estimate of 106,200). This is basically a rounding error. Revenue was indicated at $1,143,000 (versus the estimate of $1,142,000). This is, in fact, probably an /actual/ rounding error given that it's down to a single count of the base unit of measurement (that is, $1000).

PPR was $10.77 for Q2; my comments earlier of $12.50-13.40 for June hold at this rate, and as a result so do my original notes about revenue trends and so on.

"Other revenue" is interesting. I forget when Brightline started charging for parking, but Brightline is bringing in $3.69/passenger under this column (which presumably includes F&B, both on-board and at-station, as well as parking). Interesting, "cost of sales" did increase, but substantially slower than otherwise.

Am not sure what falls under "miscellaneous income"; best guess is that it includes some stuff like interest on cash balances and the like.

If we eject depreciation/amortization from the calculation (their inclusion is dubious IMO), the net loss goes from $28.34m to $21.82m, a substantial improvement on Q1's (similarly-adjusted) $24.17m. Still not positive but not nearly as bad.

I am wondering how much of those first three line items (salaries/benefits, professional fees, and G&A/other) are/were tied up in construction and what the picture will look like once that isn't nearly as big of a "thing", since for all I can tell "Brightline Trains LLC" covers both PBI-MIA, MCO-PBI, and any putative projects TPA-MCO and/or JAX-PBI.

 

Edit: Something else which gives me a mild headache: Total expenses given are $27.55m, but restricted cash decreased by $35m while PPI increased by $55m. There was, materially, no change to long-term debt. Members' equity also increased by about $5m in the midst of this. I only took introductory accounting, but I am really getting a headache trying to sort through this and I'd like to brainstorm explanations with somebody if possible.

Edited by Anderson

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Southbound 01 Oct 18
0530  1 F,   0 W,  12 Y  Last check: 0050
0600  3 F,   0 W,  10 Y  Last check: 0056
0700  2 F,   2 W,  47 Y  Last check: 0057
0800  5 F,   5 W,  37 Y  Last check: 0059
0900 13 F,   2 W,   7 Y  Last check: 0104
1000  5 F,   1 W,   9 Y  Last check: 0106
1100  2 F,   0 W,   5 Y  Last check: 0107
1200  4 F,   4 W,  11 Y  Last check: 0109
1400  1 F,   0 W,   5 Y  Last check: 0114
1500  3 F,   0 W,   1 Y  Last check: 0117
1600  2 F,   0 W,   8 Y  Last check: 0126
1700  4 F,   0 W,   9 Y  Last check: 0130
1800  2 F,   3 W,   5 Y  Last check: 0133
1900  0 F,   0 W,   5 Y  Last check: 0135
2000  0 F,   0 W,   1 Y  Last check: 0136
2100  0 F,   0 W,   3 Y  Last check: 0138
     47 F,  17 W, 175 Y

Northbound 01 Oct 18
0713  6 F,   3 W,  22 Y  Last check: 0143
0813  1 F,   3 W,   5 Y  Last check: 0144
0913  0 F,   0 W,   6 Y  Last check: 0145
1013  0 F,   0 W,   5 Y  Last check: 0146
1113  2 F,   0 W,   2 Y  Last check: 0147
1213  3 F,   0 W,   5 Y  Last check: 0148
1313  2 F,   1 W,   4 Y  Last check: 0150
1413  4 F,   0 W,   5 Y  Last check: 0150
1613  4 F,   7 W,  19 Y  Last check: 0152
1713  3 F,   2 W,  27 Y  Last check: 0153
1813  3 F,   1 W,  25 Y  Last check: 0155
1913  2 F,   2 W,   4 Y  Last check: 0156
2013  0 F,   1 W,   2 Y  Last check: 0157
2113  1 F,   2 W,   4 Y  Last check: 0158
2213  1 F,   0 W,   2 Y  Last check: 0159
2313  0 F,   0 W,   0 Y  Last check: 0200
     32 F,  22 W, 137 Y

Note: All trains showing $20/25/40
Also note that this is the first time I've load-checked a Monday.

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I'm shunting this over here, but the Virgin Trains US (VTUS) SEC filings basically gave us probable Q3 numbers via giving us Q1-Q3 numbers (since we can back out Q1 and Q2 on already-released data).  Unfortunately, the results are a little hazy:

Interpretation 1
       Pax Revenue  Total Revenue
Q1     $  663,700   $  768,000
Q2     $1,143,000   $1,540,000
Q3     $2,947,000   $2,925,000
Total  $4,754,000   $5,233,000
	Interpretation 2
       Pax Revenue  Total Revenue
Q1     $  663,700   $  768,000
Q2     $1,143,000   $1,540,000
Q3     $1,835,000** $2,446,000
Total  $3,642,000** $4,754,000
	


In interpetation 1, "passenger and customer related revenue" is aligned with passenger ticket revenue in the Q1/Q2 statements.  "Total operating revenue" is aligned with ticket revenue plus "other revenue".

