1

2006 Port Everglades Master Plan Update

Public Participation Program

2nd Meeting

December 6, 2006

2

Where We are Today . . . .

– Public participation program, 2nd meeting: December 6

– Stakeholder meetings, 2nd meeting: December 7

– Conducted one-on-one tenant meetings

– Conducted facilities assessment

– Conducted market assessment

– Conducted capacity assessment subject to berth utilization refinements

3

Where We will be Going . . . .

– Preparation of Master Plan development with assets and constraints applied

– First workshop with Board of County Commissioners scheduled for February 20, 2007

4

In Spring 2007 . . . .

– Refinement of Master Plan, 10- and 20-year Vision Plans

– Preparation of 5-year Capital Improvement Program

– Workshop/presentation with Board of County Commissioners

5

Port Everglades Mission Statement

The mission of Port Everglades is to manage the county’s port-related assets to maximize the economic benefits to the citizens and businesses of Broward County and the State of Florida. The port will manage the county’s assets in a financially responsible, environmentally sound manner, consistent with the local, state, and federal rules and regulations which govern international and domestic trade, transportation and the port industry.

6

Port Everglades Assets Today

N

7

Existing Land Uses

N

8

Market Assessment

– Container cargo

– Non-container cargo; dry bulk & neo bulk cargos (i.e. cement, lumber, etc.)

– Liquid bulk (petroleum products)

– Cruise

9

Container Cargo AssessmentPrepared by Martin & Associates

Non-Container Cargo AssessmentPrepared by Michael L. Sclar Associates, Inc.

Liquid BulkPrepared by Purvin & Gertz

CruisePrepared by Bermello, Ajamil & Partners, Inc.

10

Container Market Assessment - Methodology– Assess historical containerized growth

• US port growth• Southeast port growth• Florida port growth

– Examine historical container growth of key trading partners• Asia• Europe • Latin America/Caribbean• Other world areas

– Examine historical and future GDP growth of Latin American and Caribbean regions• International Monetary Fund• Economic Commission for Latin American and the Caribbean (ECLAC)

– Determine Florida and South Florida population growth and projections

– Interview PEV terminals and carriers to determine near-term anticipated growth

11

US containerized import cargo has grown at an average annual rate of 9.8% -- driven by Asian imports

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,00019

94

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

Tons

Carib/Central Am S. America Asia EuropeMed/ME Australia/NZ Africa All Other

12

Southern Florida population growth is expected to average nearly1.6% annually over planning horizonFlorida/southern Florida population growth and estimates 1980-2026

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

SOUTH FLA TOTAL FLA

Source: Demographic Estimating Conference Database, updated July 2006; South FLA counties include: Broward, Charlotte, Collier, De Soto, Glades, Hardee, Hendry, Highlands, Indian River, Lee, Manatee, Martin, Miami-Dade, Monroe, Okeechobee, Palm Beach, St. Lucie and Sarasota

13

Latin American and Caribbean GDP growth rates are expected to maintain levels between 4% and 5% in the near term

0

1

2

3

4

5

6

Perc

ent c

hang

e in

GD

P

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Source: International Monetary Fund, World Economic Outlook, September 2006

14

Percent of Container Imports by Trade Route 2006 comparison with other ports

PEV

17%

7%52%

6% 2%16%

ASIA/ISCSOUTH AMERCARIBBEANCENTRAL AMEREUROPE/MEDOTHER

SAVANNAH

4%

0%

1%15%

2%

78%

ASIA/ISCSOUTH AMERCARIBBEANCENTRAL AMEREUROPE/MEDOTHER

CHARLESTON

10%2%

44%

4%

40% ASIA/ISCSOUTH AMERCENTRAL AMEREUROPE/MEDOTHER

MIAMI

14%10%

14%

27%

1%

34%ASIA/ISCSOUTH AMERCARIBBEANCENTRAL AMEREUROPE/MEDOTHER

Source: PIERS Database, 2006

15

Container Forecast Assumptions– Developed LOW and HIGH scenarios

• LOW scenario assumes modest growth based on historical and projected growth

South Florida population growth (import consumption)– Statistically closely related to container growth

Growth by trade laneLatin American and Caribbean GDP (export)

– ECLAC and IMF historical and near-term projectionsSouth Florida (PEV + Miami) container growthAssumes same carrier composition, NO NEW SERVICE

• HIGH scenario assumes more robust growth based on historical andprojected growth

South Florida population growth (import consumption)Growth by trade laneLatin American and Caribbean GDPTerminal and carrier near-term projectionsNew services

