Full details of the medians are available through our interactive dashboard, by clicking here: https://www.spglobal.com/ratings/en/research-insights/sector-intelligence/interactives/us-transportation-medians. The below image is a preview.

An Activity Rebound And Management Carried The Day

S&P Global Ratings maintained 267 public ratings on 183 U.S. not-for-profit TIE issuers as of Oct. 6, 2023. This report summarizes operational and financial trends for fiscal years 2019 to 2022 across our rated universe of airports, ports, toll facilities, mass transit, and parking issuers. We exclude stand-alone passenger facility charge and customer facility charge ratings in our median analysis given their narrow revenue streams and limited operations, which reduce the comparability of financial metrics relative to those of the broader TIE universe.

With COVID-19's biggest effects in the rearview mirror, U.S. not-for-profit TIE issuers across rating categories saw improved financial metrics in fiscal 2022, including 24% median growth in operating revenue, a rebound in S&P Global Ratings-calculated net revenue available for debt service, and improved cash reserves (table 2). Despite pandemic-induced revenue declines in fiscal years 2020 and 2021, financial medians for the overall transportation sector remained comparable to pre-pandemic levels through 2022 given the rebound in activity and a combination of management actions such as increasing rates, fees, and charges; reducing operating expenses; restructuring debt; and deferring capital projects (table 2). However, financial metrics and demand recovery have varied among both our rating categories and TIE asset classes, and our analysis examines trends for 2019 to 2022 across both of those dimensions.

Our analysis focuses on operating performance

Table 1 details the core financial metrics we consider in our "Global Not-For-Profit Transportation Infrastructure Enterprises" criteria, published Nov. 2, 2020, on RatingsDirect, and the ranges for our assessments. We note that our metrics focus on operating performance, and thus that calculations of net revenue available for debt service include operating and nonoperating revenue and exclude income statement line items such as nonrecurring grants (used by airport and transit operators during the pandemic to meet fixed-cost obligations and satisfy rate covenants) and cash-basis carryover fund balances and coverage accounts.

Table 1

S&P Global Ratings transportation infrastructure enterprise criteria--financial metric ranges
	Extremely strong	Very strong	Strong	Adequate	Vulnerable	Highly vulnerable
Coverage (x)	>4.75	4.75-3.00	3.00-1.25	1.25-1.10	1.10-1.00	<1.00
Debt to net revenue (x)	<5.0	5.0-10.0	10.0-15.0	15.0-20.0	20.0-30.0	>30.0
Unrestricted days' cash on hand	>800	800-400	400-250	250-120	120-60	<60
Unrestricted reserves to debt (%)	>85	85-50	50-20	20-8	8-3	<3

Table 2 shows key financial data across all not-for-profit TIE asset classes by fiscal year, and table 3 does so by rating category. Our analytical approach separately assesses operators' enterprise risk and financial risk profiles and considers our holistic view of overall creditworthiness, which includes a qualitative assessment not captured in this report. The means and medians in the tables below should not be considered thresholds to achieving a particular rating.

Table 2

U.S. transportation infrastructure sectorwide medians and means
	--Fiscal year (n=192)--
	2022	2021	2020	2019
Total operating revenue ($000s)
Median	77,851	63,178	74,560	96,814
Mean	309,201	249,638	241,089	310,429
Total operating revenue annual % change
Median	23.8	(1.6)	(14.5)	3.6
Mean	27.2	(3.4)	(16.2)	4.7
Operating expenses ($000s)
Median	76,065	65,814	69,263	71,664
Mean	281,022	253,780	265,144	271,252
Total operating expense annual % change
Median	10.1	(2.8)	(0.2)	5.5
Mean	10.6	(1.6)	(1.9)	7.2
S&P Global Ratings net revenue ($000s)
Median	62,551	35,474	39,385	56,648
Mean	201,482	146,915	119,305	192,790
Coverage (x)
Median	1.79	1.37	1.27	1.83
Mean	2.95	2.03	1.92	2.70
Debt to net revenue (x)
Median	6.8	7.5	9.7	6.6
Mean	7.3	11.7	12.9	7.5
Debt ($000s)
Median	490,687	312,503	310,883	335,855
Mean	1,944,155	1,853,523	1,738,000	1,681,080
Unrestricted days' cash on hand
Median	648	607	490	465
Mean	909	884	777	714
Unrestricted reserves to debt (%)
Median	29	24	23	24
Mean	123	121	87	73
Unrestricted cash and investments ($000s)
Median	175,170	124,921	104,094	107,950
Mean	421,916	331,388	285,679	281,828
Note: Mean and median calculations exclude Williamson and St. Joseph County Airport Authority general obligation ratings.