In interpretation 2, "passenger and customer related revenue" is aligned with the combined total and "other" is an external revenue category (probably real estate).  In this case, I'm presuming something close to 25% for ancillary revenue (Q2 was 26%, so I think we could go with 25% or 30% as a logical estimate) so that I have *something* to work with.  Thus the pax revenue numbers get a shiny pair of asterisks since I'm having to guess.

In interpretation 1, the numbers don't make sense (ancillary revenue would have to be negative during Q3), so I'm going to go with interpretation 2.  This shows a 60% increase in pax revenue in Q3 (versus Q2).  I'm not sure how I feel about that (I'm probably comfortable-but-not-thrilled since it involves three months with operation to Miami and about six weeks of near-full operation).

      Actual   Est.   %
Q1    $0.66m  $5.98m  11.05%
Q2    $1.14m  $5.98m  19.06%
Q3    $1.84m  $5.98m  30.77%

As a worthwhile point, this actually suggests that (depending on what assumptions were in play to begin with) Brightline might at least be on track to hit a sustainable revenue level.

Edited by Anderson

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Ok, looking at the October numbers, ridership is just over 60,000 while revenue is at $1.0m for the quarter.  I would guess this puts Brightline on track to bring in somewhere between $3.5m and $4.5m for the quarter (depending on the trend and how the holiday interacts with everything).  Were the number to stay stagnant, Q4 ridership would be about 180,000:

Q1: 74,780
Q2: 106,090
Q3: Not yet declared, but probably around 120-140k.
Q4: 180,000 per October.

That'll probably put first-year ridership in the range of 480-550k; it probably also puts Brightline on course for ridership in the range of no less than 800-1,000k next year presuming a shallow slope (and no increase for the rest of Q4...something I can't really take a stab at given the presence of the holidays).

PPR is still looking like a sticky point.  At $12.50/pax in ticket revenue and another $4 in ancillary revenue, ridership would need to be something like 5.4m/yr to cover costs (I'm ignoring depreciation in this calculation), though I would note that I'm really wondering what's buried under G&A and whether those expense lines will drop off once construction wraps on the whole project.

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Wow. Much higher than October, and it looks like Q4 will exceed Anderson’s estimates. I wonder if they include the Polar Express in the ridership numbers?

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I presume they did.  There's no reason to "sandbag" the numbers by excluding them (though to be fair, if disclosure were .  Each Polar Express train is two trainsets together, so you've got 480 riders times six runs per day times five days in November giving a maximum of 14,400 tickets sold.  Only two of those trains list as having sold out, but beyond that I don't know about ridership.  Bearing in mind that there is also the loss of some additional weekend trains to consider, I suspect the impact was no more than 10,000 riders in November.

So, since ridership was around 60,000 for October and 80,000 for November, I'd put quarterly ridership somewhere between 210,000 and 240,000 depending on whether ridership in November was a blip due to the holiday or reflects a trend.  NB that Brightline is now pumping Lyft to link between the stations in Fort Lauderdale and Miami and the relevant airports, so that can't help but help.



 

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Southbound 08 Dec 18
0800  15 F,  11 W,  86 Y  Last check: 0037 (12/08)
1000  46 F,  30 W, 152 Y  Last check: 0040 (12/08)
1200  38 F,  36 W, 131 Y  Last check: 0057 (12/08)
1400  12 F,  17 W,  77 Y  Last check: 0103 (12/08)
1600  17 F,  33 W,  64 Y  Last check: 0105 (12/08)
1800  15 F,  11 W,  34 Y  Last check: 0107 (12/08)
2000   3 F,   7 W,  18 Y  Last check: 0108 (12/08)
2200  17 F,  11 W,  15 Y  Last check: 0109 (12/08)
     163 F, 156 W, 577 Y
	
Northbound 08 Dec 18
1013  21 F,  17 W,  82 Y  Last check: 0136 (12/08)
1213   7 F,  29 W,  19 Y  Last check: 0140 (12/08)
1413  30 F,  10 W,  27 Y  Last check: 0144 (12/08)
1613  15 F,  24 W,  83 Y  Last check: 0149 (12/08)
1813  22 F,  23 W,  84 Y  Last check: 0154 (12/08)
2028  11 F,  22 W,  90 Y  Last check: 0157 (12/08)
2213  11 F,  26 W,  61 Y  Last check: 0201 (12/08)
2343  14 F,   7 W,  46 Y  Last check: 0203 (12/08)
     131 F, 158 W, 492 Y
	

