Cruise Terminal Financing January 26, 2009 Board Workshop

presented byPublic Financial Management

300 S. Orange AvenueSuite 1170

Orlando, FL 32801407-648-2208

407-648-1323 fax

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Topics of Discussion

I. Existing Revenue Bonds

II. Key Bond Covenants

III. Credit Ratings Criteria

IV. Pro Forma Scenarios

Existing System (2008 Bond Forecast including MOL)

System + Hanjin without Cruise

System + Hanjin + Cruise based on BREA Case

System + Hanjin + Cruise Worst Case Scenario

V. Financial Conclusions

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Existing Revenue Bonds JaxPort currently has 3 series of revenue bonds outstanding for which system net

revenues are used to cover debt service Series 2000, 2006 and 2008

Capacity for further bonding depends on forecast system net revenues and financing conditions

-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

Dol

lars

Fiscal Year

Net Revenue vs. Debt Service on Revenue Bonds Outstanding

Series 2006 Debt Service

Series 2000 Debt Service

Series 2008 Debt Service

Existing Total Adjusted Net Operating Revenues (No Existing Cruise Revenues)

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Key Bond Covenants

Rate Covenant: Each Fiscal Year Net Revenues, together with Interlocal Agreement Revenues, will be sufficient to:

(i) pay one hundred twenty-five per centum (125%) of the then current Annual Debt Service Requirement on the Senior Bonds then outstanding, and

(ii) provide Gross Revenues, together with Interlocal Agreement Revenues, sufficient to pay all debt service, reserves and other payments required for in the Bond Resolution.

Additional Bonds Test – In order to issue Senior Revenue Bonds to fund projects such as the new Cruise Terminal and/or the Hanjin Container Terminal, JaxPort must meet one of the following tests:

(i) Historical, Net Revenues plus Interlocal Agreement Revenues during preceding two Fiscal Years equaled at least 1.50 times the MADS on the outstanding Senior Bonds plus additional parity bonds, or

(ii) Projected, Estimated Net Revenues plus Interlocal Agreement Revenues during five Fiscal Years following completion of the Project at least equal 1.25 times the MADS on the outstanding Senior Bonds plus additional parity bonds during such five Fiscal Years.

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Credit Ratings Criteria

JaxPort’s Senior Lien Revenue Bonds are currently rated “A2” by Moody’s and “A” by Fitch

JaxPort’s rating benefits from it’s diversified cargo and revenue streams as well as a strong local/regional economy

Other rating factors taken into consideration include attributes such as forecasted cargo/container demand, competition with other ports, diversification among shipping lines/trade routes, surface transportation links, etc.

While there is no defined debt service coverage level that will guarantee a certain rating, generally 1.75x senior lien debt service coverage is seen as safe level for “A” rated entities

Debt service coverage levels may be offset by above factors as well as well-crafted long term contracts and leases

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Proforma: MOL only (Existing Case)

Existing case includes MOL. Hanjin and cruise not included. Minimum senior coverage is 1.94x

Jacksonville Port AuthorityExisting with MOL

9/30/2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019JaxPort Revenue BondsNet Revs Existing Total Adjusted Net Operating Revenues (No Existing Cruise Revenues) 19,696,258 26,043,429 26,533,752 26,014,081 26,587,903 27,052,179 28,608,333 29,006,724 29,429,611 29,855,327 30,296,266

Total Net Revenues 19,696,258 26,043,429 26,533,752 26,014,081 26,587,903 27,052,179 28,608,333 29,006,724 29,429,611 29,855,327 30,296,266

Debt Serv Existing Sr DS 10,160,838 11,552,386 12,696,661 12,704,064 12,707,665 12,711,770 12,715,551 12,718,181 12,723,690 12,735,832 12,743,512 Existing Jr DS including $50 mil line of credit takeout 7,295,220 10,252,260 10,252,327 10,251,836 10,251,993 10,116,734 9,057,987 9,055,151 9,057,275 9,058,782 8,725,430 Total Debt Service 17,456,058 21,804,646 22,948,988 22,955,900 22,959,658 22,828,503 21,773,538 21,773,332 21,780,964 21,794,614 21,468,942