Table 3

U.S. transportation infrastructure medians by rating category--fiscal 2022
	AAA (n=2)	AA (n=66)	A (n=105)	BBB (n=16)	Sectorwide
Total operating revenue ($000s)	188,893	177,475	75,774	26,330	77,851
Total operating revenue annual % change	31	25	23	29	24
Operating expenses ($000s)	520,768	254,255	46,532	13,335	76,065
Total operating expense annual % change	17	10	8	15	10
S&P Global Ratings net revenue ($000s)	1,024,035	168,681	44,254	12,371	62,551
Coverage (x)	5.89	2.23	1.73	1.32	1.79
Debt to net revenue (x)	4.9	4.7	7.0	13.5	6.8
Debt ($000s)	2,485,886	1,174,256	251,119	183,908	490,687
Unrestricted days' cash on hand	1,584	754	597	604	648
Unrestricted reserves to debt (%)	71	40	25	10	29
Unrestricted cash and investments ($000s)	1,944,146	427,965	82,596	26,962	175,170
Note: Mean and median calculations exclude Williamson and St. Joseph County Airport Authority general obligation ratings.

Medians Return To Strength

Financial metrics by rating category

Coverage returned to pre-pandemic levels across all rating categories in fiscal 2022 (chart 1). 

• 'AA' rated issuers maintained strong median coverage of more than 2x through fiscal 2022, as these issuers benefited from serving larger markets and maintaining higher financial margins.
• 'A' rated issuers returned to strong median coverage of 1.73x, comparable with pre-pandemic levels, after falling to adequate in fiscal 2021.
• 'BBB' rated issuers also returned to strong median coverage--of 1.32x, comparable with pre-pandemic levels--after falling to vulnerable in fiscal 2020 and reaching what we consider only adequate in fiscal 2021.

Debt capacity returned to pre-pandemic levels for all rating categories (chart 2). 

• 'AA' rated issuers recorded extremely strong median debt to net revenue in fiscal 2022, comparable to pre-pandemic levels.
• 'A' rated issuers maintained very strong median debt to net revenue through fiscal 2022, improving to 7x as revenue continued to recover and offset higher debt and operating expenses.
• 'BBB' rated issuers returned to strong median debt to net revenue, comparable to pre-pandemic levels, in fiscal 2022, after declining to adequate levels in fiscal years 2020 and 2021.

Liquidity remained relatively stable-to-improving for all rating categories as rising debt and operating expenses partly offset increased cash reserves (chart 3). 

• Revenue growth and federal relief aid allowed management teams to bolster cash reserves. However, our two key liquidity metrics--days' cash on hand and liquidity to debt--remained relatively stable across rating categories as increased operating expenses and debt outstanding offset higher cash balances in fiscal 2022.
• 'AA', 'A', and 'BBB' rated issuers generally maintained very strong days' cash on hand through fiscal 2022.
• 'AA' and 'A' rated issuers maintained strong liquidity to debt through fiscal 2022, while 'BBB' rated issuers maintained adequate liquidity to debt.

Median operating expenses increased as a result of inflation, higher labor costs, and additional personnel needed to accommodate recovering demand.   Although many management teams reduced operating expenses in 2020 and 2021 to mitigate pandemic-induced revenue declines, fiscal 2022 median operating expenses exceeded 2019 pre-pandemic levels across all rating categories except for 'BBB'. However, strong revenue growth offset rising expenses, and we expect that stable-to-positive demand trends and rate increases will continue to support cost increases (chart 4).

Despite the higher cost of borrowing in fiscal 2022, median total debt outstanding increased across all rating categories.   More than 30% of rated issuers issued additional new money debt in fiscal 2022, as demonstrated by the increase in median debt outstanding across each rating category and asset class (charts 5 and 6). We expect increased capital project costs stemming from inflationary pressures to result in continued growth in debt, as many of our transportation issuers have large capital improvement plans.

The airport asset class has the highest median debt outstanding at nearly $1.06 billion.   Airports are followed by the toll sector ($715 million), mass transit ($600 million), ports ($260 million), and parking ($39 million).

Demand Recovery Has Varied By Asset Class

Pandemic-related effects on demand and the pace of recovery have varied across our transportation asset classes, but overall fiscal 2022 activity trends were positive.

Air travel demand has largely recovered

After declining in fiscal years 2020 and 2021, median growth in enplanements was 66% in fiscal 2022, resulting in an almost-complete rebound in demand (charts 7 and 8). Airports with high pre-pandemic passenger growth or serving warm-weather and leisure domestic destinations generally experienced stronger recoveries than those serving international markets or metro areas more heavily affected by the decline in regional business travel. We expect enplanements will fully recover to pre-pandemic levels in fiscal 2023. For more information, see "U.S. Transportation Infrastructure 2023 Activity Estimates Show Air Travel Likely To Fully Recover, With Transit Ridership Still Lagging," published Jan. 9, 2023.

Mass transit's low ridership remains a challenge

After declining materially in fiscal years 2020 and 2021, median ridership hit approximately 55% of the 2019 level in fiscal 2022 (charts 7 and 8). Mass transit has been the slowest transportation asset class to recover, as remote work patterns and, to some extent, passengers' reluctance to return to mass transit (because of reliability or safety concerns) have disrupted demand. The pace of recovery has varied between regions and modes of transit. Commuter rail systems saw weaker recovery as a result of remote working trends, while bus and subway ridership have generally performed better. For more information, see "U.S. Transportation Infrastructure Transit Update: End Of The Line Nears For Federal Assistance As Low Ridership Pressures Operators," published Sept. 28, 2023.