– Latin American/Caribbean – Asian/Northern European POTENTIAL

16

Low/High Container ForecastChoices will be made under analysis and implementation will be phased

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

2005

2006

2007

2008

2009

2010

2011

2012 20

320

1420

1520

1620

1720

1820

1920

2020

2120

2220

2320

2420

2520

26

TEU

LOW HIGH

2.7 M

1.8 M

17

Non-Container Cargo Market Assessment– Overview

• The overwhelming proportion of dry bulk and neo bulk cargos are related to the Florida construction industry

• Dry bulk cargos are dominated by cement and aggregates for the cement industry

• Similarly, the largest proportion of neo bulk cargos are steel (rebar) and lumber

18

Other Commodities - Neo Bulk

– Yachts and autos for export represent the two other significant neo bulk commodities

– Yacht imports are projected to increase significantly with the potential to double every 5 years (until the market is saturated)

– Autos handled in Port Everglades are primarily used automobiles for export; new cars are routed via Jacksonville

19

Primary Forecast Drivers– Over the long-term, the growth of the Florida

construction industry will approach the growth rates for Florida population

– The economic cycles impacting construction growth rates will dominate the long-term trends

– Changes in inventory levels (e.g. resulting from steel import cycles and cement plant capacity growth) will further impact short-term trends

– Specific events such as court ordered limitations on crushed rock mining at the Lake Belt mines could create a significant opportunity for Port Everglades

20

01,000,0002,000,0003,000,0004,000,0005,000,0006,000,0007,000,0008,000,0009,000,000

2000

2003

2006

2009

2012

2015

2018

2021

2024

BaseForecastHighForecastLowForecastNeeds Forecast

High, Baseline, Low and Needs Assessment ForecastsDry bulk and neo bulk tonnage for Port Everglades

21

Conclusions

– Cement represents the most stable market – Lumber and steel volumes are limited in growth

potential– Growth in yachts and a stable used car market round

out the neo bulk market – The dry bulk and neo bulk markets for Port Everglades

are relatively flat with limited downside– The addition of 2-4 million tons of aggregate

represents the most significant potential upside, if feasible

22

Cruise Market Assessment Factors

– Very successful in developing new products that generate sustained interest in cruising• New, larger, exciting vessels, diverse onboard products and

services

• New regions, itineraries and on shore product offerings

• Products deliver a high level of passenger satisfaction, leadingto repeat clientele and lower conversion costs

• Several lines report repeat levels of over 45%

• Lines have learned to adapt quickly to changing market conditions and shift business models accordingly

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Evolution of Cruise VesselsPeriod Length Draft PAX Characteristics of the Period

1960 508 ft. 36 ft. 500 Vessels acquired & refurbished.

1970 705 ft. 32 ft. 650 Standard business model used with profitable results until the fuel crisis.

1980 803 ft. 29.5 ft. 1,500Change in business model; experimentation with larger ships and operating itineraries.

1990 902 ft. 26.25 ft. 2,600 Larger ships becoming the destination. Shallower drafts.

1997 965 ft. 26.25 ft. 3,600Mega-ships that are floating cities. Focus on maximizing passenger capacity. One-region vessels not capable of Panama Canal Transit.

2000 1,000 ft. 29.5 ft. 3,000Larger ship volume concentrating on creating efficiencies with ship design, outside cabin development, ship services and flexible deployment.

2006 1,000 ft. 29.5 ft. 4,000Freedom class, 160,000-GT. Allows for increased onboard revenue areas, largest ship in world status (ego / marketing boost), economies of scale.

Next Generation(Genesis)

1,100 – 1,400 ft. 32 - 36 ft. 5,000+

Product and service led design; new innovative marine hull design to support more above water structure. Separate apartment towers, entertainment zones and amenities. Limited port deployment options.

Fantasy Class

Grand Class

Radiance Class

Freedom Class

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Cruise Overview– Strengths include:

• Access to regional consumers; • High quality tourism infrastructure

demand• Convenient marine access• Number and length of cruise berths

– Improvement foreseen in cruise terminal facility offerings• Capability of Terminals to receive

largest cruise vessels • Availability of additional berthing

areas on peak days of operation• Ingress/egress issues impacting

cruise operations and parking

25

Cruise Target Regions– Western Caribbean– Eastern Caribbean– Lower Southern Caribbean– Grand Caribbean– Bahamas– Transcanal– Extended Caribbean/South America– Transatlantic– World cruises– US East Coast repositioning– Daily and non-conventional cruise

26

Caribbean Growth Factors– Cuba to provide increased port of call options, not

necessarily increased regional capacity (shifting)

– Port infrastructure needed for next ship generation

– Expansion of out-islands and destinations key

– Larger ships on shorter sailings

27

Cruise Revenue Passenger GrowthFY1996-FY2006

2,10

0,00

0

2,50

0,00

0

2,25

0,00

0

2,39

0,00

0

2,73

0,00

0 3,40

0,00

0

3,50

0,00

0

3,40

0,00

0 4,00

0,00

0

3,80

0,00

0

3,45

0,00

0

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Source: B&A, 2006.