Total Sr DSC 1.94 2.25 2.09 2.05 2.09 2.13 2.25 2.28 2.31 2.34 2.38Total Aggregate Sr & Jr DSC 1.13 1.19 1.16 1.13 1.16 1.19 1.31 1.33 1.35 1.37 1.41

Scenario: MOL only (Existing Case)

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Proforma: Hanjin / No Cruise

Jacksonville Port AuthorityHanjin Terminal Plan of Finance

9/30/2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019JaxPort Revenue BondsNet Revs Existing Total Adjusted Net Operating Revenues (No Existing Cruise Revenues) 19,696,258 26,043,429 26,533,752 26,014,081 26,587,903 27,052,179 28,608,333 29,006,724 29,429,611 29,855,327 30,296,266

Hanjin Throughput Fees 0 0 0 13,600,000 13,600,000 13,600,000 13,600,000 13,600,000 13,600,000 13,600,000 17,600,000Hanjin Land Lease Rent 0 0 0 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 5,000,000 Total Revenues 19,696,258 26,043,429 26,533,752 43,614,081 44,187,903 44,652,179 46,208,333 46,606,724 47,029,611 47,455,327 52,896,266

Debt Serv Existing Sr DS 10,160,838 11,552,386 12,696,661 12,704,064 12,707,665 12,711,770 12,715,551 12,718,181 12,723,690 12,735,832 12,743,512 DS on JaxPort Revenue Bonds for Hanjin Terminal 0 0 0 12,986,675 12,986,675 12,986,675 12,986,675 12,986,675 12,986,675 12,986,675 16,735,738Existing Jr DS including $50 mil line of credit takeout 7,295,220 10,252,260 10,252,327 10,251,836 10,251,993 10,116,734 9,057,987 9,055,151 9,057,275 9,058,782 8,725,430 Total Expenses 17,456,058 21,804,646 22,948,988 35,942,575 35,946,333 35,815,178 34,760,213 34,760,007 34,767,639 34,781,289 38,204,680

Total Sr DSC with Hanjin 1.94 2.25 2.09 1.70 1.72 1.74 1.80 1.81 1.83 1.84 1.79Total Aggregate Sr & Jr DSC with Hanjin 1.13 1.19 1.16 1.21 1.23 1.25 1.33 1.34 1.35 1.36 1.38Hanjin DSC on Bond - - - 1.36 1.36 1.36 1.36 1.36 1.36 1.36 1.35

Total Rent & Additional Rent to JaxPort per PFM calculations 0 0 0 17,600,000 17,600,000 17,600,000 17,600,000 17,600,000 17,600,000 17,600,000 22,600,000

Net Income (Hanjin Project Only - Based on PFM calculations) 0 0 0 4,613,325 4,613,325 4,613,325 4,613,325 4,613,325 4,613,325 4,613,325 5,864,263

Throughput Fees Needed to Reach 1.50 Coverage on Bond DS 19,480,013 19,480,013 19,480,013 19,480,013 19,480,013 19,480,013 19,480,013 25,103,606

69,500,210 Hanjin Project NPV at 6.5% Based on PFM calculations; Does not incorporate the cost of land and improvements.

Scenario: Hanjin / No CruiseBonds: Dated 1/1/2010; $176 Mil Project; 6.5%; 7 yrs Int. only; 1 yr 4 months CAPIHanjin Throughput Fees: $80/box for all 30 years; Containers: 170,000 yrs 1-7, 220,000 yrs 8-15, 250,000 thereafter$2.0 Mil Cruise Ship Terminal Revenues Lost starting 2009Hanjin Land Lease Rent: $4 Mil yrs 1-7, $5 Mil yr 8 at 2% inflation thereafter

Hanjin proceeds as planned. Cruise business is not pursued. Minimum senior coverage is 1.70x NPV of Hanjin project is positive $70 million No bond covenant default occurs. Credit ratings remain stable.