Toll traffic remains resilient

Toll roads have been among the most resilient transportation infrastructure asset classes in recent years given the almost-complete rebound in demand, supported by steady commercial vehicle traffic. Overall, toll transactions saw an increase in 2019, followed by a pandemic-induced decline in 2020 and a rebound in 2021 and 2022 (charts 7 and 8). Most toll road operators recovered to pre-pandemic activity in 2022 and continue to see more modest growth that we expect will continue in 2023 and 2024. Although pent-up consumer travel demand following the pandemic might be subsiding, we continue to see stable-to-growing commercial vehicle traffic across the sector. For more information and credit highlights, see "U.S. Transportation Infrastructure Toll Sector Report Card: Resilient Demand And Higher Tolls Underpin Credit Strength," published Aug. 17, 2023.

Port volumes mirror the economy

Despite the temporary but severe decline in second-quarter 2020, output rebounded through 2022 as the port sector benefited more than did any other U.S. transportation infrastructure sector from the post-pandemic economy and changes in consumer behavior. Even cruise operations have recovered to pre-pandemic levels. Fiscal 2022 median tonnage was 109% of the 2019 level, although we note that it was lower than the fiscal 2021 level (table 10) and that median growth fell to 3% (chart 8) as activity slowed in late 2022, likely because inflationary pressures and the increasing possibility of a recession in 2023 adversely affected consumer purchasing power and demand for goods. For more information, see "U.S. Transportation Infrastructure Port Sector Update And Medians: Ports Are Resilient In Shifting Tides," published Dec. 13, 2022.

Recovery of parking utilization varies by location and user

Overall parking utilization improved in 2022 as mobility and health and safety restrictions eased, local economies reopened, leisure activities resumed, and remote workers gradually returned to the office. Parking has generally faced a slower recovery than have other U.S. transportation subsectors, though by its very nature parking activity is largely site-specific, and recovery trends have varied depending on local economic conditions, employment and retail trends, events and entertainment venues, and users' behavioral patterns. Unlike utilization, operating revenue per space in 2022 (charts 7 and 8) exceeded the 2019 level, as many parking systems increased rates to offset lower transactions. Some parking operators also saw a shift in utilization patterns and revenue (e.g., increased weekend parking transactions offset lower weekday parking) and some parking systems' increased daily parking revenue offset declines in monthly parking revenue, as hybrid workers commuting two to three times a week are choosing to pay daily rates rather than purchase a monthly pass. We expect to see a continued recovery in transactions and revenue across the rated parking universe in 2023, but commuter-based demand is unlikely to return to pre-pandemic levels given behavioral changes and trends related to working from home. For more information, see "U.S. Transportation Infrastructure Sector Update And Medians: U.S. Parking Sector View Is Now Stable," published May 4, 2022.

Select Fiscal 2022 Medians By Transportation Asset Class

Financial metrics vary across our transportation subsectors. Key observations from our analysis of median values of key financial metrics by asset class--airports, mass transit, toll roads, ports, and parking--are detailed below.

Airport sector medians

As air travel demand has substantially recovered and normalized to predictable levels, airport operators have returned to business-as-usual rate-setting practices and resultant financial metrics as they exhaust remaining federal pandemic relief aid. This is demonstrated by fiscal 2022 median financial metrics' returning to pre-pandemic levels (tables 4 and 5).

After significant declines in 2020 and 2021, median airport coverage and debt to net revenue returned to pre-pandemic levels given the robust recovery in air travel demand, which we expect will continue through fiscal 2023 (tables 4 and 5).

Debt capacity returned to very strong levels but remained generally weaker than pre-pandemic levels given increased debt issuance for large capital programs.   Specifically, median debt to net revenue for 'AA' rated airports and the overall airport sector improved in fiscal 2022 but remained near 10x (compared with less than 8x in 2019) as increases in debt outstanding and operating expenses partly offset revenue recovery. Median debt outstanding for the overall sector and 'AA' rating category increased as many of our rated large hub airports issued debt in fiscal 2022 to finance sizable capital improvement plans. In contrast, median debt to net revenue for 'A' rated airports slightly improved to 7.65x (compared with 8.15x in 2019) and median debt declined.

Median operating expenses increased approximately 11% in fiscal 2022, exceeding 2019 expenses (chart 9).   Although median operating expenses declined in fiscal years 2020 and 2021, expenses surpassed 2019 expenses in fiscal 2022 as a result of inflation and higher labor costs (table 4).

Significant federal aid allowed airports to bolster cash reserves as demand recovered.   As airports continued to receive federal aid reimbursements in fiscal 2022, unrestricted days' cash on hand generally improved and remained at 400 to 800, a range we consider very strong and comparable with pre-pandemic levels, as demonstrated by the overall sector median as well as medians for airports in all rating categories (tables 4 and 5).