Notes:
-I couldn't generate a seat assignment on the 1000 SB train in Y.  Given the fact that W and F were almost sold out, my guess is that Y is sold out aiside from a wheelchair space.
-Ditto W on the 1200.
-Several trains seem to have 40 seats given over to W instead of 32 (the second set of tables in the middle of the car is switched over).
-As a direct comparison vs September, a similar-time load check provided the following:

22 Sep 18     114 F, 115 W, 363 Y
08 Dec 18    163 F, 156 W, 577 Y

22 Sep 18     104 F, 120 W, 391 Y
08 Dec 18    131 F, 158 W, 492 Y


Southbound ridership is up a bit over 50% vs. September.  Northbound ridership is up 27%, quite the disparity.  I would also note that I am seeing slightly more aggressive load pricing for Y now (Y's lowest bucket has been bumped to $17 for the full trip, up from $15 (and $10 before that); the highest bucket appears to be $35), though F seems to be mostly unchanged.

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      Ridership    Ticket Revenue    PPR    Ancillary Revenue
18Q1     74,780   $  664,000    $ 8.80    $  104,000 ($1.39)
18Q2    106,090   $1,143,000    $10.77    $  392,000 ($3.69)
18Q3    159,586   $2,296,000    $14.39    $  634,000 ($3.97)
===== ===== ===== ===== ===== ===== ===== ===== =====
18Q4-A  200,000   $3,000,000    $15.00    $  800,000 ($4.00)
18Q4-B  220,000   $3,630,000    $16.50    $  880,000 ($4.00)
18Q4-C  220,000   $3,960,000    $18.00    $  880,000 ($4.00)
18Q4-D  220,000   $4,290,000    $19.50    $  880,000 ($4.00)
18Q4-E  240,000   $4,320,000    $18.00    $  960,000 ($4.00)
18Q4-F  240,000   $4,800,000    $20.00    $  960,000 ($4.00)

Projection A presumes that December "returns to form" and that November was a deviation with its ridership growth.  It also makes a low estimate on PPR (barely above Q3).

Projection B presumes that December follows in the footsteps of November and presumes an additional 10% increase in PPR.  C and D use additional bumps in PPR of 20% and 30%.

Projections E and F presume that ridership in December grows again.  They also post PPR growth (20% and about 35%, respectively).

My personal guess is D.  Christmas is going to play hell with the timetables but the Polar Express trains are going to help offset that with a solid slug of "premium" revenue.  I'm hard-pressed to see them adding another 20k pax month-over-month in that context.

Actual Ticket Revenue vs Estimates
      Actual   Est.   %
Q1    $0.66m  $5.98m  11.05%
Q2    $1.14m  $5.98m  19.06%
Q3    $2.29m  $5.98m  38.29%
Q4-Low$3.00m  $5.98m  50.17%
Q4-Hi $4.80m  $5.98m  80.27%
Edited by Anderson

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Southbound 10 Jan 19
0500  0 F,  0 W,  13 Y  Last check: 0423/0447
0600  2 F,  1 W,  21 Y  Last check: 0426
0630  2 F,  2 W,  29 Y  Last check: 0428
0700  3 F,  3 W,  48 Y  Last check: 0430
0730  5 F,  6 W,  31 Y  Last check: 0431
0830  8 F,  3 W,  40 Y  Last check: 0433
0930  7 F,  7 W,  24 Y  Last check: 0435
1030  4 F,  1 W,  22 Y  Last check: 0436
1130  7 F, 11 W,  15 Y  Last check: 0438
1330  8 F,  0 W,   4 Y  Last check: 0439
1430  3 F,  3 W,  22 Y  Last check: 0441
1530  4 F, 14 W,  17 Y  Last check: 0442
1630 32 F, 32 W,  98 Y  Last check: 0444
1730 25 F, 24 W,  56 Y  Last check: 0446
1830  2 F,  0 W,  11 Y  Last check: 0448
1930  2 F,  1 W,   4 Y  Last check: 0450
2130  5 F,  4 W,   2 Y  Last check: 0451
    119 F, 112 W, 457 Y
	Northbound 10 Jan 19
0640  3 F,  0 W,  22 Y  Last check: 0456
0740  2 F,  4 W,  29 Y  Last check: 0458
0840  3 F,  5 W,   9 Y  Last check: 0500
0940  4 F,  5 W,  15 Y  Last check: 0501
1040  5 F,  0 W,  20 Y  Last check: 0502
1140  7 F,  5 W,   6 Y  Last check: 0503
1240  2 F,  6 W,   7 Y  Last check: 0506
1340  2 F,  2 W,   8 Y  Last check: 0507
1540  8 F,  7 W,  41 Y  Last check: 0509
1640  8 F,  5 W,  33 Y  Last check: 0510
1710  3 F,  0 W,  24 Y  Last check: 0512
1740  5 F,  5 W,  24 Y  Last check: 0513
1840  0 F,  2 W,  23 Y  Last check: 0515
1940  0 F,  0 W,   6 Y  Last check: 0516
2040  3 F,  1 W,   4 Y  Last check: 0518
2210 12 F, 27 W, 114 Y  Last check: 0520
2310 11 F,  2 W,  65 Y  Last check: 0522
     78 F, 76 W, 450 Y
	