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Proforma: Hanjin / Cruise based on BREA Case

Cruise debt issued for a $60 million project Minimum senior coverage is 1.70x NPV for the cruise project is positive $45 million Cruise project supports itself. System debt service coverages on

average decrease slightly versus the Hanjin / No Cruise scenario. No bond covenant default occurs. Credit ratings remain stable.

Jacksonville Port AuthorityCruise Terminal Plan of Finance

9/30/2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019JaxPort Revenue BondsNet Revs Existing Total Adjusted Net Operating Revenues (No Existing Cruise Revenues) 19,696,258 26,043,429 26,533,752 26,014,081 26,587,903 27,052,179 28,608,333 29,006,724 29,429,611 29,855,327 30,296,266

Hanjin Throughput Fees 0 0 0 13,600,000 13,600,000 13,600,000 13,600,000 13,600,000 13,600,000 13,600,000 17,600,000Hanjin Land Lease Rent 0 0 0 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 5,000,000Cruise Terminal Revenues 3,838,143 3,934,096 6,575,686 6,740,078 8,553,672 8,767,514 9,391,969 9,837,583 10,083,523 10,335,611 10,438,967Cruise Terminal Expenses (850,000) (875,500) (1,200,000) (1,236,000) (1,273,080) (1,311,272) (1,350,611) (1,391,129) (1,432,863) (1,475,849) (1,520,124) Total Net Revenues 22,684,401 29,102,025 31,909,438 49,118,159 51,468,495 52,108,421 54,249,692 55,053,178 55,680,271 56,315,089 61,815,109

Debt Serv Existing Sr DS 10,160,838 11,552,386 12,696,661 12,704,064 12,707,665 12,711,770 12,715,551 12,718,181 12,723,690 12,735,832 12,743,512 DS on JaxPort Revenue Bonds for Hanjin Terminal 0 0 0 12,986,675 12,986,675 12,986,675 12,986,675 12,986,675 12,986,675 12,986,675 16,735,738DS on JaxPort Revenue Bonds for Cruise Terminal 0 0 0 2,331,225 4,662,450 4,662,450 4,662,450 5,804,100 5,804,800 5,805,138 5,804,788Existing Jr DS including $50 mil line of credit takeout 7,295,220 10,252,260 10,252,327 10,251,836 10,251,993 10,116,734 9,057,987 9,055,151 9,057,275 9,058,782 8,725,430 Total Debt Service 17,456,058 21,804,646 22,948,988 38,273,800 40,608,783 40,477,628 39,422,663 40,564,107 40,572,439 40,586,426 44,009,467

Total Sr DSC 2.23 2.52 2.51 1.75 1.70 1.72 1.79 1.75 1.77 1.79 1.75Total Aggregate Sr & Jr DSC 1.30 1.33 1.39 1.28 1.27 1.29 1.38 1.36 1.37 1.39 1.40DSC on Cruise Terminal Bond - - - 2.36 1.56 1.60 1.72 1.46 1.49 1.53 1.54

Net Income (Cruise Terminal Project Only - Based on PFM calculations) 2,988,143 3,058,596 5,375,686 3,172,853 2,618,142 2,793,792 3,378,908 2,642,354 2,845,860 3,054,625 3,114,056

Revenues Needed to Reach 1.50 Coverage on Cruise Bond DS 3,496,838 6,993,675 6,993,675 6,993,675 8,706,150 8,707,200 8,707,706 8,707,181

45,161,957 Cruise Project NPV at 6.5% Based on PFM calculations.

Scenario C - Base GrowthCruise Bonds: Dated 11/1/2009; $60 Mil Project; 6.5%; 6 yrs Int. only; 2 yrs CAPICruise Revenues based on BREA Base Scenario, growing at 1% every year starting in 2019Cruise Expenses starting at $850k in 2009, growing at 3% in 2010, at $1.2 million in 2011, growing at 3% thereafter

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Proforma: Hanjin / Worst Case Cruise Scenario

Cruise debt issued for a $52 million project but cruise revenue only runs through 2016

Minimum senior coverage is 1.50x NPV is negative $30 million Worst case because it assumes that after 2016 no cruise line comes back to the

new cruise terminal for the life of the bonds. Regardless, no bond covenant default occurs. However, credit ratings could be lowered.