Table 4

Select airport medians
	--Fiscal year (n=60)--
	2022	2021	2020	2019
Total operating revenue ($000s)	189,518	138,987	137,982	165,691
Operating expenses ($000s)	104,783	81,175	90,931	94,794
S&P Global Ratings net revenue ($000s)	96,069	50,580	55,043	85,649
Coverage (x)	1.50	1.03	1.06	1.58
Debt to net revenue (x)	9.5	11.2	11.4	7.9
Debt ($000s)	1,057,063	914,811	918,639	896,133
Unrestricted cash and investments ($000s)	234,431	161,873	144,629	146,135
Unrestricted days' cash on hand	652	605	489	527
Unrestricted reserves to debt (%)	25	23	22	23
EPAX (000s)	6,122	3,744	4,839	6,832
EPAX origin-and-destination share (%)	95	95	95	94
Top airline EPAX market share (%)	38	41	41	42
Cost per EPAX ($)	9.91	13.7	14.28	8.73
Debt per EPAX ($)	125	189	157	98
Note: Mean and median calculations exclude Williamson and St. Joseph County Airport Authority general obligation ratings. EPAX--Enplaned passengers.

Table 5

Select airport medians By rating category--fiscal 2022
	AA (n=16)	A (n=40)	BBB (n=3)	All airports
Total operating revenue ($000s)	461,615	109,117	25,636	189,518
Operating expenses ($000s)	316,636	73,637	18,895	104,783
S&P Global Ratings net revenue ($000s)	203,790	48,513	9,834	96,069
Coverage (x)	1.50	1.43	1.54	1.50
Debt to net revenue (x)	10.3	7.7	6.5	9.5
Debt ($000s)	2,575,080	504,935	72,272	1,057,063
Unrestricted cash and investments ($000s)	595,717	99,934	28,902	234,431
Unrestricted days' cash on hand	733	605	525	652
Unrestricted reserves to debt (%)	24	22	35	25
EPAX (000s)	22,367	4,380	584	6,122
EPAX origin-and-destination share (%)	80	95	100	95
Top airline EPAX market share (%)	43	35	50	38
Cost per EPAX ($)	10.24	8.64	14.81	9.91
Debt per EPAX ($)	131	114	124	125
Note: Mean and median calculations exclude Williamson and St. Joseph County Airport Authority general obligation ratings. EPAX--Enplaned passengers.

Mass transit sector medians

The impact of ridership declines on financial metrics has varied across the sector. Transit providers whose tax revenue makes up a large majority of their operating revenue maintained favorable metrics through the pandemic, while operators that have historically relied on farebox revenue leaned more on federal relief aid to cover operations and debt obligations. However, in fiscal 2022 most of our rated transit issuers benefited from robust growth in sales tax revenue and a 30% median increase in farebox revenue (chart 10).

Overall financial metrics improved in fiscal 2022 as a result of strong sales tax revenue growth, coupled with a partial recovery in fare revenue.   Specifically, median debt service coverage (DSC) and debt to net revenue for the overall transit sector and for each rating category improved to or beyond pre-pandemic levels (tables 6 and 7).

Favorable tax revenue performance provided revenue stability for transit operators.   Specifically, higher-rated mass transit operators with significant tax revenue support were able to maintain coverage and debt to net revenue generally near pre-pandemic levels through 2022. For 'AAA' and 'AA' rated mass transit operators, tax revenue generally makes up more than 60% of total revenue, and this provided credit stability in 2020 through 2022. Median sales tax revenue percent growth was in the double digits in 2021 and 2022 because of increased property values and inflation, coupled with higher consumer spending as a result of federal stimulus checks and easing pandemic restrictions (chart 10). In some cases, bolstered tax revenue more than offset farebox revenue declines, as demonstrated by an improvement in median coverage for the 'AA' rating category to more than 3x (very strong) in 2022.

'A' rated mass transit operators' financial metrics materially declined in 2020 and 2021 before improving in 2022.   'A' rated mass transit operators rely more on fare revenue, as net tax revenue generally made up less than 50% of total pre-pandemic revenue. In fiscal 2022 coverage and debt to net revenue for 'A' rated mass transit systems returned to levels we consider strong, comparable with pre-pandemic levels.

Liquidity positions improved across all rating categories as significant federal aid and tax revenue growth allowed transit systems to build unrestricted cash reserves (chart 10).   More specifically, unrestricted days' cash on hand and liquidity to debt generally improved annually through 2022 for most rated mass transit issuers as a result of increased cash reserves stemming from the infusion of federal relief aid, strong sales tax revenue performance, and the deferral of capital projects, as demonstrated by the overall sector median as well as median values by rating category (tables 6 and 7).