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Regional Homeport Passenger Throughput

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Port Canaveral Port Everglades Port of Miami

Port of Palm Beach Port of Tampa

Source: B&A, 2006.

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Attractiveness of Port Everglades to Cruise Market

Criteria AssessmentMarine Access (short channel for large ships) / Terminal Location(s)Pier / Berthing (length of berths) / ApronGangways (new systems installed) / Terminal OperationsGround Transportation Areas (GTA) / Parking (proximity to terminals)ProvisioningSecurity / Landside Access (gate and roadway access) / Airport and Airlift (proximity and capacity) / LodgingAttractions and VenuesAccess to ConsumersGeneral AppealMarketing / Communications / Key: Strong ( ), Fair ( ), Weak ( )

Source: B&A, 2006.

30

Range of Revenue Total Passenger Projections

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

10,000,000

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

Historical A B LOW B HIGH B MID C1 C2 C3

Source: B&A, 2006.

31

Monthly Passenger Traffic

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP

2000 2001 2002 2003 2004 2005 2006Source: B&A, 2006.

32

Daily Passenger Traffic Comparison

0%2%4%6%8%

10%12%14%16%18%20%22%24%26%28%30%32%34%36%38%40%

MON TUE WED THU FRI SAT SUN

2000 2001 2002 2003 2004 2005 2006

Source: B&A, 2006.

33

Berths vs. Volumes – Mid ProjectionProjection B MID

0123456789

101112131415

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

Num

ber o

f ber

ths

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

Pas

seng

ers

TOTAL BERTHS DEMANDED TOTAL +/- 1,100 LOA DEMANDED PASSENGERS

Source: B&A, 2006.

34

Conclusions– Its all about the berths

• More passengers, longer berths

– New terminals/berths are needed in the next 2 to 5 years to support larger ships – more passengers

– Landside infrastructure must be modified to meet demand of more passengers, baggage, vehicles• Expansion through planning, technology, partnerships

35

Port Everglades’ Petroleum Industry serves a 12-County Region– Primary Market: Broward,

Miami-Dade, Palm Beach, Martin Counties

– Secondary Market: Collier, Glades, Hendry, Indian River, Lee, Monroe, Okeechobee, and St. Lucie

– Port supplies 87 percent of gasoline demand in region and 37 percent of Florida’s gasoline requirements

– Port supplies jet fuel to FLL and MIA

36

Petroleum Product Diversity– Regional petroleum product demand is growing at

about 2.7 percent annually

– Gasoline predominates, but Port also supplies diesel, asphalt, jet fuel, fuel oil for the power plants, propane, and some biodiesel fuels

– Industry services include• Selling gasoline to retail gas stations in the region supplying the

region’s international airports • Fueling the Port’s cargo and cruise ships• Serving military needs• Providing emergency storage

37

Market Characteristics

– Percentage of vessel calls is shifting from barge to tanker, with more product coming from international sources

– Tankers coming from international markets are larger than those from domestic sources

– Existing petroleum berths are utilized to capacity.

– Fully loaded larger tankers can experience constraints (berth length, slip width, water depth)

– Emergency situations such as hurricanes during peak seasonal demand can stress tenants’ storage and distribution capabilities

38

What is Needed to meet Market Forecasts . . . .– Container Cargo

• Increase berth and yard utilizationAdd Berths/Terminal YardsIncrease Efficiencies

– Increase berth occupancy– Increase lifts per call– Use higher density stacking equipment

• Deepen and widen channel

Non-Container Cargo • Determine feasibility of aggregate as major import commodity

– Cruise • Have 9 berths to handle 1100+ foot LOA ships• Increase cruise season/weekday use • Continue dual use of berths for cargo and cruise

– Petroleum• Increase receiving system efficiencies• Add berth capacity

39

Conclusion

Berth Capacity is the primary limiting factor to Port growth

NEXT STEPS

Balance capital improvements with operational efficiencies and environmental stewardship to achieve optimum Master Plan