Jacksonville Port AuthorityCruise Terminal Plan of Finance

9/30/2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019JaxPort Revenue BondsNet Revs Existing Total Adjusted Net Operating Revenues (No Existing Cruise Revenues) 19,696,258 26,043,429 26,533,752 26,014,081 26,587,903 27,052,179 28,608,333 29,006,724 29,429,611 29,855,327 30,296,266

Hanjin Throughput Fees 0 0 0 13,600,000 13,600,000 13,600,000 13,600,000 13,600,000 13,600,000 13,600,000 17,600,000Hanjin Land Lease Rent 0 0 0 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 5,000,000Cruise Terminal Revenues 3,815,255 3,929,713 4,047,604 4,169,032 4,294,103 4,422,926 4,555,614 4,692,282 0 0 0Cruise Terminal Expenses (850,000) (875,500) (901,765) (928,818) (956,682) (985,383) (1,014,944) (1,045,393) 0 0 0 Total Revenues 22,661,513 29,097,642 29,679,591 46,854,295 47,525,324 48,089,722 49,749,003 50,253,613 47,029,611 47,455,327 52,896,266

Debt Serv Existing Sr DS 10,160,838 11,552,386 12,696,661 12,704,064 12,707,665 12,711,770 12,715,551 12,718,181 12,723,690 12,735,832 12,743,512 DS on JaxPort Revenue Bonds for Hanjin Terminal 0 0 0 12,986,675 12,986,675 12,986,675 12,986,675 12,986,675 12,986,675 12,986,675 16,735,738DS on JaxPort Revenue Bonds for Cruise Terminal 0 0 0 2,022,963 4,045,925 4,045,925 4,045,925 5,037,613 5,038,713 5,035,263 5,036,938Existing Jr DS including $50 mil line of credit takeout 7,295,220 10,252,260 10,252,327 10,251,836 10,251,993 10,116,734 9,057,987 9,055,151 9,057,275 9,058,782 8,725,430 Total Expenses 17,456,058 21,804,646 22,948,988 37,965,537 39,992,258 39,861,103 38,806,138 39,797,619 39,806,352 39,816,551 43,241,617

Total Sr DSC 2.23 2.52 2.34 1.69 1.60 1.62 1.67 1.63 1.53 1.54 1.53Total Aggregate Sr & Jr DSC 1.30 1.33 1.29 1.23 1.19 1.21 1.28 1.26 1.18 1.19 1.22DSC on Cruise Terminal Bond - - - 1.60 0.82 0.85 0.88 0.72 0.00 0.00 0.00

Net Income (Cruise Terminal Project Only - Based on PFM calculations) 2,965,255 3,054,213 3,145,839 1,217,252 (708,504) (608,382) (505,255) (1,390,723) (5,038,713) (5,035,263) (5,036,938)

Revenues Needed to Reach 1.50 Coverage on Cruise Bond DS 3,034,444 6,068,888 6,068,888 6,068,888 7,556,419 7,558,069 7,552,894 7,555,406

(29,567,518) Cruise Project NPV at 6.5% Based on PFM calculations.

Scenario A - Cruise Debt but Cruise Revenue only through 2016Cruise Bonds: Dated 11/1/2009; $52 Mil Project; 6.5%; 6 yrs Int. only; 2 yrs CAPICruise Revenues starting at $3,815,255 in 2009, growing at 3% through final year of 2016Cruise Expenses starting at $850k in 2009, growing at 3% through final year of 2016

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Conclusion

Cruise Terminal project pays for itself based on BREA study projected revenues

System debt service coverage declines slightly with the cruise project, but remain adequate such that JaxPort should keep its current rating

Even under a worst case scenario, system debt coverage may be sufficient to keep minimum “A” level credit ratings (but no guarantee)

Thus, Cruise Terminal project appears financially feasible based on the revenue forecast and financing factors

Prior to issuing revenue bonds to finance the Cruise Terminal project, JaxPort will need to obtain an updated market and financial analysis from a qualified feasibility consultant showing that the system (not just the Cruise Terminal) can support the additional indebtedness