Table 6

Select mass transit medians
	--Fiscal year (n=35)--
	2022	2021	2020	2019
Total operating revenue ($000s)	38,907	35,174	54,487	75,295
Operating expenses ($000s)	334,474	321,725	316,176	303,689
S&P Global Ratings net revenue ($000s)	97,685	56,224	45,669	71,530
Coverage (x)	1.96	1.68	0.97	2.08
Debt to net revenue (x)	2.6	3.3	6.8	4.6
Debt ($000s)	600,451	544,147	474,825	490,844
Unrestricted cash and investments ($000s)	383,614	271,540	184,797	136,194
Unrestricted days' cash on hand	482	338	252	195
Unrestricted reserves to debt (%)	74	58	52	49
Net tax revenue ($000s)	414,410	275,511	241,154	204,249
Net tax revenue as % change	13	12	3	7
Net tax revenue as share of total revenue (%)	73	80	70	65
Farebox revenue ($000s)	28,928	20,449	34,880	53,757
Ridership (000s)	22,874	17,800	27,806	36,642

Table 7

Select mass transit medians by rating category--fiscal 2022
	AAA (n=2)	AA (n=22)	A (n=7)	All mass transit
Total operating revenue ($000s)	188,893	35,713	42,742	38,907
Operating expenses ($000s)	520,768	288,074	432,305	334,474
S&P Global Ratings net revenue ($000s)	1,024,035	97,685	36,268	97,685
Coverage (x)	5.89	3.05	1.41	1.96
Debt to net revenue (x)	4.9	1.7	12.3	2.6
Debt ($000s)	2,485,886	124,515	625,540	600,451
Unrestricted cash and investments ($000s)	1,944,146	383,614	219,185	383,614
Unrestricted days' cash on hand	1584	546	337	482
Unrestricted reserves to debt (%)	71	89	35	74
Net tax revenue ($000s)	1,125,334	340,395	1,046,201	414,410
Net tax revenue % change	4	16	11	13
Net tax revenue as share of total revenue (%)	52	78	53	73
Farebox revenue ($000s)	45,515	21,921	33,271	28,928
Ridership (000s)	19,413,371	20,414	29,808	22,874
Note: AAA category includes Minneapolis St. Paul, which receives about 7.8% of revenue from property taxes and about 39% from wastewater operations.

Toll road sector medians

Financial metrics remained resilient through 2022 despite higher expenses and increased debt loads. The combined effect of higher traffic demand and toll increases in fiscal 2022 resulted in 15% median growth in operating revenue, exceeding 2019 levels and supporting stable-to-improving metrics across the sector (chart 11).

DSC was maintained near historical levels as a result of transaction growth and toll increases accompanied by higher operations-and-maintenance expenses.   Median DSC improved but remained strong with 9% median growth in operating expenses partly offsetting revenue growth. After toll road operators reduced operating expenses in response to the pandemic, fiscal 2022 median operating expenses exceeded fiscal 2019 pre-pandemic expenses given the rebound in demand and cost increases (table 8).

Overall debt increased but debt capacity as measured by debt to EBIDA generally improved across all rating categories in 2022.   Median absolute debt outstanding has increased since 2019 as debt associated with capital projects was issued. We expect increased capital project costs stemming from inflationary pressures will result in higher debt supported by revenue growth from strong demand trends and toll rate increases.

Although 'AA' and 'A' rated airports maintained very strong debt capacity through 2022, the median debt capacity for 'BBB' rated toll roads fell to levels we consider vulnerable in 2020 and 2021 because of weaker financial margins going into the pandemic and increased leverage in fiscal 2020. Approximately 67% of 'BBB' rated toll roads are single-toll bridges or roads, and the remaining 33% are smaller citywide systems or start-ups, explaining their weaker margins and debt capacity relative to those of higher-rated peers (table 9).

Management teams have increased liquidity positions as a proactive approach to mitigating future potential stresses, including rising construction costs and operating expenses.   Despite increases in operating expenses in 2022, median unrestricted days' cash on hand was above 2019 levels across all rating categories as toll operator management teams had lowered operating expenses in 2020 and 2021 to mitigate the possibility of continued demand weakness. The rapid recovery in transactions and operating revenue allowed issuers to build cash reserves as revenue exceeded budgeted amounts significantly in fiscal years 2021 and 2022.

Table 8

Select toll road medians
	--Fiscal year (n=55)--
	2022	2021	2020	2019
Total operating revenue ($000s)	159,105	122,136	120,449	135,420
Operating expenses ($000s)	45,374	36,016	41,060	43,709
S&P Global Ratings net revenue ($000s)	95,250	69,603	73,298	73,168
Coverage (x)	1.80	1.57	1.65	1.85
Debt to net revenue (x)	6.8	7.6	10.1	6.9
Debt to EBIDA (x)	6.9	7.7	11.9	7.8
Debt ($000s)	714,827	711,456	692,940	555,202
Unrestricted cash and investments ($000s)	162,207	152,816	121,740	125,260
Unrestricted days' cash on hand	978	976	1031	725
Unrestricted reserves to debt (%)	14	17	14	16
Toll transactions (000s)	45,860	44,761	39,310	52,450