NB The southbound 1630 train shows no option to choose SmartPlus.  Based on the rest of the train's ridership data, I suspect it is simply sold out.

Also note that there is a Miami Heat game at 1900 tonight (the 1730 train will get you to Miami before the game, but it's a little tight; the 1630 train is probably a safer bet and allows for grabbing a bite before the game).  Going by a 2:15 game length, the game should wrap around 2115...so the 2210 train is probably a safe bet for returning home, with some folks clearly opting for the later train "just to be safe" and/or to grab a drink or two after the game.  Likewise, I have little doubt that some folks are "winging it" on their return ticket.

Edited by Anderson

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Another point unrelated to the above: Looking at Brightline's ancillary revenue projections, loosely that comes to about $15-16m/yr plus about $6.50/passenger.  This isn't a perfect fit (that fixed income per year amount declines slightly in the first few years before slowly rising thereafter...the latter trend making sense as an inflation-adjusted item) but it's "close enough".

Now, whether that $15-16m is supposed to be from rental income, Tri-Rail access fees, both, or some mix of those and something else is anybody's guess.

Edit: A further observation that should be noted: In Q3, the growth of ancillary revenue on a per-passenger basis slowed substantially.  This happened alongside the introduction of SmartPlus, and I do not think that is an accident.  SmartPlus generally adds $5 to the ticket price but also effectively moves the F&B revenue for those pax from an on-board transaction to a ticket purchase transaction.  Going by the above numbers for today and taking them as representative, SmartPlus currently accounts for 16.3% of southbound pax and 12.6% of northbound pax...so you're theoretically moving $0.63-0.81 per passenger from ancillary revenue to ticket revenue.  Obviously, I don't think this is quite an accurate depiction since that pre-purchase will affect consumer behavior in various ways and it doesn't account for pax who don't get the drink/snack, but I think you could make a solid case for somewhere in the ballpark of 1/4-1/2 of that being "shifted" while the rest is induced revenue (albeit with some COGS that would normally be applied to ancillary revenue thrown in).  Note that some of the induced revenue is not just from encouraging folks to pay an extra $5 up front, it is also from the OBS being able to cover more pax because up to 32 (and I think sometimes 40; I think there have probably been a few trains where they've converted an additional pair of tables to SmartPlus) have paid in advance and thus don't require running credit cards.

Another edit, for further analysis on overall ridership trends:

As a note, I was able to run a very similar load check on 25 September between 0400 and 0500.  Total SB load at that point was 45 F, 23 W, 259 Y; NB load was 49 F, 22 W, 258 Y.

A back-of-the-envelope adjustment for traffic to/from the Heat game pulls about 40 F, 40 W, and 140 Y pax out of the mix SB and 20 F, 25 W, and 160 Y out NB.  Note that I am very much more comfortable with the NB estimates as things stand (there are only two relevant trains and traffic has tended to be thin at that hour) than with the SB trains (which potentially include reverse-commute traffic).

Not recalling when the accident was that damaged that car, however, it seems that the "large block of sold-out seats" on two of the trains that day may have been due to the car being damaged (with the train doing a round-trip) rather than "actual" seat sales.

Southbound
25 Sep 18 Unadjusted    45 F,  23 W,  259 Y
10 Jan 19 Unadjusted   119 F, 112 W,  457 Y
10 Jan 19 Adjustments  -40 F, -40 W, -140 Y
10 Jan 19 Adjusted      79 F,  72 W,  317 Y
Northbound
25 Sep 18 Unadjusted    49 F,  22 W,  258 Y
10 Jan 19 Unadjusted    78 F,  76 W,  450 Y
10 Jan 19 Adjustments  -20 F, -25 W, -160 Y
10 Jan 19 Adjusted      58 F,  51 W,  290 Y



Net of the Heat game, overall ridership seems to be up by about 43% southbound and 21% northbound over the last few months.  I'd need more data to definitively peg various effects and changes, however.

Edited by Anderson

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