Table 9

Select toll road medians by rating category--fiscal 2022
	AA (n=17)	A (n=29)	BBB (n=9)	All toll roads
Total operating revenue ($000s)	776,134	94,891	33,624	159,105
Operating expenses ($000s)	218,543	19,326	12,532	45,374
S&P Global Ratings net revenue ($000s)	507,101	77,070	24,401	95,250
Coverage (x)	2.24	1.80	1.58	1.80
Debt to net revenue (x)	4.9	6.5	13.6	6.8
Debt to EBIDA (x)	4.9	6.7	15.0	6.9
Debt ($000s)	2,103,100	607,837	308,602	714,827
Unrestricted cash and investments ($000s)	557,050	86,795	31,709	162,207
Unrestricted days' cash on hand	959	898	1245	978
Unrestricted reserves to debt (%)	15	14	7	14
Toll transactions (000s)	163,594	23,964	14,382	45,860

Port sector medians

Rated ports have historically maintained higher financial metrics than those of other not-for-profit transportation asset classes because of their exposure and susceptibility to swings in commodity prices affecting cargo volumes, often-rapid changes in the business cycle and global economy, and trade policy variations over time.

Record levels of containers and cargo imports and revenue growth resulted in steady improvement in financial metrics in fiscal 2022.   Many U.S. ports continued with record levels of containers and cargo imports, with median tonnage and operating revenue increasing 3% and 21%, respectively, while operating expenses increased 18% after remaining relatively stable in prior years (chart 12). As a result, fiscal 2022 median coverage, debt capacity (debt to net revenue), and liquidity steadily improved (table 10).

Strong revenue growth offset increased debt in 2021 and 2022, supporting extremely strong debt capacity.   In addition, many projects are constructed for existing shipping line tenants under agreements that provide for minimum annual guaranteed revenues sufficient to support debt.

Days' cash on hand improved to extremely strong levels as median unrestricted cash and investments grew 21% (table 10 and chart 12).   Strong demand and revenue performance have allowed issuers to build cash reserves with fiscal 2022 growth in unrestricted cash offsetting higher operating expenses.

'AA' rated ports generally maintain stronger financial metrics as a result of their larger size, activity volumes, and financial margins compared with 'A' rated ports.   'AA' rated port issuers generally maintain DSC that we consider very strong and debt capacity that we view as extremely strong, while 'A' rated ports generally maintain weaker DSC and debt to net revenue, as reflected in the medians by category (table 11). The 'AA' rated ports are the largest in the U.S. and many receive some form of tax revenue supporting their operations. The 'A' rated ports include those that specialize in a niche market, are concentrated in one commodity, have exposure to tourism revenue, or are relatively small in the sector.

Table 10

Select port medians
	--Fiscal year (n=24)--
	2022	2021	2020	2019
Total operating revenue ($000s)	108,296	96,749	101,866	109,611
Operating expenses ($000s)	59,219	53,727	56,993	53,800
S&P Global Ratings net revenue ($000s)	49,529	30,440	29,264	26,028
Coverage (x)	3.23	2.48	2.29	2.77
Debt to net revenue (x)	4.1	4.8	4.9	4.5
Debt to EBIDA (x)	4.4	4.8	6.4	5.2
Debt ($000s)	260,370	195,891	141,797	137,697
Unrestricted cash and investments ($000s)	81,945	67,930	64,172	63,352
Unrestricted days' cash on hand	815	733	571	518
Unrestricted reserves to debt (%)	72	57	49	48
Total tonnage (000s)	12,995	14,794	11,166	8,285

Table 11

Select port medians by rating category--fiscal 2022
	AA (n=8)	A (n=16)	All ports
Total operating revenue ($000s)	347,625	82,181	108,296
Operating expenses ($000s)	127,913	46,737	59,219
S&P Global Ratings net revenue ($000s)	209,562	42,245	49,529
Coverage (x)	4.62	2.57	3.23
Debt to net revenue (x)	2.1	5.6	4.1
Debt to EBIDA (x)	2.8	6.8	4.4
Debt ($000s)	389,646	201,954	260,370
Unrestricted cash and investments ($000s)	446,496	63,337	81,945
Unrestricted days' cash on hand	1251	462	815
Unrestricted reserves to debt (%)	104	41	72
Total tonnage (000s)	55,061	7,359	12,995

Parking sector medians

Parking has seen a material decline in demand and financial metrics because of the pandemic and, as with transit, has faced a slower recovery than that of other U.S. transportation infrastructure sectors. The recovery in financial metrics in 2022 has mirrored utilization, varying depending on the location and type of user served and the extent to which operators have been able to increase rates to offset lower demand compared with before the pandemic.

Overall median coverage and debt to net revenue improved but remain below pre-pandemic levels, as increased expenses largely offset revenue growth from parking rate increases and improved utilization (table 12).   Fiscal 2022 median operating revenue grew 24%, exceeding 2019, pre-pandemic revenue, but the 16% median increase in operating expenses largely offset this rebound, as reflected in median net revenue at only 66% of the 2019 level (chart 13). Management teams reduced operating expenses in 2020 and 2021 to mitigate significant revenue declines, but as parking utilization has improved, expenses have also grown, from inflation, higher labor costs, and additional personnel needed to accommodate recovering demand.

Median coverage and debt capacity for 'AA' and 'A' rated parking systems weakened but generally remained near 2019 levels through the pandemic, while 'BBB' rating category metrics materially declined and remain below pre-pandemic levels.   Specifically, 'AA' and 'A' rating category coverage remained strong as a result of those issuers' larger size and higher financial margins as well as a combination of various management actions, such as reduction of operating expenses, restructuring of debt, and postponement of capital projects. Comparatively, median coverage for 'BBB' category systems improved to 1.06x in fiscal 2022 from less than 1.0x (highly vulnerable) in 2020 and 2021 but remains below adequate pre-pandemic levels.

Debt capacity as measured by debt to net revenue for the parking sector was 4.9x in 2019, primarily reflecting the debt capacity of our 'AA' and 'A' rated parking systems. Median debt capacity weakened to 9.1x in 2020, then gradually improved but remained above 5.0x through 2022. Median debt capacity for 'BBB' rated parking systems improved to less than 20x in 2022 but remains weaker than pre-pandemic levels.

DSC varies depending on flow of funds.   DSC and liquidity can vary across the parking sector, as many parking systems are managed by the city or county and have an open flow-of-funds structure whereby excess parking revenue can be transferred out to the general fund for any use not related to the parking system. We treat these transfers out of the enterprise as debtlike in our coverage calculation. Of our rated parking systems, three are break-even enterprises that transfer out all excess revenue to the general fund, resulting in 1x DSC (S&P Global Ratings-calculated), and many others maintain slim coverage because of similar transfers out to the related government. These systems generally maintain weaker liquidity as well. However, we note that during the pandemic, these parking systems benefited from city or county support in the form of transfers from the city's or county's general fund or federal aid allocations to offset revenue shortfalls and meet debt service payments. These related governments were not legally obligated to provide financial support.

Although unrestricted cash remained stable, days' cash weakened as a result of operating expense increases in 2022.   Overall, the 2022 median for unrestricted days' cash on hand declined further into the adequate category to 169 with management's deployment of cash to cover operating expenses and debt service obligations in 2020 and 2021, coupled with operating expense increases in 2022.

Table 12

Select parking medians
	--Fiscal year (n=20)--
	2022	2021	2020	2019
Total operating revenue ($000s)	11,035	6,623	7,744	10,960
Operating expenses ($000s)	4,888	4,963	4,916	5,539
S&P Global Ratings net revenue ($000s)	4,334	2,819	3,734	5,723
Coverage (x)	1.12	0.98	1.07	1.33
Debt to net revenue (x)	7.9	6.6	9.1	4.9
Debt to EBIDA (x)	9.7	18.9	16.8	6.1
Debt ($000s)	39,101	36,730	38,509	38,180
Unrestricted cash and investments ($000s)	3,198	3,018	3,260	3,304
Unrestricted days' cash on hand	169	258	231	296
Unrestricted reserves to debt (%)	16	12	18	20
Operating revenue per space ($)	2,304	1,545	1,585	2,115

Table 13

Select parking medians by rating category--fiscal 2022
	AA (n=2)	A (n=12)	BBB (n=4)	All parking
Total operating revenue ($000s)	63,907	8,406	9,175	11,035
Operating expenses ($000s)	36,263	6,202	7,779	4,888
S&P Global Ratings net revenue ($000s)	38,537	4,006	3,331	4,334
Coverage (x)	1.30	1.49	1.06	1.12
Debt to net revenue (x)	7.0	3.7	17.6	7.9
Debt to EBIDA (x)	7.4	5.3	26.4	9.7
Debt ($000s)	188,215	20,570	48,605	39,101
Unrestricted cash and investments ($000s)	177,172	4,312	3,790	3,198
Unrestricted days' cash on hand	945	292	142	169
Unrestricted reserves to debt (%)	57	31	6	16
Operating revenue per space ($)	3,162	1,596	3,053	2,304

Rating Actions And Distribution

Mostly positive rating actions across all transportation infrastructure asset classes over the past 12 months.  The fourth quarter of 2022 and year-to-date 2023 have seen a continuation of generally positive rating trends across TIE asset classes. The past 12 months yielded 64 positive rating actions and two negative rating actions, including positive rating actions in every asset class except parking (chart 14). Mass transit and parking were the only subsectors with a negative rating action over the past 12 months given slow recoveries and financial pressures after the worst of the pandemic. The mass transit sector, however, saw some positive rating actions largely as a result of significant state, local, and federal support and favorable tax revenue growth over the past few years. Airports had the highest number of positive rating actions, followed by the special facilities sector, which includes consolidated rental car facilities and fuel facilities, as ratings were raised back to or higher than pre-pandemic levels (chart 15). The port and toll road sectors saw multiple positive rating actions and no negative rating actions over the past 12 months. S&P Global Ratings saw continued resilience and stability across the not-for-profit port and toll road operators that it rates, with no negative rating actions since the start of the pandemic in 2020.

Share of ratings at pre-pandemic levels varies across asset classes, with rating actions attributed to improving demand and financial metrics, project completion, reduced start-up risks, and tax support.   In terms of ratings relative to pre-pandemic ratings, 75% of all U.S. transportation infrastructure ratings are at their Jan. 1, 2020, levels (chart 15). Only 5% of ratings remain below their pre-pandemic levels, including those in parking, mass transit, airports, and special facilities, as these sectors materially suffered during the pandemic and some have maintained weaker demand and financial metrics. We note that approximately 20% of ratings are above their pre-pandemic levels. While 13% of special facility ratings (specifically consolidated rental car facility ratings) remain below their pre-pandemic level, 38% of ratings are above their 2019 ratings. This includes newer consolidated rental car facilities that have completed construction and have performed well post-pandemic (Chicago O'Hare and Port of Portland customer facility charge ratings), as well as the SFO Fuel Company LLC and SEATAC Fuel Facilities LLC, which demonstrated financial resilience through the pandemic given their highly essential nature and residual agreements with member airlines.

As a result of these positive rating actions to levels above pre-pandemic levels, the U.S. transportation infrastructure sector median rating has improved to 'A+' from 'A' since Jan. 1, 2020 (table 14). At the asset class level, the median rating improved for three of our six asset classes.

Table 14

Median U.S. transportation infrastructure enterprise ratings as of Oct. 6, 2023 vs. Jan. 1, 2020
	--As of Oct. 6, 2023--	--As of Jan. 1, 2020--
All U.S. not-for-profit transportation infrastructure	A+	A
Airports	A+	A
Special facilities	A	A
Ports	A+	A
Parking	A-	A
Toll roads	A	A
Transit	AA	AA-

Continued increase in outlook stability across most transportation infrastructure asset classes.  The prevalence of stable rating outlooks continues, with 91% of TIE ratings maintaining a stable outlook, up from 84% at the beginning of 2023. For historical context, on Jan. 1, 2020 (pre-pandemic), 90% of TIE ratings had a stable outlook (chart 16), suggesting a continued return to normalcy in the aftermath of the worst of the COVID-19 pandemic over the past 12 months.

Outlook stability is most pronounced in the port, toll road, and airport sectors, with transit and parking making up a larger share of negative outlooks.

Across the U.S. not-for-profit TIE sector, rating outlooks are mostly stable at 91%, while 6% are positive and 3% negative as of Oct. 6, 2023 (chart 16). Mass transit and parking ratings make up a majority of the sector's negative outlooks, as demand and financial metrics materially declined as a result of the pandemic and have recovered more slowly than have other U.S. transportation infrastructure sectors. The airport sector only has one rating (Guam International Airport) with a negative outlook (see chart 17).

Most TIE sector ratings are high-investment-grade, in the 'A' rating category or above, as a result of strong financial metrics, and generally stable demand trends, notwithstanding pandemic-related adverse demand effects that have mostly subsided

The majority of U.S. TIE ratings are in the 'AA' and 'A' rating categories (87%), reflecting favorable market positions and financial metrics, while only 1% of ratings are speculative-grade. There is some variation between asset classes, although most TIE ratings are 'A+' and 'A' (charts 19 and 18).

• Approximately 94% of port ratings are either 'AA' (34%) or 'A' (59%), reflecting their highly essential nature and generally stronger financial metrics compared with other U.S. transportation infrastructure asset classes.
• More than 50% of toll road ratings are in the 'A' category. 'AA' rated toll roads primarily consist of large, statewide systems such as Florida's Turnpike Enterprise and the New Jersey Turnpike Authority. Most toll roads in the 'BBB' rating category are single-asset systems and/or start-up toll roads with significant capital needs and high leverage.
• More than 70% of airport and special facility ratings are in the 'A' category, while 19% are in the 'AA' category, which includes large-hub airports with favorable competitive positions providing an essential service to their region and with strong-to-very-strong financial metrics.
• Mass transit ratings tend to be higher given significant local, state, and federal government financial support in the form of grants and dedicated tax revenue streams, as is evident in that 9% of our transit ratings are in the 'AAA' category, with 65% in the 'AA' category and the remaining 26% in the 'A' category. We note that no transit issuers have an issuer credit rating lower than 'A-' following our positive rating action on the New York Metropolitan Transportation Authority's transit system on Oct. 3, 2023.
• The parking sector tends to be lower rated: 90% of parking ratings are 'A+' or lower, with 10% speculative-grade and only 10% rated 'AA-' (Texas Medical Center and Baltimore Mayor & City Council).

Primary Credit Analyst:	Kayla Smith, Englewood + 1 (303) 721 4450; kayla.smith@spglobal.com
Secondary Contacts:	Kurt E Forsgren, Boston + 1 (617) 530 8308; kurt.forsgren@spglobal.com
	Andrew J Stafford, New York + 212-438-1937; andrew.stafford1@spglobal.com
Research Contributors:	Ritesh Bagmar, CRISIL Global Analytical Center, an S&P affiliate, Pune
	Nisha Gujaran, CRISIL Global Analytical Center, an S&P affiliate, Mumbai
	Romi Pandey, CRISIL Global Analytical Center, an S&P affiliate, Pune